|Economists say that business competition can bring both better products and lower prices. On the heavily traveled bus routes between U.S. cities new 'immigrant' bus companies are causing competition for the big bus companies.|
Betty Ungar is helping load passengers on a bus. It's her bus. She is the mother of ten children and thought she had a better idea.
"I took my kids to a trip to Washington, D.C. and it was so expensive. I took them by bus, and it was lousy. And I said to myself, 'You know what, I think I can do something better than that. I'm going to start a company of my own. I'm going to be cheaper and my service is going to be a lot better.' "
Betty Ungar is now the owner of the Washington Deluxe Bus Company. Washington Deluxe is one of the so-called 'immigrant' or 'curb-side' bus companies that have gone into business over the last several years, providing low cost service between major U.S. cities.
"As long as you follow the rules and regulations of DOT [U.S. Department of Transportation] you can open your bus company,” she says. It's not a problem. So that's exactly what I did."
Customers crowd these buses because the cost is half that of what the major bus companies used to charge and one quarter of what a ticket costs on Amtrak, the national passenger trains.
One bus passenger explained why she rides one of the buses. "Well, I used to take Amtrak but it is just so much cheaper, like $35 dollars round trip, which is just unbeatable."
Established large bus lines like Greyhound and Peter Pan feel the competition is unfair because it isn't meeting the same standards. According to Peter Pantuso, president of the American Bus Association, "There certainly is price competition in the market. What all of the companies are looking for is that they compete fairly, on a fair basis, that everyone is following the same federal, state, local rules. That they have the same insurance, that they pay the same taxes, that their drivers go through the same training…"
Some of the better new bus companies, like Betty Ungar's Washington Deluxe, have survived and built a good safety and reliability record that keeps bringing in new customers.
"We work on a penny markup, very low markup. We work very hard to try to please the people," Betty explains.
The first of these small immigrant bus companies appeared about eight years ago. Originally the buses moved Chinese immigrants between Chinatowns in East Coast cities, says Jack, who works for a bus company in New York's Chinatown.
"Most people don't realize that, in five years the shuttle service in Chinatown -- going to different places, has been exploding because there is a need for the Chinese community, shuttling the people to different places to work."
The curbside buses don't use bus stations, which keeps costs down. They load at sidewalk locations. Reservations and information about the buses are on websites.
"I think it must have been word of mouth, yes, it was word of mouth," said one passenger.
This brought students and tourists who now ride the small bus lines and prefer them.
Suzanne, a bus passenger, remarked, "The people who ride it are normal, and it's comfortable and clean and you get there in a good amount of time."
On this run from Washington D.C. to New York City, the bus encounters unexpected heavy traffic and A.J., the driver, takes a different route. "We listen to the radio, we pay attention to the trucks."
It is this kind of flexible innovation that some of the small bus company's customers appreciate, but others find trying.
"I ride it on Wednesday, come back on Friday and I've never ridden it once without an incident,” says Juan, a regular rider.
For passengers like Juan, low bus fares may come at the price of occasional inconvenience. But bus line competition should benefit consumers in the long haul.