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It's difficult for foreign travelers to travel by bus in Upper Egypt (authorities strongly discourage it). If you can get a ticket, it's definitely the cheapest way to move around, though not terribly comfortable.
Twelve-seater minibuses run services around town, and locals pay around £E1 to £E3 per trip, depending on the destination. However, drivers don't always stop for visitors and may try to charge more if they do stop. Know the fares (ask at the tourist office, as rates can change) and refuse to be intimidated into paying more.
Be aware that many intercity buses never leave Cairo unless a mechanic is aboard. There's a reason for that. Even if no mechanical problems befall, buses to Upper Egypt can be a very rough ride, because of the condition of the seats, the sporadic functioning of the air-conditioning, and the blaring of the onboard videos. Egyptians who must travel overland from Cairo to Luxor almost always take the train. That being said, buses are by far the cheapest way to go—about £E90 one-way to Luxor. If you insist on spending the next 12 hours of your life on the bus to Luxor, purchase tickets from the Targoman Station in central Cairo.
Targoman Bus Station. Shar'a Mahata Aboud, Downtown, Cairo. 02/2431–6723.