President Obama’s $100-billion high-speed rail plan faces an unexpected threat. It is called the bus.
At least 14 bus companies compete directly with Amtrak’s high-speed trains between Boston and Washington, offering more than a thousand mostly non-stop trips per day each way connecting Boston, New York, Washington, and intermediate cities. Between them, these buses carry far more passengers than Amtrak in the same corridor.
Although they take a little longer than Amtrak, many offer leather seats, free WiFi, and electrical outlets at every seat, all for far lower fares. While Amtrak charges $49 to $169 to ride from Washington to New York, a bus on the same route will cost from $1.50 to $25.
Because they aren’t subsidized, intercity buses are ignored by most policymakers. While the congressionally created Surface Transportation Policy Commission offered many reasons why American taxpayers should subsidize trains, it never mentioned intercity buses. Yet nationally, intercity buses carry at least two and a half times as many passenger miles as Amtrak.
After declining for four decades- partly because of government-subsidized passenger trains- intercity buses were reinvigorated when a Chinese entrepreneur named Pei Lin Liang started carrying passengers between Boston and New York for $25, half of Amtrak’s and Greyhound’s lowest fares. More “Chinatown buses” soon entered the market, leading to a fare war that drove prices down to $10.
This led two companies from Britain – which privatized and deregulated its public transit services in the 1980s – to jump into the market. Megabus (owned by a British company named Stagecoach) is providing 88-seat double-decker buses in the Boston-to-Washington corridor. Bolt Bus (part-owned by Greyhound, which in turn is now owned by another British company called FirstGroup) offers more legroom than ordinary buses. Both carry passengers from New York to Boston or Washington for as little as $1.50.
Intercity bus ridership is now growing by nearly l0% per year, with new lines throughout the Northeast, Midwest, South, and far West – exactly where Obama wants to run high-speed trains.
Obama’s main justification for high-speed rail subsidies is the supposed environmental benefit. Yet without any subsidies, but an incentive to fill as many seats as possible, intercity buses spend only a third as much energy and produce only a third as much pollution per passenger mile as Amtrak. Obama should take a lesson from Britain. Privatizing Amtrak and deregulating transportation will do far more for mobility and environmental quality than throwing money at high-speed rail.