European bus startup FlixBus heads to US, starting with LA

BERLIN — European bus service startup FlixBus will expand to the United States in the coming months, initially focusing on the West Coast and nearby destinations such as Las Vegas, the company’s chief executive said Wednesday.

The Munich-based company has become a dominant player in Europe over the past five years without owning any buses of its own, but will face stiff competition across the Atlantic from established operators such as Greyhound Lines and Megabus.

“The way we do things is fundamentally different from established transportation companies,” said CEO Jochen Engert.

The company develops timetables, sets service standards and provides the app for customers to book tickets. Small- and medium-sized bus companies operate the actual routes.

“We do everything except buy buses and hire drivers,” Engert said.

The 36-year-old, who co-founded FlixBus in 2013, said the company plans to use the same green livery as in Europe and offer free WiFi and entertainment, space for two pieces of luggage per person and real-time travel information.

Backed by investment companies including Germany’s Holtzbrinck Ventures and U.S.-based Silver Lake Partners and General Atlantic, FlixBus now offers 250,000 connections between 1,700 cities across 27 European countries.

Engert said the company has been profitable as a group since last year and expects to grow again in 2018.

FlixBus will launch its U.S. operation in Los Angeles this summer with the goal of establishing a “comprehensive network” between cities in California and neighbouring states, he said.

The company takes a quarter of the ticket price while partners keep the rest, and typically offers 3-5 year contracts, said Engert.

In addition to its U.S. venture, FlixBus recently launched a train service and is working on rolling out electric buses. The first route using Chinese-made vehicles already connects Paris and Amiens in France.

Engert said the company, whose founders still hold a 25 per cent stake, currently has no plans for an IPO.