IRACST- International Journal of Research in Management & Technology (IJRMT), ISSN: 2249-9563

Vol. 2, No. 4, August 2012

A Quick Assessment Technique to Determine

Profitability in Private City-Bus-Services – Case
Study Kolkata-Howrah Urban Area, India
Soumen Mitra
Assistant Professor
Department of Architecture, Town & Regional Planning
Bengal Engineering and Science University, Shibpur, Howrah, India

Dr. Jayita Guha Niyogi

Professor and Head
Department of Architecture
Jadavpur University, Kolkata, India
 

Abstract - Public transport system must be profitable to the
private operators without government subsidy or intolerable
rise in bus fare to ensure efficient mobility in a third world
city. However, a populist but not so affluent government is
unwilling either to subsidize or raise the bus fare, thereby
forcing private players to withdraw or compromise with the
level of service and the commuters are badly affected. Present
research aims to strike a balance.
A study on private city-bus services has been conducted in
Kolkata-Howrah urban area which incorporates data on route,
operation and financial system. A multiple linear regression is
used on a combinatorial basis which indicates that five
attributes, namely, route-length, number of days a bus
operates in a month, average passenger per day, average fare
and legal cost contributes significantly in computing service
profitability. Thus, the decision makers may adopt the tool for
quick assessment of profitability in the constraint domain of
operation of existing and new bus routes.
Keywords: Profitability, Private City-Bus Service, Multiple
Linear Regression
I. INTRODUCTION
Bus transport system largely serves the travel demand of
developing countries [1] like India. They serve more than
90% of commuters in Indian cities [2]. Since buses
constitute less than 1% of vehicle fleet but meet around 62%
of total travel demand [3], their service cannot be
overemphasized. Bus service involves minimal installation
cost, flexibility in operation and lower fare structure vis-a-
vis other effective qualities like reduction in street
congestion, fuel consumption, environmental pollution,
street fatality and land used for transport [4]. National Urban
Transport Policy (NUTP) 2006 [5] of India and Jawaharlal
Nehru National Urban Mission (JnNURM 2005) too view
public transport as an efficient solution of future
transportation system [6].
Bus services in India are operated by ‘government’ and
‘private’ authorities as well. There are dedicated
government city-bus services in 17 cities of India having
population more than 1 million [7]. However, lately bus
services in Indian cities are incurring loss [8] and there is a
steady decline of fleet sizes [9]. Quantitatively the losses per
effective kilometer in Mumbai, Delhi, Chennai and Pune
amount to Rupees 20, 84, 3 and 5, respectively [10].
Present survey reveals that employment-load per bus (both
in number and salary) in government is much higher than
their private counterpart. Hence, the privatized operations
seem to be more profitable in a constraint domain of
operation. But practically, the overall profitability in private
city-bus service is found mostly to be negative with a
marginal profit in only some routes.
This article investigates least possible attributes responsible
for profitability and finds out a methodology to quickly
assess the profitability in Indian context for rapid appraisal.
Kolkata-Howrah urban area, in the Eastern state of West
Bengal, India, has been chosen to make a case study. The
outputs from the study exhibit combinatorial equations
processed through multiple linear regression analysis.
Furthermore, the relevant directions for further research
have been identified.
II. REVIEW OF LITERATURE
Two distinct approaches have been adopted by various
researchers to account for profitability: some of them
explore relationships among various attributes connected
with profitability, while others suggest improvement
strategies for bus service, this being an extremely efficient
mode.
Models in relation with profitability and various social,
economic and system-based attributes have been developed
by various researchers. In a nut-shell, these attributes
include residential density [11], demographic characters and

