Flixbus

FlixBus
Private
Industry Transport, Travel, Travel technology
Founded 2011
Founders Daniel Krauss, Jochen Engert, André Schwämmlein
Headquarters Munich, Berlin
Area served
 Europe
Key people
 Panya Putsathit (CEO)
Services Intercity bus service
Subsidiaries Paris, Milan
Website www.flixbus.com

FlixBus is a mobility provider offering daily intercity bus service all over Europe. Launched in 2013 after the deregulation of the German mobility market, FlixBus aimed to establish a new means of transport as "reliable and green alternative" to carpooling and the German railway Deutsche Bahn.[1] In 2015, after the merger with the competing startup MeinFernbus, FlixBus became Germany's undisputed market leader,[2] operating 71% of the German market (measured in kilometres driven by the company).[3] FlixBus is now rapidly expanding across Europe. The company's expansion is financially backed by the global growth equity firm General Atlantic[4] and investors like Holtzbrinck Ventures.[5]

Business model

A bus in the signature green livery
Setra
VDL Futura

FlixBus runs on an international mobility platform by cooperating with regional bus companies from all over Europe. These local buspartners are responsible for the day-to-day running of routes, while FlixBus is in charge of the official authorizations required to operate the long-distance network. The FlixBus team handles network planning, marketing, pricing, quality management and the customer service. This unique business model leads to a high scalability and has allowed a tremendous speed of international growth.[6] On the other hand, the quality of buses is subject to the fleet available to subcontractors unlike competitors who own all or most of their buses and can thus guarantee consistent service. Furthermore, Flixbus has often handed off the risk of low occupancy to subcontractors as their bottom line depends on the farebox revenue of the routes they operate on.

Expansion

FlixBus was founded 2011 in Munich by Daniel Krauss, Jochen Engert and André Schwämmlein and launched its first route in February 2013 in Germany. One year later in 2014, FlixBus already operated a nationwide network. Along with the merger with MeinFernbus, the company also announced the internationalization of its business model. In summer 2015 FlixBus launched its Italian subsidiary in Milan[7] and entered the recently liberalized French market with "FlixBus France".[8] In November 2015 FlixBus announced its new entity FlixBus B.V. in the Netherlands and with this the very first national Dutch intercity bus network. After Germany, France and Italy, this is the company's fourth national market,[9] while the company's international lines also connect cities in Austria, Switzerland, Belgium, Luxembourg, Sweden and Denmark.[10]

In January 2016 FlixBus announced its entry to the markets of Central and Eastern Europe with the new branch FlixBus CEE. This includes six countries (Czech Republic, Slovakia, Hungary, Poland, Slovenia and Croatia) with new lines in the making.[11][12] In March 2016, the company launched first lines to the United Kingdom and Spain.[13]

On 29 June 2016, it was announced that FlixBus had purchased the Mainland European and Anglo-European services of Megabus from Stagecoach Group with effect from 1 July 2016, with Stagecoach remaining as contractor to operate the services.[14]

On 3 August 2016 it was announced that German competitor Postbus would be acquired from Deutsche Post for an undisclosed sum, thus cementing the near-monopolistic position FlixBus enjoys on the German market. The merger is to be completed by 1 November with the Postbus brand name and identity disappearing and all buses and routes redesigned as FlixBus.

In September 2016, FlixBus announced to expand to new markets in Scandinavia. Together with Danish SME partners, FlixBus plans a domestic network in Denmark.[15]

The network

The network includes approximately 80,000 daily connections to 700 destinations in 18 countries.[16] In the beginning of 2016 the company announced its plan of building a long-distance network from Bordeaux to Bucharest.[17]

Services and sustainability

The provider emphasizes the sustainability of its long-distance buses, lower prices and free Wi-Fi on board. Customers can voluntarily compensate their individual CO2 emissions during the online booking process. The amount of the compensation is between 1-3% of the ticket price and goes to internationally certified climate projects to offset the equivalent of CO2 emissions.[18]

Controversy

Like many competitors in the German intercity bus market, FlixBus has been accused in some media articles of unfulfillable contracts with sub-contractors that lead to excessive working hours for drivers and low salaries. The mentioned critics point out that drivers must clean the buses or sell snacks in what is deemed "free time" in order to not exceed the limits for time at the wheel. On the other hand, official inspections by authorities revealed that the general balance about the resting, driving and working hours in the market was much better than by some media reports assumed. Especially the large providers as purchaser of the operational service are taking responsibility by monitoring the compliance with social and legal standards.[19] A survey by German public banks also showed that SME coach operators improved their profitability since the opening of the market despite the tough price competition and that market deregulation had led to a better utilization of their existing fleet.[20]

FlixBus has gotten into conflict with the city of Cologne that moved the long distance bus station due to the congestion associated with the rapidly growing bus sector that was virtually non-existent prior to 2012. Recently, the city centre of Cologne was connected again through cooperation with a public transportation provider.[21]

