Using his father’s redundancy money, with his sister Ann Gloag and his brother-in-law Robin Gloag he established the Stagecoach Group in 1980, running buses from Dundee to London. Following the deregulation of bus services in Great Britain, expansion continued, and in the late 1980s Stagecoach acquired National Bus Company subsidiaries in Cumberland and Hampshire, and the East Midlands, Ribble, Southdown and United Counties companies. Stagecoach also bought bus operations in Scotland, Newcastle and London, with Manchester being added a few years later. In 1993, Stagecoach was valued at £134 million and was floated on the London Stock Exchange to access capital for new opportunities for buses and trains overseas.

In 1989 Souter received an award from the Scottish Business Achievement Award Trust.

In 1992 Souter and his wife set up the Souter Charitable Trust, which assists humanitarian projects in the UK and overseas, especially, but not exclusively, those with a Christian emphasis. Projects include the prevention of malaria and supplying daily meals to school children in Africa. The Trust has donated more than £98m to 13,000 worthwhile causes.

In 1997 he was granted an honorary degree from Strathclyde University.

In 1998, Stagecoach purchased a 49% shareholding in Virgin Rail Group that operated the CrossCountry and West Coast franchises. In 2007, Stagecoach commenced operating the East Midlands Trains franchise. From April 2015 until June 2018, Virgin Trains East Coast, in which Stagecoach held a 90% share, operated the InterCity East Coast franchise.

In 1998 he was awarded the Scottish Entrepreneur Award.

In 1998, Souter described English Northerners (who make up a considerable proportion of his customers) as “the beer-drinking, chip-eating, council house-dwelling, old Labour-voting masses.”

In 1999 he received his second honorary degree, from Abertay University.

In 2000, the Scottish Executive proposed the abolition of Section 28 laws, which forbade local authorities from “intentionally promoting homosexuality”. Souter was a prominent leader of the Keep the Clause campaign, which sought to prevent its abolition. In Scotland, where Section 28 was known as clause 2A, Souter spent £1 million on the first privately funded postal referendum across Scotland to gauge public opinion. A spokesman for Souter stated “He is not in this for personal glory. He is fighting this battle because he is a father and committed Christian.”

Shortly after Souter floated Stagecoach on the London Stock Exchange, he turned his attention to British railways. Initial experiments consisted of a Scotland to London service branded Stagecoach Rail with carriages attached to the Caledonian Sleeper. During the privatisation of British Rail, Stagecoach bid successfully to operate the South West Trains franchise from 1996 followed by the Island Line Trains later the same year. Stagecoach successfully bid to retain both when retendered in 2001 and 2006, before they passed to South Western Railway in 2017.

In 2003, Souter added the bus and coach operator Megabus to the group. With its slogan “Low Cost Inter City Travel Serving Europe”, it offered discounted travel across the UK and Europe. In 2012 it operated in 31 cities in the UK with a turnover in excess of £2 billion, with annual profits of over £250 million.

In 2004 he was honoured with the Businessman of the Year award at the Insider Elite Awards.

Souter was a major financial supporter of the Scottish National Party (SNP). In March 2007, he donated £500,000, citing an imbalance of funding within Scottish politics. He stated that it was his intention to redress an imbalance in funding: “as long as I can remember, the case for the union has been hugely financed by cash from London, while the case for independence has lacked resources. I hope my donation will help redress this imbalance”. Following the donation, SNP leader Alex Salmond was criticised for “pandering to homophobia” by accepting the donation. Salmond thanked Souter for his support, calling him “one of the outstanding entrepreneurs of his generation”. One month later, in April 2007, the SNP’s commitment (made at the party’s 2006 conference) to re-regulate the bus network was dropped from the 2007 manifesto, although the SNP denied any direct link.

In 2008 he was given a Special Recognition Award for services to the bus industry.