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income distribution [12], vehicle assignment method [13],
labor force and service utilization [14], identification of
‘ideal’ and ‘optimized’ conditions through GIS approach
[15], Price and Cost elasticity [16], etc.
A number of good practices are observed globally which
explain various improvement strategies to revitalize the bus
service. Among the cities of developing countries, Curitiba
in Brazil is considered to be one of the finest examples [17].
In India, cities like Banglaore, Surat, Jalandhar, Raipur and
Indore have followed the same suite. Major strategies for
improvement of bus service include (i) integration and
ticket-unification of public transport system [18], (ii)
penalization of private transport, (iii) standardization of
revenue based on service-distance instead of number of
passengers and distance-based extra fare [19], (iv)
introduction of electronic Passenger Information System
(PIS), (v) low-capacity buses for narrow streets, and (vi)
measuring productivity improvements for profitability [20].
III. METHODOLOGY
The research involves following steps:
Step I: Different stakeholders, namely passengers, bus
owners and employees from different bus routes in the
Kolkata-Howrah urban area were interviewed to identify
possible explanatory variables. As it emerged, one can
identify four broad groups: (i) bus route and trip
characteristics, (ii) revenue and passenger profile, (iii)
expenditure and (iv) the stated and calculated profit.
Step II: Using these variables a questionnaire has been
developed to interview private bus operators. 59 randomly
chosen bus owners from 20 different routes distributed over
the study zone is interviewed.
Step III: Qualitative studies of the survey reveal inter-
relationships of different attributes with profitability.
Step IV: To investigate quantitative relationships among
variables, a simple combinatorial Multiple Linear
Regression technique is adopted to develop a multi-attribute
expression for profit derived by private bus operation.
38 independent as well as derived variables have been
identified and among them 10 variables manifested apparent
significance. However, for further simplification, 5 variables
were finally retained. This list includes variables like route
length, number of days a bus operates in a month, average
passenger per day in a bus, average fare and legal cost
involved. The regression equations have been formulated
using Microsoft Excel using various combinations of 5
aforesaid variables.
Step V: The resulting regression equations have been
applied on all individual records and percentage deviation
from the observed profit is noted.
IV. OVERVIEW OF STUDY AREA
A. Physical Settings
 
