Insider Exclusive: Will Crowdsourced Buses Crowd Out Operators?

Insider Exclusive: Will Crowdsourced Buses Crowd Out Operators?

‘The jury is still out,’ says one industry expert

By George Spencer

Every technology and trend brings blessings and woes. The growth of crowdsourced bus travel is no different. For some motorcoach operators, it means new business with new passengers and clients. For others, it may threaten existing fixed-route service.

For better or worse, change is coming quickly in this emerging industry segment. The Ford subsidiary Chariot has muscled into San Francisco and New York with its 14-seat vans. (Don’t call them vans, says Ford. It prefers the term ‘Chariot.’) Their drivers are professionals, and riders reserve seats via a phone app. Chariot’s niche is filling gaps in “transportation deserts” unserved by buses and subways, according to its CEO Ali Vahabzadeh.

Meanwhile, Bridj, a three-year-old Boston-based startup that seemed promising has suddenly gone belly up. Its vans ran “pop-up” routes in Austin, Texas, Washington, D.C., Kansas City, Mo., and Boston. The company’s demise came swiftly when “a deal with a major car company” fell through, according to its CEO. Bridj had done business with Ford in Kansas City.

While crowdsourced routes in cities get the media attention—and the worry from traditional operators—crowdsourced buses to concerts, sports events, and political rallies also appear to be thriving, much to the delight of some operators.

This is how it works: Although it doesn’t own any vehicles, a crowdsource company like Rally operates as an online travel agent/bus-booking platform. When its website generates enough potential riders to make hiring a bus profitable, it contracts with a motorcoach operator.

“We are now entering our third year of working with Rally, and every year has proven to be better than the year before,” said Tom Caughey, president of Flagship Trailways, an ABA member based in Cranston, R.I. “This year is no exception. Rally booked more than a dozen buses with us for the summer concert season.”

According to Caughey, it’s been “very exciting” to see Rally’s “powerful” social media technology in action and to be at the forefront of this trend. “We now have a good understanding of the popularity of various artists and can watch the Rally app as more and more riders book with them to ride on our buses,” he said.

The Flagship-Rally relationship has grown so strong that Caughey considers it a partnership. “As such, we give our input as to what technologies we think are needed to make our industry more efficient,” he said. “We are in the front row testing the newest technologies that are being built for fleet, driver, and rider management.”

But will crowdsourced line-run service break out of small urban niches? The answer remains unknown, according to industry expert Joe Schwieterman. He is director of the Chaddick Institute for Metropolitan Development at DePaul University, and he authors an annual comprehensive report on inter-city bus travel.

“I think the jury is still out,” he said. “We know it will work in big, dense and chaotic urban areas where people dread driving. It’s not so clear whether it will play in Peoria (Ill.).”

Will crowdsourced buses go after inter-city markets? Schwieterman thinks so. “It’s only a matter of time before we see the crowdsourcing sector moving into bona fide inter-city markets,” he said. “That could be a game-changer.

“Envision routes such as New York City to Albany (N.Y.), New York City to Philadelphia, or Washington (D.C.) to Baltimore—they’re short enough so companies could do on-demand services and pick you up at your house.” Schwieterman added. “We don’t yet have that. We have line-haul services and Uber and Lyft solving the last-mile problem, but nothing has been truly integrated to make this a reality.”

Schwieterman is keeping a close watch on uberPOOL as it moves into longer-distance markets. “Now you can go from New York City to Trenton (N.J.) that way. It’s affordable, and it’s a baby step toward true crowdsourcing,” he said. “Its prices are remarkably affordable when compared to renting a car. In my opinion, it’s more likely that innovation will occur from the lower end with Ubers and sedans upsizing to bigger vehicles rather than bus companies morphing into van operations.”

One thing is certain: All motorcoach operators need to educate themselves about this trend. That’s the opinion of Brad Decker, the motorcoach marketing manager at ABA member Sands Bethlehem in Bethlehem, Pa. His destination receives about 75 buses a day, none of which are crowdsourced.

“I’m hoping operators grasp the crowdsourcing market. They see it as a threat, but instead it’s a huge opportunity,” Decker said. “I feel like a lot of them are going to be left in the wake if they’re not more advantageous in getting in on the app world. I work with bus companies that still only do faxes and don’t do email.”

Chapel Hill, N.C.-based freelance writer George Spencer is a frequent contributor to ABA media.

About the American Bus Association

The American Bus Association (ABA) is the trade organization of the intercity bus industry, with more than 1,000 motorcoach and tour company members in the United States and Canada. Its members operate charter, tour, regular route, airport express, special operations and contract services. Another 2,800 members are travel and tourism organizations and suppliers of bus products and services who work in partnership with the North American motorcoach industry.

Contact

Melanie Hinton, Director of Communications & Media Relations, ABA
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