00:00If you were in college over the last 20 years or so,
00:03you might have some memories of Megabus,
00:06the big blue double-decker bus with
00:08a giant yellow mascot painted on the sides.
00:11Maybe you went on a neat little weekend getaway with friends.
00:14Other times, you probably got stuck in
00:16traffic or the bus broke down on the trip.
00:19For all of its flaws,
00:21Megabus was a decent and affordable way to get around for years.
00:24But now, it's in trouble.
00:26The parent company, Coach USA,
00:29has filed for bankruptcy and Megabus is handing over
00:32some of its routes to other operators and discounting others altogether.
00:36Business insiders, Emily Seward,
00:38looked into what's happened to Megabus and
00:40whether the double-decker icon can or should survive.
00:44These buses are actually pretty important to get people from point A to point B,
00:48especially people who maybe can't afford a train ticket or can't afford a plane ticket.
00:53Stagecoach Group, which is based in the UK,
00:55first launched Megabus there in 2003.
00:59It offered seats for one pound or a quid,
01:01which is where the mascot, Sid the Quid, gets his name.
01:04They brought Megabus to the US in 2006.
01:07Megabus was kind of hip.
01:09It had outlets that worked most of the time,
01:13if not all of the time,
01:14so you could put your phone in.
01:15It had Wi-Fi that worked none of the time,
01:18but you can pretend like it was going to work.
01:20You could also buy the tickets online,
01:23which was novel.
01:25So Megabus felt cooler than a Greyhound.
01:28And it was cheap.
01:29Megabus could lure people in with $1 tickets.
01:33Now to be clear, maybe there was like a seat on the bus that was a dollar,
01:37and that wasn't going to be your seat.
01:39Millennials loved it.
01:40Along with Greyhound, Megabus became one of the two main inner-city bus carriers in the US.
01:46But in the mid-2010s, the tides started to turn.
01:49Gas prices fell in 2015 and 2016,
01:52which made other forms of transportation that customers might prefer,
01:56like driving and flying, cheaper.
01:58And Flixbus, an operator out of Germany, launched in the US in 2018,
02:03which meant more competition.
02:05While Megabus was ahead with the power outlets and Wi-Fi,
02:08everybody else caught up.
02:10And some high-profile accidents may have left some with safety concerns too.
02:15Then in 2019, Stagecoach sold Coach USA to Variant Equity Advisors
02:21in a $271.4 million deal.
02:25So basically, when this private equity firm comes in and buys Coach USA,
02:32they do what a lot of private equity firms do,
02:34which is that they load it up with a bunch of debt.
02:36That happens in 2019, and in 2020, the pandemic hits,
02:39and the bus industry, like a lot of travel, just completely grinds to a halt.
02:44And so if they're not bringing any money in,
02:46there's no way to service those debt payments.
02:50A lot of that debt is still outstanding.
02:52And so Coach USA filed for bankruptcy in the middle of 2024.
02:57Megabus is sort of a microcosm of what's happening in the inner-city bus industry,
03:01which has been struggling.
03:02I was trying to take a bus from New York City to Atlantic City over the summer,
03:06and I was kind of shocked at how few buses there were.
03:09I could still get them, but it wasn't like I,
03:12at least I felt like it was five years ago
03:14when there were a bunch of options at all times.
03:17According to one insider,
03:18there were about 3,000 licensed bus and motor coach companies
03:22before the pandemic.
03:25Now it is about half the size.
03:27The industry has had a hard time recovering,
03:30in part because it didn't get the government assistance
03:32the airlines did during COVID.
03:35Policymakers tend to treat it as an afterthought.
03:38There are also problems on the operational side,
03:40like rising costs for parts
03:42and the shortage of both drivers and mechanics.
03:45Bus terminals are becoming a problem, too.
03:47Some localities are pushing back against them
03:49because they sometimes have an unsavory reputation.
03:53I've taken a bus before, and I think, you know,
03:55sometimes it is nice to be in a terminal
03:57and not just waiting on the side of the road,
03:59wondering if this magical bus is going to appear or not.
04:03Making the issue even worse is that 33 of Greyhound's terminals
04:07have been sold to a commercial real estate investor,
04:10and they have other plans for the space
04:12that can make them more money.
04:13One thing that hasn't really helped the bus industry
04:15is the involvement of finance.
04:18They don't really care if the public has a great place
04:21to pick up the local bus.
04:23In other words, the intercity bus industry
04:25is facing a lot of headwinds.
04:28Of course, if you want to hop on a bus
04:30from Boston to New York for the weekend, you still can.
04:33It just might not be a megabus.
04:35It'll probably be a Peter Pan or Greyhound or Flix
04:38or something else.
04:40But your options might be more limited
04:41than they were before and more expensive.
04:44I think it's tough to think about a solution.
04:46I did find that there was kind of mention
04:49of trying to lobby a little bit more in public policy spaces
04:53to try and kind of get across to policymakers,
04:56to lawmakers that buses do matter,
04:58whether it be providing more funding
05:01so that they can get to rural areas
05:02or that they can get to underserved areas.
05:05You want a bus terminal in your city,
05:07and you don't want it to be 20 miles out of town
05:09where nobody can get to it.
05:11Still, travel in America may never be what it once was.
05:14And the days of dollar receipts and Sid the Quid
05:17rolling down the highway could soon be gone for good.
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