In this research, we try to explore La La Land’s Superbus corporation to resolve its severe decrease in profitability. The main objective of any public transportation system is to improve the quality of life in communities by providing efficient, safe and economical transportation service (Tran, 2005, p.154). Thereby, we analyzed three factors that could be the causes of the inefficiency in the current system: unreliability, inconvenient payment, and unsystematic routes plan. We then propose several suitable recommendations for the problems.
Existing Problems
Problem on Reliability. Reliability is a crucial measurement for transit performance because it is a major element customers consider when making their transit decisions (Arhin & Noel, 2013, p.3). Bus riders expect to rely on the bus to arrive at their destinations on time. We observed the issue by trying to find the reasons behind this lack of reliability and found that it happened because of the system’s unpredictability and inconsistency. Having a group of passengers has complained that “the bus comes too frequently”, while another group complained that “they come so infrequently that not all the passengers were able to board the bus”, the revenue will continue to decline if reliability is not immediately restored.
Problem on Bus Allocation Scheme. Most Superbus’ current routes are cumbersome, while some are even unnecessary. Although Superbus has been in operation for more than 20 years, with 205 bus routes, some routes still fail to cooperate with others. When new demands appear, either new routes are added or old ones are extended, without a careful revision. This leads to two major problems. Firstly, the system is overly complex and becomes difficult for existing customers to use, making it even less attractive for new users to start using. Secondly, for some routes, only parts of the route are frequently used meaning that customers have to take a long needless distance to get to their actual destinations. Therefore, in order to prevent a further loss of profit, a careful revision of bus allocation is required.
Problem on Payment System. Passengers’ transportation choice is also greatly influenced by the payment system, which refers to both the ticketing and the pricing model. At the moment, Superbus accepts only cash and does not provide change which means that passengers must give the machine the exact amount of money. This inconvenience caused some passengers to change their transit method, which led to the decrease in profitability. The pricing system directly relates to the revenue, with ticketing approach represents the qualitative and pricing model represents the quantitative aspect. Only with a reasonable and attractive payment system could Superbus increase its revenue from ticketing.
Potential Solutions
The ideal solution is to develop an all-in-one mobile application that has all the required functions including GPS, new bus allocation map and payment system featured in it. All systems are already available in the market, a developer only needs to put them together in one application for the purpose of convenience. Although this application might requires some time to develop, it requires almost no time to install and only a small amount of resource.
Feature 1: GPS. According to Danny Krouk (2002), Global Positioning System (GPS) technology is widely used to improve the efficiency of public transit system. Recently, GPS is being used to ease Automatic Vehicle Location (AVL) Systems by yielding three important benefits. First, it helps estimate bus arrival time. Passengers will be able to find out the schedule and estimated actual arrival time in full graphic detail on their smartphones. Second, it helps keep the bus on time by measuring the performance of both drivers and dispatchers. Lastly, it helps improve bus safety systems by giving safety records of the buses to the users. This system has been used in several parts in the United States and has proved to be successful (p.13-14).
One good example can be found in Portland, Oregon. The Tri-County Metropolitan Transit District (Tri-Met) has adopted this technology and achieved a terrific result. One year after implemented, a big difference was immediately recognized. Knowing that performance could be measured, dispatchers and drivers managed to find ways to make things run better, which leads to 7% increase in the on-time performance the first year and another 7-8% jump the second year. Aside from the improvement of time management, the unprecedented data of both targeted and actual arrival times becomes apparent, which allows the system planners to realize traffic levels at different times of day. The Tri-Met also incorporated a traffic signal priority system into its existing AVL. If a bus running late, signalled by the GPS, approaches a traffic light that is about to turn red, the system will automatically hold the traffic light to green for several extra seconds for the bus to get through the traffic, and to achieve its scheduled timetable (Krouk, 2002, 15). This shows how the concept can work wonders in a real-life application.
Similarly, in Chicago, a bus tracker system has been used to improve reliability of bus service. The system incorporates GPS to position CTA (Chicago Transit Authority) bus so that passengers can get general information such as the current location and expected arrival time at a specific stop. Based on a linear mixed-effects model, Bus Tracker service helps increase bus ridership significantly: “On average, the weekday ridership for the CTA bus route with Bus Tracker service is about 126 more than the bus route without such information” (Tang & Thakuriah, 2012, 151). When bus schedule is guaranteed, more people will choose to commute by bus. What’s more, in the following years, the increase of profit more than offset the investment cost.
