Software scrap

Bumpy Ride for Bus Firms

  • Why it matters

    Why it matters

    Flixbus has big plans for its newly-merged business, but court and criminal charges might get in the way.

  • Facts

    Facts

    • The two largest long-distance bus operators, Flixbus and MeinFernbus, merged in January 2015.
    • Almost 20 million passengers traveled by long-distance bus last year.
    • The Hamburg-based firm Hreos developed the software for Flixbus, before the operator cancelled all contracts.
  • Audio

    Audio

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Earlier this month, colorful buses parked in front of the Tempodrom at Potsdamer Platz in Berlin. Five bright young entrepreneurs posed out front with big travel plans.

On January 9, they announced the merger of Germany’s two largest long-distance bus operators, Flixbus and Meinfernbus. They hoped to put a thousand vehicles on the roads and carry 20 million people throughout Germany – a great green transportation giant set to capture half the market.

“We’re up for taking on Europe,” said Flixbus founder Jochen Engert at the time.

But behind the ambitious talk is a raging controversy. The cause is a computer program that runs Flixbus’ online platform travelers use to buy bus tickets.

The software was developed by the Hamburg company Hreos, but Flixbus cancelled their partnership. A hacker with a Hreos IP address then attacked and damaged Flixbus’ system which later collapsed.

The question is now who owns the rights to the software Hreos developed for the bus company?

The Hamburg public attorney’s office is investigating a reported hacker attack to Flixbus’ website.

There are two different answers in the dispute which is playing out in Hamburg’s district court – complete with criminal complaints, accusations of sabotage and an office raid.

The head of Hreos argues he has been deprived of intellectual property. Hreos developed the software VAZ and a cancellation system, said its lawyer, Dittmar Kania and also had ongoing maintenance contracts, he told Handelsblatt.

But a few weeks ago, Flixbus suddenly excluded Hreos, changing entry codes, the company said. Hreos’ engineers no longer had access to their own software.

The company is seeking an injunction against Flixbus and intends to secure access rights. Hreos is demanding hundreds of thousands of euros in compensation for the canceled contract.

The district court confirmed receiving the injunction petition and said no date has been set for announcing a decision.

 

DB Tougher Competition for Buses-01

 

 

The bus company, Flixbus, tells a different story. Company officials would not comment but sources said Hreos is a former service provider.

“We no longer have a business relationship,” a source said. “All relevant contracts were canceled some time ago. Flixbus possesses all the necessary rights regarding the booking platform.”

Flixbus’ founders have confirmed this version of the story in an affidavit.

The controversy has now moved beyond the civil court and to the prosecutor’s office. The Hamburg public attorney’s office is investigating the reported hacker attack on Flixbus’ website. Handelsblatt has obtained documents from the inquiry, and they include claims that Flixbus data was deleted, damaged or altered.

Restoring service and lost bookings cost Flixbus more than €100,000.

According to documents, the hacker gained unauthorized access to the website Flixbus.de and initiated a large number of bookings for all bus lines and times of day. The hacker then immediately canceled the bookings, which overloaded the system, the documents said.

Investigators said that for several days, it was impossible to book Flixbus tickets online. Restoring service and the lost bookings cost Flixbus more than €100,000.

According to documents, investigators say the attack was launched from an IP address that was assigned to Hreos. Law officials have since stormed the company’s offices, seized computers and data-storage devices.

The lawyer for Hreos’ manager, meanwhile, said the claims are unfounded.

“There is absolutely no evidence in the search warrant,” said the lawyer. “I have submitted a complaint. There is no indication of what constituted the necessary grounds for suspicion.”

All the mudslinging comes at a bad time for Flixbus – it has its hands full after the merger with Meinfernbus.

Flixbus is not the only bus company involved in a takeover. From IT and ticketing to future acquisitions, much change is ahead on Germany’s bus market which is highly fragmented following deregulation in 2012. As companies struggle to cover costs and find drivers, travelers are benefiting from a fierce price war and enjoying low cost tickets – when they can book them.

 

Massimo Bognanni is part of Handelsblatt’s investigative reporting team. To contact the author: bognanni@handelsblatt.com.

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