Fung Wah Is Getting Stuck In Low-Cost Bus Traffic Jam

Rising gas prices are proving to be a boon for New York City's increasingly competitive intercity bus industry.

While Chinatown's Fung Wah Bus has traditionally beat out its main competitor, Greyhound Lines, by offering similar routes for lower fares, an increase in demand and the sparse amenities offered by Fung Wah have opened the doors to alternatives.

Among the newest low-cost competitors are BoltBus, which is a Greyhound-Peter Pan Bus Lines joint venture, and Megabus, owned by Coach USA. Both services offer similar prices to Fung Wah, ranging between $12 and $18 each way and offering at least one $1 seat a bus, as well as free wireless Internet access.

"I believe the bus market as a whole will grow," an economist at New York University, Karl Storchmann, said. "The cake will be bigger — this is not only due to the fact that gas prices are higher but also because real incomes will shrink or stagnate."

While Fung Wah travels between New York and Boston, the new companies also travel to Philadelphia, Washington, D.C., and, in Megabus's case, Buffalo, Atlantic City, and Baltimore.

Megabus offers "extraordinary value for the money," the company's chief executive, Dale Moser, said. "With gasoline at $4 a gallon, airline fares increasing every month because of jet fuel increases, and the economy in a tough time, this is the one transportation value that isn't dipping into people's pockets."

A BoltBus spokeswoman, Abby Wambaugh, said Greyhound and Peter Pan launched the service because there was a need "for a low-cost express service that was safe and had a unique set of amenities."

Ms. Wambaugh added that BoltBus competes with Fung Wah in price because its online ticket purchasing system and its curbside service lowers its maintenance and human resources costs. Furthermore, she said, Greyhound's contracts with fuel companies allow BoltBus to buy diesel fuel at reduced prices.

Mr. Moser said Megabus uses similar methods to cut costs, in addition to limiting its service to popular destinations such as Boston, thereby saving on gas and avoiding costly, low-passenger routes.

While Fung Wah employees declined to comment, a company consultant who requested anonymity said it was not cutting any staff and hadn't seen any change in demand as a result of the increased competition. The consultant said the company receives 5,000 hits a day on its Web site, and "on July 4th, we filled every single bus."

Some officials said the popularity of buses is only temporary. "There's clearly more players in the industry serving these routes than can be sustained," the president of the Economic Development Research Group in Boston, Glen Weisbrod, said. "They're trying to see which can outlast each other, because no one can make money on the low fares they have now."

A student at Wellesley College, Yael Misrahi, said prices and safety concerns led her to the newer bus companies. She said she's been warned against Fung Wah "by many people and told it was unsafe. I heard the bus drivers are not certified and that the buses are old and uninsured. That's why I would never take it ... on the other hand, I feel very safe on the Megabus."

Meanwhile, Nicolas Depauw of Boston said he switched "because the Fung Wah is expensive now. ... I only paid $23 to go round trip from D.C. to Boston" with Megabus.

Mr. Weisbrod said the competition will eventually come to a head. "They are playing out this battle, and no one expects, when the smoke clears in two years, for there to be as many companies as there are now," he said. The competition is "a windfall for customers."