FlixMobility Acquires Greyhound to Expand U.S. Intercity Bus Services | Hacker News Reader

FlixMobility Acquires Greyhound to Expand U.S. Intercity Bus Services

corporate.flixbus.com

121 pointsdoener89 comments

That makes sense. and fits FlixBus history of growing through acquisitions. Not working for them anymore, but I still route for them. They treat employees well, as well as any large employer, treat their partners (those companies operating the buses) reasonably well and actually do add value through their way better booking system.

Fun fact, the actual operations come from one of their earlier acquisitions, MeinFernbus, and are still based in Berlin (last time I checked) and not the Headquarters in Munich.

Do you root for them or route for them? Not trying to fix potential typo, I am just curious what does it mean to “route” for a bus company.

From context, I'd say the GP is specifically rooting for this company (to do well.)

For the sake of the scenario, though, I'd imagine routing for a (transportation) company would involve logistics and timetables over a map.

Even when I worked there I didn't do the routing. Now I still root for them. Auto-Correct is a blessing sometimes!

They might be great for employees, but have a terrible reputation among customers atleast in Europe.

Most common issues seems to be staff often not enforcing/honouring seat reservations, the company refusing to implement a tag/validation system for hold luggage (allowing rampant theft) as well as bad on time performance + frequent last minute cancellations

> Most common issues seems to be staff often not enforcing/honouring seat reservations

My understanding is they don't actually have any staff on the bus, they are a booking system and branding provider for smaller bus operators. There are some small exceptions where providing bus services requires actually operating a bus in a given country but they only do the bare minimum there.

Those are all implementation details that a passenger doesn't care about. Seat reservations aren't honoured. That has little to do with the ownership structure. You're getting on a big green bus with a huge Flixbus logo on the side, of course it's Flixbus's fault if things are wrong.

True to a degree but in the end you get what you pay for. If you want a more standardized experience, take an IC bus, or the train. Just like an Uber. Compared to Uber I agree the aggressive branding of the busses is misleading though.

Who do I give my money to? If I give my money to <company X> for something, and that something is wrong in some way, then it is the responsibility of <company X> to resolve the problem. Period, full stop. If <company Y> is actually at fault, then <company X> is responsible for dealing with <company Y> to resolve the situation.

Do you have the same opinion when you buy a flight on Expedia?

I don't use Expedia, but if I paid my money to them, then yes. If you, as a company, take my money in exchange for something, then that something is your responsibility to make right.

That seems like a pretty extreme position to me, I guess we just have different standards for these kinds of providers then.

If I go into Best Buy and buy a hard drive (I don't, but play along) and I get home and it doesn't work because of a broken connector... I bring it back to Best Buy and have them replace it for a new one. Best Buy sold it to me, I paid them for it, it's their responsibility to resolve any problems.

If it's 6 months later and the drive starts to fail, I'm in warranty territory at that point. For this case, I go to the manufacturer. So I guess there's some grey area.

If I buy a flight on Expedia (I wouldn't but that's beside the point), do I get on a plane that says "Expedia" on the side of it? I've never heard of FlixBus, but it seems like the answer would be yes in their case, which is a very relevant difference IMO.

A price comparison website is different to a company subcontracting services. Expedia don't represent themselves as the supplier, Flixbus apparently does.

Shitty customer service might have flown in Germany (I live in Berlin now, ask me how garbage most retailers at treating their customers, it's bad) but it won't win them much in teh way of goodwill or customers in the US which typically has a better track when it comes to customer service. So there's hope that this might change in the future.

Not sure greyhound was/is the paragon of customer service though either.

Greyhound has terrible customer service [0]. I’ve heard many reports of lost baggage, the bus being delayed by up to 12 hours, and staff not answering questions.

[0]: https://www.bbb.org/us/tx/dallas/profile/bus-lines/greyhound...

Have you ever been in a Greyhound terminal, never mind having traveled via Greyhound bus? The worst customer service on the continent of Europe would be a vast improvement on the squalid unhygienic condition of literally everything owned or leased by Greyhound, not to mention the eagerness to cancel trips so that passengers unexpectedly have to layover 13 hours in e.g. downtown Indianapolis in such condition.

Jerry: I don't understand. Do you have my reservation?

Rental Car Agent: We have your reservation, we just ran out of cars.

Jerry: But the reservation keeps the car here. That's why you have the reservation.

Rental Car Agent: I think I know why we have reservations.

