Grand Rapids Megabus adds Grand Rapids route to Michigan fare Bus company is planning new route between Detroit and Chicago

By Zane McMillin The Grand Rapids Press GRAND RAPIDS, Mich. (AP) -- Transit competitors of the low-cost Megabus service preparing to roll out a new Michigan route downplayed news of the company's expansion, saying their time-tested services maintain their customer bases. Megabus recently got the go-ahead to roll into Grand Rapids, allowing it to bring its big, blue buses and slick marketing of $1 fares into a market that for years has been served by the likes of Amtrak, Greyhound and Indian Trails. Now, with the 6-year-old upstart Megabus preparing a new route between Detroit, East Lansing, Grand Rapids and Chicago, its competitors were quick to point out what some deem as flaws with Megabus's business model. "It's a very different product than ours," Amtrak spokesman Mark Maglieri said of Megabus. "It has very different price points, it only has one way to be paid for (online) and it doesn't provide any sort of shelter for its passengers." That's the big-picture argument echoed largely by Greyhound and the Owosso, Mich.-based Indian Trails, but something transit experts would argue has worked to Megabus's advantage. As a curbside service, Megabus operates by picking passengers up at locations designated by cities, typically parking lots or along sidewalks. In rare cases, say where Megabus is permitted to set up at a city bus terminal, shelter might be provided for Megabus riders. But more often than not, there are no ticket counters, no terminals, no lobbies in which to sit while waiting to roll out. It is that lack of relief from any inclement weather, and the fact there typically are no readily available Megabus personnel to answer questions or solve problems, that has led to criticism of the company by users online and by its competitors. Greyhound spokesman Timothy Stokes hinted as much, and also hit on Megabus's "express" service that foregoes stops at smaller cities along a given route. "With Greyhound, you have more options to choose from when you're traveling," Stokes said. "We stop in some of the smaller locations than what Megabus would do." "We operate not curbside," he continued, "we operate in a facility." The Grand Rapids transit option likely most comparable, from an operational standpoint, is the Owosso, Mich.-based Indian Trails. Indian Trails Vice President Chad Cushman said in an email the companies are indeed similar, insofar as both feature newer buses, free wireless Internet and electrical plug-ins for travelers' gadgets. "They pick up their passengers typically curbside or in parking lots, whereas we are operating out of full service, typically state-of-the-art facilities such as in Grand Rapids or downtown Lansing," Cushman said. Such facilities, he argued, are climate-controlled and have waiting areas for passengers. "Agents at each terminal are also available to assist passengers as needed," Cushman said in the email. "The Megabus business model doesn't include that." And in Grand Rapids, a $3.8 million Amtrak station should soon get off the ground. That will give train passengers a new station situated next to Rapid Central Station, 250 Grandville Ave., where The Rapid's city buses and Greyhound and Indian Trails operate. "We make a commitment to the community," Maglieri said of Amtrak. "We change service infrequently, and when we add service it's very public. When there's a service disruption, we make that public and when we expand service we make it public." As for price differences, given Megabus's $1 fare marketing, the competitors argued they give equal value for riders' money. "Our prices are competitive. While we have different pricing structures depending on what type of ticket you purchase, you can get from (Grand Rapids) to Chicago with us for about $30," said Cushman of Indian Trails. "The $1 gimmick is certainly a creative marketing strategy," he added, "but in reality, very few passengers will get the $1 fare." Others who have tracked Megabus' progress since the service was rolled out by parent company Coach USA in 2006 said such criticisms of the company have actually worked to its advantage. Joseph P. Schwieterman, director of DePaul University's Chaddick Institute for Metropolitan Development, said Megabus's lack of facilities and readily available personnel means it has less overhead to deal with. By extension, Schwieterman argued, the company has been able to grow nearly limitlessly over a period of six years, whereas competitors have been left in the dust because of time and money needed for facilities investments and other projects. But Megabus, by only requiring a place to stop for passengers, can just "add a hub and it seems to work, and they add another. They basically expand their computer program, their dispatch and drivers," Schwieterman said. "The technology has allowed Megabus to keep costs to an absolute minimum." As a rival bus system, Greyhound is at a disadvantage because Megabus has forced it to "revamp" its image, Schwieterman argued. Greyhound has rolled out services similar to Megabus in recent years, including Greyhound Express, an "express" service that also advertises $1 fares, wireless Internet and other amenities. But even then, Greyhound and Megabus are divided by demographics, Schwieterman said. "The clientele is still significantly different," he said. "With Megabus, you have a younger crowd, a little more slanted toward people on personal business and school trips. On Greyhound, you have more people who can't afford automobile travel." As for Amtrak, the service's Pere Marquette Line between Grand Rapids and Chicago is severely limited by its once-daily departure to Chicago, and rail congestion issues in northwest Indiana, Schwieterman said. Megabus's three daily trips to Detroit, East Lansing and Chicago makes Amtrak's service pale in comparison, Schwieterman said. "You really need four to five daily departures to allow people to integrate other transportation into their lives," he said. "One train a day is a mere skeletal service, and there's also punctuality problems." Mostly, though, Megabus's competitors either said competition is a non-issue or that a new rival service is healthy for business and the industry. "We welcome competition very much," said Greyhound's Stokes. "We see it as a benefit for the passengers, seeing as there are more options for passengers. We think it benefits the industry." Indian Trails' Cushman echoed that sentiment, and added the company sees Megabus as competing more directly with airports and Amtrak than Indian Trails itself. "It benefits the traveling public and provides more travel options to help get people out of their cars, thus reducing the congestion on our roads and improving our environment," Cushman said of competition. And to be fair to Amtrak, Megabus has yet to take a substantial bite out of its business, Schwieterman said. "It's going to hurt Amtrak, but people are also very creative, taking the train one way and a bus back," he said. Still, "it hasn't seemed to hurt Amtrak in a big way," Schwieterman added. "Out east is where (Megabus is) having a huge impact, where there are these huge price disparities. These intermediate stops are so important for Amtrak that it hasn't cut into it. Amtrak is still reporting really strong ridership, but there's no question that it adds to the debate over frequency and things like that." Amtrak's Maglieri also pointed to record Amtrak ridership, which he said has spilled onto its Pere Marquette Line. Between October 2011 and May, the line saw 69,335 riders, up from 67,408 for the October 2010 to May 2011 timeframe, Maglieri said. Amtrak also is awaiting news from the federal Transportation Department about TIGER grant funding, whose recipients should soon be announced. Amtrak joined the Michigan Department of Transportation and the harbor town of New Buffalo, Mich., in applying for a chunk of TIGER's $500 million transit infrastructure pot to help make service upgrades that would benefit the Pere Marquette Line. And as for the time it would take to get those projects of the ground, should funding be awarded, Maglieri said "these are real capital investments, not just pulling up to a curb somewhere." Published: Tue, Jul 10, 2012