INNOBLOG

From the Wall Street Journal this morning comes a story about disruption in interstate bus travel. New entrant Megabus.com, hubbed in Chicago, serves eight cities in the Midwest and advertises fares as low as $1.50. Like its airline counterpart Southwest, the companys operating expenses are far below rivals. Passengers reserve tickets online eliminating staffing costs. Megabus routes leave from street corners avoiding the congestion and fees of major bus terminals. The service targets both non-consumers, drivers wary of Chicagos $3+ gas, and low end consumers of other bus services willing to forego flexibility and amenities for bargain basement prices. On a typical route, rival Greyhound advertises fares three times higher than megabus.

Low end bus services have had success in other markets. The famed Fung-Wah bus services linked cities like Boston and New York for as little as $10. Fung-Wah initially served the cities Asian communities traveling Chinatown to Chinatown. Despite few amenities, a spotty safety and on-time record and the occasional live chicken passenger Fung-Wah and its imitators soon became favorites with students and budget travelers up and down the east coast. And Megabuss own parent company Stagecoach started a similar bargain bus network in Scotland.

So how does high(er) end rival Greyhound respond? By emphasizing its upmarket amenities. According to the WSJ: Greyhound says its customers can walk in and buy a ticket on the day they travel, rather than having to reserve it online. Then, they can wait in terminals with wireless Internet and TV sets.

How about it? Is megabus good enough or do you need Wi-Fi to make the wait for your bus ride worthwhile?