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Bus station và bus stop

Bus Stations and Terminals
A bus terminal, or terminus, is the point where a bus route starts or ends, where vehicles stop, turn or reverse, and wait before departing on their return journeys. It’s also where passengers board and alight from vehicles. It also often provides a convenient point where services can be controlled from.

The size and nature of a terminal may vary, from a roadside bus stop with no facilities for passengers or bus crews, to a purpose built off-road bus station offering a wide range of facilities.

If the number of vehicles arriving and departing is low, a roadside bus stop, with no facilities, will normally be adequate. With a large number of vehicles arriving and departing, it may be necessary to provide off-road bus station facilities for the convenience of passengers and to reduce traffic congestion.

Terminals versus stations
Although the terms bus terminal and bus station tend to be used synonymously, the latter is normally more correct since in most cases there are some routes which pass through the station without terminating there.

The term bus station is normally used to refer to an off-road location with at least basic facilities for passengers, while a terminal may be a fully equipped bus station but might equally be merely a point in the road.

In many cities the majority of passengers start and end their journeys at bus stations, and a significant proportion of operators’ revenue may be collected at these points.

Stations and terminals are important elements
Bus stations and terminals are a significant element in the operation of bus services. Their design and location affect the efficiency of a transport system, and its impact on other road users. Some stations are regarded more as landmarks than as utilities, and as such are often of prestigious rather than practical design, which may detract seriously from their efficiency.

Local bus services in many towns and cities are centered on bus stations. Often there are large stations in the central area, with smaller ones at the outer ends of the routes. There may also be intermediate stations, especially at points where many passengers interchange between different bus routes, although most intermediate passengers on urban services board and alight at roadside bus stops.

Bus stations may also be used for parking between journeys for buses which are away from their home bases. But they should not normally be regarded as long‑term parking facilities, particularly in locations where land is expensive. When they are not required for loading, buses should be parked elsewhere, preferably at depots where there are facilities for vehicle servicing and cleaning. Buses should not normally be permitted to park in streets adjacent to bus stations.

Efficient systems limit bus time at stations
If buses are utilized efficiently, it should not be necessary for them to spend much more time at bus stations than is required for loading and unloading. The requirement to park large numbers of buses for long periods between trips is often a reflection of inefficiency or excess capacity in the industry. Although it may be unavoidable at off-peak times if there is a significant difference between peak and off-peak service levels.

In practice it is necessary to achieve a realistic compromise with regard to parking at bus stations. While it’s expensive to provide parking space at city centre terminals, it can also be expensive and inefficient for buses to be driven for long distances to remote parking areas, particularly if traffic congestion is a serious problem.

It may be appropriate for bus operators to be charged for parking on a time basis to discourage them from parking their vehicles for too long. Calculating these charges should take into account the cost of providing parking facilities. But it should not be so high that it encourages operators to park their vehicles elsewhere when this would be uneconomic or undesirable not only to the operator but to the community.

Locating bus stations for urban services
It’s essential that stations are not only constructed to a suitable design and with adequate capacity, but also that they are suitably located.

There are a number of considerations in deciding the best location. The location should be where routes should logically connect or terminate, as determined by passenger demand patterns. If the station is used as an intermediate stopping point on routes passing through, it should be conveniently located for passengers joining or leaving vehicles.

Sometimes the location of stations for different classes of vehicles is influenced by the catchment areas of the passengers. For example, the majority of people using air conditioned buses may live in a different part of the city from those using standard services.

An efficient urban bus route network in any medium or large city will inevitably require a large number of terminal points, not only at the ends of each route but at various intermediate points where some vehicles may turn short.

Simple terminal points do the job
It would be both uneconomic and unnecessary to construct large complex terminal facilities at all of these points. In the majority of cases all that is required is the facility for vehicles to turn, without obstructing or endangering other traffic, and sufficient space at the curb or alongside the road for a reasonable number of vehicles to stand between journeys.

It’s often appropriate, where the road layout permits, for buses to follow a loop round the block at the end of the route, standing between journeys at a roadside stop at some point in the loop, or immediately before or after it.

Similarly, bus stations en route will be required only where demand justifies their provision. As a guide, an off-street bus station may be justifiable if the number of buses standing simultaneously loading, unloading or waiting to depart regularly exceeds 10 or 12, although much will depend on the road layout, and the volume of other traffic. If the road is very wide and there is little traffic, roadside bus stops may cater adequately for up to five buses loading simultaneously on each side of the road.

If suitable off-street terminal sites are not available it’s usually preferable for routes to terminate on-street, even in central areas, rather than for terminals to be sited at inconvenient locations.

Efficient routing minimizes the need for terminals
Efficient routing can minimize the number of routes which must terminate in busy central areas, while efficient scheduling and regulation of departures can minimize vehicle waiting times. Provided there is no excess capacity in the system, no more than two or three vehicles on any one route need be waiting at the central terminal point at any time, so that disruption to traffic can be minimized.

