Interconnected bus routes across Germany, symbolizing competition and connectivity.

Bus Industry Battle: How Competition is Shaping German Travel

Author's portrait.
Beau Callahan in Business & Economy April 2025 • 4 min read.

"An Inside Look at the German Interurban Bus Market: Two Years After Liberalization and What It Means for Travelers."


Since the 1970s, deregulation has swept across industries worldwide, aiming to boost efficiency and cut subsidies by fostering competition. Network industries, like transportation, have been at the forefront of these changes. The shift from regulation to liberalization presents fascinating research opportunities, focusing on how these changes impact efficiency, prices, and profitability.

For decades, Germany's interurban bus industry remained untouched by these trends, but in 2009, the government announced plans to liberalize the market for bus services exceeding 50 kilometers. The industry fully opened in January 2013, and in this article, we delve into the competition in the German interurban bus industry two years after liberalization.

Following a brief overview of the liberalization process and market developments, we provide an in-depth analysis of market concentration, competition, fares, and service quality. These insights inform our discussion of industry consolidation and potential abuses of market power, culminating in recommendations to ensure fair competition.

Market Dynamics After Deregulation

Interconnected bus routes across Germany, symbolizing competition and connectivity.

Following deregulation in January 2013, there was a surge in providers seeking operating licenses, with numbers increasing from 86 in December 2012 to 301 in September 2014, marking a 350% increase. This growth translated into more routes and increased service frequency. Comparing a week in August 2013 to the same week in August 2014, the number of lines jumped from 113 to 244 (up 116%), and the number of journeys soared from 2,360 to 7,088 (up 300%).

New entrants like MeinFernbus and FlixBus rapidly expanded their route networks by adopting a subcontractor-type business model, partnering with existing local bus companies. This strategy proved successful, with MeinFernbus leading the market share at 29%, followed by FlixBus at 24% in August 2014. Other operators held smaller shares due to later entry or focusing on regional services.
Despite the growth, the German interurban bus industry remains relatively small. In 2013, 8.2 million passengers traveled by interurban bus (2.7 billion passenger kilometers), compared to 131 million on long-distance railways. Here are some important points to consider:
  • Market Entry: Significant market entry by both new and existing firms.
  • Business Models: Subcontractor models become popular for rapid expansion.
  • Market Share: A few major players dominate.
  • Overall Size: Still small compared to rail travel.
A recent forecast projects the German interurban bus industry to grow to about 25 million passengers by 2030, generating 8.8 billion passenger kilometers. The main factors are market concentration, competitive interaction, fares, and service quality. Analyzing these factors requires detailed route-level data, which we constructed by merging data from various sources, including online search engines and Google Maps. The dataset includes information on dates, times, cities of origin and destination, duration, provider, amenities, and prices.

The Road Ahead

Our study supports the hypothesis that competition in the German interurban bus industry is viable and functioning. Frequent firm and route entries have led to a quick expansion of route networks, with new entrants capturing the largest market share. While consolidation events may lead to short-term price increases, the low level of entry barriers and price-elastic demand should prevent non-transitory increases.

Newsletter Subscribe

Subscribe to get the latest articles and insights directly in your inbox.