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A Big Bus Battle--Time Magazine

A Big Bus Battle
Chinese-owned firms in New York City and Boston offer a vivid lesson in the perils of discount transport

The Chinatown bus business in New York City is a rough-and-tumble one, featuring supercheap fares along the Eastern seaboard, erratic schedules and cutthroat competition. But it got out of hand one night in May 2003. In the shadow of the Manhattan Bridge, a Dragon Coach bus company driver named De Jian Chen, reportedly caught in the middle of a murky feud with another outfit, was shot dead.

Things have calmed down since the killing, as Chinatown buses have begun to professionalize their services. But traveling on the discount lines can still be harrowing. In front of the red-walled Mahayana Buddhist Temple, Chinese immigrant workers, college students and tourists are lining up for $15 tickets to Boston. A bus rolls up and fills up in a matter of seconds--leaving 20 passengers stranded. The Chinese ticket taker struggles to explain to the frustrated customers, "No seat, no seat." Finally, the bus driver relents and allows another person to squeeze on, just before it pulls out into traffic.

One entrepreneur thinks the discount bus industry can do a lot better. David Wong, a native of Nanjing, China, is literally taking the Chinatown out of his company. Instead of operating in traffic-clogged Chinatown, Wong chose Penn Station, a major Manhattan transportation hub, as the base for his Eastern Travel & Tour Inc. More important, inspired by David Neeleman, whose JetBlue shook up the airline industry, Wong hopes to remake the bus-trip experience into a paragon of customer service. Wong and his four partners, one Spanish and the rest Chinese, are emphasizing service. "I don't want to copy from Greyhound," says Wong, who earned his M.B.A. from Indiana State University's business school. "My model is JetBlue."

The Eastern Travel bus stop outside Penn Station already offers one convenience virtually unknown in Chinatown: a sign. The neatly dressed driver, speaking good English, politely collects the tickets. On a recent afternoon, the 61-seat bus is only a third full, but the driver closes the door and heads off on the four-hour trip to Washington on time at 5:30 p.m. sharp--even though Wong says he needs 30 passengers to break even. "If you do not know how to take care of customers," Wong says, "in the long run, you will never succeed."

As they improve service, the 40-odd Chinatown bus companies are becoming a growing threat to Greyhound Lines Inc. along Eastern seaboard routes. Greyhound has been shrinking its national network because of a string of financial problems. "We have no objection to competition as long as it is on a level playing field," says Kim Plaskett, director of corporate communications at Greyhound, which now offers a special online ticket rate of $18 on its New York City--Boston route, vs. the normal $35 fare.

Wong and his partners, meanwhile, have big plans. Wong, who used to run tours in New York City geared to vacationers from China, says sales will be about $3 million this year. He hopes to draw on his contacts back home for capital to expand. Eastern Travel is looking to break into the more profitable New York City-to- Boston corridor. Wong will need all the help he can get to outlast the wave of consolidation that may soon shake the industry. His competitors are already moving upmarket. Some of the family-owned Chinatown companies have brought in professional managers to expand, and Boston's Chinatown bus lines recently grabbed space at Boston's South Station. The shooting may have stopped, but not the fight for business.