Bus deregulation in Europe

November 2016

1

Past

Flixbus is Bringing Bus & Mobility Services to the 21st Century

Today: FlixBus – The New Mobility Experience

BremenAmsterdamThe Hague

Brussels

ParisLuxembourg

Essen

Dusseldorf

Frankfurt

Zurich

Stuttgart

RomeBarcelona

Switzerland

HamburgBerlin

Hannover

Dortmund

Cologne

Nuremberg

Dresden

Prague

ViennaBudapest

Copenhagen

Slovenia

Romania

Poland

Ukraine

Slovakia

Austria

Croatia

London

2

How FlixBus Works

Customers

250+ Bus Partners

>35 Mio. Happy

customers

>5.000 drivers

>1.000 buses

3

Busses compete primarily with cars and trains and are most attractive for easy, modern and cheap travel

Busses offer a great alternative to people with lower income, students and older people

Alternative means of transportation Major reasons to chose bus

9%

20% 18%12% 15%

7% 10% 24%

10%

28% 17%

16%

16%

12%12%

23%

35%17% 26%

31%

9%

0%

20%

40%

60%

80%

100%

Germany CEE France Italy

I wouldn't have made this trip Car (own car or driven by …)Car sharing Another bus companyRegional train Intercity railAirplane

87%

41%

20%

17%

15%

13%

12%

9%

8%

Attractive price

Direct connection

WiFi on board

Nearby station

Frequency

Comfort

Short travel time

Environmentally friendly

Safe

4

Innovation in bus travel strengthens public transport

Deregulation created higher demand in public transport… … along with better offer on rail

• Attractive prices also offered by state railway

• WiFi offering introduced after example from busses

• Punctuality initiative and quality improvement

• Network expansion announced after decades of decrease

• Technology investments to improve customer experience (apps, booking, …)

100

110

120

130

140

150

160

170

180

2012 2013 2014 2015 2016 forecast

Mio

Pas

sen

gers

Long distance rail Long distance bus

5

European deregulation still with untapped potential

Deregulated Protective regulation Not accessibleNot an EU member state/ contingent accessibility

State of deregulation

• Some major countries pushed deregulation to foster economy

• Further deregulation on hold besides Switzerland

• Authorization processes in all countries time consuming and highly inefficient

• European cross-border traffic deregulated but with most complex authorization process

6

Many regulatory challenges even in deregulated markets

Regulatory challenges destroy value for travelers, bus companies and tax payers

Weak infrastructure in cities

• Low share of cities with proper bus terminals

• Wrong decisions on bus terminal location in young markets

• Infrastructure monopolies threaten customer value

Complex application processes

• Lengthy discussions with authorities and formalities

• Long process time destroys values for customer and companies

• Low flexibility for changes

Intense paperwork & border control

• Huge amount of documentation in paper needed

• Authorities on the street not knowledgeable on regulation

• Boarder controls create huge delays

State subsidies for competitors

• State railways with aggressive attacks on private companies

• Losses are compensated by subsidized rail business

• State railways tries to change regulation against bus companies

7

Innovation and deregulation in bus travel creates huge positive effect without costs for governments

Public transport in bus and rail gets more attractive against cars

Positive environmental impact from bus travel as the most efficient way to travel and save CO2 emissions

Thousands of new permanent jobs and in many cases in economically weak regions

Millions of tax from VAT and other taxes as well as social security payments

Increased travel cross-border and higher cultural exchange across countries

Totally free for governments