Jerry: I don't think you do. You see, you know how to take the reservation, you just don't know how to hold the reservation. And that's really the most important part of the reservation: the holding. Anybody can just take them.

U-Haul does this too, maybe it's sector-wide. Anecdotally, they appear to have no equipment reserve. If, at crunch time at the end of the month, a rental customer does not return the vehicle at a scheduled time then that means a previously issued 'reservation' isn't going to be honored, at least not at that place and time. They'll try to upgrade to a larger truck if available, or try to send you 50 miles away chasing another truck of the same size (which often isn't actually there) or they'll try to incent you via a heavy discount to rent the same truck 1-2 days later when it's finally available - just know that a reservation is an entirely notional construct to them.

How would you build a better system in an industry with tight margins? They are at the whim of the person with the vehicle to return it on time.

Outside of regulation which requires companies to actually hold the reservations, and keep a certain number of reserve vehicles on standby it's not gonna happen because customers will not pay the increased prices that such a company would need to charge. Effectively, the entire system is stuck in a local maximum that is much lower than the global maximum.

One possibility is to simply charge an optional premium price to actually hold a reservation, but I suspect the premium would probably be too high for anyone to really take up and would simply lead to a lot of bad press.

You kinda get what you pay for, or more, actually. It may be crammed and slow, but there are some overnight routes just not comparable with train offerings.

> They might be great for employees, but have a terrible reputation among customers atleast in Europe.

This is the first time I hear about it. My personal experience was that it got a bit worse over the years, but still not as bad as Deutsche Bahn and the likes.

I had to use flixbus once when I was traveling to france and the train system was on strike (again)

I had such a shitty experience. A “direct” bus making stopover in every major city in between at rush hour, giving us completely different seats than what we booked, bus was late to arrive at pickup point, no indications about where to actually wait for the bus, late to arrive… never ever again will I take a flixbus.

Took them regularly here in NL for a few months pre-Covid and I thought they were pretty great. Much better and faster than the national railway (even their intercity trains stop every 25km).

> They treat employees well

Are you including drivers in that?

Honestly, from what I've seen, I would go out on a limb and say yes. At least not any worse than other bus or truck companies. After all, the buses are operated by third parties and those are employing the drivers. Back the day FlixBus had a policy of having two drivers on long rides and those over night, even when that wasn't a legal requirement. Not sure if that is still the case or not.

treat their partners (those companies operating the buses)

So this is just Uber for buses.

In Greyhound's good years, they not only owned the buses, they had them custom-designed and built.[1]

[1] https://www.hemmings.com/stories/article/greyhound-scenicrui...

Well, FlixBus is not using freelancers or ignoring existing regulations around their business. So not the traditional gig economy pseudo-tech company.

>> Greyhound currently connects approximately 2,400 destinations across North America with nearly 16 million passengers each year.

"Across north America" is a stretch considering their recent abandonment of about 1/2 of the continent.

https://www.cbc.ca/news/business/greyhound-canada-1.6025276

"Company will no longer offer domestic service, but U.S. affiliate will still offer cross-border routes"

Given the development of FlixBus / MeinFernbus over the past 10 years here in Germany, I would expect them to massively expand the network very quickly.

There was an interview with one of the founders, André Schwämmlein, in the FAZ a few weeks ago in which he talked about his vision for the US to become the biggest market for them [0].

Google translate version:

> FAZ: In the US, greyhound has been synonymous with intercity buses for a century. Should the Americans think of the green Flix logo instead of a greyhound when it comes to bus transport?

[...]

> Schwämmlein: We are now bringing a lot of young people to the bus, for whom traveling by bus was not an option before. However, the image of many providers in the USA is not where it should be. We want to show people that the bus is an attractive alternative to the car. It WILL, of course, take a long time to grow in, given the size of the country. But our ambition is to see FlixBuses in Hollywood films at some point.

> FAZ: And in the sparsely populated Midwest?

> Schwämmlein: There is certainly still potential for the future. In the core relations in particular, we already aim to be the market leader in the near future.

> FAZ: What do you do differently than the established providers?

> Schwämmlein: It's about customer orientation in connections and stops. In L.A., most providers have one, two, or three stops - we have ten and we stop at universities, for example. Or in Vegas on the Strip and again in Downtown. We think of networks differently - not in terms of operation, but rather on the basis of the customer. If people want to drive from L.A. to Vegas on Friday afternoons to party, then the timetable has to map that with more trips instead of driving every hour all week when demand is significantly lower. The passenger determines the timetable.