Vol. 2, No. 4, August 2012
The twin cities of Kolkata-Howrah, located respectively on
the eastern and western sides of river Hooghly and
connected by two bridges, form the dense urban core of
Kolkata Metropolitan Area (KMA), West Bengal, India.
Jointly the area, population and density of these two cities
are 236.74 km2, 5.582 million and 23577 persons/km2 [21],
respectively. The cities have some major tertiary job centers,
recreational and cultural areas, public utility centers and
industries along river banks, major transport junctions and
dense residential settlements with large number of slum
pockets. There exists a dense network of organic as well as
planned streets to serve the internal parts of cities, while the
regional connectivity is established through Grand Trunk
Road and National Highway 6 in Howrah, and Barrackpur
Trunk Road and Diamond Harbour Road in Kolkata. Major
public transport modes are bus, underground and overhead
metro rail service, tram and ferry services. Para-transit
modes like auto-rickshaws, taxis and trekkers too are getting
popular by the day.
B. Overview of City-Bus Services
Bus service in Kolkata-Howrah is operated under
government and private patronage. The government system
has five operating authorities among which three (Calcutta
Tramways Company, Calcutta State Transport Corporation
and West Bengal State Transport Corporation) are city-bus
services (total 125 routes) and rest two (North Bengal State
Transport Corporation and South Bengal State Transport
Corporation) are offered for regional services.
Number of private city-bus routes is almost double that of
government run routes. The private service is based on
fixed-route fixed-fare basis. Buses are of two types (i)
general buses (seating capacity 39, comfortable standing
capacity 20, 2 doors, 1 driver, 2 conductors) and (ii)
minibuses (seating 29, comfortable standing 15, 1 door, 1
driver, 1 conductor and 1 cleaner). Total 276 (106 routes for
minibuses and 170 routes for general buses) routes are
operated in the study zone. Starters posted at the depots and
important intermediate intersections maintain time schedule
of bus arrival and departures. All of these employees are
wage-paid as a certain percentage of total daily income. The
owners have usually more than one bus in different routes.
The fares are decided by the state government. General
buses and minibuses have different fare structures on same
distance coverage.
Due to high employment ratio per bus, standardized salaries
with all government benefits and low fare structure,
government buses are highly subsidized and the state
government wishes to privatize the system. On the other
hand, due to high investment and operational expenditure
and government policies of not to raise bus fare, many
private owners have to compromise with level of service
(LOS). Since commuters seek a reliable and rapid
alternative, shared para-transit rides have gained popularity.
V. SURVEY AND DATA
A. Selection of Buses and Routes
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Vol. 2, No. 4, August 2012
It has been observed that 237 routes out of 276 private bus connections mostly with tertiary job centers and educational
routes (85.87%) touch at least one of the four major transfer institutes. Some routes touch shopping centers, wholesale
nodes, namely, Howrah (railway station, bus, auto-rickshaw, markets as well as recreational centers like cinema halls,
taxi and ferry terminals), Sealdah (railway station, bus, auto- exhibit centers and food plazas, etc. Owners of many routes
rickshaw and taxi stands), Babughat (ferry and bus terminal stop operation of buses or reduce the number of trips during
and circular railway station) and Esplanade (the central weekends or holidays. However, for this research, only the
business district, bus and metro station) area and some other data for weekdays have been considered. This reveals that
promising trip-attraction zones. Considering this, 59 private the number of ticket-sales per day ranges between 470 to
buses, both general (31) and minibuses (28), from 20 routes 695 for general and 510 to 675 for mini buses. The
have been chosen such that they connect major parts of distribution of tickets sold of various denomination indicates
study area and touch at least one of the aforesaid nodes. that trip-lengths availed by most of the passengers is in the
range of 4 to 6 km, followed by 6 to 7 km and 1 to 4 km.
B. Survey and Discussions Beyond 7 km of trip length, number of passengers becomes
It has been mentioned earlier that survey of each bus and drastically small. Table 2 shows the distribution of revenue.
route addresses the issues like (i) bus route and trip Table 2: Revenue Generation
characteristics, (ii) revenue and passenger profile, (iii)
expenditure and (iv) stated and computed profit. Data Range / Average
Sl. Description
Remarks Value
Bus Route and Trip Characteristics 1.
No. of ticket-sale (Rs. 4) 60-580 (Only for
404.06
per day general buses)
Surveys show that there is a variation in route lengths (8-20 2.
No. of ticket-sale (Rs. 5) 80-175 (Only for
145
km) and number of stoppages (10-24) among the routes per day  minibuses)
resulting in the variation in distance (0.4-1.2 km) between No. of ticket-sale (Rs. 6) 70-280 (Both the
3. 177.83
per day  buses)
two stoppages. Buses plying through dense corridor often No. of of ticket-sale (Rs. 7) 25-240 (Both the
halt for passengers at non-stop stretches which badly affects 4. 122.86
per day  buses) 
the average speed. The bus owners revealed that most of the 5.
No. of ticket-sale (Rs. 8) 25-120 (Both the
61.68
buses run on street around 18-28 days per month. Buses per day  buses) 
No. of ticket-sale (Rs. 9) 5-50 (Both the
having shorter trip lengths (8-10 km) are compelled to run at 6.
per day  buses) 
20.83
the most 6 trips though their capacity ranges between 7 and No. of ticket-sale (Rs. 10) 0-20 (Both the
9. Unplanned fleet approval, irregular job opportunities for 7. 9.52
per day buses) 
bus employees and political influences are the major 8. No. of ticket sale per day 470-695 602.96
hindrances those curb the profit margin of a bus service. Amount of ticket sale per
9. 2120-4514 3143.65
day (Rs.)
Table 1 explains the summary of route and trip data. 10. Monthly revenue (Rs.) 46800-117880 76744.70
Table 1: Summary of Route and Trip Data
As revealed in the survey, income range of minibuses is
Description Data Range higher (Rs. 78400 – Rs. 117880) than general buses (Rs.
46800 – Rs. 94920) with an average difference of Rs.
Route Length (km) 8-20
No. of Stoppages 10-24
24839. Both kind of bus owners prefer to have multiple
Frequency of buses (min) 8-30 user of a single seat in a trip for more profit, and often avoid
Trips per day 3-6 known faces who travel longer distances.
Duration of per trip (hour) 1.5-3.5
Total duration of buses per day (hour) 10-14.5
Expenditure
Fleet Size 6-30 The survey further reveals that the expenditure of a single
Active running days per month 18-28 bus service includes 4 broad items (i) Fuel cost which is
Total km run per day per bus 88-220
Total km run per month per bus 1584-4840
based on kilometers travelled, (ii) Legal cost (mandatory
expenditure, doesn’t depend whether the bus is under
operation or not) which is a series of expenditures in
Revenue and Passenger Profile different items, both long and short term. (iii) Operation and
Maintenance Cost (O&M), and (iv) Wage and Bonus Cost
Fare collected from passengers is the only means of revenue (daily wages of a driver is 12% of the total daily income,
generation. General buses and minibuses have different fare 6% for conductor, 4% for the cleaner and Rs. 6-10 for the
systems. At present, the minimum fare of the mini buses and starter for every bus). Table 3 summarizes the expenditure
general buses are Rs. 5 (for first 3 km) and Rs. 4 (for first 4 data and Fig. 1 explains the distribution of monthly
km), respectively. Thus, for same distance coverage, per expenditure.
capita revenue earned by minibuses is higher than general
buses; however, passenger carrying capacity is lower. Table 3: Summary of Expenditure
Data of ticket sale has been collected from the sample week- Description Minibuses General Overall
Buses Scenario
day sale vouchers provided by the bus owners. In most
(i) Fuel Cost
routes, week-end sale of tickets is on an average 20% less Diesel Requirement
than the weekdays. This happens for the routes those have 25-40 litre 25-45 litre 25-45 litre
(Range)

