Flixbus

FlixBus
Private
Industry Transport, Travel, Travel technology
Founded 2011
Founders Daniel Krauss, Jochen Engert, André Schwämmlein
Headquarters Munich, Berlin
Area served
 Europe and the United States
Services Intercity bus service
Website www.flixbus.com

Flixbus (styled "FLiXBUS") is a German brand which offers intercity bus service in Europe and the United States. Launched in 2013 following the deregulation of the German bus market, Flixbus aimed to establish an alternative to carpooling and Deutsche Bahn, the German state-owned railway.[1] In 2015, after the merger with the competing startup MeinFernbus, Flixbus controlled[2] 71% of the German market (measured in kilometres driven by the company).[3] Flixbus is now rapidly expanding across Europe. The company's investors include General Atlantic,[4] Holtzbrinck Ventures and Silver Lake Partners.[5][6]

Business model

A bus in the brand's green livery
Setra in the pre-merger blue colour scheme
Setra S 431 DT

Flixbus services run in cooperation with regional bus companies from all over Europe. Local partners 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. Flixbus handles network planning, marketing, pricing, quality management and customer service. This business model is highly scalable and has enabled the company to grow quickly.[7] On the other hand, the quality of buses is subject to the fleet available to subcontractors. Competitors who own all or most of their buses can guarantee consistent service. Flixbus has also often handed off the risk of low occupancy to subcontractors as their bottom line depends on the fare revenue of the routes they operate.

Expansion

Flixbus' second logo, used from January 2015 until 4 May 2016
A LEO Express-liveried Taurus locomotive hauling Flixtrain-liveried ex-DR UIC-Z passenger cars near Göttingen

Flixbus was founded in 2013 in Munich by Daniel Krauss, Jochen Engert and André Schwämmlein and launched its first route in February 2013 in Germany. Within a year, Flixbus was operating a nationwide network. Along with the merger with MeinFernbus, the company also announced the internationalization of its business model. Flixbus continued to operate under both names for a while, but gradually phased out the "MeinFernbus" brand. Flixbus' original blue color scheme was changed to a green color scheme, inherited from MeinFernbus.

In 2015 Flixbus acquired Liinita, a start-up company working on ride sharing service to retail stores, shopping centers and restaurants which had been funded by the Business Incubation Center (BIC) of the European Space Agency (ESA) and the Government of Upper Bavaria.[8] Flixbus used technology developed by Liinita to start its charter business.[9]

In summer 2015 Flixbus launched its Italian subsidiary in Milan[10] and entered the recently liberalized French market with "FlixBus France".[11] In November 2015 Flixbus announced the establishment of a new subsidiary called FlixBus B.V. in the Netherlands, creating the very first national Dutch intercity bus network. The Netherlands was the company's fourth national market, after Germany, France and Italy.[12] The company's international routes also connect cities in Austria, Switzerland, Belgium, Luxembourg, Sweden and Denmark.[13]

In January 2016 Flixbus announced it was entering central and eastern European markets with a new subsidiary FlixBus CEE, covering Czech Republic, Slovakia, Hungary, Romania, Poland, Slovenia and Croatia.[14][15] In March 2016, the company launched its first routes to the United Kingdom and Spain.[16]

On 29 June 2016 Flixbus announced the purchase of Megabus' mainland European and Anglo-European services from Stagecoach Group with effect from 1 July 2016, with Stagecoach remaining as contractor to operate the services.[17]

On 3 August 2016 Flixbus announced the acquisition from Deutsche Post of Postbus, a German competitor, for an undisclosed sum. The purchase cemented Flixbus' hold on the German market, taking it to around 90%. The merger was completed by 1 November with the Postbus brand name and identity disappearing.

