Stagecoach, the parent company of Megabus, began growing shortly after UK bus services were deregulated and privatized (mid 90s). Their tactic was to take the b

Stagecoach, the parent company of Megabus, began growing shortly after UK bus services were deregulated and privatized (mid 90s). Their tactic was to take the busiest (and most profitable) routes in a city and saturate them with buses, charging lower fares. The 192 route in Manchester suddenly went to literally a bus every two minutes, and Stagecoach buses were half the price of everything else. They made losses but took nearly every passenger on the route. They then bought the company which previously ran the route and fares rapidly escalated. Manchester now has extortionate bus fares and Stagecoach run virtually all routes. I imagine that their business model is almost identical with Megabus: sink the competition by undercutting their profitable routes, buy them out/bankrupt them and then reap your rewards. sidenote: I used to vaguely know the chap who almost founded Stagecoach with his wife. They divorced and she took what was a small local bus company and built it up with her new partner. He started a new company called Highwayman (robs the stagecoach). It remained a small (< 8 buses) operator in scotland until he died a couple of years ago.