> FAZ: Will America one day become the biggest market for FlixBus?

> Schwämmlein: It is very clear that this will happen within the next few years. In terms of potential, it can even be expected that it will be as big as all of Europe.

[0] https://www.faz.net/aktuell/wirtschaft/unternehmen/flixbus-c...

i wish they do to public transportion what t-mobile did to cell carriers in the US!!

The big problem with public transit is that since customers are sharing the same space, an excessively high ratio of customers that drive other customers away will make the business go into a downward spiral.

It is particularly rough because there is almost no reason (outside a few large, dense cities) to take a bus if you already have a car in the US. The marginal cost of driving a mile is so low and the convenience of having your own vehicle so high, that buses are relegated mostly to people that do not have access to cars.

It can even be hard flying on weekends when the planes are full of non-business passengers- things move much more smoothly when everyone is just used to the grind.

I think he's on to something. Lots of young people in the U.S. don't want to drive. They are less motivated than my generation was, because more of their social life can be remote, and cars now carry a lot of stigma as well. Their generation are going to spend a lot less on personally owned automobiles and a lot more on other forms of transportation.

It's not that they don't want to drive. Tesla as a brand has plenty of cachet with the Millennial and Gen Z demographics. It's that cars are expensive to obtain and drive. In both and nominal and real dollars, cars and car insurance have gotten expensive (even pre-pandemic) to the point that buying one is no longer a good deal unless you have no other mode of transportation.

Not to mention that in places like SF they're kind of a liability. Protected parking is expensive, on the street they're likely to get broken into. In some parts of San Jose, you would also just have a hard time finding street parking that's not a half-mile away from your home.

> for an enterprise value on a debt-free / cash-free basis of c.$46m plus unconditional deferred consideration of $32m with an interest rate of 5% per annum

In SV terms that's what? A round B series?

Sure, maybe the debts are substantial, but that seems like it was cheap.

Unlike a railroad, there isn't much in terms of assets in a bus service sans the paper value of the brand itself and (where applicable) route licenses. Old buses are long-since written off, new buses are usually leased.

Further driving down the value (which does seem to be cheap given that GH made 54M profit out of 914M revenue) are long-term obligations: lease agreements that may be expensive to break, employment contracts for the drivers and operating costs (fuel, road tolls) that have to be paid even if a bus line isn't operating at capacity (or, as with corona crisis, at all).

Fuel and road tolls don’t have to be paid if the bus line isn’t operating at all.

I need to add that virtually no railroad operating companies own any railroads in Europe - even the private operators use public infrastructure. That is the case for Flixmobility’s Flixtrain as well.

DB is owning all German railroads. They operate the vast majority of trains. They do share their network with competitors, e.g. FlixTrain. Not sure, but I do think SNCF in France is also owning French railroads.

It probably is cheap, but one would have to sustain the network until the pandemic eases.

Greyhound seems like the kind of iconic US company that would pique the interest of Berkshire Hathaway -- it is telling that BH didn't pick it up.

Hasn't been American in a while, though. It's been British owned for at least a decade before this recent purchase.

Greyhound absolutely fails most of Berkshire's criteria, and the size of the deal ($78 million) is well under the deal size Berkshire is looking for.

As for being "iconic", I'm not sure "iconic" is the word I'd use to describe Greyhound. It has a reputation for sure, but not a good one.

FWIW, my instantaneous reaction on seeing the title of this post was "wait, isn't Greyhound a special entity designated by US govt, like Amtrak or the USPS?".

I knew it couldn't be correct after half a second of reflection, but it's a measure of how "iconic" Greyhound is.

Also, they have big real estate (often in beautiful old buildings) in the center of the big cities, and their branding is red white & blue.

It seems likely that they don't own the real estate, and maybe the cities own the bus stations which only appear to be operated by Greyhound. I have only been inside about half a dozen bus stations though.

I think the opportunity for these bus services is in the 1.5-3hr window, like the SF->Sacramento route [1]. Anything shorter or longer than that, people who own a car are likely to drive, or fly.

They will also need to upgrade/modernize the Greyhound buses if they want to attract the climate-change-concerned crowd.

Unfortunately, intercity buses in the US have been culturally stigmatized and associated with poverty. They need to increase appeal to a broader swath of the population while still providing an economical service for intercity transportation.

Electrification is one way - the novelty of an electric intercity bus would get me to take it - but they will need to sell comfort and convenience too.

How they will do this without raising prices is the tricky question, as it will require a fair amount of capital to make these upgrades.