Where bus stations are required, they should be located near to points of high demand for maximum passenger convenience. The location of stations is often determined primarily by the availability of sites, and as a result they are often in inappropriate locations, causing inconvenience to passengers using them, and increasing vehicle operating costs by increasing the distances traveled.

Central area terminals can create congestion
In many cities there are one or more terminal bus stations in the central area. If there is a single central bus terminal, this is convenient for passengers interchanging between routes. However, if there are very many bus movements a single terminal may be impractical, requiring a very large area of land, and creating congestion both within the station itself and on surrounding streets. In large cities, there are often several terminals, usually located around the periphery of the central area.

Where there are several central terminals, there are normally different terminals serving different groups of routes or destinations. Each terminal should ideally be located close to the corridor served by its group of routes. This minimizes the number of buses crossing the central area and reduces traffic congestion caused by buses. But it may mean that the majority of passengers must walk some distance into the centre to complete their journeys, and passengers interchanging between routes may be seriously inconvenienced by having to walk from one terminal to another.

An alternative is to allocate routes to terminals in such a way that every route crosses the city centre before reaching its terminal. This may increase passenger convenience, but may also increase the level of traffic congestion, and requires a greater number of buses to provide an equivalent service.

While urban bus services are often severely hampered by traffic congestion, the buses themselves may also contribute to congestion in the city. In particular, city centre bus terminals can cause severe traffic congestion through the concentration of buses arriving and departing. This is particularly so where buses load at the curbside rather than in off-street bus stations.

Operating from suburb to suburb can decrease congestion
The congestion caused by buses terminating in central areas can be alleviated by linking bus routes so that the majority operate across the city from one outer suburb to another, stopping in the central area for no longer than is necessary to set down and pick up passengers. All terminal points will be outside the central area. This means less disruption is caused to other traffic and there is likely to be more space for buses to stand for long periods, as may be necessary at off-peak times.

Additional advantages from this type of operation are that bus utilization may be improved by reducing the number of times when a bus has to turn. Additional links are also provided for passengers whose journeys take them across the city centre.

A potential disadvantage is irregularity of services, caused by eliminating the opportunity to compensate for traffic delays by adjusting layover times at central terminal points. Although such delays may be reduced through minimizing bus-induced congestion.

Where routes are linked to operate across the city centre, there can be a benefit in providing facilities for passengers to interchange between routes. These facilities may take the form of purpose-built off-road facilities, or roadside bus stops with shelters, perhaps linked by pedestrian bridges or subways.

With these kinds of facilities, the location should not require buses to deviate significantly from their routes; otherwise much of the benefit of operating through services is lost. However, with appropriate routing, it should be unnecessary for the majority of passengers to transfer between bus routes in the city centre, and extensive interchange facilities should not be required.

Off-street bus stations in city centers are, in any case, often a wasteful use of expensive land, although this may be offset by the development of property above the station.

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A monopoly may be publicly or privately owned. In almost all cases, instituting a public monopoly structure is inadvisable. The experience of developing countries around the world shows that public monopolies fail to deliver a sustainable public transport service.

There are several inherent disadvantages of a public monopoly system. Poor service because of a lack of competition is a typical example. Another is the inability of public monopolies to generate sufficient funds to pay for bus maintenance and investment in infrastructure. A privately owned monopoly, unless effectively regulated, may also have serious disadvantages. A common problem is exploitation of the users, by offering inadequate or unsatisfactory services at excessive fares.

As with the public monopoly, there is a tendency for staffing levels, wages and other costs to rise at a faster rate than they would have done under a competitive regime. In addition, depending on the financial incentive program and the extent of the government's powers, there may be a tendency for service quality to be poor, with the service catering only to those with no choice of transport mode.

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Legal Aspects
A monopoly is the exclusive right or power of someone to provide specific goods or services within a given market.

This broad definition includes how the term monopoly is commonly used where it describes a situation where one producer or supplier, because of the large size of the market it controls, can suppress effective business competition in that market and thus enhance the price of its products or services.

However the term monopoly also means — and this is how it should be understood here — the exclusive right granted by the state to one person or persons to sell a product or provide a service within a given area. This turns something that was once a common right into a privilege. Where the exclusive right is granted by the state to a public body it’s a public monopoly.

A public monopoly, in the context of urban bus transport services, entails the right of a municipal government or of a public transport authority to provide, to the exclusion of all others, urban bus transportation services within their areas of jurisdiction.

Two kinds of public monopolies
Municipal government
A municipal government is a city, town or other geographically defined urban area created by the will of the state and having autonomous authority to administer its own affairs. Municipalities are not independent entities. It and its governments are usually created by a law of the state or an equivalent legal instrument [e.g., a municipal charter] and derive their powers from it. This includes the right to regulate urban bus transport in its territory or to provide urban bus transport services itself, either in conjunction with others or on an exclusive basis.

