Low-fare Chinatown bus triggers price war

PUBLISHED : Tuesday, 18 March, 2008, 12:00am
UPDATED : Tuesday, 18 March, 2008, 12:00am

New York

At the foot of the Manhattan Bridge, in front of a Buddhist temple's red gate and beside a Sichuan food restaurant, there is a queue at almost any time of the day. But the queue isn't for those seeking food or prayer. It is for people like Mike McFarlane and Jordan Bach, who were waiting there on a recent weekday for the half-hourly bus to take them from New York's Chinatown to Boston.

Mr McFarlane, a middle-school teacher, was a first-time passenger. 'A friend told me this is a better way to get to Boston. It's much cheaper,' he said, referring to the US$15 fare for the 350km trip - about half the price charged by Greyhound, and only about a tenth of the cost of the trip by train or air.

Mr Bach, a student from the Parsons School of Design, is a veteran. He said he was attracted to the service less for the price than for its atmosphere. 'I like the idea of a neighbourhood-run operation - it's more effective and less tied up in rules. A lot of students run around the campus and say you take the Chinatown bus, the Chinatown bus, the Chinatown bus. It seems there are more artists and students on the bus.'

It's a boom time for the so-called Chinatown bus - in reality, any of a number of budget intercity bus services run by Chinese immigrants, connecting New York with almost all major cities on the east coast.

Started in the late 1990s, the Chinatown bus used to mainly serve the Chinese community, particularly restaurant workers and others who would commute between cities to take odd jobs or visit scattered relatives.

They barely advertised but their irresistibly low prices soon found a broader audience. In the past five years, more and more non-Chinese New Yorkers have made their way to Chinatown to catch a ride and now make up most of the passengers.

But the development of the industry has not been smooth. As New York absorbed an influx of immigrants from Fujian province , bus companies sprang up in competition to Fung Wah, the first Chinatown bus company launched by Guangdong immigrant Pei Lin Liang in 1998.

This led to a cutthroat price war - the fare from New York to Boston dropped to US$10 at one stage - and sparked fights, vandalism and even some shootings. At least three murders have been connected in some way to bus competition in recent years.

The competition is not only within Chinatown. Greyhound, the largest intercity bus service in the US, has been trying to win back its customers. It sued two Chinese companies over licensing issues. It invaded the Chinese companies' turf by offering a free shuttle transfer from Chinatown to Greyhound's midtown terminals. And it cut some prices to only slightly more than those offered by its Chinese competitors.

But all of this, and news coverage of several serious accidents, have failed to dent loyalty to the Chinatown bus.

Now Greyhound and its affiliate Peter Pan are launching a new bus line called BoltBus, which will focus on routes from New York to Washington and Boston and offer fares as low as US$1, more spacious seats, outlets and free Wi-fi. These routes were previously dominated by the Chinatown bus.

A spokesman for Greyhound shrugged off the competition with the Chinatown bus by emphasising that BoltBus was an independent operation. The US$1 fare, which will be offered to at least one passenger on each bus on a-first-come-first-served basis, is a regular business model, not a short-term promotion. But he said proudly: 'If you consider the entire package, there is the US$1 fare, the free Wi-fi, 3 inches [7.6cm] between seats, there is no other product like it on the market. It's extreme value.'

The new service, which will start by the end of this month, has already sent a shudder through Chinatown.

'This is a clear signal for a new price war, but we shouldn't jump in the trap,' said Ji Xiong Ni, the general secretary of the steering committee of the Chinatown Bus Association. He said that after years of instability, the bus industry in Chinatown has achieved a balance in recent years, with fares little changed and violence reduced.

The last thing he wants to see is more chaos.