Ironically, in other countries like Germany (Flixbus) and even developing countries like Mexico [2], decent and broadly utilized intercity bus services exist.

1. https://shop.flixbus.com/search?departureCity=65e6af81-18ec-...

2. https://www.mexperience.com/bus-travel-in-mexico/

Their vision for attracting new riders in the US reminds me of MegaBus. I was a big fan of MegaBus when I was in college--they stopped at universities, and had clean buses with wifi (supposedly, it never worked), and low fares. I took many a $30 weekend trip to Chicago.

I don't know what happened to them, I think they cut a lot of routes.

I live in Austin and took a Megabus to Houston last year. It was exactly the experience I had in college 16 years ago which was identical to what you described here.

Wifi on buses has never made sense to me. It just can't work. It's too technical. Connecting dozens of clients with competing streams over a very narrow and lossy channel simply is beyond the capabilities of all but a very small subset of network engineers, none of whom are working on wifi for buses. Tethering your own mobile to your laptop always works better.

Do you doubt the capability of wifi to serve fifty passengers, or the capability of the mobile uplink to the cell network? Neither of these strikes me as beyond the capability of readily available hardware.

Besides which, on the Greyhound buses I've ridden, most passengers were too busy sleeping, attempting to stay seated given the terrible buffeting of USA-standard interstate highways and bouncy Greyhound suspension, or being too poor to afford a device, to contribute much congestion to the WLAN.

Fairness in the presence of congestion is a difficult problem and just slapping some single-board computer with two network interfaces in between wifi and cellular isn't going to work. I don't doubt the ability of wifi to deal with a few dozen stations on the air.

I've been on buses (and trains, and airplanes) where the wifi worked, in that I was able to read email and browse the web. It's probably OK if not everyone is streaming 8K video the whole trip? Like many other engineering tasks, the answer may just be to massively over-specify each component.

So apparently what Germany is great does not seem to be engineering but logistics, when you look at its successful startups: Zalando, HelloFresh, Delivery Hero, FlixBus.

As German, professional logistician this is the first time I hear someone say that!

On a serious note, so, German organizations seem to be not too bad at it. Once the organization actually treats logistics seriously and not some necessary evil at best.

The ground transportation version of Ryanair.

Nah, FlixBus is actually pretty good.

I used them a lot when travelling in the US and EU, though I will say that they're a lot better at serving the EU.

I once had a really unfortunate situation between SF and LA where I waited for 5hrs for a bus that never showed up. Another driver took pity on us so we got there, but I'm not sure exactly what happened.

I think the comparison is not too far off really. You get the minimum amount of service while the maximum amount of seats is crammed into buses. At least that was my experience with FlixBus. I only use their services when I absolutely have to. I seem to remember that it was much more pleasant before they bought all the competitors.

I agree, Flixbus goes for minimal service at minimal price, just like Ryanair. Space is cramped, the on-board toilet isn't guaranteed to work, but if you don't have to transfer it beats every other method of transport on price.

More like the bus version of Uber, they don't own the buses (well, since they've just bought Greyhound, maybe they do now) but instead rely on "partner" companies to own, maintain and drive the buses.

Interesting. In India, there is a similar bus company called IntrCity which partners with other bus owning and operating companies and just apply their name to the service.

In Germany they have buses labeled with flixbus logos. It didn’t seem like partnerships.

Perhaps partners are how they established a foothold in America?

> In Germany they have buses labeled with flixbus logos. It didn’t seem like partnerships.

Take a careful look at the front side of the bus, driver side, and the front door. There will be the logo of the partner operating the route.

Flixbus and the various companies they bought up over the years requires the partners to decorate their buses in the Flixbus CI (green/orange + logo). Exceptions apply for peak-capacity / spare buses, these however have to be decorated with a magnetically attachable Flixbus logo if in service for Flixbus.

The buses with the logos are the partners, they are not owned by them.

Amazingly there are bus-sized vehicle wraps: https://www.wrapstation.it/project/flixbus/

If you have your journeys saved on the mobile app, they also say "Operated by [partner name]".

Is this amazing?

It's not unusual to see an all-bus (or all-train) wrap with advertising, or the logo of the bus (or train) company.

They're all operated by partners. Flixbus only owns a single bus they use for PR purposes.

True, they own one bus and employ one bus driver. Not for PR, but to fulfill legal requirements to be allowed to run a vast network to transport people (as opposed to goods, freight forwarders have no such requirement). Not that the owned and employed driver where ever used on an actual route, at least not to my knowledge.

