Buses and Trains: The Turtle and the Hare?

(Flixbus is a popular German line / wikipedia)

In America, there is an almost stifling consensus among pro-urban types—trains are good, trains are right, trains work. Trains have marked the upward surge of mankind—trains clarify and capture the essence of the American spirit. “Just look at Europe!”

Yes, let’s look at Europe. What you’ll find is a startling change—Europeans are embracing the conventional coach bus for trips once exclusively the province of trains and private automobiles. The Economist has called it a ‘Revolution on Wheels.’ The consultancy Oliver Wyman titled their report ‘Hit by a Bus: European Rail.’

Why did this happen? Trains were supposed to be the future, and buses a shoddy relic of the past.

Up until a few years ago, it was illegal to run intercity buses in Germany and France, among others, to protect their state-owned train system from competition. When Germany relaxed this ban in early 2013, suddenly a host of newcomers sprang up to serve the demand for travel between cities. By year’s end, weekly bus journeys in Germany had increased by 230%. The industry went through a cycle of intense competition between several players, followed by consolidation into a few big rivals.

Just this summer, the biggest player in Germany, Flixbus, acquired the continental operations of Megabus, a big player in the United States, as well as domestic operations by Germany’s Postbus.

During the summer of 2015, France followed with its own deregulation to allow intercity buses. The Economist writes that “France had only 100,000 intercity coach passengers in all of 2014, but saw 250,000 in the single month from mid-August.” Italy, Sweden and Finland have also deregulated their markets in recent years.

Buses have one premier appeal—they are cheap. For the 140-mile trip I took this weekend from Brussels to Cologne, tickets were $10, while a train ride was $44. Browsing a few other potential routes, like Brussels to Amsterdam, there was a similar 4-to-1 price ratio, at least for trips booked close to their date of departure.

The Interior of a Postbus

But the bus operators are not content to rest on their laurels and compete on price alone. They offer flexible online ticket purchasing, and their prices are consistently low, unlike train and plane prices that lurch up as your departure date approaches. For those concerned about their emissions, Flixbus offers carbon offsets, which were about 5% of my ticket price. On-board wifi, electrical outlets and reclining seats are common. One American startup, Shofur, even offers reserved seating and ratings for individual bus drivers. And the glut of capacity means there’s a good chance you can get two seats for the price of one.

As the market matures, it’s likely that more luxury options will emerge. A ‘sleeper bus’ in California has seen great success, for offering a comfortable night’s sleep for trips between Los Angeles and San Francisco, at $48 per trip. Given buses’ cost advantage, it could offer more amenities at a lower price than trains.

Will the Turtle Win the Race?

To be sure, buses are slower. They are also less reliable—my outgoing bus (Flixbus) arrived 45 minutes late. For my trip, the train would take about an hour and fifty minutes, while a bus would take about an hour longer, while saving $34. Sure, the train is better, but is it enough to warrant paying three or four times as much as a bus, especially for low-wage workers? Decades of the state protecting trains and banning buses fell hardest on such people, making these policies regressive.

Trains: Destined to be museum pieces? Location: Train World, Brussels

Though the trains were subsidized, the highways that buses use tend to be highly subsidized as well. But if highways already exist for a given corridor, adding a rival, billion dollar transportation rail network at public expense is simply imprudent.

Further, government regulations require buses to travel at 60 miles per hour, which quickly becomes apparent as you see cars zooming by. It’s not clear that imposing different speed limits helps or hurts safety. And while buses may burn more fuel traveling faster than 60 miles an hour, faster buses would also be more enticing to people who would otherwise drive, and thus emit far more carbon. Faster speeds would also help cut labor costs per trip.

A Shared Fate

However, trains are actually cheaper to run when there are more than 300 passengers. Trains can still beat buses on cost on the busiest routes. A ‘free market’ in transportation would still see trains servicing major and wealthier routes at peak times, with buses serving less populated routes and times.

Buses and trains may be less rivals, than partners in the fight against car use, which the government has subsidized for decades, neglecting everything from the environment to public health to property rights and balanced budgets.

Conclusion

With buses a relatively safe, cheap and green form of travel, the wisdom of the government favoring trains at great public expense is dubious. This isn’t to say that trains are bad and buses are good—to each his own. But given the trade-offs involved, buses cannot be dismissed as inferior and obsolete—in the real world, budgets are limited and prices matter, so a small sacrifice of time and comfort is worth the savings.

The conventional wisdom is that ‘culture’ governs how we like to travel. Los Angeles has a car culture, the Netherlands has a bike culture, Oakland has a ghost riding culture, and so on. Look a little closer, and you’ll find that people everywhere simply want transportation that is safe, convenient and affordable. Whatever strikes those notes best tends to become the most popular way of getting around. With billion-dollar fortunes built on buses, as well as cheap airfare (Ryanair) and carpools (BlaBlaCar), it’s clear that even Europeans will ditch trains for a bargain.