Monday, November 15, 2010

Greyhound Reads SWNID, Adopts Megabus Model

Legacy-carrier Greyhound is responding to the competition. At last.

The hoary bus company of legend and infamy will offer inexpensive express service between Chicago and various Midwestern cities, eschewing its own dismal terminals to meet passengers curbside, with tickets booked online and fares as low as a dollar. The buses will be new and clean, with WiFi, plug-ins and wider seats.

Where'd they ever get that idea?

Of course, their upstart competitors say that they welcome the competition, as should passengers. As Megabus fills up (as witnessed by the SWNIDs this weekend), Greyhound can pick up slack and drive down prices. Demand and supply in their never-ending dance of non-equilibrium, and we're mostly better off for it.

And that, gentle readers, is why we really, really don't need intercity rail boondoggles.


Anonymous said...

Greyhound is unfair competition because it's federally subsidized. They could easily put Megabus out of business. Monopoly power and federal subsidy may overcome their general incompetence.

Jon A. Alfred E. Michael J. Wile E. SWNID said...

Anon, we reckon mightily with the power of the federal behemoth to create and sustain an uncompetitive business climate. In this case, we think fear is unwarranted and disaster remote. As far as we know, Greyhound is subsidized by Uncle Sugar only to provide its service to smallish towns in Our Republic. Inasmuch as services competing with Megabus are express routes between major cities, there's no subsidy for these new routes. Granted that subsidies are in the end fungible, we expect that Greyhound is plunging into this market because they realize there's money to be made.

Effectively they're operating two separate services: the kind that DC pays for that no one wants to ride and the kind that stands on its own two feet. They don't make enough on the subsidized one to fund much of a discount on the unsubsidized one, we believe.

But we'll see. We have no problem whatsoever with two bus companies competing for our business.

Anonymous said...

I think they changed since they(Greyhound) are now a part of FirstGroup plc of ABERDEEN SCOTLAND Hey - wait a minute - isn't SWNID tied to Aberdeen....something fishy here.........