Germany's FlixBus to take on Greyhound in the United States
FRANKFURT (Reuters) - German long-distance bus firm FlixBus plans to expand to the United States next year, taking on rivals such as Greyhound and Megabus from a base in Los Angeles, it said on Wednesday.
"There is a significant shift in the American transport market at the moment. Public transportation and sustainable travel is becoming more important," FlixBus founder and manager Andre Schwaemmlein said in a statement.
FlixBus became a major player on European long-distance routes after Germany liberalised the market for inter-city bus services in 2013.
It survived a fierce price war among new market entrants to boost its market share in Germany to more than 90 percent, making its bright green coaches a common sight on German motorways. It does not own any of the buses but rather works with local and regional partners.
In the United States, it would compete with companies such as Megabus, operated by Britain's Stagecoach Group (NASDAQ: SGC), which launched in the United States in 2006, and the famous Greyhound bus line.
Greyhound, founded in 1914 and now owned by Britain's FirstGroup PLC (NYSE: FGP), transports around 18 million passengers a year in a fleet of around 1,700 vehicles.
FlixBus said it had already sent a small team to Los Angeles to start setting up a base for its U.S. business, though it was not yet clear when and on which routes it would start its bus service there.
It may face an uphill battle in the United States, where existing bus companies and the Amtrak rail system are competing for travelers with airlines and personal vehicles.
Researchers at the Chaddick Institute at DePaul University in Chicago in August issued a report saying that cheap gasoline was encouraging travelers to drive cars between certain cities that are 120 miles to 400 miles apart, leaving gaps in the bus and rail networks.
The Chaddick Institute has since withdrawn that study. Amtrak has reported the system's ridership increased to 31.3 million passengers in the 2016 fiscal year from 30.9 million in the 2015 fiscal year.
An Amtrak spokesman said by email on Wednesday that the system expected to show another increase in ridership and revenue in fiscal 2017.
Joseph Schwieterman, an author of the Chaddick study, said on Wednesday that the institute expected to reissue the study.
(Reporting by Maria Sheahan, Editing by Louise Heavens)