Dale Moser: Megabus president says Orlando fits his company well
Dale Moser, 58, is president and chief operating officer of Coach USA/Megabus.com, based in Paramus, N.J. Megabus is a low-cost express carrier that earlier this month made Orlando its 14th hub nationwide. Offering free Wi-Fi and one-way fares as low as $1, the company books almost all its fares at Megabus.com and operates largely without terminals. Moser recently spoke with staff writer Dan Tracy.
CFB: You are expanding the service. Where?
Before, we went to Atlanta or Gainesville or Jacksonville. Now we’ve expanded. The bus will go from Orlando to Miami, Tallahassee and Tampa, and then to New Orleans with a stop in Mobile, Ala. To and from Orlando there are now five new destinations.
Why Orlando? Why not expand in Tampa or Miami?
This is a good destination. Our business model is driven around focusing on a destination city and then hub-and-spoking to other major cities from that. Where Orlando is located, it creates a good network for us. Orlando is a popular spot. How do you make money on a $1 fare? That’s the $64 million question. The $1 fare is not a promotion. The $1 fare is on every bus, every day, every trip. There is some variable number of those $1 seats on every bus. But after the $1 seats are purchased, they’ll start to ratchet up. It’s just like what discount airlines have been doing for years. ... and we’ve just implemented it into a ground transportation system. When you see a discount airline that markets $29, not every seat on that plane is $29. The earlier you book, the better your probability of getting the $1 seats, the lowerprice seats. The closer to the time of departure, or as the bus fills, then the higher the price will be. The average [price] seems real economical and affordable. But even the top price will always be cheaper than air and/or driving your car, when you take into consideration the price of gas, wear and tear on your car, parking. So $1 is your loss leader? One dollar is your catch point. It really catches your eye.
One way to keep your prices down is to not have a terminal.
It’s not like we do that in every city. We’re happy to be at an intermodal terminal. Sometimes the intermodal terminals are of such age, they are not equipped and can’t handle getting a double-deck bus, which is 13 inches taller than a standard motor coach. They weren’t designed for that. Sometimes that’s the hurdle. In [Washington] D.C., we’re in Union Station. In Boston, we’re in South Station. But granted, using center-city stop locations along the street or in private parking locations keeps our costs down. I don’t have to have bricks and mortar, maintenance to a facility, staff a facility. You can keep your costs down in that aspect, and we book 99 percent of our tickets online. So I don’t need people selling, collecting cash or credit cards and going through all that process at a terminal. All that saves what we see as official overhead and costs, and we can pass that savings on to the consumer.
You were at the Lynx terminal. Now you are at a private parking lot just off Orange Avenue, between Washington and Jefferson streets. Why change?
I think there’s some construction and expansion related to SunRail. We were happy there.
Is there a demographic you are shooting for in your ridership?
The No. 1 demographic is what we call young professionals, 18 to 30, either in college, out of college, in their first job or something. They are looking for affordable transportation that is green. Megabus meets both of those initiatives. The second demographic is 30- to 55-year-old females whowant to travel, don’t really want to fly, are not too keen to drive sometimes because they are driving in cities they are not familiar with. The third is what we call silver surfers — really, that’s retirees. They have flexibility in their schedule. They are on a fixed income. They are really good at finding the $1 seats.