10 things to know about FlixBus

Go to Europe, and you’ll see the bright green FlixBus nearly everywhere. In five years, this German tech start-up has built a network across the continent. After years of studying the U.S. market, FlixBus set up shop on the West Coast this summer, with plans to build a network in this country. Financed by private equity firms, FlixBus turned a profit in 2016. With a vision for expanding beyond bus transportation, the parent company changed its name to FlixMobility in 2016.

Here are 10 things to know about this fast-growing company and transportation industry disrupter that has set its sights on the U.S. market and is eager to partner with bus operators here. This information is based on responses that UMA received from the company to more than a dozen questions.

1. History

The millennial-age founders of FlixBus are co-CEOs Andre Schwämmlein and Jochen Engert, and Daniel Krauss, the company’s technology chief. It launched in Germany in 2013, taking advantage of the country opening up its coach market to competition. Previously, regulations blocked operators from scheduled intercity routes to protect state-run, subsidized railways. With an increasing number of participating bus companies, more routes and reduced fares, FlixBus quickly dominated the German market without owning a single bus. Its investment has focused instead on building a technology network.

2. Geography

FlixBus currently has 40 destinations across California, Nevada and Arizona. A second launch in July doubled the U.S. network, expanding routes into central and northern California. FlixBus also is speaking with potential partners in other regions. The company expects to have more than 1,000 daily connections by the end of 2018.

 3. Partners

The company partners with 300 bus companies — mostly small, family owned businesses — in 28 countries across Europe and the U.S. These partners operate anywhere from two to 13 buses, each running daily service with scheduled breaks for maintenance and washing to ensure the safest and cleanest fleet in the industry.

 4. Revenue sharing

FlixBus takes 25 percent of revenues for its services, according to news reports. The company’s agreements with bus partners vary, depending on cities served and the demand within specific regions.

5. Pricing model

FlixBus says it can offer lower prices than competitors and still turn a profit by dividing the costs more efficiently. It’s a dynamic pricing model that raises and lowers prices based on timing and demand.

6. Driver perks

A plan to update the FlixBus app so riders can tip drivers is in the works, although the company declined to say when it will be released.

 7. Exceeding expectations

FlixBus says its U.S. launch exceeded expectations, with a number of routes booking at higher-than-average capacities, even from the first week of service. The company’s round-trip connection from LA to Vegas, for example, began at 80 percent capacity, which is its best launch to date.

8. Early ridership

The company’s research concluded there is demand in the U.S. for a new way to travel. FlixBus acknowledges there is some work to be done in changing the perception of long-distance bus travel, but early ridership shows people who typically don’t travel by bus are using the service.

9. Biggest competitors

FlixBus says it competes with every form of mobility in the U.S. — buses, trains, planes and cars — but its biggest competitor is the personal car, because most Americans choose to drive, even on long trips. Their goal is to show people that they can let someone else drive for them while they work, relax or even watch movies.

10. Demographics

In general, millennials are early adopters of this new means of travel, which also has been the case in the U.S. In Europe, university students and young professionals were the first to utilize FlixBus, but ridership has grown to include business professionals who travel between cities for work, older individuals as part of group trips and families for holiday travels.

Share this post