Changing Lanes: Ground Transportation in Mexico

Ground transportation Mexico

550 million bus tickets are sold every year in Mexico. Recognizing the potential of this market, Mexico City based online booking platform Reserbus launched in 2013 and continues to add partners and destinations. The company, run by Sebastián Gómez, recently signed a series of significant agreements with two more major Mexican bus carriers, with U.S. based Greyhound, and popular Mexican OTA BestDay.

In an interview, the Colombian native, MIT educated entrepreneur said the company works with over 42 bus lines in Mexico allowing Reserbus to sell tickets on more than 12,500 routes and 150 domestic destinations. Five carriers control 75% of the Mexican bus market. Reserbus currently works with four of them and is working on closing ADO to grow their network.  

The Mexican bus market offers significant opportunities when it comes to growth in online bookings, which prompted the partnership between Reserbus and BestDay. Only 5% of the 550 million tickets sold each year are purchased online (valued at 182 million pesos) according to data from BestDay.com. In the US, 50% of bus tickets are sold online.  

Sebastian at ReserBus estimates that in the next four years, 25% of bus tickets sold in Mexico will be online. Sebastian and his team of 18 developers and partnership managers approaches the opportunity from both a B2C and B2B angle. They are selling directly to the consumer via their proprietary platform. They also hope to be the GDS of Mexican bus bookings, powering the engines for online intermediaries. The partnership with BestDay is one example and a step in that direction.

Reserbus began operations in late 2013 and has maintained month-over-month growth in ticket sales of 90%. The platform has also been a catalyst for carriers to pay more attention to their online sales channels, to make the user experience more friendly to the end user. "We are a source of innovation and we seek to grow the cake", explained Sebastian.

Reserbus has also partnered with Uber to provide discounts on rides from the terminal to final destination. In August, the company signed a strategic partnership with U.S. bus carrier Greyhound, which also operates in Mexico.  

Analysis: The Challenge of taking ground transport online

Taking bus tickets online also poses significant challenges. It's a huge big-data problem. The vast number of routes, carriers, and stations compounds the task of integrating back-end systems under one platform. It's a common problem with ground transportation networks globally. Europe's passenger rail network suppliers also have similar issues.

Ironically, good customer service and automated ticketing kiosks could be Reserbus's biggest obstacle on the B2C front. Frequent departures for the highest traffic routes reduces the need to pre-book tickets. Some of the busiest intercity routes in Mexico have buses leaving every 15 minutes. Another benefit to online ticketing is reduced wait times at ticket counter. But this value proposition rests on the assumption that wait-times are a big enough issue. Yet another big incentive to booking transport online is the seamless integration of mobile ticketing. This is great in the U.S. and Europe, but Mexico is still far behind in mobile device penetration. Mexico is still very much a cash economy.  Ecommerce has a way to go to catch up to developed market levels.