While many municipal services can be sub-contracted to a third party, if the municipal government is granted a monopoly over the provision of urban bus transport services it will most likely operate those services:

directly through a department of the municipality; or
indirectly through a bus company specially set up by the municipality for that purpose.

Public transport authority
For large urban agglomerations the state may sometimes retain jurisdiction over urban bus transport services and create by law a public transport authority that it then controls to the exclusion of the municipalities over whose territory the public body operates.

Often this statutory public transport authority will be responsible for the provision of urban transport services, not only by bus, but also by metro, light rail, ferry or any other available means of urban public transport. When many modes of public transport are involved, the public transport authority can provide the urban bus transport services either directly or through a functional or legal subdivision of it [e.g., a business unit or a separate bus company].

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Area Contract: Gross Cost
When an authority issues a contract to a bus operator giving him the exclusive right to operate bus services in an area that forms all or a substantial part of a city, it’s described as an area contract.

Normally these contracts are awarded on the basis of competitive tenders. During a transition period, however, negotiated area contracts may be awarded on the basis of negotiation with an incumbent bus operator.

If the financial basis of the contract is payment to the operator of a specified sum to provide the specified service for a specified period, with all revenue collected being for the account of the authority, it’s known as a gross-cost contract.

An area contract will be appropriate if:

The city has a number of relatively self-contained areas. [If the total number of buses in the city is fewer than 500 then there should be only one citywide area.]
The authority wishes the operator to undertake bus service planning for the area [normally this would be subject to approval by the authority].
The authority wishes the operator to establish himself and be identified as the bus system provider for the area.

A gross-cost contract will be appropriate if:

The authority wishes to avoid on-street competition for passengers.
The authority wishes to provide free or discounted interchange between all routes in all areas in order to minimize route duplication
A high percentage of revenue is collected off-bus.

The disadvantages of a gross-cost area-contract

The operator does not keep the revenue collected and so may not pay sufficient attention to revenue collection.
The authority must ensure that all revenues are being collected and handed over, requiring constant vigilance and inspection.
Penalties must be in place both for passengers who do not have tickets and staff who fail to issue tickets.
The operator is not concerned with the efficient operation of the route.
Since the number of buses involved is relatively large, the number of bidders is likely to be small.
It’s difficult to replace a poorly performing operator since a large fleet of buses is involved.

System design for a gross-cost area-contract must take into account:
Selection of Work to be tendered
Legal and regulatory framework
Institutional requirements
Financial aspects
Fares
Vehicle types
Infrastructure requirements
Making the transition

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Area Contract: Net Cost
When an authority issues a contract to a bus operator giving him the exclusive right to operate bus services in an area that forms all or a substantial part of a city, it’s described as an area contract.

Normally these contracts are awarded on the basis of competitive tenders. During a transition period, however, negotiated area-contracts may be awarded on the basis of negotiation with an incumbent bus operator.

Under a net-cost contract the operator provides a specified service for a specified period and retains all revenue. The authority pays a subsidy to the operator if the bus services in an area are unprofitable. If the services are profitable, the authority pays the operator a royalty. Under a net-cost contract the operator has to forecast both his costs and his revenues.

An area contract will be appropriate if:

The city has a number of relatively self-contained areas. [If the total number of buses in the city is fewer than 500 then there should be only one citywide area.]
The authority wishes the operator to undertake bus service planning for the area [normally this would be subject to approval by the authority].
The authority wishes the operator to establish himself and be identified as the bus system provider for the area.

A net-cost contract will be appropriate if:

The authority wishes to give an incentive to the operator to increase ridership and revenue.
The authority wishes to give the operator some flexibility to amend routes and schedules to make the network as attractive and efficient as possible.
A small percentage of revenue is collected off-bus.
Sharing off-bus revenue is not seen as a problem.
The authority wishes to fix the absolute amount of subsidy.

The major disadvantages of a net-cost area contract are:

There is a possibility of encouraging on-street competition for passengers on streets where more than one company operates.
Sometimes it’s difficult to decide which operator should operate routes that cross two or more areas.
The authority may have to pay more for a net-cost rather than a gross-cost contract since the operator usually makes very conservative estimates of revenue to reduce his financial risk
The authority’s ability to make essential changess to the network are restricted if they adversely affect the revenue of pre-existing net-cost contracts.
Since the number of buses involved is relatively large, the number of bidders is likely to be small.
It’s difficult to replace a poorly performing operator since a large fleet of buses is involved.

System design for a net-cost area contract must take into account:
Legal and regulatory framework
Institutional requirements
Financial aspects
Fares
Vehicle types
Infrastructure requirements
Making the transition

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Route Contract: Gross Cost

When an authority issues a contract for the operation of one specified route or a specified group of routes, it’s described as a route contract.

