A government as its policy of protection of the poor, may decide to subsidize loss making bus routes in the interest of equity and social justice. It is an admirable intention. It is important however that full accounting is done on the subsidy, how much is acceptable and how to minimize it by novel revenue raising ideas. Often these plans flow from the top, with no real understanding of the issues at ground level leading to a huge waste of state resources.
It is important to realize that rural routes, that the private sector does not want, are those where the roads are so bad the axles, and undercarriage breakdown owing to the parlous state of the road. A better road, may result in a private operator wishing to bid for the route, and thereby avoid the need to subsidize this particular route.
Another example is where the local school closes down due to few students making it uneconomical, and then a bus is laid on to take the village kids to the nearest town to a better quality school which has better teaching staff, and an overall improvement in quality of education and choices offered. This subsidy in roundabout terms does not cost more as the money saved from running an uneconomical school should cancel the subsidy to a certain degree.
Night bus services are uneconomical for private operators and therefore a decision must be taken on what type of night service the state should offer and in order to reduce the subsidy a rate that is fair bearing in mind the expected passenger load. This will save many garment workers from having to arrange for a three wheeler or for some companies to arrange expensive hires to send employees home, when they work late in the private sector. (no one works late in the govt. sector!!)
The people hired for this service may need to be at a different pay grade to the bus service that currently competes with the private sector, and which must run at a profit as the private sector seem to do despite the many added costs such as expensive route permits and bribery to get these permits. Higher charges can be offset by season tickets at much lower rates, so that frequent travelers are not penalized over the occasional one who should be able to pay the higher fare, a three wheeler being his nearest alternative.
In conclusion using some of the practical examples that I have been exposed to one can see there is a need, there is a solution, and it need not bear an unreasonable cost as long as it is properly planned and run as a different organization, maybe with even a smaller sized buses in rural areas that is distinct and safe for night use.
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