The concept of a collaborative or shared economy is already widespread. When less popular, the easiest way to explain it was with an analogy: “like Uber”. The ride-sharing company has become a paradigm for many others that have succeeded it and is still used today by speakers and innovation entrepreneurs paradoxically stuck in time.
But not all “Uber-like” startups are … like Uber. During the biggest party and Brazilian holiday, the Carnival, I tried one of these: Buser, a platform that connects passengers interested in chartering an intercity bus with a common destination. A Uber-like startup? Almost that. And the idea is attracting investors.
In October last year, the startup was the target of an investment round led by SoftBank. The total amount raised was not disclosed, but the company said it would use at least BRL 300 million (about $64.1 million) to invest in its expansion throughout Brazil. Besides SoftBank, Brazilian media conglomerate Grupo Globo and existing investors Canary, Valor Capital and Monashees also joined this Series B round in Buser.
How does Buser work?
From the passenger’s point of view, Buser resembles any other traditional bus company. The main difference of the company in relation to the traditional bus companies appears well before the trip, when it is time to swipe the credit card.
It’s the ticket price, which is up to 60% cheaper in some segments than that of traditional buses. Or rather, the price of the apportionment: fundamentally, it is a group of people chartering a bus and sharing the invoice. So, the more people, the cheaper the trip gets.
In my case, a trip between the cities of Curitiba and São Paulo, a distance of just over 250 miles, back and forth, cost BRL 87– Buser does not charge the return on the first purchase. I actually paid BRL 89, but as more people confirmed the trip later, the apportionment was cheaper and I ended up with BRL 2 in my Buser account.
If I had traveled by a conventional bus company in the same type of seat, weekdays and departure times, I would have paid BRL 328, a difference of 277% for Buser price. Without the promotion of the free return, the difference would have been 84.2%.
Buser does not directly operate buses, it connects passengers to transport companies that charter trips, a modality already regulated by the Brazilian land transport agency (ANTT). With the logistical gains and the guarantee that the buses only run full, Buser is able to practice lower prices, without jeopardizing the remuneration of partner companies.
The disadvantage of the model is the limitation of routes and the uncertainty surrounding the confirmation of trips. Buses only gain the road if there is a minimum number of passengers, and the confirmation of the trip can be made up to 48 hours before departure time. Otherwise, Buser simply warns passengers that the trip is not going to happen, and returns their money.
If the minimum number of passengers had not been reached, good luck to me in trying to find a last minute ticket with traditional airlines. Given this condition, there are still not many destinations operated by Buser, although the number is growing, driven SoftBank’s investment round.
The somewhat “lack of commitment” seems to be a feature of the business. Even the KitKat delivered before the trip is “subject to availability”–just to emphasize, I received the chocolate on departure and on the way back from the trip.
Another treat that depends on availability is the pillow and blanket kit. This one I didn’t get, and it would have been useful on the way out, when the temperature inside the bus was so low that it looked like a freezer.
Even the characterization of buses is not guaranteed. On the way back, I came in one of these, without Buser’s visual identity. The startup said, in an email interview, that the brand stickers on the outside of the bus are optional for partner companies.
Like Uber, but not exactly
Being a platform that connects passengers and vehicles is a definition that includes both Uber and Buser. Even the discourse that they are not transportation companies, but technology companies, is common to them.
But there is a fundamental difference between the two services: the relationship with drivers. At Buser, they are professionals hired by partner companies. “Unlike Uber”, explains the startup, “Buser’s partner drivers are not autonomous, but professionals linked to partner family companies, following the rest time requirements, as well as regular labor rights”.
Buser has over 100 partner companies, and none have left the platform so far. To become Buser’s partner, the charter company is inspected and must have in the garage “vehicles in excellent condition to provide comfort and especially safety to passengers, in addition to having the authorizations and inspections of the supervisory bodies up to date”. All trips are monitored in real time, and aspects such as speed are observed. The startup said it is testing some safety tools for passengers, such as alarms that sound when someone disconnects their seat belt and remains seated.
Unforeseen circumstances are covered by two insurances that include passengers and drivers, one from Buser and the other from the partner charter company. A Buser 24-hour operations center, which also provides assistance via WhatsApp, helps speed up service.
Problems with Justice
One of the striking features of the disruptive models is the judicialization created by incumbents in the sector. At the end of February, on the eve of Carnival, the Federal Court of Santa Catarina State responded to a request from the Union of Santa Catarina State Passenger Transport Companies (SETPESC) and banned Buser and 4bus, another startup based on the same model, to operate in the state, under penalty of a daily fine of BRL 5,000 in case of non-compliance.
In the dispatch, Judge Ana Luísa Schmidt Ramos, from the 1st Public Finance Court of Florianópolis, saw signs of unfair competition in startups. The fact that the site offers defined itineraries, purchase of individual tickets and one-way option, contradicts the argument that they intermediate charter trips.
“With this price difference–the price offered by Buser represents approximately 30% of the legally charged fare–, it is clear that the defendants Buser and Lucretur capture the regular passenger transport clientele, without being subject to the charges imposed on them. They can freely choose itineraries and economically attractive schedules, and practice significantly lower prices with passengers, as they do not have to pay for restricted itineraries and schedules, minimum frequencies, exemptions or tariff reducers,” said the judge.
It is important to note, in this sense, that at the moment the possibility of creating sections to gather groups of passengers interested in them is disabled on the Buser platform, according to the service’s documentation. With this, it is very difficult to distinguish, from the point of view of the passenger who accesses the website or downloads the Buser application, practical differences in relation to a traditional bus company, which operates pre-defined lines.
Buser, in its turn, says that its success is due to the fact that the startup is “an alternative to a concentrated market” and that “it has been attacked exclusively by interest groups linked to the large groups that dominate the sector”. Right or wrong, despite the legal impediment in the Brazilian state of Santa Catarina, the Buser website continues to offer trips to destinations there, to cities such as Florianópolis, Balneário Camboriú, and Blumenau. I asked the startup if this would not characterize non-compliance with the Justice’s decision, but the startup avoided giving a direct answer:
“Buser complies with all judicial decisions immediately after summons by the Judiciary. In our brief history, we have a large volume of actions promoted by companies in the traditional transport sector and our record has been very positive, both at the Federal and State levels,”the company said in a statement.
In its favor, the startup recalls, in 2019 Minister Edson Fachin, of the Supreme Federal Court (STF), decided not to proceed with a lawsuit filed by the Brazilian Association of Ground Passenger Transport Companies (Abrati), which called for the suspension of favorable decisions to Buser granted by the Federal Court in several states. The Attorney General’s Office was in favor of Buser in this case.
These judicial conflicts only postpone the inevitable. What the startup does is to optimize travel with the help of technology, something that is probably already done by traditional bus companies, which in turn are unable to reach similar prices because they run into legal obligations and commitments to deficit lines.
Every optimization faces barriers in the real world, and when someone needs to take a bus to a small town, served by only one line twice a week, it becomes much more difficult to “optimize” the route so that it does not cause any loss. For this type of situation there’s still no Buser.