Simon Calder: The Man Who Pays His Way

Life in the slow lane with the Scottish Megabus

You know how to catch a bus. 1: Wait at a bus stop. 2: If you are outside London - in Edinburgh, say - the bus should turn up on time. 3: Step aboard and buy a ticket. But this week, when I climbed on the 11am bus from the Scottish capital to Dundee, I was obliged to say "4-1140-100304-M90-1100-Edi-Dun".

You know how to catch a bus. 1: Wait at a bus stop. 2: If you are outside London - in Edinburgh, say - the bus should turn up on time. 3: Step aboard and buy a ticket. But this week, when I climbed on the 11am bus from the Scottish capital to Dundee, I was obliged to say "4-1140-100304-M90-1100-Edi-Dun". This may look like a coded message from our ever-watchful security services, but in fact it is the latest weapon in the bus wars that are raging in Scotland and spreading to the rest of the UK. Even if you would rather cycle on flat tyres than be seen on a long-distance bus, the benefits of this extraordinary conflict will spread to rail travel.

Edinburgh's bright and clean St Andrew's bus station celebrated its first birthday this week. The rejoicing was muted, though, because a number of its intended users were shivering half a mile away on Waterloo Place, opposite the Christian Science Reading Room. Providing warm, dry waiting facilities is expensive, and does not fit in with the notion of a no-frills bus.

Megabus is the latest venture from Stagecoach, the Scottish company that has extended its corporate tentacles into surface transport all over Britain. It already runs Stagecoach-branded services from Edinburgh bus station to Dundee bus station, price £5.50 each way. But the company's boss, Brian Souter, believes there is money to be made by charging people as little as £2.50 return for the 60-mile journey.

The business plan has been borrowed from the no-frills airlines closely. You must book online, at www.megabus.com. There are no tickets. You are allowed on the bus only if you can utter a 24-digit code (or, if you have remembered to print out your booking, point to it). The principles of yield management are employed to squeeze as much as possible out of each of the 76 seats on the double-decker buses. But mid-morning, midweek, in March, is the lowest of seasons. So each of the 12 travellers waiting for the Megabus had paid the minimum fare to stretch, should we wish, across six seats.

I made myself (relatively) comfortable on the top deck at the front, and sat back for a fine sight-seeing tour of Edinburgh, Fife and the Tay Valley. The journey began on the stroke of 11 with an architectural sprint through Edinburgh's handsome New Town, including a pause at a Charlotte Square bus stop where the population of the vehicle increased by three. The bus had evidently done service plodding around some distant town or county, before re-emerging as the bright new hope for British travel. It was not exactly a chauffeur-driven limousine, but the views of the Water of Leith and Cramond Brig are better from the top-deck of a 76-seater.

Gliding along the A90 on a vehicle like this feels odd, as though the number 41 bus had overshot its usual terminus and pressed on to the Forth Estuary.

Even on a drab day, crossing the Forth Road Bridge is a treat. The hills of Fife crumble towards the water, with a huddle of houses perched on the shore - all framed by the muscular Rail Bridge. So much for aesthetics; what about the economics? Stagecoach believes, like easyJet, that the travelling public is under-served. If you cut costs sharply enough, the theory goes, you will be able to offer low fares, stimulate extra journeys and make a profit. When every seat is occupied at an average fare of, say, £3.50, the business looks very attractive: the fixed costs of wages, fuel and tolls on this one-way trip add up to perhaps £66 - a "profit" of £200.

Out of this has to come the cost of the vehicles (negligible, given their age), marketing (the huge yellow man with a bow tie plastered on each bus should ease that spend) and the obligation to run almost-empty buses on Wednesday mornings. It remains to be seen if Mr Souter is right, but while Megabus is still in the inevitable loss-making early stages, the traveller benefits.

Look, there's a Scotrail train, as grumpy as Gordon, trundling across the rail bridge. I know for a fact that there is one fewer traveller on board because of Megabus, because I would have taken the train were it not for the prospect of saving £15 on the trip. Scotrail has hit back at the no-frills airlines by slashing its Anglo-Scottish sleeper fares, and is no doubt planning the same on key routes within Scotland. As Megabus spreads south, with fares from London to Birmingham and Bristol as low as £2.50 return, other rail rivals will be planning their responses.

Megabus is not for people in a hurry; ours did not need to slow to 50mph for a stretch of contra-flow. And to reach Dundee, you change at Perth.

"Perth" turned out to be a bit of a Ryanair description; the connecting point was a park-and-ride depot. But we were on our way within two minutes, and wafted along beside the Tay to arrive ahead of schedule at a windswept bus stop near the station. Here, a couple of passengers for the return trip were preparing by puffing on a Megajoint. I wish I had hung around to listen to them try to recite their 24-digit codes.

But even without chemical assistance, the Megabus has a feelgood factor: it takes you through 60 miles of beautiful scenery in under two hours, at a fare of less than three pence a mile.

WELCOME TO THE CHEAP SEATS

Megabus is charging prices so low that they could finish off hitch-hiking in Britain for good. National Express has already embraced the internet with inter-city trips as cheap as £1 each way for those who book "funfares" ahead and buy online at nationalexpress. co.uk. And Stelios Haji-Ioannou, founder of easyJet, is soon to join the fray with a fleet of 16-seater Mercedes buses with fares as low as £1.

This fares war raises the intriguing prospect of reducing traffic on Britain's motorways. Even the most ardent motorist must have a point at which he or she will abandon their car, if the price of the alternative is low enough. Should the average fare for a 90-mile journey such as Birmingham to Manchester fall to, say £2, the M6 could be all the clearer for Megabuses and easyBuses.

Time for a competition: who can devise the cheapest journey from Aberdeen to Plymouth by public transport? As a starting point, the lowest fare on Virgin Trains is £33.

You can construct your itinerary using published fares; if yours is the lowest credible bid, then I shall send you the money to pay for the trip - as long as you promise to make the journey and let us know how you get on.