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'Chinatown bus' picks up speed - by Times Dispatch
2005-05-15
BY DENA SLOAN

TIMES-DISPATCH STAFF WRITER

The picture, hanging in the bus restroom, of a chubby, robed cartoon cat with Chinese characters reminds you that you ain't going Greyhound.

The long white buses seem like any other when they pull in and out of town in the wee hours on their runs between Richmond and New York. Reclining cushioned seats form several rows, and small television screens are fixed to the ceilings.

But upon climbing aboard, it's hard not to notice that many of the passengers, as well as the driver, are of Asian descent.

So-called "Chinatown buses" began shuttling passengers between those sections of major Northeastern cities in the 1990s. But the low-cost carriers have increasingly caught on with non-Asian customers looking for a cheap ride, putting pressure on traditional carriers such as Greyhound Lines.

"This is nice, it's relaxing, it's comfortable. It's more money [to take Greyhound], on top," said Carolyn Peterkin, a Richmond resident who takes the coach, operated by New York-based Today's Bus Inc., when she visits family and friends in her native New York. "I don't take Greyhound no more."

It's a statement that's being heard more and more up and down the East Coast.

Some in the commercial passenger-bus industry have raised questions about the safety of the so-called curbside carriers, some of which pick up and drop off passengers on the street rather than in a traditional terminal. But many of these small startups have withstood recent government regulatory inspections and appear to be making inroads in the market.

An online search for "Chinatown bus" calls up sites for companies running buses between about a dozen East Coast cities. Round-trip tickets between New York and Boston can be had for $30, and for $35 between New York and Washington from companies with names such as Fung Wah Bus and Dragon Coach.

A round-trip ticket between Richmond and New York runs $60 on Today's Bus, typically less than Greyhound or an airplane or train ticket.

Greyhound, the only nationwide provider of intercity bus service, has dropped its rates on some Northeastern lines to match its less-expensive competitors at a time when the bus giant is already struggling financially.

Its parent company, Laidlaw Inc., emerged from bankruptcy protection in 2003 after two years. Standard & Poor's has dropped Greyhound's bonds to junk status.

Though the popularity of the inexpensive carriers poses challenges to Greyhound, some say the curbside companies have produced certain benefits for the bus industry.

"I think that's certainly a positive for the industry to the extent that you have new people riding buses that may not . . . have ridden before," said Peter Pantuso, president of the American Bus Association, the trade association for the intercity bus industry.

But Pantuso isn't totally happy to welcome new members to the bus family. With small companies charging significantly less than the dominant carriers, he questioned how the startups could be making a profit without cutting corners.

It's a matter of doing more with less, according to Jimmy Chen, the president of IvyMedia, a Cambridge, Mass.-based company whose Web site offers tickets on a variety of Chinatown-bus lines.

Because the startups don't operate large terminals and can trim other costs, owners of Chinatown bus companies keep their operating expenses lower.

"Small [businesses], in order to stay alive, they have to do more," Chen said.

And it looks as if these companies could be sticking around for a while, said George Hoffer, a transportation expert at Virginia Commonwealth University.

Hoffer likened the bus situation to conditions in the airline industry in which newer companies, such as AirTran Airways and JetBlue Airways, cause financial headaches for traditional "legacy" carriers such as American Airlines.

Legacy firms pay to maintain a large network, whereas new carriers can cherry-pick the most profitable routes, such as those bus lines in the densely populated Northeast. The fact that so many smaller bus companies have been operational this long indicates they're profitable -- to the detriment of Greyhound, Hoffer said.

But ticket price isn't everything, said Greyhound spokeswoman Kim Plaskett.

The Texas-based company serves more locations, is better able to handle high volumes of customer traffic and offers more departure times. And its tickets are refundable, unlike those of some curbside carriers. (Today's Bus departs Richmond at 1 a.m. seven days a week.)

To help stem the company's financial problems, Greyhound has begun eliminating service along certain unprofitable routes in the Northwest. Similar cuts are in the works for other regions, Plaskett said, in the hopes of boosting profit.

"We certainly have no objection to competition as long as it's on a level playing field, and that includes complying with federal regulations," Plaskett said.

Though they're putting pressure on Greyhound, the Chinatown-bus companies don't necessarily have the perfect business model, according to Hoffer. They are more likely to succeed in larger cities where passengers can connect with extensive public transportation systems, such as those in New York and Washington.

Plus, the curbside carriers themselves are not immune to competition and other problems.

Philadelphia-based New Century Travel Inc. began operating service between Richmond and New York several months ago, to the frustration of Jimmy Chen, the owner of Today's Bus. (He is not related to Chen of IvyMedia.)

New Century's schedule and prices between Richmond and New York are identical to those of Today's Bus, and it picks up and drops off passengers across the street from the Today's Bus office at 106 W. Broad St.

What's more, Today's Bus has recently hit a regulatory snag in Richmond. The bus used to pick up and drop off passengers in the area in front of its Broad Street office. City officials recently told Chen that the space's zoning doesn't allow such activity, so buses have been picking up passengers at a store parking lot a few blocks away.

It's a temporary fix until he completes the purchase of a location with the proper zoning, Chen said, adding that his local manager is renting the lot.

For many trips between her family in Richmond and her college in New York over the past four years, Christi Hallman has taken curbside carriers. She doesn't much like it that the bus's only departure from Richmond is 1 a.m., but it's preferable to flying or taking a train.

"It's a good, cheap way to visit family," she said.