Operations

Learning From The Failures Of Chinatown Buses

Posted on June 13, 2012

NEW YORK — FastCompany writer Neal Ungerleider, in his article “Business Lessons From Chinatown Buses” says that “the era of Chinatown buses came to an end on Thursday, May 29, when federal authorities shuttered 26 of the bus firms.” He says their fate is “an example of an ingenious business model failing to adapt to a changing market.”

The first Chinatown buses offered cheap transportation between New York, Philadelphia and Boston for the Chinese immigrant community, whose members commuted between the major cities for work. But like most things, customers got what they paid for. Issues such as mechanical breakdowns, outdated equipment, safety issues and unlicensed drivers repeatedly popped up.

Ungerleider writes: “In the end, Chinatown buses were victims of an inability to adapt to a shifting business environment…Perpetual price-cutting, an unwillingness to submit to expensive (and necessary) inspection and safety standards, and unfamiliarity with American lobbying did them in.”

On the other hand, companies such as BoltBus and MegaBus used key aspects of the Chinatown business model, such as Internet ticketing, curbside pickup and discount prices, and combined them with modern enhancements such as onboard Wi-Fi and well-maintained, newer-model equipment, to achieve success.

Click here to read the full article.

Michael Campos, LCT associate editor

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