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Vol. 2, No. 4, August 2012
Description Minibuses General Overall into monthly basis for the ease of computation. Once, the
Buses Scenario bus is registered for operation, the owner has to pay for all
(i) Fuel Cost
Diesel Requirement
the heads under legal expenditure.
33.57 litre 32 litre 32.48 litre
(Average)
Fuel and O&M costs are directly dependent on trip
Cost per month (Range) in 27606.25- 22459.22- 22459.22 –
Rs. 49260.40 48980.40 49260.40 characters, i.e., total journey length and journey hazards.
Cost per month 36204 34259 34851 Expenditure under wage and bonus is dependent upon
(Average) in Rs. (44.38%) (48.64%) (45.65%) revenue generation. Hence, the operators intend to minimize
(ii) Mandatory (Legal) Cost [All the expenditures have been converted the total journey length and hazards while tries to maximize
into monthly basis]
EMI (Equally Monthly
revenue. However, due to various external factors like
9501.85 10523.81 10212.78 congestion on road, accidents and competitions with other
Installments)
Road tax (paid quarterly) 400 435.42 424.64 buses in many stretches, operators have to compromise. This
Certificate of Fitness (paid
2514 2312.5 2264.50 in turn results loss or marginal profit which affects the
annually) service intensity.
Pollution Check (paid bi-
34 30.52 30.20
annually) Profit and Other Related Issues
Insurance of bus (paid
1717 1361.5 1394.93
annually) Of the 59 buses surveyed, 29 reported loss; most of the
Accident Insurance (paid minibuses could avert loss till date. The range of loss for
392 90.625 165.22
annually)
Renewal of services (paid
general buses is around Rs. 900 – 17000/- per month.
308 238.54 246.38 Therefore, in many routes, the fleet size has been reduced
once in 5 years)
Overall Mandatory
14866.85 14992.915 14738.65
and even operations of few routes have been stopped.
(Legal) Expenditure (18.23%) (21.29%) (19.3%) Minibuses earn profit ranging Rs. 800 to Rs. 24000. Table 4
(Average) in Rs.
summarizes the average profit data and other derived cost
(iii) Operation and Maintenance (O&M) Cost
O&M (includes repair and 8231 7456.25 7594.93 units.
alteration cost, toll taxes,
rituals, buying tickets etc.)
Table 4: Profit and Other Issues
Penalty for violation of 500 250 304.35 Mini General
traffic rules Description Overall
Buses Buses
Total O&M Expenditure 7706.25 7899.28 Average passenger /month / bus 14706 15026 14566
8731 (10.70%)
(Average) in Rs. (10.94%) (10.35%) Average total km run /month /bus 3092.48 3411 2953.13
(iv) Wage and Bonus Cost [monthly basis] Passenger per day per km 4.94 4.47 5.14
Driver (12% of daily 11177 8302 9209.36
Cost per km (Rs.) 25.51 24.52 25.94
revenue)
5589 4151 4869 Revenue per km (Rs.) 25.13 27.88 23.93
Conductor (6% of daily
revenue) Profit per km (Rs.) -0.38 3.35 -2.01
Cleaner (4% of daily 3726 --- 3726 Cost per passenger (Rs.) 5.28 5.5 5.19
revenue) Revenue per passenger (Rs.) 5.2 6.25 4.75
Starter (depot basis) 128 190 171.5 Profit per passenger (Rs.) -0.07 0.75 -0.43
Bonus (annually provided) 1147 826.25 884 Fuel cost per km (Rs.) 11.55 10.63 11.95
Total Wage Average 21767 13469.25 18859.86
(26.69%) (19.13) (24.7%)
Total Average
81568.85 70427.42 76348.79
VI. MODEL APPLICATION AND RESULTS
Expenditure per month (100%) (100%) (100%)
in Rs. A. Assessing Major Attributes
Profit is the difference of overall revenue and expenditure, if
the outcome is positive. Data on revenue earned has been
obtained from the number of passengers and distribution of
fares docketed in the daily ticket-sale-vouchers. Hence,
these two attributes are considered independent of each
other. However, various social, economic, physical and
political factors have significant control on them. To
simplify computing, number of average daily passenger and
average fare are accepted as explanatory variables.
Expenditures include fuel cost, legal cost, and O&M costs
incurred, along with wages and incentives paid to the staff.
Fuel cost is derived from fuel demand which is a function of
total km run. Total km run is a function of trip length,
number of trips per day and number of days a bus runs per
Fig. 1: Distribution of Monthly Expenditure (Overall Scenario)
month. It has been observed that number of trips per day is
Legal (Mandatory) expenditure (19%) includes various
collectively decided considering the unplanned fleet size.
heads; those which are paid in different time periods,
Thus, for a bus the number of days it operates in a month is
starting from monthly to once in 5 years. However, all the
a significant determinant of profit it generates. To start with
long and short-term expenditures have been converted here
it is believed that trip length and stated number of days