In 2009, Souter received a £1.6m bonus. Stating “it was felt that in the present economic climate it would not be right for any individual to pocket a bonus package of £1.6million”, he donated £900,000 to his own charity, the Souter Charitable Trust, which assists humanitarian projects in the UK and overseas. Most of the remainder was given to the staff pension fund.

In June 2010 he was given a Special Career Service Award at the “Talent In Mobility” Awards, part of the European Mobility Exhibition held in Paris for the public transport industry.

In October 2010 he was awarded the Ernst & Young UK Master Entrepreneur of the Year.

In February 2011 Souter again pledged financial support for the SNP, promising to match every pound they raised with a donation of up to £500,000. Announcing his support he said Salmond and the SNP deserved a second term in office. The SNP won a resounding victory in the election with Salmond being returned unopposed as First Minister.

In 2011 he was presented with an outstanding achievement award at the 2011 Perthshire Chamber of Commerce Business Star Awards.

Souter was knighted in the 2011 Birthday Honours for services to transport and the voluntary sector. This proved controversial, and was criticised by Scottish Labour MP Cathy Jamieson, who suggested a link between the knighthood and the large amounts of money he has donated to the Scottish National Party. In a public statement, Jamieson said: “The First Minister and his party must look seriously at the relationship they have developed with wealthy individuals handing them large sums of cash. The public will rightly be asking what’s next on Mr Souter’s shopping list?” Salmond denied any wrongdoing in the matter and referred himself for investigation after calls for a probe by Scottish MP Jim Sheridan. An independent report, conducted by Lord Fraser of Carmyllie, cleared Salmond of any wrongdoing, asserting that “There appears to me to have been no breach of the ministerial code by Alex Salmond as First Minister and he should be wholly exonerated of any breach.”

In August 2012, it was announced that Souter would become Chairman of Stagecoach Group on 1 May 2013, finance director Martin Griffiths replacing Souter as CEO. It was announced in December 2019 that Souter would step down from his role as Chairman at the end of the year, but remain on the board as a non-executive director.

Souter and his sister Ann Gloag formed Highland Global Transport in 2012. It owns a portfolio of transport related investments valued at more than £600million including:

On 18 April 2012 he was inducted into the British Travel and Hospitality Industry Hall of Fame, the first public transport entrepreneur to receive the honour.

In April 2013 Souter announced a new Megabus overnight sleeper service from Scotland to London. The sleeper coaches cost £5 million to build, and have 53 leather seats which can be converted into 42 bunk beds. Passengers receive a onesie for sleeping in during the trip. This service ended in May 2017, due to it being consistently loss-making, and the coaches are now only used on daytime services.

The BBC reported in August 2014 that Souter had donated £1 million to the campaign for Scottish independence. Since Nicola Sturgeon became SNP leader in November 2014, Souter has made no further donation, but in December 2014 he gave £3,500 to the Lewes branch of the Liberal Democratic Party.

Highland Global Transport has purchased and established a number of subsidiaries in New Zealand. In August 2015, these were brought together under the one umbrella as the InMotion Group with 340 buses and coaches and 17 ferries.

In April 2015, Souter was officially appointed Vice President of the Institute of Chartered Accountants of Scotland, alongside newly appointed President, Jim Pettigrew. Souter, who qualified as a Chartered Accountant in 1984, was the sole nominee for the vice-president role. In May 2017 the organisation appointed him as its president.

ManaBus and Naked Bus ceased operation on 15 July 2018, with the bus fleets being sold to Ritchies Transport. Reesby Buses was also sold to Ritchies in February 2019. Mana Coach Services and Howick & Eastern Buses were sold to Transdev Australasia in October and November 2019 respectively. This leaves Fullers Group (Fullers360) as Souter’s only subsidiary in New Zealand as of November 2019.

In April 2019, Souter’s company Stagecoach Southeast was announced as the sponsor of the annual Turner Prize for visual artists, but the sponsorship was ended a few days later by mutual agreement after public criticism of Souter’s involvement in the sponsorship.