Bolt Bus – Disrupting the Urban Transit Market

bolt bus

Bolt for a Buck.  This simple concept has created value—an estimated $85MM* in annual revenues for Peter Pan and Greyhound who partnered to create BoltBus in 2007—in a formerly stagnant bus transportation industry.1

BoltBus’ business model is simple: to transport customers across major metropolitan cities at a low cost.  Yet, through its unique operating model, BoltBus has managed to disrupt the urban transit market, growing the market size for bus-goers and even stealing share from premium formats.  According to the Chaddick Institute for Metropolitan Development, in 2014, “while bus service grew, Amtrak train-miles held constant, and the number of airline flights diminished by 3.5%.”  Conversely, “the number of daily trips [by city-to-city express carriers] was up 3.9% in 2014 vs. 2013, with BoltBus and Megabus accounting for nearly 80% of these operations.”2

The company’s success can be attributed to its distinct value proposition.  Offering a marked difference from other providers, BoltBus guarantees passengers a seat on the bus, removing the headache of uncertainty and the frustration of excessive wait times for passengers.  Given this, the company is still able to maximize revenue and seat utilization via two methods: 1) Non-refundable tickets secure revenue and reduce the threat of ‘no-shows’ by implementing a “use it or lose it” policy and 2) Walk-up tickets are sold 10 minutes prior to departure with customers lining up on “standby” to fill up any open seats.  This approach serves to maximize seat utilization but also, with prices for walk-up tickets costing ~30% higher than the highest advance purchased fare [and only in cash eliminating credit card fees], it also serves as an additional revenue stream.3

Furthermore, its distinct operating features at each point in the value chain enable BoltBus to create and sustain a competitive advantage:

Bolt Bus - Value Chain1. Ticket purchase

BoltBus reduces overhead costs by eliminating traditional ticketing agents.  The company primarily sells tickets online, offering customers who prefer more traditional formats the option to purchase tickets over the phone, albeit, for an additional $3 fee, passing on the additional service cost to the consumer.3

Furthermore, dynamic pricing enables the company to maximize revenue based on demand.  Though its slogan, “Bolt for a Buck,” derives from a minimum of one ticket for each trip being priced at a dollar, BoltBus’ pricing strategy is much more than a marketing gimmick.  Dynamic pricing encourages price sensitive passengers to buy early, securing a lower price and confirming minimum utilization for each ride as early as four to six weeks in advance.  As the bus reaches breakeven, pricing can steadily increase, up-charging last-minute customers who have a high willingness to pay.

2. Passenger pick-up

While competitors such as Greyhound incur the expense of maintaining bus terminals in major metro areas, BoltBus eliminates this cost by doing curbside pickups.  This practice enables BoltBus to provide additional convenience to its customers, with pick-up locations often located in central and accessible locations.

3. Bus boarding

Defined processes for boarding based on pre-defined “Groups” (A-C) create an orderly process akin to airline boarding.  Whereas traditional competitors use a “first come- first serve” policy to seating, BoltBus’ process allows travelers to be more efficient, guaranteeing not only a seat, but also a place in line.  However, unlike airlines, BoltBus give priority seating (A) to all loyalty program members, encouraging frequent passengers to join and providing BoltBus even greater access to customer data.

4. Travel

Despite its low-cost offering, Bolt Bus provides premium amenities such as Wi-Fi access and power plug-ins, all on a new, luxurious fleet of buses.  Doing so has allowed it to attract a new, younger segment of consumers while also converting more premium customers.