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Vol. 2, No. 4, August 2012
running per month would play significant roles in assessing explanatory variables and a dependent variable and assess
the fuel demand and corresponding data available from the the strength of this relationship through the R2 value. Value
operators’ record. of coefficient of determination (R2) indicates the capacity of
the explanatory variables to predict the dependent variable
The legal (mandatory) cost is distributed under 7 heads in a scale of 0 to 1, where 0 indicates absolute failure and
which are almost independent of the trip and route unity indicates absolute success of such predictions.
characters. Further, it is independent of whether a bus is Literatures on statistics state that when R2 value is close to
making trip or not. The O&M cost is dependent on number unity, the relation is acceptable, but they fail to state the
of days/month a bus is running. The wages of the staff are range that is supposed to be acceptable.
directly linked with the income. Hence, number of
passenger and distribution of fare are accepted as Here, the regression is applied to obtain (i) the nature of
explanatory variables. contribution of the selected explanatory variables towards
‘profit’ and (ii) relative weights of these variables.
After assessing the entire situation five major attributes have Maximum possible combinations from 5 explanatory
been handpicked as independent variables. They are (1) Trip variables (i.e., 5C1, 5C2, 5C3, 5C4 and 5C5 with 31
Length, (2) Average number of days a bus operates per combinations) are used to run the experiment. Table 5
month, (3) Average number of passengers per day, (4) shows the weights for the variables which can guide the
Average passenger fare and (5) Daily legal cost, while the policy makers to select an appropriate relation that will
dependent variable is ‘Profit’. provide an acceptable prediction. The regression equations
B. Multiple Linear Regression Results in Table 5 follows from 59 samples surveyed.
A multiple linear regression model is a powerful and simple
method to establish some relationship between a group of
Table 5: Regression Results
Attributes Regression R2 Remarks
5
C1 (5 results)
Trip Length [X1] -7532.9 + 976.2117*X1 0.092
No. of day running [X2] -12030.5+770.9*X2 0.047
Passenger number per day [X3] -60236.3+113.49*X3 0.391 Rank 2
Average Fare for Passengers [X4] -57133.3+12180.17*X4 0.744 Rank 1
Legal Cost [X5] 16664.48+(-0.54592)*X5 0.062
5
C2 (10 results)
1-2 -20042.4 + 869.97*X1 + 575.1957*X2 0.117
1-3 -65700.6 + 632.4276*X1 + 107.1173*X3 0.427
1-4 -58239 + 144.09*X1 + 11988.73*X4 0.746
1-5 2325.66 + 944.68*X1 + (-0.51408)*X5 0.147
2-3 -69358 + 455.2182*X2 + 110.09*X3 0.406
2-4 -68870.7 + 516.9*X2 + 12007.77*X4 0.765 Rank 3
2-5 -3696.51 + 874.5148*X2 + (-0.60334)*X5 0.121
3-4 -94262 + 77.411*X3 + 10581.654*X4 0.872 Rank 1
3-5 -50468.2 + 111.6404*X3 + (-0.46267)*X5 0.434
4-5 -46599.1 + 12387.55*X4 + (-0.642)*X5 0.830 Rank 2
5
C3 (10 results)
1-2-3 -72026.4 + 575.94*X1 + 340.633*X2 + 105.0734*X3 0.436
1-2-4 -69042.1 + 53.98*X1 + 506.20*X2 + 11939.38*X4 0.765
1-2-5 -11659.9 + 815.12*X1 + 685.511*X2 + (-0.567)*X5 0.182
1-3-4 -94340 + (-7.21)*X1 + 77.311*X3 + 10590.7*X4 0.912 Rank 3
1-3-5 -56021.4 + 612.09*X1 + 104.89*X3 + (-0.4484)*X5 0.469
1-4-5 -47309 + 85.562*X1 + 12272.43*X4 + (-0.639)*X5 0.830
2-3-4 -100848 + 333.381*X2 + 74.19*X3 + 10517.87*X4 0.921 Rank 2
2-3-5 -60675.1 + 551.133*X2 + 106.74*X3 + (-0.5)*X5 0.457
2-4-5 -60267.9 + 630.73*X2 + 12190.05*X4 + (-0.689)*X5 0.860
3-4-5 -83064.7 + 73.34*X3 + 10848.61*X4 + (-0.575)*X5 0.951 Rank 1
5
C4 (5 results)
1-2-3-4 -100775.4 + (-64.778)*X1 + 345.455*X2 + 75.303*X3 + 10593.75*X4 0.921
1-2-3-5 -63493.89 + 537.5*X1 +440.02*X2 + 102.19*X3 + (-0.483)*X5 0.483
1-2-4-5 -60145 + (-31.99)*X1 + 637.35*X2 + 12231.04*X4 + (-0.68391)*X5 0.861
1-3-4-5 -82779.58 + (-52.8)*X1 + 73.65*X3 + 10913.17*X4 + (-0.576)*X5 0.970 Rank 2
2-3-4-5 -9111.8 + 446.2758*X2 + 70.08*X3 + 10777.23*X4 + (-0.605)*X5 0.985 Rank 1
5
C5 (1 result)
1-2-3-4-5 -91005+(-73.2358*X1)+458.0586*X2+71.30201*X3+10807.86*X4+(-0.61894*X5) 0.994
(1) Combination set 5C1 (5 results) gives the best
correlation with average fare (R2 = 0.744) followed by
average number of passengers (R2 = 0.391). It is understood
C. Discussion on Results that these two variables have contribution in revenue