Several cities criticized the behaviour of FlixBus with regards to their business decisions to serve or not serve certain stations, depending among other things upon the height of access charges, which FlixBus sharply criticizes. In this they are similar to low cost airlines which also change the airports they serve at short notice due to landing fees. Unlike competing train services and trucks, buses do not pay any road toll in Germany, which has been called a hidden subsidy by politicians of SPD and Alliance '90/The Greens as well as from Rüdiger Grube, chairman of FlixBus competitor Deutsche Bahn.[22] The bdo (Association of German Bus Companies) stated in response that buses already pay their infrastructure costs by several taxes, while billions of subsidies are paid to national rail provider Deutsche Bahn.[23]

Following the acquisition of Postbus in 2016, FlixBus gained roughly 80% of the German long distance bus market, which was criticised by various media outlets[24][25][26] as a de facto monopoly and harmful for competition. Furthermore, fears of rising prices and less service to marginal destinations were expressed.

References

  1. ↑ Zach Netzer (17 December 2014). "Derailing the Train: How Intercity Buses Are Changing the Way We Travel in Germany".
  2. ↑ "Fernbusmarkt wächst weiter | MDR.DE". www.mdr.de (in German). 2015-11-08. Retrieved 2015-11-11.
  3. ↑ "Fernbusmarkt startet stabil ins neue Jahr". IGES Institute. 9 February 2016.
  4. ↑ Dieter Fockenbrock (9 January 2015). "Ticket to Ride – A merger between Germany's two largest long-distance bus operators has rattled the country's state-owned rail company".
  5. ↑ Ingrid Lunden (16 January 2015). "Holtzbrinck Ventures Closes $331M Fund To Back More Consumer And E-Commerce Startups".
  6. ↑ "Mobility Challengers – Company Presentation by Jochen Engert, Founder & Managing Director of FlixBus at the NOAH 2015 Conference in Berlin". 10 June 2015.
  7. ↑ "FlixBus: viaggiare per l'Italia spendendo solo 1 euro e 9 euro per l'Europa". 4 August 2015.
  8. ↑ "Autocars: l'allemand FlixBus se lance en France". 19 May 2015.
  9. ↑ "FlixBus opent netwerk intercitybussen in Nederland". 24 November 2015.
  10. ↑ Di Lucchio, Maurizio (12 August 2015). "Flixbus, la startup degli autobus low cost che vuole creare 1.000 posti di lavoro".
  11. ↑ Johnston, Raymond (14 January 2016). "FlixBus expands international service from Czech cities".
  12. ↑ "Blaguss fährt mit deutschem Flixbus nach Osteuropa". 21 January 2016.
  13. ↑ FlixBus enters UK Bus & Coach Buyer 24 March 2016
  14. ↑ "FlixBus to acquire Megabus". www.flixbus.co.uk. Retrieved 2016-06-29.
  15. ↑ Mathias Sommer (27 September 2016). "Tysk busselskab satser på danske indenrigsruter" (in dk). Retrieved 12 October 2016.
  16. ↑ Davies, Phil (16 March 2016). "Low-cost coach operator enters UK market".
  17. ↑ Eder-Kornfeld, Rosa (21 January 2016). "Blaguss und FlixBus spannen grünes Netz in Europa".
  18. ↑ "Ein grünes Netz von Bordeaux bis Bukarest!". 22 January 2016.
  19. ↑ "Einhaltung der Sozialvorschriften im Straßenverkehr und der Arbeitszeiten bei Fernlinienbusunternehmen ...". www.landtag.nrw.de (in German). 2016-08-09. Retrieved 2016-10-12.
  20. ↑ "Steering into a Bright Future". 30 August 2016. Retrieved 12 October 2016.
  21. ↑ Dieter Fockenbrock (9 September 2016). "VRS-Kooperation Flixbus bietet wieder Verbindungen nach Köln an" (in German). Retrieved 12 October 2016.
  22. ↑ "Verkehrsminister fordern Maut für Fernbusse" (in German). 14 April 2016. Retrieved 12 October 2016.
  23. ↑ "bdo weist Forderungen nach einer Fernbusmaut zurück". www.bdo.org (in German). 2015-04-18. Retrieved 2016-10-12.
  24. ↑ Ingo Arzt (3 August 2016). "Flixbus schluckt Postbus: Die Fernbuskrake" (in German). Retrieved 12 October 2016.
  25. ↑ Christin Jahns and Stefan Schultz (3 August 2016). "Flixbus kauft Postbus: Was die Fernbusfusion für Fahrgäste bedeutet" (in German). Retrieved 12 October 2016.
  26. ↑ Nikolaus Doll (3 August 2016). "Das bedeutet das neue Fernbus-Monopol für Kunden" (in German). Retrieved 12 October 2016.
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