Thursday, September 10, 2009

Greyhound Opportunity

Greyhound’s announcement of service cuts is a fantastic opportunity for Canadian entrepreneurs. Small, nimble companies with a focus on serving rural customers could fill the void left by Greyhound and make money doing it.

Here’re my ideas on how it would work.

1. Copy the Southwest Air model – instead of the hub (Winnipeg) and spoke (everywhere else in Manitoba) system used by Greyhound, run point to point service between rural communities. This would end up being less expensive because smaller coaches could be used (see below) more frequently

2. Use smaller coaches – growing up in rural Canada, I used to ride Greyhound. Their 50+ seat coaches were never even half full until we stopped at a mid-major centre like Kelowna, Red Deer or Brandon. Smaller coaches mean fewer seats which translates into few fares to break even

3. Automate as much as possible – Reduce overhead by equipping drivers with mobile credit card scanners for last minute purchases and routing all other purchases through a call centre. As Internet access is slow at best in rural Canada, an e-commerce option wouldn’t be highly used, but should be available

4. Increase frequency – as many rural towns, including my hometown, lack services such as a grocery store, doctor, dentist, video store and registry, increased frequency of service between “small town A” and “slightly larger town with services small town A doesn’t have” would provide steady, recurring revenue

Admittedly, the above ideas are just a shell of a plan. Let me in comments would it work? Wouldn’t it? How would you tackle this opportunity?

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