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22.10.2018 12:07
© FlixBus
FlixMobility GmbH, will expand to New York City next year, Bloomberg reports.
After an initial U.S. launch earlier this year connecting California college campuses with destinations like Las Vegas and Disneyland, the Munich-based company will start routes to the Big Apple and Texas in 2019. Next comes expansion to Chicago, Florida and the Pacific Northwest. The plan is to have the company’s bright green and orange coaches crisscross America next year to take on Greyhound Lines Inc.
“Our goal is now to duplicate the success we had in the West Coast across the country,” Chief Executive Officer Andre Schwaemmlein said in an interview. “I’ve got 50 competitors in Europe, and 10 of those are state-owned with unlimited resources. Competition is something we’re not afraid of.”
After starting with a handful of routes in Bavaria five years ago when Germany opened up intercity bus travel, Flix has become a dominant force in Europe, serving 2,000 destinations in 28 countries. The company’s rapid expansion, which includes train services in Germany, was facilitated by staying out of the messy and capital-intensive business of owning and operating buses.
Like Uber Technologies Inc., Flix contracts out the services it offers. Bus companies -- which maintain the coaches and hire the drivers -- keep roughly 70 percent of ticket receipts, while Flix handles sales, scheduling, customer service and marketing. The company says that makes it more flexible than traditional bus companies in adapting to demand.
Tickets from downtown Los Angeles to the Las Vegas Strip are available on the company’s website for as little as $4.99. While low fares are clearly a draw, Flix says its strength is in appealing to new customers with its app-based booking system and amenities such as Wifi and electrical outlets.
After five months on the West Coast, “we’re seeing extremely good passenger numbers -- better than some markets that we started in in Europe,” said Schwaemmlein. “We’re very happy” with developments so far, he said, adding that the company is ahead of rivals like Stagecoach Group Plc’s Megabus on the West Coast. Its Los Angeles to Las Vegas route is on average 75 percent full, while services in southern California and San Francisco Bay area have an average occupancy of 60 percent.
New York represents a bigger test for the German startup, which is backed by General Atlantic LLC, Silver Lake Capital Management LLC and Holtzbrinck Ventures Adviser GmbH. In addition to Greyhound, travelers can choose from regional bus companies, train lines and low-cost airlines.
“The West Coast was about testing a hypothesis,” said Schwaemmlein. “Now we want to go pedal to the metal toward number two, and hopefully number one someday.”
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