Normally these contracts are awarded on the basis of competitive tenders. During a transition period, however, negotiated contracts may be awarded on the basis of negotiation with an incumbent bus operator.

A gross-cost contract pays the operator a specified sum to provide a specified service for a specified period. All revenue collected is for the authority.

A route contract is appropriate if the authority wishes to:

Have mandatory retendering after a certain number of years
Determine the routes and daily schedules
Be identified as the bus system provider
Offer opportunities to smaller operators to participate
Take full responsibility for service planning
Wishes to avoid involvement in setting operators’ profit levels

A gross-cost contract is appropriate if the authority wishes to:

Avoid on-street competition for passengers
Establish a sustainable procedure to constantly test the market to achieve the lowest cost
Avoid the need to apportion off bus revenues between operators
Provide free or discounted interchange between all routes
Avoid discrimination against concession fare passengers, and
Collects a high percentage of revenue off-bus

The major disadvantages of a gross-cost route contract are:

The operator has no direct incentive to ensure revenue collection
The authority must ensure that all revenues are being collected and handed over, requiring constant vigilance and inspection
Penalties must be in place both for passengers who do not have tickets and staff who fail to issue tickets
The operator is not concerned with the efficient operation of the route
As this option places the greatest demands on the authority it requires the highest staff numbers
All service improvements are initiated by the authority which may result in a very conservative approach

System design for a gross cost route contract must take into account:
Legal aspects
Institutional requirements
Financial aspects
Fares
Vehicle types
Infrastructure requirements
Transitional aspects

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*NOTE:

In almost all cases, instituting a public monopoly structure is inadvisable. The experience of developing countries around the world shows that public monopolies fail to deliver a sustainable public transport service. Even where a management contract is used, the results do not usually meet expectations.

Public Monopoly with Management Contract
If all bus services within a city or urban area are provided by one publicly-owned undertaking it’s a public monopoly.

The senior management team of this system might not be on its payroll. Instead, a specialist team of managers, usually from the private sector, may be engaged under contract, selected by tender or other means. This situation is called a public monopoly with management contract.

Typically, the management team would consist of a:
General manager
Operations manager
Engineering manager
Marketing manager
Chief accountant
Human resources manager
Corporate affairs manager
Senior administrative and secretarial staff

Major disadvantages of a public monopoly with management contract

Absence of competition often results in poor service.
Conforming to government guidelines for staff terms and conditions often results in over-staffing with high salary costs.
As a government agency the operator cannot voice opposition to political edicts even where these are detrimental to bus operations.
Public monopoly operators are often unable to secure adequate fare increases, or to secure funds for investment in new buses.
There is a tendency for the operator to become more powerful than the regulatory authority.
Frequent management changes will result in poor continuity within the organization.
The management team is limited in its powers since most of the staff remain on local government terms and conditions.

A public monopoly should only be considered under limited circumstances

No private companies are interested in investing in the bus industry.
An exclusive franchise or operating right to a route or area cannot be enforced.
Previous attempts to improve the services provided by private sector operators have failed, for reasons beyond the authority’s control. For example, because of criminal activities or failure by government to fulfill its obligations.
There is a desire to bring in professional management while retaining ownership of the assets.
There is a desire to introduce some competition for the right to operate the system.

System design for a public monopoly with management contract must take into account:
Legal aspects
Institutional requirements
Financial aspects
Fares
Vehicle types
Infrastructure requirements
Transitional aspects

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Route Contract: Net Cost
When an authority issues a contract for the operation of one specified route or a specified group of routes, it’s described as a route contract.

Normally these contracts are awarded on the basis of competitive tenders. During a transition period, however, negotiated route-contracts may be awarded on the basis of negotiation with an incumbent bus operator.

A route contract will be appropriate if the authority wishes to:

Have mandatory retendering after a certain number of years.
Establish a sustainable procedure to constantly test the market to achieve the lowest costs.
Determine the routes and daily schedules.
Be identified as the bus system provider.
Take full responsibility for service planning.
To avoid involvement in setting operators profit levels.
Offer opportunity to smaller operators to participate.

A net cost contract will be appropriate if:

The authority wishes to give an incentive to the operator to increase ridership and revenue.
A small percentage of revenue is collected off-bus.
Sharing of off-bus revenue is not seen as a problem.
The authority wishes to fix the absolute amount of subsidy.

The major disadvantages of a net-cost route contract are:

The authority may have to pay more for a net-cost rather than a gross-cost contract since the operator usually makes very conservative estimates of revenue to reduce his financial risk.
The authority’s ability to make essential changes to the network are restricted if they adversely affect the revenue of pre-existing net cost contracts.
Fewer operators usually bid for net-cost as opposed to gross-cost tenders.
There is a possibility of encouraging on-street competition for passengers on streets where more than one company operates

System design for a net-cost route-contract must take into account:
Legal aspects
Institutional requirements
Financial aspects
Fares
Vehicle types
Infrastructure requirements
Transitional aspects

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Unregulated Entry with Quality Control
An authority [assuming one exists] may allow free entry to the public transport market, subject only to a requirement that the vehicles used meet a specified set of standards.