That is one of the differences between Uber and FlixBus, the latter actually respects regulations. They doing so in creative ways, but they don't ignore them.

As others said, all bus partners. That’s also one reason why they could survive the pandemic relatively unscathed. They could scale down their networks pretty well and pretty quickly, for a long time down to zero.

Sucks for the bus partners, but FlixBus didn’t even have any layoffs, at least not in Germany.

(Inside info, I can tell you that FlixBus has been mighty proud of their ability to scale up and down their networks during the pandemic and at least the internally communicated credo has always been that while this is all hard and challenging they might even leave the pandemic strengthened and in stronger position than their competitors, something this acquisition also hints at.)

Eh, I wouldn't say that. They're similar in that they're low cost and were very early to embrace internet booking and such, but the quality of the product is quite good IME (whereas Ryanair is generally a considerably worse experience than legacy carriers, FlixBus is as good as or better than any legacy intercity bus networks I've used).

They also seem low on Ryanair arseholery; booking a Ryanair flight, you get the strong impression that Ryanair's business isn't actually flights, but selling extras and collecting fees when the traveler makes mistakes (someone who shows up for their 5 euro flight to London with a slightly oversized bag and having forgotten to print their boarding pass is likely to be paying an extra 50 euro or so, say).

Funny anecdote, last time I took FlixBus out of London (Victoria Coach Station looked like shit btw, wtf happened), they charged me and a few other people extra for "overweight" bags.

Mine were definitely not overweight, I checked them myself. Paid cash in hand - straight into the driver's pocket, I'm guessing.

But I see now that the buses are run by independent companies, so that explains a few things.

Still very cheap :D

Huh. Do they even have facilities to weigh the bags?

But yeah, they might well be more regionally variable than Ryanair.

The original low-cost airline was Southwest Airlines, their business model was copied by EasyJet in Europe, it isn't necessary to be an asshole like Ryanair to be successful.

Well, other than race to the bottom. My understanding is that Southwest is no longer considered especially low cost. And, honestly, I only ever flew them because they were convenient for a couple short city pairs I flew at one time, not because I otherwise liked flying them.

The original low-cost airline was Laker Airways in the UK.

https://www.latimes.com/archives/la-xpm-2006-feb-11-me-laker...

Anyone know the origin of the name FlixBus? My completely uninformed wild guess was that when the company was starting, they borrowed the “flix” from Netflix as a shorthand for “tech savvy company” without caring too much about the actual English slang meaning.

Since it's a German company, it might be one of the "fake" English words Germans like to come up with. Another examples: "Handy" for a smartphone or "Beamer" for a video projector. These are the most used names for these appliances.

Flixbus basically destroyed other competitors by driving the prices down to extreme levels. Once their competitors were gone, their raised the prices. Example: Postbus.

It’s a German company and “flix” is local slang for quick

local to where? there is "fix" and "flink" which both mean quick, so it could be a portmanteau.

Ugh. Flixbus is a cancer on European public transit. They ignore laws they don't like and compete unfairly.

Flixbus is Uber for busses, and that's not a compliment.

That also feels like regression, environmentally.

We have very good train systems in a lot of European countries. These trains run on electricity (which is mostly nuclear as I understand it), so very low emissions and cost effective.

But instead, let’s promote buses which are slow, polluting, noisy, add to road congestion… still a step better than the individual car but not when trains could be a viable alternative.

Still an improvement in USA. We are poorly served by passenger trains.

tough to write this press release without too much mention of the pandemic and its effect on the service (basically killing it in places like Canada). They claim in the US it helped during the pandemic but it's got to be only by a very thin thread holding on

My last trip on the greyhound was actually on a flixbus. One without AC, in the desert, in the summer. They thought the AC would magically start working once they left Vegas and we had to wait around for something like 3 hours before a replacement bus showed up.

Fun times all around, highly recommend…

Opinions on FlixBus clearly vary but as a .uk person who used to take buses a lot First Group are far from well loved here so this is probably at worst still not actually a downgrade in terms of ownership.

I hope we'll eventually get autonomous minibusses in US cities, operated privately. Tesla FSD is already suitable, maybe with remote human operator takeover for the 0.1% of exceptional conditions.

One of the problems of public transport is that the clientele is not exclusive enough, and the routes do not automatically align to the pickup and dropoff points of the passengers. A private members-only service with an app would solve this.

So you're proposing a limo service basically?

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