BoltBus’ unique operating model creates value in an antiquated industry.  Doing so has enabled it to revive bus transportation in cities, delivering passenger satisfaction ratings of over 90% over the past three years (as compared to Greyhound’s 67% satisfaction score).3  However, as competitors replicate this model (e.g., MegaBus, Yo! Bus, BestBus, Go Bus, etc.), BoltBus will need to continue to evolve its operating model to sustain its competitive advantage as it expands nationally.4


*Estimated based on 200 daily departures, operating 365 days a year at an average ticket price of $30 and 40 passengers per trip segment.2


  1. Peter Pan Company History. Retrieved from:
  2. Chaddick Institute for Metropolitan Development. “Adding on Amenities, Broadening the Base 2014 Year-in-Review of Intercity Bus Service in the United States.” Retrieved from:
  3. Bolt Bus FAQ. Retrieved from:
  4. FirstGroup 2015 Annual Report.



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Student comments on Bolt Bus – Disrupting the Urban Transit Market

  1. Thanks for the insights on the inner-workings of BoltBus! I’ve used their service before and had a great experience myself. In addition to the factors you pointed out, does their bus fleet utilization factor into their low-cost model? I’m wondering if BoltBus is able to afford luxurious buses and still charge bottom dollar prices by maximizing the utilization of the bus routes. Additionally, I’d be curious to see what other kind of internal HR/organizational structures BoltBus has implemented that also contributes to their low SG&A.

  2. Thanks Trang! This was an interesting and thoughtful analysis of a superior business and operating model that should continue to spread through and disrupt the transportation industry.

    A couple questions come to mind:
    (1) How much of this model can and cannot be replicated by competitors? For example, curbside pickup instead of bus terminals as a cost-saving measure seems like a no-brainer, but (a) why can’t existing competitors and new entrants do the same thing? (is there a regulatory + space constraint?), and (b) as boltbus scales up, will it have to eventually build out its own terminals if it has enough transportation volume? Can the same replicability be said for the boarding process and the pricing scheme?

    (2) How much of this seemingly lower pricing scheme is actually growing the revenue/profit pie (lower per unit price offset by even more volume –> more revenue) rather than shrinking the pie while allowing boltbus to take share? If it is the latter, then how sustainable is profit/share capture by one particular firm, especially if competitive advantages not sustainable (i.e. can be replicated by other firms)?

    In the long-run, it seems that these changes are providing greater value to end consumers and making bus transit more affordable and comfortable, but perhaps any capital providers to these companies should not expect an attractive financial return.

  3. Very interesting! I agree that a major business risk is the replicability of the model. There are virtually no barriers to entry other than the capital costs of the buses and employing the drivers. A robust customer loyalty program could help somewhat as competition grows.
    I’m interested in the company’s long-term growth strategy. Will the company pursue growth in markets beyond the coasts? (For example, other markets where short-haul flights connect cities, such as Dallas-Austin, seem to have a lot of potential.) Might the company pursue longer trips, such as SF-Las Vegas, overnight? It will be really interesting to see this evolve, especially as flying has continued to get more expensive.

  4. You did a great job of analyzing the key factors that create value for passengers. Having used the service, I do appreciate the low cost, clean cabin, and online ticketing. The point you raised about potential competitors replicating the business model is a valid one. A point of differentiation comes to mind. I think BoltBus has done an excellent job of maintaining a high safety record. Other low-cost competitors, especially in the Boston area, have not done as well (or at least have not managed perceptions as well). As long as BoltBus isn’t cutting corners on maintenance or has plans to replace buses sooner than the industry standard, I imagine they will continue to provide safe and convenient service to their customers.

  5. Thanks for sharing this! I’ve used Bolt Bus a ton, especially in college. I have noticed a distinct increase in prices over the years, though. As their new luxury fleet continues to age, what will Bolt do to command a price premium? Particularly as the other new companies you mentioned enter the market at lower prices and even more convenient locations (Go Bus service to Cambridge, for example), what innovations will Bolt make to it’s service to fend off the competition?

    I’ve also noticed that Bolt services is concentrated on the Northeast Corridor, providing a great alternative for expensive train tickets. I’d be curious to see Bolt expand service to other parts of the country where transportation options are fewer. This could allow the company to take market share from short haul flights without cannibalizing existing bus route sales from parent co’s Greyhound and Peter Pan.

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