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generation, but doesn’t contribute largely to expenditure
assessment; hence, cannot predict profit by themselves.
(2) Combination set 5C2 (10 results) provides best results
from 3-4, 4-5, 2-4 and 1-4. So, again variable 4, i.e.,
‘average fare’ takes the lead role. Combinations 3-5, 2-3 and
1-3 gives a second best result, which indicates that variable
3, i.e., number of passengers, may be considered as the
second strongest variable followed by 2, 5 and 1 in
declining order. Again trip length (variable 1) provides the
worst result.
(3) Combination set 5C3 (10 results) produce higher R2
values with combinations 3-4-5 (R2 = 0.951), 2-3-4 (R2 =
0.921) and 1-3-4 (R2 = 0.912). Association of variable 4
provides higher values of R2. Variable 1 has kept changing
sign in different equations which shows it has but only
limited influence.
(4) Combination set 5C4 (5 results) provides the best result
in 2-3-4-5 (R2 = 0.985) followed by 1-3-4-5 (R2 = 0.970)
and 1-2-3-4 (R2 = 0.921). However, it indicates that variable
1 in combination with other strong variables may provide
better results.
(5) Combination set 5C5 generates a very high R2 value
(0.994). Hence, the ranking of the variables may be as 4-3-
5-1-2. Figure 2 shows the highest R2 values in different
combinations. The figure indicates that R2 value has
increased with increase in the number of attributes but rather
asymptotically. Best relations of combination 1 and 2 do not
provide results to satisfactory level of confidence. Hence,
for data constraints, only 3, 4 and 5 variables may be
accepted for this test. Small change in fare has major impact
in profit. The legal cost being hefty, small corresponding
weight is not insignificant.
Fig. 2: Maximum R2 Values in Different Combination Groups
Fig. 2, as stated earlier, plots the highest R2 values in each
combination. The graph suggests asymptotical growth of R2
values with increasing number of explanatory variables. The
R2 values are unacceptable for single and double-attribute
combinations indicating little reliability of these results. On
the other hand, 3-, 4- and 5-attribute regressions produce
quite high and close R2 values. The hike of R2 value from 3-
 
