With Megabus.com the early bird gets the worm

By BARBARA PAYNE

6:00 am, August 28, 2006


Some Internet-savvy travelers in Cleveland have figured out a way to pay less for a ride to Chicago than for a cup of good coffee.

Aficionados of Megabus.com know the trick to getting a $1 bus ticket (plus a 50-cent booking fee) is to be one of the first online at www.megabus.com to book a trip. Riders reserving tickets behind the first several early birds could be charged anywhere from $8 to $15, or the top price of $32 for a one-way ticket.

Megabus.com operates round-trip service to Chicago from Cleveland, Cincinnati, Detroit, Indianapolis, Minneapolis, St. Louis and Toledo. Megabus.com also has an operation in the United Kingdom.

The nearly 5-month-old service has been a hit with Northeast Ohio travelers, according to Dale Moser, president and chief operating officer of Coach USA, the parent company of Megabus.com.

Cleveland is one of Megabus.com’s top three service locations, in addition to Detroit and Minneapolis.

Megabus.com passenger volumes continue to increase weekly — 12,000 passengers rode between Cleveland and Chicago in the service’s first three months from April to June — and traffic has spiked for the summer, Mr. Moser said. Revenue exceeded $1 million in the first three months, Mr. Moser said.

If the company can maintain this kind of return, with incremental small increases, he said Megabus.com is on pace to break even in the next two to three months.

Online to downtown

Megabus.com offers express service from downtown to downtown, and tickets, which gradually increase in price, can only be booked on the Internet.

The Megabus.com concept is the brainchild of executives at Coach USA, which owns and operates more than 20 local companies in North America that run scheduled bus routes, motor coach tours, charters and sightseeing tours.

The idea for cheap, hassle-free transportation between Midwest big cities was developed in an effort to make better use of the company’s midlife equipment and meet a real consumer need.

While Mr. Moser did not release specifics on Megabus.com’s pricing methods, he did say that the company’s software gives the lowest $1 fare to the first two to seven passengers to book each trip. Prices also are based on how far in advance the reservations are made.

“We keep costs low because we have no terminals and no staff out there. We’re just delivering timely runs and meeting people’s need,” according to Mr. Moser.

The bright blue Megabus — which includes a decal of Megabus.com’s trademark smiling driver — picks up and drops off passengers in Cleveland adjacent to the entrance to Tower City at West Huron Road and West Third Street.

From the Cleveland stop, riders can take the bus to downtown Chicago or, beginning Sept. 12, to downtown Toledo.

All aboard

The target rider for Megabus.com is the leisure passenger as opposed to the business traveler, according to Mr. Moser.

Surveys conducted for Megabus.com, show that most passengers are visiting family and friends, while others are traveling to see special events and exhibits.

“When Detroit came to Chicago to play the Cubs in an inter-league game, volumes in both cities grew,” Mr. Moser said.

About half of the passengers using Megabus.com are 30 years old or younger, while the other large majority, according to Mr. Moser, is made up of older “silver surfers.”

“They have more time on their hands, they’re more flexible, they don’t want to or can’t drive. They don’t want to fly or pay those fees but like to go to Milwaukee for Summerfest, or visit St. Louis because they haven’t been there in 20 years.”

The service isn’t completely free of glitches, according to one passenger. Heather Barna, business travel sales manager for Wyndham Cleveland at Playhouse Square, used the service to Chicago for a recent conference and expressed concern about an hour-long delay in departure she experienced for the return trip.

However, Mr. Moser said independent surveys indicate that 97% of passengers say they will use the service again, and 55% of Megabus.com’s passengers say they’re leaving their car behind to use Megabus.com

“That’s an inter-modal shift that in our culture we think is truly exciting,” said Mr. Moser. “We weren’t positive it would work. But the key is it’s low cost, it’s express, it’s guaranteed seating.”