Long-distance bus travelling in Europe has been in strong decline for decades, but howcome the highways in Germany, France, and Italy start to get overrun with coach buses these days? An industry stuggling to survive has re-invented itself and is now starting to thrive in the travel industry. Main reason? Smart use of IT
You may have heard stories from your parents, who have traveled Europe by coach bus, mostly Eurolines. A sweaty 14 hour drive in an overfull bus on the highway to the other side of Europe. Back in the days airplanes were still a luxury and destined for business travelers or long-haul flights across continents. However in the mid-1990’s new low-cost airlines started to pop up and the long-distance bus industry found itself a new competitor, a strong one. Because who would actually pay for a bus ticket to go from Amsterdam to Berlin in 10 hours, if for the same price you could reach Berlin in a quick 1,5 hour flight?
The bus industry suffered and the airline industry has taken over in the 2000’s. However when in 2012 the German government announced to release its’ strict laws on public transport a few German entrepreneurs seized the new-grown opportunity. Both in Berlin (MeinFernbus) and Munich (FlixBus) two new digital startups arose with a similar business model. Instead of traditional ticket counters, fixed prices, and old-fashioned marketing techniques, they created an online platform where tickets could be bought online at dynamic prices (as in the airline industry), and made strong use of online marketing tools. This enabled them to provide a new and better service to customers, but the most essential part of their newly created business model is the way they enable growth. Both startups actually do not own a single bus, but have created a platform where they sign on partner companies. These partner companies are existing small to medium sized (family) bus companies. In this way there is no need to invest heavily in new buses to operate new bus routes, which allows for a much faster growth. FlixBus does all the ticketing, network planning, accounting, marketing and customer service. Whereas the partner companies take care of everything related to the actual bus driving (bus drivers, maintenance etc. ). Similar business models seem to be very popular and effective these days and has allowed Uber and AirBnb to grow at impressive rates as well and disrupt the taxi and hotel industry alike.
This growth enabled both MeinFernbus and FlixBus to quickly build a large network of bus lines throughout Germany. The large network and competitive pricing pushed most other bus companies out of the industry and even made the Deutsche Bahn see a sizable drop in passengers. The two firms were in strong competitions when in 2015 it was announced that both companies merged and renamed into FlixBus later that year. The merger allowed for a further expansion into Europe and the company is now operating in over 20 countries in Europe.
Still the company faces challenges from competitive pricing and the partner companies impose a certain risk of quality management, but the company shows how a traditional industry can be disrupted through IT. The same basic product, which was facing decreasing demand, was revitalized and put into a new spotlight and actually created new demand by a new and better offer.
Your blog post caught my eye as about a year ago Flixbus introduced bus lines between 9 dutch cities that did not have a direct train connection. I used the FlixBus from Rotterdam to Den Bosch and enjoyed it very much. it was faster and cheaper than travellingby train. However, I just looked at the Flixbus website and it seems the line Rotterdam – Den Bosch got canceled. I’m curious if Flixbus will be as popular in the Netherlands as in Germany in the future, as I really like the concept.
Thanks for your comment. I did my internship at FlixBus during the time of the launch of the Dutch national network. Unfortunately the line between Rotterdam and Den Bosch had to be closed prematurely due to low passenger numbers. I think the main reason why the national network in the Netherlands is not lifting off as well as in other countries is the subsidized travelling for Dutch students. In Germany students do not receive free public transport tickets and the Deutsche Bahn was quite expensive. Particularly in that segment FlixBus gained a lot of market share due to their low prices. In the Netherlands it almost does not matter how low their price is, as a large part of Dutch students would still opt for the free travelling. In the future I either see FlixBus becoming a part of the public transport system (allowing for OV Chip Card usage) or having to lower their frequencies. In my opinion the strongest part of FlixBus are the international bus lines that take between 3 and 7 hours to get to the destination or the international night buses.
I found your post interesting to read because I personally never use bus connections in the Netherlands. However, I think it is a very good concept because in the beginning of this year I went tot Dusseldorf with my friends and I enjoyed this trip very much. The seats were comfortable and before I knew we were already there. Especially whenever trains are cancelled (which happens very often) I think this is the perfect solution to quickly allow travelers to get to their destination. Last summer I was in Peru and the bus lines are very extensive there because the environment does not allow train lines such as in the Netherlands. The Netherlands could really learn something from their concept, because the service I received there as a passenger was great compared to the price I had to pay for my ticket. For this reason, I really hope there will be a future for FlixBus in the Netherlands.
Hi Stefan! I greatly enjoyed your post as I myself have been a FlixBus user for a few years now. I first heard about it from a German friend in Munich, as I had to travel from Munich to Frankfurt. I was amazed by how to cheap it was, and the busses provide WiFi, which makes the trip a lot easier. Then, the next time I had to go from Paris to Rotterdam, and that line had just recently been introduced. For only 16€ I took the trip last minute, which was waaay cheaper than the 150€ Thalys asked for a last minute ticket. While I agree that FlixBus may have difficulties to provide lines within the Netherlands because of the discount students receive for their trainrides, I believe that FlixBus offers many opportunities to travel cheap internationally, from Rotterdam or Utrecht. I will definitely travel with them again!