Feature 2: Solution for Route System. We will divide all our buses into four-color route classifications: Orange, Green, Pink, Blue. While orange routes connect La La Land and neighbouring cities, Green routes lie on the main roads and CBD as straight lines, Pink routes lead to subway stations and airports, and Blue routes are designed to link urban centres or sub-centres as circles. In addition, each color’s inner routes need to be analyzed separately before being recombined, much like putting together a jigsaw puzzle (Rosen, 2013). While some routes are overly crowded, some are almost empty so the bus system has to be revised as a whole instead of simply adding more and more routes, which is how the problems got piled up. The application will help recognize the detailed traffic conditions such as which area is crowded and which area is empty according to passenger records. Taking these data and information into consideration, new bus route system could be reconstructed.
A similar color-coded system has been successfully adopted in Seoul (Kim, Cheon, & Lim, 2011). In 2003, 368 routes were serviced by 8,110 buses in Seoul. First, the government adjusted many problematic routes: shortened the lengthy ones and removed the ones that were overlapped. Second, routes are now divided into 4 different types: long-distance intercity, trunk, feeder, and circular which serves a different purpose. Now, there are 369 routes with 7,748 buses that cover a larger area. This system not only helps save costs but also increase the revenue. During rush hours, green route buses (for short distance) will be increased to satisfy commuters’ demands. Consequently, by using this strategy, the system will satisfy the demands of larger group of passengers.
Feature 3: Solution for Payment Problem. Firstly, paying tickets through a mobile application is the most efficient and convenient approach. The application will have a function to pay for tickets using a contactless Near Field Communications (NFC) technologies (Wireless Business Forecast, 2005). All that passengers need to do is to hold the phone up to the reader device when boarding and once again when alighting from the bus. Passengers can deposit money into their account from debit or credit cards. The application will serve as an integrated electronic wallet that can be used on multiple public transportations including buses, subways, etc. This kind of mobile application has proved to be working efficiently in many places around the world. For instance, in the UK, Financial services provider “Barclays” offers its mobile application Pingit as a payment option by UK bus operator “First Bus”, which contributes to continuous growth in its revenue. (M2 EquityBites, 2014).
Secondly, the travel price could be automatically calculated by this application based on specific pricing models. According to regression analysis from Montalbo Jr., the operation hours, congestion, and maintenance are the factors that have an effect on dynamic fare pricing of the public transportation (1997). Combining with recommendation 2, we should take passengers’ travel distance, travel time (traffic congestion), and routes feature as factors to determine bus fare. Moreover, bus pricing should also keep pace with the economic development level of the city. According to an empirical pricing model (Ghosh Anupam, 2017, p. 13), new fare should be calculated according to the following factors: the current fare, the change in cost, the change in Wholesale Price Index, the change in Consumer Price Index, and the number of passengers. It is suggested that the city should make fare adjustment every few years.
Proposed pricing principles. At the moment, bus fare is $2 for any distance in La La Land. Based on the pricing models above, we propose two revised pricing plans for the Superbus.
First, for short-distance routes, the fare will be fixed as $1.5. For long-distance routes, the basic fare is $1.5 and then adds as the distance increases with an maximum limit of $3. Similar pricing policy has been implemented in Korea for many years and proven to be successful.
Second, there are also weekly ticket ($10) and monthly ticket ($40) for short-routes for those who commute by bus with high frequency. During the valid period on the ticket, people can take the bus as many times as they want. Bus systems from many countries such as China, Korea and US have this kind of special tickets that helps commuters save extra dollars if they travel frequently.
Thirdly, it is encouraged that bus system cooperates with the subway. Passengers can get a 50% ticket discount of the latter vehicle if transiting between bus and subway in 1 hour. Different public transportations share the same customer group, so they can cooperate to attract more passengers for a win-win result. New York is one of the cities that has been using such cooperating strategies on bus and subway for years.
In all, by incorporating several useful features, together with the proposed pricing models, bus transit efficiencies will be enhanced in both short-term and long-term. This way, by using the application, passengers will be able to not only estimate the time of arrival of a bus to a specific bus station, but also to know the actual fare ahead of time and to actually make a payment using this specialized mobile application. Thus, it is an all-in-one application that could solve all the problems the Superbus is now facing.
Conclusion
In conclusion, the application proves to be the fastest, most applicable, if not the best, way to solve the existing problems. The citizen’s quality of life can be significantly improved by adopting this solution and encouraging customers to use the mobile application to ease their everyday journey. Although it could be hard at the beginning to get everyone to know and used to the concept, it is worth experiencing because if it works, people will use more bus and less car which will eventually make the community environmental-friendly. Developing and installing this all-in-one application not only can it significantly increase the bus company’s revenue and profit, but it can also change the dynamic of the whole community.