In September 2016 Flixbus announced plans to expand to new markets in Scandinavia. Together with Danish SME partners, Flixbus plans a domestic network in Denmark.[18]

In May 2017 it was announced that Flixbus would take over the Austrian Hellö coach network from Austrian Federal Railways (ÖBB) in August of the same year.[19]

Starting on 24 August 2017, Flixbus cooperated with Czech train company LEO Express to take over the operation of the Locomore rail service between Stuttgart and Berlin (via Hannover and Frankfurt) in Germany.[20] While initially seen as a "test phase", this service is to operate on a daily basis from April 2018. Tickets for the rail service, operated by the subsidiary Flixtrain, are sold via the Flixbus website.[21]

On 24 March 2018, Flixmobility acquired the open-access rail operator Hamburg-Köln-Express GmbH (HKX), which operated a route between Hamburg and Cologne, and integrated the HKX route into the Flixtrain network alongside the above-mentioned Locomore service.[22]

On 15 May 2018, Flixbus announced its expansion into the US market. Starting 31 May, Flixbus plans to offer 180 connections within the southwest parts of the country, operating from a main hub in Los Angeles.[23] Main cities planned to be served at launch include Las Vegas, San Diego, Tucson and Phoenix. It plans to have expanded the network to over 1000 connections by the end of 2018.

The network

The network includes approximately 120,000 daily connections to 1,700+ destinations in 28 countries.[24] In the beginning of 2016 the company announced plans to set up a long-distance network from Bordeaux to Bucharest.[25]

Services and sustainability

The provider emphasizes the sustainability of its long-distance buses, lower prices and free Wi-Fi on board. Customers can choose to offset their CO2 emissions when buying a ticket online. The offset costs between 1-3% of the ticket price and goes to internationally certified climate projects to offset the equivalent of CO2 emissions.[26]

In 2018, Flixbus is launching routes served by electric buses made by BYD and Yutong. The first two are routes over 100 km long in France and Germany.[27][28]

Controversy

Workers conditions

Like many competitors in the German intercity bus market, Flixbus has been accused by parts of the media of subcontracting services with conditions which cannot reasonably be fulfilled, leading to low salaries and drivers working excessive hours. Critics point out that drivers must clean the buses or sell snacks during what is deemed "free time" to avoid exceeding limits for time at the wheel. On the other hand, official inspections have found that resting, driving and working hours in the market were much better than some media reports had suggested. Large providers in particular, who purchase services from contractors were found to be taking responsibility by monitoring compliance with social and legal standards.[29] A survey by German public banks also showed that SME coach operators have improved their profitability since market deregulation, despite tough price competition and that market deregulation had led to a better utilization of their fleet.[30]

Use of infrastructures

In 2015, Cologne closed its city center long-distance bus station because of the congestion associated with buses. The city had wanted Flixbus to move its Cologne stop to the airport, which Flixbus refused to do. As of September 2016, Flixbus passengers can use public transport to get from the Flixbus stop in Leverkusen to Cologne city centre at no extra charge.[31] Also, as of 2017, Flixbus does serve the Cologne-Bonn airport.

Several cities criticized the behaviour of Flixbus with regards to their business decisions to serve or not serve certain stations, depending on access charges (among other things), which FlixBus sharply criticizes. In this they are similar to low cost airlines which also change the airports they serve at short notice. Unlike competing train services and trucks, buses do not pay any road toll in Germany, which has been called a hidden subsidy by SPD and Alliance '90/The Greens policitians, as well as by Rüdiger Grube, chairman of Deutsche Bahn, one of Flixbus's main competitors.[32] bdo (an association of German bus companies) responded by saying that buses already pay for infrastructure they use in the form of various taxes (ex. mineral oil tax), while billions of subsidies are paid to national rail provider Deutsche Bahn.[33] However, Deutsche Bahn also pays mineral oil tax on the diesel fuel it uses.

Market share

Following the acquisition of Postbus in 2016, FlixBus gained control of roughly 80% of the German long distance bus market, which was criticised by various media outlets[34][35][36] as a de facto monopoly and harmful to competition. It was also suggested that Flixbus' control of the market could lead to higher prices and less service to smaller destinations.

Passenger name record

On 25 June 2018 the Belgian Government announced that it was running a pilot project with Flixbus and Eurostar for which they are collecting all passenger data for Flixbuses and Eurostars crossing the Belgian border. [37]