If these standards are reasonably high and ensure that the vehicles are of good quality, at least by local standards, with high maintenance standards ensured by government inspections, this system is described as unregulated entry with quality control.

If a vehicle meets the quality criteria set down it may enter service on any route at any fare, and pick up and set down passengers at any location unless forbidden by general traffic regulations.

Thus entry to the public bus system should in theory be no different from other businesses, such as the restaurant business, which has no restrictions on entry other than hygiene and environmental standards and is subject to health inspections at any time.

Major disadvantages of an unregulated system

The vacuum of control by the authority is usually filled by criminal elements.
Service is normally concentrated on the major route corridors causing severe congestion, and poor services on less busy routes.
This system is usually accompanied by dangerous driving by drivers attempting to maximize passenger loads.
Members of the public without other means of transport have no assurance that service will be provided where and when they need it.

Unregulated entry with quality control should only be considered under limited circumstances

The authority does not have the expertise to plan and implement a more ordered system, but wishes to keep some control over the safety and quality of vehicles employed.
The authority does not have the legal framework enforce a more ordered system.
The authority requires a large amount of capacity to be placed in service in a short timeframe.
The authority has a political directive to do so.
The authority wishes to offer employment or investment opportunities to individuals and smaller operators.
Public transport provision is not an important mode of transport.

System design for unregulated entry with quality control must take into account:
Legal aspects
Institutional requirements
Infrastructure requirements
Making the transition

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Unregulated Entry without Quality Control
An authority [assuming one exists] may allow free entry to the public transport market, without any requirement that the vehicles used meet any standards other than normal vehicle type approval. This system is unregulated entry with quality control.

Major disadvantages of an unregulated system without quality control

The vacuum of control by the authority is usually filled by criminal elements.
Service is normally concentrated on the major route corridors causing severe congestion, and poor services on less busy routes.
Members of the public without other means of transport have no assurance that a service will be provided where and when they need it.
The absence of a quality standard makes it difficult to ensure public safety.

Unregulated entry without quality control is only appropriate under limited circumstances

The authority does not have the expertise to plan and implement a more ordered system.
The authority does not have the desire or the ability to enforce vehicle quality standards.
The authority does not have the legal framework enforce a more ordered system.
The authority requires a large amount of capacity to be placed in service in a short timeframe.
The authority has a political directive to do so.
The authority wishes to offer employment or investment opportunities to individuals and smaller operators.
Public transport provision is not an important mode of transport.

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This section provides in-depth detail about eight different reform options. These options range from a public monopoly, through various forms of tendered services, such as gross-cost route contracts, to a completely unregulated system.

For each approach, information is organized into various topics, including legal and institutional issues, contract design, financial considerations, and monitoring and enforcement.

Possible options for reform

The principal urban bus system options are:

Choosing the right option
Not all of these options will apply to your situation. The interactive tool identifies the appropriate bus system options for you by taking into account the particular situation in your city and the objectives of the principal decision-makers.

This Urban Bus Toolkit does not set out to identify a system that will necessarily apply to the entire bus service in a city. It will identify the most appropriate system for the major portion of your service, but in practice there will probably be a mixture of systems.

For example, most bus routes may be operated under contract, but some peripheral services may be operated by unregulated operators. However, in some cities it may be possible to identify a single system that may be applied to all services.

Before you choose an option
To optimize your first experience before choosing a reform option, start with the evaluation section. Then use the interactive tool to identify the appropriate bus system reform option.

A note about contracts
The term contract is defined in the relevant sections. In the overall context of this toolkit, it embraces the various forms of bus service licensing, franchising and concessioning.

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introduction to Choosing the Right Reform Option

The Urban Bus Toolkit offers eight options to reform your bus system. They range from a public monopoly, through various forms of tendered services, such as gross-cost route contracts, to a completely unregulated system.

Reform option definitions:

Not all of these options will apply to your situation. The interactive tool identifies the appropriate bus system options for you by taking into account the particular situation in your city and the objectives of the principal decision-makers.

Before using the interactive tool, review the summaries for each of the system reform options.

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This section offers advice about making the transition to a reformed system. It will help you think about where you are today and plan how to get where you want to be.

Making the transition to an area- or route-contract system
This transition may involve the breaking up of a large monopoly into several smaller operators. Or it may require many small operators to amalgamate into operating units of sufficient size to be eligible to bid for route or area contracts. Encouraging smaller operators to form associations can help to achieve this.

