To understand how America will win the future, it helps to keep in mind a little bus company called Fung Wah. Starting in 1998, Fung Wah offered New Yorkers $25 fares from New York’s Chinatown to Boston’s Chinatown. The established bus companies, operating out of big bus terminals closer to the center of town, had grown stodgy and complacent, not to mention expensive. Recent immigrants, college kids and assorted other penny-pinchers embraced Fung Wah in large numbers, and soon a slew of competitors started springing up. A ferocious price war sparked tit-for-tat violence, and established players like Greyhound saw their opportunity to swoop in and offer cheap curbside service of their own. In 2008, 10 years after Fung Wah opened its doors, Greyhound and Peter Pan launched BoltBus, a hipper, high-tech alternative to travelling Chinatown-style.
And there you have it: The grubby, messy, inspiring story of capitalism in a nutshell. In the space of a decade, ethnic entrepreneurs had carved out a profitable new niche, and then deep-pocketed corporate types came in and perfected the model. As Ben Austen reports in Bloomberg BusinessWeek, coach travel has been transformed by players like Megabus and BoltBus, which promise free Wi-Fi, working power outlets, a smooth ride, and absolutely no Chinatown-style gangland violence. This new wave of companies offers clever pricing gimmicks, including $1 tickets for those who book far enough in advance. They have also made it easier for countless 20-somethings to maintain long-distance relationships. As unromantic as it sounds, a cheap round-trip ticket can make all the difference.
What is even more impressive is that these nimble bus companies are starting to pose some competition to heavily subsidized Amtrak and the airlines, thanks to the combination of ultra-cheap fares, low-cost creature comforts and decent customer service. Curbside bus service is growing at an explosive rate, and it has plenty of room to grow.
Now compare the extraordinary, bottom-up success of Megabus and BoltBus with Washington’s plans for high-speed rail. The federal government pledged $2.4 billion out of an almost certainly lowball estimate of $2.6 billion in construction costs to build a sleek, super-fast train from Tampa to Orlando, Fla. Keep in mind that once you took this train of the future, you’d have no way to actually get around either city without renting a car. And, of course, you could have traveled between the two cities in your rental car in about as much time as it took you on the train. Thankfully, the governor of Florida killed the project, perhaps because he knew it would be an embarrassing white elephant.
There are, of course, other routes where high-speed rail might make more sense, but the mentality behind the Tampa-to-Orlando line tells you everything you need to know about top-down plans for growth hatched in D.C. One of the main reasons the federal government backed the Tampa-to-Orlando boondoggle was that it could be completed quickly — so quickly that it would be photo-op-ready before the 2012 election — and central Florida is jam-packed with swing voters.
Megabus and BoltBus and Fung Wah can’t afford to spend billions of dollars on routes to nowhere. According to Austen, Megabus does $100 million in business annually, a rounding error as far as the federal government is concerned. These companies need to choose routes that people will actually use, because failure to do so could mean going out of business. And as ridership increases and decreases, these companies can adjust in real time, shifting coaches from one route to another.
Granted, a Fung Wah future isn’t exactly glamorous. When it comes to raw sex appeal, a sleek train will beat a double-decker bus every time. But as the British environmentalist George Monbiot has argued, coach travel is far better for the environment than high-speed rail. Once we factor in the carbon emissions involved in building new tracks and rolling stock, high-speed rail looks almost as bad as flying. Intercity coach travel, in contrast, is taking thousands of cars off the road every year, and that number will only increase as gas prices continue to climb. We could make coach travel even more efficient. If the Megabuses of the world had more political muscle, perhaps they could secure dedicated lanes on major highways that would allow them to zoom past traffic. Perhaps they could also get taxpayers to buy them a pony. The point is that coach travel doesn’t depend on taxpayer handouts. All these companies need is a reasonably level playing field.
If you listen to President Obama, you’d get the distinct impression that it is the government that is going to get the American economy moving again, by making huge public investments in projects like the Tampa-to-Orlando train and other marvels of the modern age. In truth, it is nameless entrepreneurs like the Chinatown founders of Fung Wah who will get us where we need to go. The most important thing government can do is to live within its means.
And there you have it: The grubby, messy, inspiring story of capitalism in a nutshell. In the space of a decade, ethnic entrepreneurs had carved out a profitable new niche, and then deep-pocketed corporate types came in and perfected the model. As Ben Austen reports in Bloomberg BusinessWeek, coach travel has been transformed by players like Megabus and BoltBus, which promise free Wi-Fi, working power outlets, a smooth ride, and absolutely no Chinatown-style gangland violence. This new wave of companies offers clever pricing gimmicks, including $1 tickets for those who book far enough in advance. They have also made it easier for countless 20-somethings to maintain long-distance relationships. As unromantic as it sounds, a cheap round-trip ticket can make all the difference.
What is even more impressive is that these nimble bus companies are starting to pose some competition to heavily subsidized Amtrak and the airlines, thanks to the combination of ultra-cheap fares, low-cost creature comforts and decent customer service. Curbside bus service is growing at an explosive rate, and it has plenty of room to grow.
Now compare the extraordinary, bottom-up success of Megabus and BoltBus with Washington’s plans for high-speed rail. The federal government pledged $2.4 billion out of an almost certainly lowball estimate of $2.6 billion in construction costs to build a sleek, super-fast train from Tampa to Orlando, Fla. Keep in mind that once you took this train of the future, you’d have no way to actually get around either city without renting a car. And, of course, you could have traveled between the two cities in your rental car in about as much time as it took you on the train. Thankfully, the governor of Florida killed the project, perhaps because he knew it would be an embarrassing white elephant.
There are, of course, other routes where high-speed rail might make more sense, but the mentality behind the Tampa-to-Orlando line tells you everything you need to know about top-down plans for growth hatched in D.C. One of the main reasons the federal government backed the Tampa-to-Orlando boondoggle was that it could be completed quickly — so quickly that it would be photo-op-ready before the 2012 election — and central Florida is jam-packed with swing voters.
Megabus and BoltBus and Fung Wah can’t afford to spend billions of dollars on routes to nowhere. According to Austen, Megabus does $100 million in business annually, a rounding error as far as the federal government is concerned. These companies need to choose routes that people will actually use, because failure to do so could mean going out of business. And as ridership increases and decreases, these companies can adjust in real time, shifting coaches from one route to another.
Granted, a Fung Wah future isn’t exactly glamorous. When it comes to raw sex appeal, a sleek train will beat a double-decker bus every time. But as the British environmentalist George Monbiot has argued, coach travel is far better for the environment than high-speed rail. Once we factor in the carbon emissions involved in building new tracks and rolling stock, high-speed rail looks almost as bad as flying. Intercity coach travel, in contrast, is taking thousands of cars off the road every year, and that number will only increase as gas prices continue to climb. We could make coach travel even more efficient. If the Megabuses of the world had more political muscle, perhaps they could secure dedicated lanes on major highways that would allow them to zoom past traffic. Perhaps they could also get taxpayers to buy them a pony. The point is that coach travel doesn’t depend on taxpayer handouts. All these companies need is a reasonably level playing field.
If you listen to President Obama, you’d get the distinct impression that it is the government that is going to get the American economy moving again, by making huge public investments in projects like the Tampa-to-Orlando train and other marvels of the modern age. In truth, it is nameless entrepreneurs like the Chinatown founders of Fung Wah who will get us where we need to go. The most important thing government can do is to live within its means.
