Friday, December 23, 2011

Remarks made at Press Conference at Fort Wayne, IN Greyhound Station - 12/23/2011

Greyhound Petition Delivery Comments
Delivered at Greyhound Station, Fort Wayne, IN
December 23, 2011

Good morning. My name is Shawn Ambrose and I am an Assistant Professor of Business Administration in the Keith Busse School of Business and Entrepreneurial Leadership at the University of Saint Francis, Fort Wayne, IN. The views expressed here are strictly my own, and do not represent an official policy or opinion of the University of Saint Francis. However, under the guidelines and privileges of academic freedom, I believe that in addition to my expertise, that as a faculty member at a Franciscan University, I have a moral duty to speak out on a business practice that I believe is unfair.

On October 7th, I initiated an online petition campaign through Change.org, asking Greyhound Lines, Inc. to discontinue the practice of charging an $18 fee for third party e-purchase transactions (aka “Gift Ticket Fee”). I am pleased to report that as of 7:00 a.m., 8,007 people have signed the petition, including 29 from the Fort Wayne area, and 142 from the state of Indiana.

All of these people agree with my opinion, the Greyhound Gift Ticket Fee exploits those who are trying to assist a person in need, or to pay the fare for a friend and/or family member to travel.

Consider the following facts about Greyhound:

·         The average ticket price is $48
·         The majority of Greyhound passengers travel to visit family and friends
·         Nearly 60 percent of Greyhound passengers travel less than 450 miles.
·         Two-thirds of Greyhound passengers earn less than $35,000 annually.

Based on these data, it is clear that Greyhound targets lower-income customers, based on the fare structure and the preponderance of lower income customers. Given these data, the Gift Ticket Fee, on average, is a 37.5% markup. In addition, for short-haul schedules, the Gift Ticket Fee can exceed the cost of the ticket.

In addition, the Gift Ticket Fee is a hardship for many families. David Henderson, an advocate for the poor, decided he would purchase a bus ticket to help someone move to another city to get a start on a better life. David’s words speak to the unjustness of the Gift Ticket Fee:

I have always known that being poor is expensive. When I was providing direct services to low-income individuals and families it seemed they would get caught in an endless web of miserable ticky-tacky corporate fees and fines. But my experience with Grey Hound (sic) was the first time I have been directly impacted by a corporate culture that kicks the crap out of poor people, knowing they have no voice with which to complain.

In addition, Greyhound needs to consider that many non-profits, with limited funds, use Greyhound’s transportation services to assist with people who are trying to better their lives, or in some cases, to escape physical injury. Laura Stockwell, who works for a small non-profit domestic violence agency in North Carolina, wrote:

One of my clients needed assistance with traveling out of state to flee from her abuser. Thanks to Greyhound’s exorbitant fee, our agency will have to dish out even more money to ensure that our client can get to safety.

Many other accounts of the impact of the Gift Ticket Fee can be read at the petition site at Change.org.

Greyhound representatives have stated the Gift Ticket Fee covers the expenses for handling charges and is an anti-fraud measure. Based on job analysis and statistics from the credit card industry, it is clear that neither of the two reasons stands up to scrutiny.

The Gift Ticket Fee applies to all third party e-transactions, whether the ticket is mailed to the intended user or picked up at the terminal. For a ticket which is being mailed to the intended user, there is no additional work required for the processing of the ticket, since the ticket purchaser is entering all of the information at the Greyhound website. The ticket is printed and mailed. There are no additional steps needed by Greyhound employees.

When a ticket is purchased for pick-up at the Greyhound terminal, I believe that, while an employee must perform steps to process the transaction, that the steps are significantly reduced for a Gift Ticket which is picked up at the terminal rather than having the buyer make the trip to the terminal. In my November 21 letter to Dave Leach, CEO of Greyhound, I constructed a job analysis. It is apparent there are more steps needed to process a “Gift Ticket Fee” in the terminal than electronically. Besides the inconvenience of having a purchaser drive to a Greyhound terminal to purchase a Gift Ticket, more labor is needed to process the transaction, which increases the labor cost. My letter to Mr. Leach is available at my blog, which can be accessed through the petition website. For the record, Mr. Leach and Greyhound have not responded to my letter.

Greyhound representatives  have also stated that the Gift Ticket Fee is an anti-fraud measure. With an average ticket cost of $48 and a Gift Ticket Fee of $18, the average ticket cost is covered by 2.67 Gift Ticket Fees. In other words, one out of every 2.67 Gift Ticket Sales are fraudulent. This defies logical explanation.

In an interview with the Toronto Star concerning the Gift Ticket Fee, Visa Canada stated that it was unaware of higher fraud rates in the bus industry. When one considers that in 2010, online fraud losses were less than one percent of revenue, to infer that Gift Ticket Fee online fraud rates are 33% strains credibility.

The Greyhound Gift Ticket Fee is a poor business practice. In my research, I have not found any business that charges a 37.5% markup for the privilege of conducting a third party transaction, including competitors such as MegaBus and Amtrak.

I urge Greyhound to eliminate the Gift Ticket Fee immediately.  The Gift Ticket Fee is unfair to Greyhound customers, not cost effective for Greyhound, and is not duplicated by your peers. I look forward to the courtesy of a personal response from a member of Greyhound’s senior management.

I wish to extend my sincere thanks to the over 8,000 people who have signed the petition. In addition, special thanks to Tim Neumann at Change.org for his advice, encouragement, and petition acumen. Finally, I wish to thank the many media outlets who have covered this petition, and for your coverage of the petition delivery. The petition delivery does not mean that this effort is over; rather, the delivery celebrates a significant milestone in this effort. At this time, I’ll be happy to answer your questions.

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