Introducing efficiency in a monopolistic set-up
Introducing efficiency into a monopoly set-up will, in practice, normally involve a break-up of the monopoly, the introduction of new operators to compete with the incumbent, or both. Injecting competition in the market may force the monopoly to become more efficient and service oriented. If a public monopoly is to be broken up into smaller units operating in competition with one another, it is invariably more effective if the smaller units are offered for sale to the private sector.

Key issues to consider
Changes in industry structure
Forming operators’ associations
Privatization arrangements
Creating a level playing field
Negotiating a purchase price

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Creating a Level Playing Field
For the benefits of competition to be fully realized, all competitors must be able to compete on equal terms. All operators must be treated equally. All regulations should apply equally to all operators.

In many nominally competitive situations, there are operators who have an unfair advantage over others.

Public versus private sector operator advantages
Public sector operators sometimes have advantages over private sector operators, such as exemption from certain taxes or licensing requirements. This may reduce their costs, and enable them to charge lower prices than their competitors. Or, when bidding for area or route contracts, enable them to make more attractive bids.

On the other hand, public sector operators may be at a disadvantage in other respects, such as having to pay their employees at government rates of pay which may be higher than those in the private sector.

If there is a public sector operator operating in the same city, it must be subject to the same rules and regulations as the private sector operators. Any special concessions which a public sector operator enjoys, such as tax relief, must either be waived in respect of the operator concerned, or extended to private sector operators in the city.

Similarly, if the public sector operator is committed to government regulations which put it at a disadvantage, these must be waived.

In practice, the complexities of ensuring equality between public and private sector operators may be such that it is preferable for the public sector not to be involved in the operation of bus services in a competitive situation.

Open access to terminals, bus stops, depots and workshops
Access to bus stops and terminals must be open to all operators. An operator owning its own terminal in a strategic location may exclude other operators from using it and put them at a disadvantage.

This applies not only in the case of on-road competition, but also in competition for the market. A bidder with access to terminal facilities may be able to offer a more attractive bid than those which do not, even though in other respects these operators may be able to provide a better service.

It is normally more satisfactory, particularly in the case of urban bus operators, for bus terminals not to be owned by the operators, but by the local authority, which can make them available to all operators on an equal basis.

The same may be said of depot and workshop facilities. If some operators have facilities but others do not, this may drastically reduce the number of potential bidders. In a mature market, where there are many established operators with their own facilities, this may not be a significant issue. But in the majority of developing cities it will be.

A satisfactory means of overcoming this problem in a city where there is a large public sector bus operator which is to be privatized, is to retain the infrastructure in public ownership. Then the infrastructure can be leased to successful bidders.

Where bus services are subsidized, the basis for calculating the subsidy must be consistent.

Other key issues to consider
Changes in industry structure
Increasing the number of operators
Consolidating small operators
Forming operators’ associations
Privatization arrangements

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Changes in Industry Structure
Area contracts require up to 10 bus operators, depending on the size of the city. In most cities with populations of between 1 million and 10 million, it’s unlikely that there would be more than six area contracts.

Route contracts may require a greater number of operators, unless each operator has several route contracts. The maximum number of operators in a city with a route contract system will be equal to the number of different bus routes.

A single operator and a potential monopoly situation
If there is a single operator, and therefore only one area contract, this constitutes a monopoly. An area or route contract system may be introduced to replace a public or private monopoly, in which case the number of bus operators in the city will increase.

Alternatively, it may replace a situation where there are many small operators; in this case there must be a reduction in the number of bus operators. This will raise social and political issues.

Rationalizing operations to give exclusive rights to specific areas
Finally, the number of operators may remain unchanged. But the routes operated by each may be rationalized so that each is given an exclusive right to one area of the city, instead of operating throughout the city in parallel with other operators.

Other key issues to consider
Increasing the number of operators
Consolidating small operators
Forming operators’ associations
Privatization arrangements
Creating a level playing field

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Forming Operators’ Associations
There is a minimum size for an operating unit to be eligible to bid for a route or area contract. In the case of a route, it is likely to be at least 20 vehicles. For an area it may be 200 or more.

When the industry is based on small operators with only one or two vehicles each, none of these will be eligible to bid for a contract. Unless entirely new operators are established, it will be impossible to introduce a route or area contract arrangement.

Even if such operators are formed, there will be a large number of small operators who will be excluded from the market, and this may have undesirable consequences.

Creating larger operating units
The problem may be overcome through the creation of larger operating units in the form of operators’ cooperatives — sometimes also referred to as associations or unions. They already exist in many cities.

Most transport cooperatives or associations are formed by a number of vehicle owners. They pool their resources by putting their vehicles into a common fleet, under the control of officers appointed by the cooperative members. The members usually retain ownership of their vehicles, and may continue to employ the crews.

A more formal structure and constitution may be required if the associations are to be eligible to bid for contracts.

In addition, the officers of the associations are likely to require training in basic management techniques, as well as in the fundamentals of bus operating practices and procedures.

