Megabus, a Cheapskate’s Dream

My wife and I started our wintry trip with a 1½ mile walk to the Oxford train station. We had two Eurohike ‘rucksacks’ between the two of us, plus a pair of umbrellas, some food and water, and two cameras. Mobility is of a high importance when we travel, as cabs and convenient traveling options are often not in the budget (we feel a real kinship with the Show Us Your Cheap contest entrants).

Our trip was primarily governed by the cheap National Rail train and National Express bus deals available that 2006 holiday season. We hit Stratford-upon-Avon, but didn’t pay to see Shakespeare’s or Anne Hathaway’s home. We went to Edinburgh, but skipped the underground city. Instead, we reveled in the cost-free beauties of the cities. After taking the train from Edinburgh to London, we had opted not to take the expensive London-to-Oxford train. We instead paid the few pounds cost to hop aboard the clean and comfortable Megabus.

The following spring, we took the same gear, adding a Johnson & Johnson tchotchke bag, to tackle Western Europe by primarily traveling and attempting to sleep on daytime and overnight National Express/Eurolines buses and a tiny EasyCruise riverboat, and by walking onto a SeaFrance RORO ferry (though we did take a TGV to Calais as a gift to me, and a currency exchange error on my part landed us in a nicer Paris hotel for the Easter weekend). After we were dumped off in downtown London, we again were happy to pay the small amount for our Megabus tickets home.

My final low-cost story reviews our most recent trip was this year. We hit Boston and New York, crashing at friends and family, staying in Hotwire-garnered hotels outside the city (and for a time, using a Hotwire-acquired rental), living on shared $5 Subway sandwiches (that promotion was a wallet-saver), and flying on JetBlue’s ‘red-eyes’. While planning, my wife and I found we needed to find a way to get from Boston to New York, and we loath spending over $10 for nearly anything. Our fears quickly vanished when we discovered that Megabus had recently added a Boston to New York route. Fortunately for us, the riders the week before were the guinea pigs (they luckily had a New York native aboard to help the lost driver), and we experienced a low-stress, low-priced—$8—jaunt into Manhattan.

Of course this isn’t about the chain-smoking and music that we had to endure on the bus from Amsterdam to Paris (it was awful), or about the 12am – 2am creepy tour of Brussels (it was the least expensive time to get there); it is about the reasons that Megabus as become one of the constants in our travels.

Megabus isn’t innovative simply because it caters to me and all of my fellow dinner-sharing, park-and-riding, non-AC-using cheapos. It wins because it has created a platform that wholly embraces the web and in so doing, passes on the cost-savings to the consumer (often said, but not often executed). They are succeeding in a thought-to-be-dead industry, using an Easy and/or Hotwire type motel, where seats are sold with a supply-demand treatment. Instead of looking at seats as a perishable item, like, say an airline that drastically cuts costs at the last minute to fill their plane, they look at their space as a commodity. When there are a lot of seats available, it’s $1 to ride, and every seat taken increases that cost. The magic also comes in the routes they chose. The focus on high-use routes (LON-OX, BOS-NY), knowing that if consumers are made aware, the Megabus seats will fill. And, as a result of their model, they cut through the clutter—it seems primarily by word-of-mouth—and their services begin to own the route. Their success comes in adapting a proven, customer-centric model (seen most effectively with Ryanair and Easy; and I mean customer-centric not in a fluffy way, but in the way the customer does the work in securing the tickets, planning, etc.) in an antiquated industry, knowing that their larger competitors are hard-pressed to change their business models to compete.

As a result, Megabus wins.

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