Bus Operations: How to make bus operators more profitable

Long-distance bus aggregation still has a long way to go in India.

July 10, 2021 9:46 AM
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By Amit Gupta

The COVID-19 pandemic has hit travel and tourism hard. And with social distancing expected to be the norm, the way the world travels is also changing. In India, almost 90% of travel is undertaken through trains and buses, of which bus travel has a lion’s share. For short or intermediate distances (100-400 km), 60% of traffic moves through buses. In this category, while trains have limited capacity – routes are congested and seat availability is low especially during festive seasons and in high population density geographies – flights are costly. Buses are the natural alternative, but the pandemic has put the brakes on buses.

According to last year’s UITP World Bank survey, a mere 1-2% of bus operators were running normal services and 81% reported no ridership at all. Also, 38% said a major challenge was crowd management, a prerequisite during the pandemic. The survey covered government, private, urban and intercity bus operators. Bus operators’ agony has been accentuated by sky-rocketing diesel prices, coupled with low travel demand.

So, what ails the sector?

Lack of tech-based solutions

Airlines have several resources to predict traffic and select routes; even railways has a centralised ticket issuance data and occupancy rate data to know which routes have higher demand. But when it comes to bus travel, given its unorganised nature, huge number of transporters and lack of pooled data, operators mostly rely on their own judgement. This leads to suboptimal and inefficient utilisation of assets.

The good news, however, is bus operators are realising the power of data and technology companies. In our experience, in the last few months we have observed a surge of 200% in our system from operators looking for our data-backed insights for selection of best routes to operate on.

Passenger mobility contributes around 6% to India’s GDP, and it’s time for key stakeholders to come together to sail through these challenging times.

Food for thought

Smart selection of routes on the basis of predictive demand analysis has been eluding the sector, resulting in overlaps and crowding of specific routes. The other challenge is limited presence of digital channels. During such times, operators can consider associating with data-backed tech companies to ‘earn more’. Operators should also consider associating with tech platforms with end-to-end capabilities, which can assist them to ‘save’ up to 15% of their daily operating costs.

(The author is co-founder & CEO, GoGo Bus. Views are personal)

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