Vol. 2, No. 4, August 2012
variable model to 5-variable model has been 4.6%, whereas
that between 4-variable model and 5-variable model is only
0.9%. Thus the 5-variable model is adopted for this
research. The 5-variable model has been applied to the 59
records taken one at a time to assess the efficiency of the
model and the deviation of stated and computed profit
presented in Table 5 seems quite acceptable for making
quick assessments.
Table 5: Percentage Deviation between observed and predicted
profit using 5 explanatory variables on 59 samples
Percentage Deviation between
observed and predicted profit
No. of Data % of Data
Within ±5% 38 64.40678
Between ±5% to ±10% 17 28.81356
Between ±10% to ±15% 3 5.084746
±15% above 1 1.694915
VII. CONCLUSION
The study started with the reconnaissance survey which
revealed the perceptions of different stakeholders of bus
service. The bus owners think the loss is incurred due to: (i)
Rise of fuel price on a regular basis, (ii) Little/no increment
in bus fares in suitable intervals, (iii) Huge penalty for
violation of traffic rules, (iv) Higher mandatory (legal) cost,
(v) Competition with other long-route private buses, (vi)
Competition with Informal buses (private buses operated
under educational institutes as well as various offices), (vii)
Competition with para-transit modes and personal vehicles,
(viii) Absence of proper route optimization schemes that
provide sufficient passengers and (ix) Cheating by bus
employees.
The commuters are aggrieved because (i) Level of service is
poor especially during peak hours, (ii) Intermittent stoppage
and picking up more passengers causing waste of time, (iii)
Congestion in many stretches of streets, (iv) Lack of
schedule of service and (v) Urge to reach respective
destinations in time that forces the commuters to avail para-
transits or shared-taxis.
The imbalance of demand and supply affects quality of
service provided by the private buses. Some policy level
decisions are also responsible. In view of the proposed
methodology a decision maker can toy around with the
variables so as to see that the number of passengers and bus
fare be set at some rational level which makes the service
profitable to the bus owner and the service becomes self-
sustaining. The Government can review if the Legal costs
could be harnessed, while optimal bus allocation could
alleviate the number of active days per month for a bus.
Parallel researches on route rationalization, corridor
demand, utility of various capacities of vehicles in a given
route, etc., would be useful to conduct a more detailed
analysis for making the service attractive to all stake
holders.
REFERENCES
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AUTHORS’ PROFILE
Soumen Mitra is working as Assistant Professor in Department of
Architecture, Town and Regional Planning, Bengal Engineering
and Science University, Shibpur. He has 11 years of experience in
architecture and planning profession, institutional consultancy
projects, academic research and teaching. His domain of interest
includes urban public transportation planning, environmental
planning, application of GIS, Architectural history and theory.
Contact: mitrasmen@yahoo.co.in

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