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). 8 November 2015. Retrieved 11 November 2015.
  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. ↑ "FlixBus and Silver Lake Announce Strategic Investment" (PDF). 16 December 2016.
  7. ↑ "Mobility Challengers – Company Presentation by Jochen Engert, Founder & Managing Director of FlixBus at the NOAH 2015 Conference in Berlin". 10 June 2015.
  8. ↑ "Alumni of the ESA BIC Bavaria". www.esa-bic.de (in German). Retrieved 8 April 2017.
  9. ↑ "MeinFernbus FlixBus übernimmt Liinita". www.deutsche-startups.de (in German). 16 November 2015. Retrieved 8 April 2017.
  10. ↑ "FlixBus: viaggiare per l'Italia spendendo solo 1 euro e 9 euro per l'Europa". 4 August 2015.
  11. ↑ "Autocars: l'allemand FlixBus se lance en France". 19 May 2015.
  12. ↑ "FlixBus opent netwerk intercitybussen in Nederland". 24 November 2015.
  13. ↑ Di Lucchio, Maurizio (12 August 2015). "Flixbus, la startup degli autobus low cost che vuole creare 1.000 posti di lavoro".
  14. ↑ Johnston, Raymond (14 January 2016). "FlixBus expands international service from Czech cities".
  15. ↑ "Blaguss fährt mit deutschem Flixbus nach Osteuropa". 21 January 2016.
  16. ↑ FlixBus enters UK Bus & Coach Buyer 24 March 2016
  17. ↑ "FlixBus to acquire Megabus" (Press release). Flixbus. 30 June 2016.
  18. ↑ Mathias Sommer (27 September 2016). "Tysk busselskab satser på danske indenrigsruter" (in dk). Retrieved 12 October 2016.
  19. ↑ "FlixBus acquires long-distance bus business 'HELLÖ'" 23 May 2017. Retrieved 6 March 2018
  20. ↑ "Kooperation zwischen Fernbusanbieter und Fernzug-Startup Locomore" (in German). 16 April 2017. Retrieved 6 March 2018
  21. ↑ Locomore fährt wieder! Und bei uns gibt’s die Tickets!
  22. ↑ http://m.railjournal.com/index.php/main-line/flixtrain-to-launch-german-open-access-services-this-month.html
  23. ↑ "Germany's data-driven FlixBus launches in the U.S. to make bus travel cool again". VentureBeat. 15 May 2018. Retrieved 16 May 2018.
  24. ↑ Davies, Phil (16 March 2016). "Low-cost coach operator enters UK market".
  25. ↑ Eder-Kornfeld, Rosa (21 January 2016). "Blaguss und FlixBus spannen grünes Netz in Europa".
  26. ↑ "Ein grünes Netz von Bordeaux bis Bukarest!". 22 January 2016.
  27. ↑ "Flixbus launches first long-distance electric bus route in France - electrive.com". electrive.com. 11 April 2018. Retrieved 17 April 2018.
  28. ↑ "World's first long-distance electric bus line to begin in Paris | DD News". ddinews.gov.in. Retrieved 17 April 2018.
  29. ↑ "Einhaltung der Sozialvorschriften im Straßenverkehr und der Arbeitszeiten bei Fernlinienbusunternehmen ..." www.landtag.nrw.de (in German). 9 August 2016. Retrieved 12 October 2016.
  30. ↑ "Steering into a Bright Future". 30 August 2016. Retrieved 12 October 2016.
  31. ↑ Dieter Fockenbrock (9 September 2016). "VRS-Kooperation Flixbus bietet wieder Verbindungen nach Köln an" (in German). Retrieved 12 October 2016.
  32. ↑ "Verkehrsminister fordern Maut für Fernbusse" (in German). 14 April 2016. Retrieved 12 October 2016.
  33. ↑ "bdo weist Forderungen nach einer Fernbusmaut zurück". www.bdo.org (in German). 18 April 2015. Retrieved 12 October 2016.
  34. ↑ Ingo Arzt (3 August 2016). "Flixbus schluckt Postbus: Die Fernbuskrake" (in German). Retrieved 12 October 2016.
  35. ↑ Christin Jahns and Stefan Schultz (3 August 2016). "Flixbus kauft Postbus: Was die Fernbusfusion für Fahrgäste bedeutet" (in German). Retrieved 12 October 2016.
  36. ↑ Nikolaus Doll (3 August 2016). "Das bedeutet das neue Fernbus-Monopol für Kunden" (in German). Retrieved 12 October 2016.
  37. ↑ "Le gouvernement donne son feu vert à deux projets pilotes élargissant le PNR". RTBF Info (in French). 25 July 2018. Retrieved 27 July 2018.

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