Megabus business model hits roadblock in Metro

Thursday, March 14, 2013 at 10:05pm
031513 Megabus topper.jpg

(Eric England/SouthComm)

 

Updated with letter from the Metro Department of Law

When Megabus first announced it would start operating in Nashville, it presented an additional low-cost alternative for travelers to and from Music City. The bus service, which offers fares as low as $1, now claims to provide transportation for 200,000 people per year through its Nashville stop.

But Megabus may have temporarily outgrown its welcome. A key part of the company’s business plan is the absence of a brick-and-mortar location, which reduces overhead and allows prices to remain low. In Nashville, Megabus has used public streets and sidewalks for its drop-offs and pickups.

The model has caused a few headaches — and Megabus officials are in town this weekend to scout new locations as a way to smooth things out with local officials.

As the Megabus service grew in popularity, its original downtown stop on Commerce Street between Fourth and Fifth avenues caused traffic troubles. The large double-decker buses parked at the location for several minutes at a time as passengers loaded and unloaded.

In December, Metro’s Traffic and Parking Commission ousted Megabus from the downtown site and asked the company to find another suitable spot to operate as of Jan. 1.

“It was my understanding that our intent was to send the message to them to find a location off of a Metro street, and that if they did want to pursue another location off a Metro street, they would have to propose that location to us,” commission member Steven Turner told The City Paper.

So Turner was surprised when he saw news reports indicating Megabus had set up shop off Nolensville Road near the fairgrounds. He said the commission has received several complaints about the “ill placement” of the stop.

“Their business model is to come into the city and provide the city with a service at no cost,” Turner said. “But I would prefer to see them partner as a business with another business ... and not necessarily ride the backs of city roadways to facilitate their business.”

But Megabus director of operations Byrony Chamberlain said the company received approval from Metro Transit Authority to use the stop temporarily for about three or four weeks. An MTA spokeswoman denied any formal contract exists with Megabus.

The company was hoping to finalize negotiations in January to use a site off James Robertson Parkway near the south end of Bicentennial Mall.

Chamberlain said those plans “fell apart” because the state — whose Department of General Services oversees Bicentennial Mall — didn’t approve.

“We just need to find somewhere which is safe, suitable for our customers, approved by the city — and we are struggling, I’ll be honest,” Chamberlain said.

Chamberlain insists Megabus doesn’t want to mooch off the city’s resources.

“We’re not scared of paying our way and making sure we get somewhere decent,” Chamberlain said. “It’s finding a location that we can lease from either a private company or from a city or state authority and ensuring that it suits our services ... and we don’t have neighbors nearby who we might inconvenience.”

Megabus realizes that loading and unloading at curbside isn’t the solution for Nashville, Chamberlain said. The company scouted the Clement Landport, an MTA-owned structure behind Cummins Station off the Demonbreun Street Bridge, which was originally built for buses in 1997. MTA, which is currently using the site for parking, wasn’t receptive to the idea.

An ideal location for Megabus would also have quick access to forms of public transportation and cars. As Megabus has discovered, those spots aren’t plentiful in downtown Nashville.

Due to its low prices, Megabus also has a large contingent of student customers, so the company may also try to find space near one of the local universities as a backup plan, Chamberlain said.

“We have done our best,” Chamberlain said. “There’s a lot of overlap. When you’re trying to find a bus stop, there is overlap between so many city departments, and [that] is in reference to every city.”

Megabus had a similar run-in with city hall in Dallas. The company originally advertised a downtown Dallas bus stop before city attorneys stepped in, according to reporting in The Dallas Morning News. Megabus then moved to a location owned by Coach USA, its parent company, before reaching an agreement to use a public transportation facility.

Chamberlain said she expects a move in Nashville soon.

“We’ve got a number of different negotiations working at the moment, and I’m hopeful that something is going to come out of these current meetings in the next few weeks,” she said.

Turner said he hopes Megabus can find a suitable spot, but the traffic commission may consider adding regulations to prevent future problems.

“I think we definitely should have some kind of regulation in place,” Turner said. “I’ve been considering putting something together myself to see what we can do.”

The Metro Department of Law sent a letter to Coach USA stating that the company needed to find a private lot to operate out of it rather than a public right of way. Metro threatened to take "more aggressive action" if needed.

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7 Comments on this post:

By: tbulgarino on 3/15/13 at 7:36

nashville_bound

This is absurd. MegaBus tries to accommodate the city's wishes by moving the loading/unloading off the city streets by actually trying to use a federally funded mass-transit location and MTA says thanks but no thanks.

As a resident of downtown I am frequently inconvenienced by umpteen tourist and convention busses parked on the city streets loading/offloading and many times just waiting, hours at a time, empty (with their diesel engines spewing) for dinners or ceremonies to complete. I realize it is part of downtown living so no big deal. There is real hypocrisy in looking down upon Megabus as a nuisance, IMO.

http://www.nashville...roadblock-metro

"Megabus realizes that loading and unloading at curbside isn’t the solution for Nashville, Chamberlain said. The company scouted the Clement Landport, an MTA-owned structure behind Cummins Station off the Demonbreun Street Bridge, which was originally built for buses in 1997. MTA, which is currently using the site for parking, wasn’t receptive to the idea."

An appeaser is one who feeds a crocodile, hoping it will eat him last.
- Winston Churchill

By: NewYorker1 on 3/15/13 at 9:29

This is an excellent service for many people that want/need to travel to other cities at a low rate. The state doesn’t want to invest in Amtrak or other transportation services and when something good like this comes along, the city is trying to sabotage it. I heard Megabus has limited its services to Nashville now because of this issue. I’ll give it a few more months before the city completely takes this service away from its citizens, which I really don’t understand.

There’s a bunch of idiots in our political system. I will be so happy when all those old people holding a political office are dead. They are holding us back from progress.

By: courier37027 on 3/15/13 at 10:57

Apparently Megabus has not lined the pockets of local politicians. A company wants to start a legitimate service to provide inexpensive and perhsps superior service. Yet government frowns on this. Smells of charter schools, second verse.

By: courier37027 on 3/15/13 at 10:59

Meanwhile, thet Landpot which cost $10 million and is yet to open seems a great deal for Metro to lease.

By: JeffF on 3/15/13 at 11:13

Megabus is missing the boat here. What they should do is do a press release where they proclaim that all the benefits of their services will accrue only to downtown. If they can add a line or two about punishing the suburbanite horde they may even get money from MDHA and a discounted contract with MP&F.

I think the Megabus people have figured out on their own that the less they interact with the forces of urbanista utopia in Nashville the better they and their customers will be. They have done the unthinkable in other cities and moved their services outside of the craziness of the urban core.

The true goal of the people in charge is to pester this private company into moving its stop to that stupid bus hub in downtown and charging them rent. I just do not see why "leaders" would have a problem with a bus stop at the fairgrounds or near a school, those places are part of the same city and the hassle is so much less for the company and the passengers.

I saw landport and actually got excited that someone would use it. Then I read further and noticed that it was already killed.

By: stevencwarren on 3/15/13 at 1:32

As a frequent Megabus rider, the nashville drop off location is terrible. I use the megabus to travel to and from Atlanta for work very frequently. I really wish Metro could figure this one out.

I really don't understand why they don't use the parking lot of the Farmer's market. It is a reasonable walking distance to the bus terminal and you have places to pick up lunch if you are connecting.

By: Jughead on 3/19/13 at 3:49

Megabus is a PITA if you live or work near a drop-off point. Causes traffic problems, trash (including alcohol containers) was always left on Commerce. Good service, but they need to find a business model where they do not leech. Everyone else pays for space.