Skift Take

Intercity bus travel isn't glamorous. But at least one company will drag this sector online and make piles of money along the way.

Series: Travel Tech Briefing

Travel Tech Briefing

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The majority of the world’s long-distance trips are done by bus, but the market has remained stubbornly offline in most countries. Yet a handful of companies are dragging the sector, kicking and screaming, online.

New players are helping operators either sell tickets to international travelers, run their businesses more efficiently with software, or both. Activity has increased recently, and here are the highlights:

  • Bookaway Group, a Tel Aviv-based company that’s an online travel agency but also provides reservation platforms and operational software for intercity bus and ferry operators, this month said that it had acquired Plataforma 10, an online travel agency based in Argentina.
  • Bookaway Group raised $35 million during the pandemic and plans to acquire more companies.
  • Busbud, a Montreal-based online travel agency for intercity bus tickets and a startup building software for selling intercity coach tickets, in Febraury acquired
  • Busbud closed an $11 million ($15 million Canadian) Series C round of financing during the pandemic. It helps 4,000 operators in 80 countries sell tickets. Busbud last month acquired Recorrido, a leading intercity bus marketplace based in Santiago, Chile, and it plans to scale up Recorrido’s software-as-a-service tech for operators in Latin American countries beyond Chile.
  • MakeMyTrip Group has been investing significantly in its Redbus brand. It has 3,500 active bus operators, including more than 20 state government operators, signed on its platform, offering more than 3 million seats bookable online on any given day.
  • MakeMyTrip’s goal is to build “a global distribution system” for intercity bus operators. Its software for operators is widely used in India and the company has been slowly ramping up sales internationally. It claimed that more than 36 million consumers have bought moer than 230 million tickets via Redbus since 2018.
  • Omio, a Berlin-based online travel agency for multi-modal travel, has been doing the arduous work of accessing the full ticketing content of state and private railway operators, who often use clunky, legacy IT systems. It raised at least $100 million in 2020. It offers transport to and from more than 10 million locations worldwide.
  • Reservamos, a Mexico City-based online travel agency, expanded into a software-as-a-service business for operators in 2020. The software sales have had “amazing growth,” the startup said.
  • Octobus, an inventory management system for bus operators founded in Ukraine, is being scaled up since last year by well-funded French player BlaBlaCar.

Competition from digital-first, well-funded bus operators such as FlixBus, BlaBlaCar, and Buser has prompted many traditional bus companies to think more seriously about digital innovation.

Ferries are also part of the business model. At Bookaway Group, for example, about 30 percent of sales are for ferries.

The various technology vendors are taking different approaches.

  • Some act as channel managers, helping bus operators sell tickets in international markets via online travel price-comparison brands such as CheckMyBus and Wanderu and online travel agencies such as Kiwi.com and Klook. In theory, ecommerce brands such as Amazon, Uber, Grab, or Rappi could add intercity bus travel by plugging into the data feeds of these technology middlemen.
  • Some provide technology for helping buses with ticketing and managing transactions.
  • Some provide white-labeled customer service for online orders, such as handling cancellations and rebookings.
  • Some offer actual operational help with planning networks and routes.
  • Some are just online resellers. For smaller bus companies, it’s not practical to create websites for international markets, especially when it comes to accepting foreign payment methods.
  • The bus operator market is fragmented in most countries, which has delayed growth.
  • “If you’re, say, a 50-year-old bus company and you’re embarking on a digital transformation, you want to make sure you have the right partner,,” said co-founder and CEO LP Maurice.

Many more players are involved in digitizing the inter-city bus sector than the ones mentioned above. Here are some other names to watch.

  • Obilet.com has been operating in a single market, Turkey, where it projects this year it will double its tickets sold compared with last year to about 30 million tickets. That would make it one of the top bus ticketing platforms worldwide, and it plans to go global soon.
  • Pinbus.com claims to be the leading player in Colombia with 60 percent online market share and integration with more than 80 bus companies. Colombia is the third largest bus market in the region after Brazil and Mexico with more than 150 million tickets a year (seven times airline ticket sales). The company is about to launch Pinbus Peru. It hopes to consolidate the bus market in Colombia, Peru, Chile and Argentina by 2023.
  • Betterez, which sits in the “backend” of this digitization as an “inventory management system.” Until now, digitization has been hindered at times because of how many bus company inefficiently manage their routes, schedules, capacity, pricing, dynamic pricing, seat maps, connections, and ancillary sales. Betterez helps companies deliver that information accurately via what it calls a modern API.
  • GogoBus, a Gurugram-based full-stack tech-enabled intercity bus platform focussed on democratizing access to technology for fleet owners and customers in India. It has raised an undisclosed seed round from Aloke Bajpai and Rajnish Kumar, co-founders of the travel reseller Ixigo, and some prominent angel investors. 
  • Tutu.ru, probably Russia’s top player.
  • Clickbus, a top player in Brazil.
  • Traveloka offers a significant amount of intercity bus ticketing in Indonesia particuarly.

While there will always be more so-called “AvGeeks” obsessing over trains than social media fans of intercity buses, the reality is that for most of the world intercity bus is the most practical and flexible form of long-haul travel.

Buses may become only more important as travelers seek more sustainable ways of traveling than flying. Expect more innovation in this segment.

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