Is German FlixBus the fix for Canada's bus woes?

For many, the signature silver dog of Greyhound is the symbol of bus travel.

But that iconic image might be replaced by a more colourful logoif the European bus lineFlixBusgets access to Canada's intercity bus markets.

FlixBusruns lime green buses that have a pair of orange arrows emblazoned on their sides. It launched U.S. operations in California, Nevada and Arizona earlier this year, to go along with its service in 28 other countries.

Mexico and Canada are next "on the rough agenda," saidCEO and co-founderAndrSchwammlein, "for 2019, 2020 latest."

"I have to be able to make it in North America," he said. "I mean, otherwise I will never be able to call myself a global brand."

Just where and when the company could secure routes in Canada would depend largely on provincial regulations. Greyhound's withdrawal from all routes west of Sudbury, Ont., except for in parts of B.C., has created an opportunity for other players to put buses on routes they believe can be profitable.

Tech and marketing

Founded by three Munich-based entrepreneurs,FlixBushasbecome Europe's largest bus carrier injust five years.

While most carriers own their own buses,FlixBusis not a bus business in the conventional sense.

Practically speaking, it's part tech company, part marketing machine, with a model built on partnerships. It contracts out bus operations to local bus companies, which must provide coaches withWi-Fi,USBand power outlets, free audio books, video games and movies, and extra legroom.

In return,FlixBusgenerates all the routes and connection planning, provides real-timeGPSbus tracking for passengers, does extensive marketing, and operates an online sales platform centred on its mobile app. Operators keep 70per cent of the revenue from ticket sales.

At the core of the company is technologyand data.

Of its 1,200-plus employees "about 25 per cent work in engineering" explainedSchwammlein, "and, like, another 30 to 40 per cent of people are working on data."That means more than half the staff is working on software or crunching numbers to helpplan routes and schedules, and set fares using dynamic pricing.

U.S. expansion

One ofFlixBus'sfirst American partners was Dan Palmer ofAmerican Explorer Motorcoach, whosefamily has been in the bus business as a tour and charter operator since the1970s.

Palmer is based in Arizona and runs aFlixBusroute between Tucson, Phoenix and Los Angeles. He says he's convincedFlixBuswill outrun Greyhound.

"Flixwill be it," he said, "it will be everything in North American intercity transport.I firmly believe that."

The 52-year-old admits he made the biggest bet of his career on this partnership. He sayshe's a "very, very conservative bus operator," but nonetheless decided to buy three buses to make the deal withFlixBus.

That cost him roughly $1.5 million US. a big spend for a man who previously only ever bought buses one at a time.

Sometimes his 55 passenger coaches are only 40 per cent full, but Palmer says his customers love the new service.

He says he is sold on the founders' vision. "They are a bunch of very, very bright, as my dad calls them, young lions."

Fast and furious growth

The young lions,Schwammleinand his partnersJochenEngertand DanielKrauss, are friends, all in theirmid-30s.

They founded the company in 2013, when Germany opened its intercity bus market to private operators.

After launching,FlixBusacquired two rival German bus companies, and now owns 90 per cent of its home market. By 2015, it had launched in Italy, France and the Netherlands, and in 2016took over the massive operations of MegaBus Europe.

SchwammleinsaysFlixBusbroke even last year on all its territories. It's been funded by venture capital firms from Europe and the U.S. firms that have backed disruptive companies likeAirbnbandGroupon.

That private money has been essential to the company's "pedal to the metal"expansion, experts say.

"I think the ownership structure certainly allowed this type of growth," said Jean-BaptisteLitrico, an associate professor of strategy at Queen's University's Smith School of Business.

Hesays the key is that those investors are willing towait for profits to come gradually as the company takes over markets.

Litricopoints out the partnership model has beenused by other bus companies, but he sees theFlixBusapproach winning over investors now because of a wider trend of "vertical disintegration." This is when companies focus on niche parts of their business and outsource others such asUbernot owning cars, orAirbnbnot owning properties.

He says the rise ofFlixBus"would never have been possible 10 years ago, beforesmartphones."

Can it work in Canada?

But busoperators sayFlixBusfaces a different world in Canada.

"I think the biggest factor is trying to get people out of their cars," saidDean Wright of Pacific Western Transportation, which owns the Alberta-basedRed ArrowandEbuslines. In North America, he says, "there's still a love affair and attachment with the personal vehicle."

Wright is in an interesting position. His company could partner withFlixBus, or be in competition with them.While Wright would be open to starting a new route withFlixBus,they'd be rivals ifFlixBuswere to go after Red Arrow andEbusroutes in Alberta, orthebrand new B.C. routesEbusjust opened with Greyhound's exit.

With bus lines falling under provincial regulation, where and whenFlixBusenters Canada will unfold slowly.

"It's a little tricky"Schwammleinsaid."I don't say we will be able to cover all Canadaand everything will be perfect."

Still, the company claims it isvery interested in the Prairie provinces and connecting small centres to big cities.

"If Canada would have a regulatory environment with free competition, where we can compete for big routes, for small routes, whatever, I think we can bringdown prices,"Schwammleinsaid.

Greyhound hadcalled on provincial and federal governments to create a fund to subsidizeintercity routes in rural and remote communities that would be available toany carrier that provided the service.

Some provincialgovernmentshave either operated bus routes orsupported private carriers on low traffic routes.

FlixBus, however, says it would not seek oraccept government subsidies.

"Most of our competitors really don't understand what kind of company we are," Schwammlein said. "We are a very unique animal."