Bus Company Tries to Lure Customers with $1 Fare on Midwest Routes

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Anybody who's tired of the politics in Indiana can soon take a very cheap trip out. That's one of the states served by a new bus company, which will begin service in one week, linking Chicago, Illinois and eight other Midwest cities. Some seats will sell for as little as a dollar.

Megabus.com is borrowing from the business model of the discount airlines and offering express service as well as online booking. NPR's David Schaper reports.

DAVID SCHAPER reporting:

There's something different about Megabus.com. It's apparent from the moment you first see a Megabus.

Mr. DALE MOSER (President and CEO, Coach USA): This is a blue bus with very distinctive yellow graphics on it.

SCHAPER: Dale Moser is president and CEO of Coach USA, which operate Megabus. Standing next to one of his bright, blue buses, Moser says another distinctive feature is that all tickets will only be sold over the Internet in advance, no walk-up ticket buying like on Greyhound, Amtrak, or most airlines.

But Moser promises Megabus fares will be cheaper than driving to Chicago from its eight cities: Detroit, Cleveland, Columbus, Cincinnati, Indianapolis, St. Louis, Milwaukee, and Minneapolis.

Mr. MOSER: With the high cost of fuel, the congestion at airports, high parking prices at airports, waiting in lines to get it through security, we just thought that the market could use an alternative.

SCHAPER: Moser says every bus will have a few seats selling for one dollar each way, plus a fifty-cent booking fee. After those are sold out, prices rise to five bucks, then eight, ten, and maybe higher, depending on the route. All routes are to and from Chicago, not between the other cities.

And because Megabus service will be express, with no stops in smaller cities in between, Moser says it will attract what he calls silver surfers.

Mr. MOSER: Those who are maybe retired, and they're looking for a way to go around and visit family, friends, or just go see the country and have a low-cost way to do it. The other demographic seems to be those under the age of 30.

Professor JOSEPH SCHWIETERMAN (Director, Chaddick Institute of Metropolitan Development, DePaul University): Well, those of us watching the inner city bus industry, it's been a long time since we really had some good news.

SCHAPER: Joe Schwieterman is director of DePaul University's Chaddick Institute of Urban Planning in Chicago. He says just offering super low fares won't be enough to make the new bus service successful.

Mr. SCHWIETERMAN: Usually, travelers that take the bus find there's some reason they're forced away from the airport or the car, of course, and price isn't going to drive people, you know, out of their cars to make that happen too quickly. So, it may be a tough go with the discount route.

SCHAPER: But Morningstar transportation stock analyst Marisa Thompson says, with airfares rising right now, the timing is right for Megabus to attract some air travelers who will no longer be able to get rock bottom fares on short Midwest flights.

Ms. MARISA THOMPSON (Stock Analyst, Morningstar Investment Research Site): There's definitely have to be a smaller group of people, a very niche group of people who aren't as concerned about the time constraints.

SCHAPER: One other difference: Megabus will have no bus stations, just a sign at a downtown curb at each city. And since the Midwest has plenty of windy, wet, and cold days, representatives of Amtrak and Greyhound say they believe most customers will prefer their warm, dry, and safe seats indoors, while they wait to travel. David Schaper, NPR News, Chicago.

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