Improving the efficiency of urban bus services in India

This dissertation analyzed the performance of public bus services in Indian cities and explored factors that affect their efficiency. Following the Road Transport Corporation Act of 1950, most states in India established State Road Transport Corporations to provide public bus services in their respective states. By early 1990s, most of the State Transport Undertakings (STUs) had become large monopolistic operations that incurred huge losses. The government of India started to encourage the STUs to resort to privatization to expand their services and stopped providing funds for purchase of new vehicles. Delhi and Bangalore privatized part of their urban bus services to increase the supply of buses in the city.;The analysis involved quantitative analysis of the performance of urban transport companies, the efficiency of their operations and a comparison of the privatization experience of Delhi and Bangalore to understand the differences in their experience. Data Envelopment Analysis (DEA) was used to estimate the relative efficiencies of public bus companies. Then, tobit regression and truncated regression were performed on the estimated efficiencies to explore the exogenous factors that influence efficiency.;Results from the multivariate analysis showed that privatization significantly affects service efficiency. Privatization led to an increase in the supply of buses, a decrease in crowding on buses and overall improvements in the quality of service. However, its impact on production efficiency was insignificant. The results from regression analyses indicated that factors other than privatization, such as higher population density and regular revisions of fares influence efficiency. Higher traffic speeds can also improve efficiency of bus systems. While some these factors can be directly controlled by the bus operator, others are beyond their control and have to be addressed though overall planning for land use and traffic management.;The research also offers several practical implications to cities that are planning to privatize their operations. The comparison of the privatization experiences of Delhi and Bangalore does not support the theory that competition between operators improves efficiency. Regardless of the method of privatization chosen, the nature of regulations imposed on the private operators determines the outcome from privatization.