FlixBus plans Texas, East Coast expansion

The company’s business model is intended to affordably bring digital marketing and technological capabilities to small and mid-sized bus operators

For a business to thrive in this digital age, it seems necessary to be good with technology; you need to know how to promote your services on social media, build an appealing and reliable website and app, optimize them for search engines, and interact with customers online — all of this in addition to the other demands that come with running a business.

It can be discouraging for motorcoach business owners who are experts in their field — employing drivers; owning, operating and maintaining fleets; and getting passengers to their destination safely — but who have no experience in all the tech work that is standard practice for a business today. You shouldn’t need an IT or marketing degree to run a motorcoach business, right?

As with many things these days, there’s an app for that.

FlixBus is a German company that specializes in digital marketing and sales for partnered bus companies. The platform-based mobility provider employs a unique business model to accomplish its mission to provide “green and smart mobility for everyone to experience the world,” according to the company’s website.

Michael Kahn, the head of business development in the west coast at FlixBus, said the beauty of this business model is that FlixBus and its partners split the operation’s responsibilities within their respective specializations.

“So they provide the bus, the maintenance, the fuel, the drivers — they focus on the operational side that they’re already experts at,” Kahn said. “We focus on the technology, sales and marketing, pricing, the actual planning of the routes, the time tables, when we’re stopping where, all the authorizations for the locations that we stop at, all the customer service. That’s all on our side.”

He said this method is mutually beneficial because then small or mid-sized operators don’t have to invest in learning about search engine optimization (SEO) and app development, and the team at FlixBus don’t have to learn about operating and managing a fleet.

Kahn said this model was born in 2013 when Germany deregulated its bus market so that private companies were allowed to operate bus lines. The company’s founders realized they weren’t going to add any more on the operation side, he said. But they wanted to create a mobility platform that puts the customers first, according to the FlixBus website. So, they reached out to already successful bus companies and offered to have them put a few of their buses on the FlixBus service.

The model took off, and FlixBus is one of the leading mobility providers in Europe, with networks in France, Italy, Denmark, the Netherlands and Croatia, as well as cross-border regular services to Norway, Spain, and England.

FlixBus USA launched in May 2018. Kahn said it currently has 50 buses on the road, operated by ten partners. Currently, services are offered in California, Nevada and Arizona, including Reno, Sacramento, Los Angeles, San Diego, the bay area, Tucson, Phoenix, and Las Vegas. In February, FlixBus expanded its southwest and central U.S. reach by launching across Texas — specifically Dallas, San Antonio, Austin and Houston — and in New Orleans and Oklahoma City. Plans to launch in the east coast in spring are also in the works, he said.

“When people think about city bus travel, it’s not necessarily the best image,” he said. “We’re trying to change that because we think there’s a huge market here. We’re trying to bring higher quality service, friendly drivers, and super easy booking to the market.”

Kahn also said a benefit of this is helping the local cities that FlixBus and its partners serve because it not only creates business — and potentially hiring opportunities — for local operators, but also brings passengers to the cities’ businesses, stimulating the local economies.

He said the locations for the 2019 expansion are an exciting opportunity because the company’s primary goal is to attract Millennials: people in their 20s or 30s who aren’t accustomed to bus travel.

“In Europe they were riding trains and that was a big train culture,” Kahn said. “Bus culture was not really what it is there today until FlixBus built a brand around it. I think a high percentage of our riders — I think almost two-thirds — have never taken a bus before.”

He said the business doesn’t just want to acquire more of the market share, but “increase the entire pie” by getting more people on buses by showing them what a great experience it can be. They do this by using newer buses, installing outlets and Wi-Fi and having movies and TV shows streamed directly to passengers’ phones on every bus. FlixBus prioritizes giving passengers a consistently reliable and pleasant experience at a reasonable price to keep customers coming back.

“We have the same quality standards for the buses so that the customer has a similar experience whether they’re traveling with us in California or in New York come this summer,” Kahn said. “What we’ve seen in Europe is people stop looking elsewhere. The app’s on your phone, you click a button, and you know you’re going to get a trip at a good price. It sort of just builds from there.”

This increased market can be shared by multiple operators in an area, thanks to the FlixBus model.

“It’s the opportunity to enter a business that is diversified from the rest of the business that they’re doing and that’s consistent work for their buses and their drivers,” Kahn said. “We can only do so much. It’s the partners that really deliver the fantastic service and what keep it building.”

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