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California Shuttle Bus, which runs express buses between the Los Angeles and San Francisco areas, began offering fares as low as $5 each way Monday. Previously, one-way tickets cost $45.

The move came a day after competitor Megabus, which touted fares as low as $1, shut its Los Angeles hub because of low ridership.

Only a few seats on each vehicle that California Shuttle Bus operates on the route will sell for $5; the highest price for a ticket will be $49. Pick-up locations include downtown and Hollywood.

Kazuhiro Nakagawa, founder and chief executive of San Jose-based California Shuttle Bus, said he believed there was a market for low-cost bus transportation between Southern and Northern California.

"Many Megabus customers were disappointed that the company canceled their Los Angeles-San Francisco service and are excited that we are offering the same route with more convenient pick-up locations at amazing prices," Nakagawa said. "Many Californians care about the environmental impact as much as affordability and we are offering them a service where they can have both."

Operating a budget bus service is a far cry from Nakagawa's previous endeavor: For more than two decades, he ran a luxury bus service for Japanese tourists who paid $10,000 each for whirlwind tours of the United States.

Over the years, he built that firm into an enterprise with 24 buses, nearly 200 employees and $36 million a year in revenue. But a sour Japanese economy and the lingering effects of the Sept. 11 terrorist attacks hampered business, and Nakagawa sought a new niche by founding California Shuttle Bus in 2003.

The company operates one bus a day in each direction between Los Angeles and San Francisco, and two buses each way on Fridays. Nakagawa said he planned to add trips if demand dictated.

andrea.chang@latimes.com

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