Intercity buses: India versus US!

The United States of America has a fairly widespread and established intercity bus industry. Freeways of the US established intercity buses has a preferred mode of transport for people who cannot afford to fly. Railways, or Railroads as they call it in the US, is often an option that is not considered a first-choice for many - AMTRAK is famous for its delays, and is considered "slow". Operators in the US are licensed by the Department of Transportation (DOT) of the US government, and operate legally by providing tickets. 

India, on the other hand, has a fledgling highway network. Four-laning of National Highways, and development of access-controlled expressways are progressing in many areas of the country. The Golden Quadrilateral highway network moved a lot of passengers from trains to buses. A characteristic difference of the Indian railway network is that, the railway network developed much before the highway network. Although the Indian Railway network is by no means 'developed' or 'advanced', it still moves millions of passengers each day. Subsidies allow the railways to provide services at a very low cost, and this encouraged more people to prefer the railways over the road. Air connectivity is still elitist and is reserved for larger cities/towns of the country. 

Intercity bus in the US - Prevost H3-45 coach operated by New York Trailways

The advent of high powered buses in 2002, with the arrival of Volvo buses, shifted more passengers from trains to buses - especially frequent travellers. The intercity bus industry is largely unregulated and unorganized. Technically speaking, only the state government transport undertakings operate legal intercity bus services. Very few states give permits to private operators as well. The mushrooming interstate (and intrastate) premium bus services run by private operators use permits that are originally intended for use for carrying tourists. The grey areas in the permit conditions, and interesting interpretations of the conditions allow mis-use of these permits to operate regular trips. Some states, like Tamilnadu, give, what is called as, "omnibus permits" that permit carriage of passengers from one point to the other.  

Majority of the operators operate using a type of permit called "All India Tourist Omni Bus" - this type of permit is issued to carry tourists as "package" tours. Going strictly by definition, all passengers are to board at the same point, travel together, and return to the same origin. This permit is not meant to pick-up passengers from wayside points or drop them in wayside points. Such operations can be conducted only using a "stage" carriage permit. An alternative permit commonly used is called a "Contract Carriage" - this kind of permit is used for carrying groups for a specific purpose, like a marriage. These vehicles are operated against a "contract" - and hence, all travelers must originate at the same place. 

That said, these operations are run using loop-holes in the permit conditions, and due to the fact that stage carriage operators (a major chunk of which is controlled by state governments) are unable to meet the demand for buses. The government has been maintaining silence on this deviation since they cannot scale up their own infrastructure to meet the demand of passengers. Passengers are left with no choice by to use private operators. Private intercity operators offer a range of options from non-ac seaters to premium multi-axle ac sleeper coaches. Some government operators also offer premium options as well - but are very limited. 

The private intercity operators are largely unorganized and the industry works around gray areas of the law. There is lack of a central registration process, and the operating protocols of operators aren't controlled. The operators obtain a permit from a random state, and operate between random states. It is not uncommon to see buses registered in Arunachal Pradesh or Nagaland operating from Karnataka to Tamil Nadu/Kerala. Different states in India have their own procedures and policies for issue of permit for different kinds of buses. Some states do not issue permits for Sleeper buses, while some do - among them some issue All India Permit for sleeper buses, while some others issue only contract carriage permits. Each of these permits have their own advantages and disadvantages - include rates of taxes. 

Intercity coach in India - Volvo B11R 14.5m coach operated by Kerala Lines!

Commercial vehicles in India need to pay road tax to each state the vehicle calls upon. Thus, a bus operating from Telangana to Kerala, via Andhra Pradesh, Karnataka and Tamil Nadu needs to pay tax to each of these 5 states. These taxes are paid either on a monthly or quarterly basis - some states demand annual payments as well. On an average, these vehicles shell out close to Rs. 15000 per seat per quarter (3 months) - that is close to about Rs. 165 per seat per day. Add fuel cost, toll payments and capital expenses. Breaking even gets difficult on days when loads are poor. To make up for the losses, operate resort to higher fares during weekends and even higher fares during festive days. They do give discounts on weekdays.

Taking an example - fares in routes like Bengaluru-Chennai go down as low as Rs. 450 (or even lesser) during week days for a AC Multi-axle seater coach, and as high as Rs. 1200 during weekends, and even higher to Rs. 1999 during 'Super Peak' days. These 'super peak' days would make up about 10-15 days in a year, while there are around 100 days of "weekends" in a year. So that is about 115-120 days of high fares, and the remaining 245 days of discounted fares. The operators need to break even with such varying fares. Weekday fares are often bloodbath as operators try undercutting each other in an attempt to mop up last minute travellers. Unlike airfares, bus operators apply the same fare to passengers irrespective of whether they book early or on the date of journey - in fact, there are passengers who wait till the last minute to book a ticket so that they could benefit from last minute reductions in fare - this generates a situation of uncertainty for the operator. 

During the travels in US, I had noticed that bus operators in the US used a very dynamic mechanism of pricing - the ticket prices varied according to the number of seats available in the bus. They started at the lowest price bracket and went upwards as the day of journey came closer. This encouraged people to book early, and the operators get a guaranteed number of seats by the time the trip comes closer. The strategy in India is the opposite - private intercity operators open bookings at the highest fare brake - forcing passengers to prioritize trains, or government buses, or worse, the new trend to book a self-drive car rental! The operators reduce their fares closer to the travel date as they realize their seats are unsold - by now, most passengers would already have a confirmed ticket by another cheaper mode of travel. High bus fares, and good roads, have actually encouraged people to hire self-drive rental cars these days! Most of the last moment ticket seekers in these buses are people who couldn't, mostly, get a tatkal reservation on the train!

These high fares on opening day, and low fares on day of journey is very counterproductive to operators - passengers avoid booking in advance, and prefer waiting till the last minute. The end result is buses being largely unoccupied until the day of journey, and large unpredictability for the operator. 

I had the opportunity to try two major players in the US - Greyhound and MegaBus, along with a smaller player called "New York Trailways". Greyhound is perhaps the largest operator in the US, and they operate largely Prevost and MCI coaches. Megabus is a smaller player in the US, largely promotes itself as a low cost operator and operator VanHool built double decker coaches. While Greyhound owns its own bus station and largely operates from such bus station, Megabus picks up passengers from road side points, or even from public transit bus stations (like the Union Station at Washington DC). Both the operators allow booking 'through' tickets. Greyhound offers great connections, and they even put you on the 'next' bus if you miss one because your previous bus ran late. Comfort levels on these buses are average - they do not offer facilities like a calf-rest, or higher angle of recline, which Indian buses provide. Buses in the US offer on board toilets as a standard.

On the whole, I found buses in India more comfortable than the ones I traveled in the US. The ticket pricing mechanism in India requires large scale overhauling. Dynamic pricing is a great idea, but then passengers should be given benefits of booking earlier. Indian operator prefer penalizing passengers who book early by charging higher fares from them, and charging lower from walk-in passengers. The cost of operations in India is higher, largely due to the fact that the industry in unorganized, and operates in the gray areas of the law. The new, proposed, All India Permit for buses would be a great boost for this industry, as it cuts down tax outflow by a large extent - but it is yet to be seen if all states would permit this to happen. Hope the government also brings in regulations for registration of such operations, making them completely legal and allow for safe passage of passengers. 


C.A.Raghu Ram said…
The proposed regulations for Aggregators including buses should improve comfort and convenience to passengers, besides making it mandatory for operators to provide minimum level of safety
C.A.Raghu Ram said…
The proposed regulations for Aggregators including buses should improve comfort and convenience to passengers, besides making it mandatory for operators to provide minimum level of safety