Other key issues to consider
Changes in industry structure
Increasing the number of operators
Consolidating small operators
Privatization arrangements
Creating a level playing field

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Privatization Arrangements
There are a number of ways that publicly owned systems may be privatized, including:

Management or employee buy-outs
Sale of shares
Joint ventures between government and the private sector
Privatization of an industry by attrition [for example where competition from informal operators results in the eventual demise of the public sector operator]

Management or employee buy-outs
The sale of a transport company to its management, and sometimes also to its employees, through a management buy-out is often the most appropriate option. It conserves the local knowledge and expertise essential to the business, while the inclusion of the employees in its ownership helps to overcome some of the problems of control.

An alternative to a management/employee buy-out, which may be appropriate in a situation where services are operated on an informal basis, is to sell the vehicles to their drivers. This is usually done under some form of hire purchase arrangement. Other assets, such as properties, are sold on the open market.

Sale of shares
Gradual sale of shares to management and employees through deductions from salary over a period of time is often a practical means of implementing this option. It also overcomes the problem of limited financial resources on the part of the purchasers.

Sale of shares in a transport company to outside investors depends on the availability of funds at the disposal of individual investors or venture capital institutions. In many developing countries availability of funds for such investment is low. The absence of a stock exchange may also preclude this as an option.

Joint ventures between government and the private sector
Some governments prefer to retain partial ownership, through the establishment of joint ventures between government and private sector. The government usually wants to hold a majority share. However, this is not always a practical option, since private sector investors will require a degree of control.

Where the government retains only a minority interest this will not be a problem. But the government will then have little control of the organization. Nevertheless, there may still be advantages, since the government may be represented on the board of the undertaking, providing a useful means of communication.

Privatization
When nationalized undertakings are privatized, the sale proceeds are often very low. In some cases they are less than total asset value, because poor performance under state ownership makes them unattractive to potential investors.

Often the share value of a privatized company has increased in value many times over within a relatively short period following its sale, when the new owners are able to demonstrate the potential of the business. There have been cases of asset-stripping where the sale price has been below the asset value.

It’s desirable to provide for such contingencies, so that the government is at least able to realize the market value of the physical assets of the undertaking. The sale agreement may include the provision that excessive proceeds from property sales within a specified period after sale may be shared with the vendor on a predetermined basis.

Where a nationalized transport undertaking has degenerated irretrievably to a point where it is making substantial losses, the only realistic option may be to dispose of it for its asset value and to allow it to cease trading as a transport operator.

In some circumstances it may be appropriate for a nationalized transport company to be restructured before privatization if this will improve its viability and increase its sale value.

Other key issues to consider
Changes in industry structure
Increasing the number of operators
Consolidating small operators
Forming operators’ associations
Creating a level playing field

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Negotiating a Purchase Price
The privatization of a public monopoly involves negotiating a price for each piece of the monopoly that is privatized. These prices should reflect the value of the monopoly, normally in terms of the market value of its assets, less any liabilities.

There may also be a goodwill element, to reflect the value of the monopoly to its existing owners [in the case of a private monopoly] or the government [in the case of a public monopoly]. Where the total current market value of the shares in the business exceeds the total value of its assets, the difference between the two is normally treated as goodwill

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This section shows you how to evaluate your bus system so you can engage in meaningful system reform. It has four major parts.

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reform Objectives
There are four main reasons for reforming a bus system.

City leaders decide that fundamental change is needed because the bus service is unsatisfactory.
Political decisions are made at a state or national level to introduce reform.
Reform is introduced in a city because the country is party to international agreements that require bus services to be provided in a different format.
Receiving international loans, domestic grants or domestic funding is dependent on accepting reforms.

Key reform objectives In all the above cases the objectives of reform are usually spelled out only in the broadest terms with perhaps just two or three key objectives being clearly specified. In recent years the key objectives in most cities have been:

Introducing competition for the right to supply bus services.
Creating a level playing field for this competition.
Clearly separating the operating function from the regulatory function.

While these key objectives give a clear direction for reform, they leave considerable flexibility when it comes to bus system details. There are a wide range of operating structures to choose from.

Defining reform objectives
It’s the responsibility of city public transport professionals to create a structure that meets the specific needs and objectives of the city while at the same time incorporating the reform objectives. The first step in this process, after assessing the current situation, is to define the city’s public transport objectives.

Whether the need to reform is driven by internal political agendas or by external influences, the objectives may be grouped as:

Financial objectives
Operational or service objectives
Social objectives

In many cases not all of the desired objectives will be achievable. Often some objectives will be incompatible with others or will be mutually exclusive.

For example, the objective of reducing subsidies may be incompatible with the objective of keeping fares low. In fact, the types of fares charged and the average fare paid per passenger are fundamental considerations under any system reform. [Learn more about fares.]

It will be necessary to prioritize your objectives. Prioritizing objectives is very useful in helping to determine the most appropriate bus system structure for your city. The interactive tool can help you prioritize your objectives.

