Editor’s note: This op-ed for Bus & Motorcoach News is written by Kai Boysan, CEO of Flix North America.
In 2021, Congress passed the Infrastructure Investment and Jobs Act (IIJA), sharply increasing spending on America’s transportation system. At the time, economic recovery from the pandemic was urgent and normal budget rules were waived. Subsidies for highways, public transit, and passenger rail were dramatically increased, despite a lack of revenue from user taxes on fuel to cover the costs.
When the new president and Congress arrive in 2025, it will be time to begin the difficult process of reassessing the IIJA and establishing priorities that maximize transportation benefits and minimize costs. With budget rules back in place, Congress will need to better align spending with Highway Trust Fund revenue, take a harder look at public subsidies per passenger mile, and tailor programs to maximize value to taxpayers.
Tiny share of subsidies
Intercity buses are the most cost-effective, least subsidized, and most fuel-efficient mode of long-distance travel per passenger, connecting more communities than airlines or rail. With as many as 7,000 bus stations nationwide, including in rural communities, intercity buses serve more than 14 times as many locations as long-distance passenger rail and commercial airlines, yet receive roughly a penny per passenger mile in federal and state subsidies. In 2024, the amount of federal funding available for long-distance passenger rail was at least 48 times more than what was available for the intercity bus industry.
Unlike passenger rail and public transit, private intercity bus operators also pay fuel taxes into the Highway Trust Fund. Much of America’s flyover country is served by privately operated buses. While buses transport people from all walks of life, they provide essential transportation for millions of Americans who earn less than $50,000 per year, as well as college students, seniors on fixed incomes, military personnel, people with disabilities, and rural residents. Many bus passengers often lack affordable access to other modes of transportation that can connect them to destinations beyond their own community.
Intercity bus companies are leading the way by investing in new technologies that enable more efficient routes, better on-time performance, simplified ticketing, and overall improvements in efficiency and climate impact. They are also revamping business models to address high costs and dramatically transform operations and customer experience. With growing trends favoring hassle-free travel, reduced car ownership, and a demand for affordable, sustainable options, intercity buses are becoming increasingly attractive to new demographics for long-distance journeys.
Opportunity for change
With this momentum building in the private sector, there’s a unique opportunity to revitalize and expand this essential service and further enhance its role in America’s transportation future through supportive public policies. By making small but targeted legislative changes, the new Congress can make a substantial impact, benefiting the traveling public and strengthening the industry.
First, Congress should encourage more public-private partnerships between intercity bus companies and public transportation agencies. These partnerships would reduce terminal unit costs per passenger for bus operators, enhance passenger safety and security, and facilitate smoother intermodal transfers. All these improvements are crucial for increasing the appeal of intercity buses to families and enhancing overall passenger experiences.
The bus industry is already gradually moving away from costly terminal management and shifting toward more sustainable models by collaborating with local and state governments and transit agencies for affordable access to publicly owned transportation centers, rail stations, and airports. Experience in cities like Los Angeles, Washington, New York, Boston, Atlanta, and Miami shows that co-locating with other modes of transportation attracts more riders, improves safety, and better utilizes publicly funded infrastructure. Additionally, small-business vendors and restaurants in these transportation centers benefit from increased foot traffic.
Second, customer safety must be prioritized. Amtrak, airports, and public transit agencies receive public funding for security personnel, and similar programs should be expanded to cover the intercity bus sector. Our experience shows that security problems often stem from outsiders who do not purchase tickets, not from the riders themselves. The industry cannot afford the costs associated with security issues caused by non-riders. Expanding federal security funding and measures to include intercity buses will address these issues effectively and ensure a safer experience for all passengers.
Finally, a crucial area for federal funding that requires significant growth is the rural intercity bus program, the FTA’s 5311(f). Although one of the smallest federal transit programs, it is vital for maintaining nationwide bus connectivity. This funding, administered through state DOTs, helps maintain the national intercity bus network and connect communities where it is not commercially viable for private companies to operate independently. In return, as demand increases, the need for subsidies decreases, allowing resources to be allocated to other underserved small cities. However, current subsidies are insufficient to reach all towns and communities, underscoring the need for increased funding.
The 2021 Infrastructure Bill initially focused on high-cost transportation modes that sought billions of dollars in public subsidies. As we move into the next phase, more focus should be directed at investing wisely, including preserving and expanding the most efficient transportation modes. America’s most affordable and least subsidized mode of transportation—the intercity bus—deserves more attention in the reform of these programs.
Kai Boysan is the CEO of Flix North America, the parent company of Greyhound and FlixBus USA, overseeing two of the largest intercity bus networks in the U.S.