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This section will help identify your city’s problems and determine their causes. Bus systems in developing countries face many problems. Some are serious, some less so. Some problems appear to be more serious than they are. Conversely, an existing problem may not even be recognized.

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Unreliable Service
Poor reliability of bus services is a common problem in cities in developing countries. There are several aspects of reliability. Most fundamental is whether a service operates at all, and if it does, whether it operates on schedule, if it has one. Also significant is the reliability of the vehicles themselves: frequent mechanical failure will detract considerably from service reliability. And in some cities, buses frequently fail to complete their journeys, particularly if there are few passengers remaining on board.

Reliability is difficult to measure, and standards and expectations vary considerably from one place to another. Where services are operated to schedule, reliability may be measured in terms of the percentage of journeys operating on time or less than a specified number of minutes late, or by the percentage of scheduled kilometers actually operated.

Poor reliability may be due to inadequate enforcement of rules and regulations, so that operators may disregard them with impunity. Inefficient operating practices such as the system of “full-load dispatching,” where buses wait at terminals until they are fully loaded before they depart instead of operating to schedule, may also result in an erratic and unpredictable service.

Poor vehicle maintenance is the main reason for unreliable vehicles. This is particularly common where there is a predominance of small operators, but there are also some large operators with poor standards of maintenance. The number of kilometers per breakdown is a useful measure of reliability.

Some causes of unreliability are largely outside the operators’ control. Traffic congestion is a particular problem in many cities, often making adherence to schedules extremely difficult.

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Benchmarks and Indicators
The performance and statistical measures listed below should be familiar to public transport planners. They form the basic building blocks for a management information system.

It’s not possible to draw firm conclusions from comparisons of these measures either over time within a city or at a point in time between different cities. However, these measures will help you identify and understand how your bus system may be out of line with other cities and how it compares to best practices elsewhere.

Comparing your system’s data with these benchmarks and indicators will also help you assess the extent of the problems with your bus system. Tools linked to each benchmark will help you collect data for your system.

Role and importance of buses

Total population in service area
Total daily trips [excluding walk trips]
Total daily trips by public transport
Percent mode share to public transport
Average daily ridership
Average bus boardings per bus trip
Average daily trips by bus
Percent mode share to bus

Network description

Percent of urban area within 500 m of bus stop

Fleet description

Fleet size: buses
No. of buses per 1000 people
Average bus capacity
Total fleet capacity
Percent seated capacity
Percent air conditioned [if appropriate]
Average vehicle age

Output performance measures

Average availability percentage
Average vehicle utilization rate [percentage of available buses actually used]
Percentage peak only buses
Average daily km per bus
Average total daily place-km [place = seated + standing capacity]
Percent lost km
Km per breakdown in service
Km per accident

Passenger loading and adequacy of capacity

Passengers per vehicle per day
Average peak hour occupancy ratio at maximum load point
Average distance travelled per boarding [km]
Daily passenger km
Average load factor [passenger-km/place-km]

Staff

Staff productivity indicators

Affordability

Measuring affordability

Financial performance

Cost recovery ratio

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Average Daily Ridership
It is useful to know the total number of passengers traveling on average each day. In most cities, the number of passengers traveling on working days is significantly higher than at weekends. It is the peak hour weekday figure that determines the required capacity of the bus system.

The figure normally quoted is the number of passenger boardings per day [which is normally termed passengers per day]. Most bus users will make at least two trips daily [to and from work], and many will have to use more than one bus to make one trip. Thus a passenger making two boardings per trip would make four boardings daily. The number of daily passengers, therefore, is normally much higher than the number of people who travel every day.

For a formal bus operation, passenger statistics are usually derived from the ticketing system, which normally records the number of tickets issued. The regulatory authority should require that daily ridership figures are reported on a route by route basis at weekly or monthly intervals. Usually, figures quoted as the number of passenger boardings are in fact the number of tickets issued. There may be discrepancies if not all passengers are correctly issued with tickets, or, as is sometimes the case, where two or more low-value tickets must be issued for a high-value fare, for which the correct value of ticket is not available. In these cases surveys should be carried out to establish factors for each route to convert numbers of tickets sold into passengers and these factors should be updated from time to time.

In many cities in developing countries, where some or all bus services are operated less formally, and no tickets are issued, ridership figures are not readily available, and must be determined by surveys.

Use this survey to calculate system ridership.

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Factors Influencing Bus System Efficiency
The principal factors that influence the efficiency of a bus system are:

Regulatory framework
Fare control
Enforcing rules and regulations
Route planning
Interchange facilities
Through ticketing of tickets
Operating structures and company size
Vehicle size and type
Fleet size
Excessive Operating costs
Operating practices
Vehicle maintenance
Bus utilization
Revenue integrity
Competition in the market
Competition from the informal sector