Dear Activists, Profit In Public Transport Is Important To Get People To Give Up Their Cars

The decision of the Bangalore Metropolitan Transport Corporation (BMTC) to increase its fares recently has not gone down well with many sections of society. Many a civic ‘activist’ has criticised the move, claiming that public transport should not be bothered about profits, as reported by The News Minute.

The problem here is not BMTC’s decision, but the opposition to it. The primary cause of heartburn is the decision of the corporation to hike the fare for its air-conditioned services – Volvo and Corona – and the reasons for the protests are problematic.

Among the vague and unfounded statements made were ones such as ‘increase in fares is directly going to result in congestion and pollution’, and that increasing fares would deny the poor access to education, lifestyle and mobility.

Society, as an entity is a heterogeneous one. Different people have different lifestyles, choices, preferences and necessities. Then why is public transport a homogeneous one? Why does public transport operate under a ‘one-size-fits-all’ model?

BMTC’s AC services – known officially as Vajra – has always been branded as a premium service. Across India, AC services in urban areas have been branded as such and priced in a higher bracket. Even Chennai – with its dirt-cheap fares thanks to its populism – charges a significantly higher price for its AC services.

Profits Are Important

Public transport, as a service is a highly capital-intensive one. Buses cost a lot to acquire and maintain. The Volvo B7RLE 8400 model that the BMTC operates comes at a market price of Rs 72 lakh. With nearly 800 such buses in its fleet, that’s a significant investment.

Due to the high investment, these buses need to recover their cost of investment and also make profit in order for their maintenance. Further, drivers need to be specially trained to drive them.

In December 2016, the BMTC cancelled close to 6,000 trips per day. The underlying reason was an acute shortage of buses due to the oldest sections of the fleet being phased out. This in turn brought the question of profitability to the fore. BMTC chairman Nagaraju Yadav said that due to accruing losses, the corporation was unable to purchase buses and the older buses were becoming expensive to maintain.

Targeting The Commuter Base

Bengaluru’s traffic congestion today is at an all time high. Lack of proper public transport options in the last two decades – when the information technology (IT) sector came up, mostly in the city’s periphery – forced many residents of the city to either buy a car or a bike. This in turn led to overburdening the city’s roads, which has subsequently gotten worse with the advent of ride-sharing platforms.

Volvo buses were inducted into the fleet in 2006 mainly to cater to the IT sector. However, due to the lack of takers, in 2008, BMTC offered a four-day discount to passengers where a flat fare of Re 1 was charged. The ondu rupaay ticket (one rupee ticket) scheme was a success, prompting the corporation to bring down fares on weekends and public holidays before bringing them down on all days. However, in 2010, it gradually started increasing fares, first by restructuring the fare structure that until then offered cheaper fares on IT corridors, then to keep up with the cost of diesel, which went up when petrol rates were deregulated. BMTC has since then revised the fare when fuel prices went up significantly, a decision it cannot avoid, given international sanctions against countries where India imports its oil from.

It is a common misnomer that when fares are increased, passengers drop. This logic is only applicable when fares remain unchanged for an extended period of time and then rise drastically, as it happened in the case of the Delhi Metro this year. A Right To Information (RTI) query in 2015 showed that when the Mumbai Metro did increase its fares, the passenger count did go down marginally, but was up in the next quarter.

All across India, public transit in major financial sectors offer a premium version to target the upper class. This is why Mumbai’s Suburban Railway offers a first class option that costs nearly 10 times the second class fare. At the same time, first class coaches form only a small component of the total number of coaches. The passengers of the first class are usually businessmen and executives. This is also the reason why when the Brihanmumbai Electricity Supply and Transport (BEST) undertaking in Mumbai ran AC buses, they chose to ply on routes bound for the central business districts (CBDs) of the city and ran only during the morning and evening peak hours.

In Bengaluru, the average car user would not take a bus for a variety of reasons, ranging from the crowd, lack of services connecting their areas, and more. The car user would not take an ordinary bus on a daily basis although they might on select occasions. The higher fare structure on the Vajra fleet is aimed at getting these people on to the bus.

It is common knowledge that a passenger wearing a suit would not board a bus where they would have to sit next to someone covered in cement. Why not give someone in a higher income group, a bus that charges more to encourage these people to give up their cars?

Prioritising Profit

However, BMTC must not keep fares as its only focus. It needs to look at alternative sources of income (non-fare revenue) that includes revenue from advertisements, and leasing out commercial spaces that it owns. While it has leased out spaces to shops at its smaller bus stations, 10 of its larger bus stations were redeveloped into Traffic and Transit Management Centres (TTMCs) in 2009. Each TTMC featured paid parking spaces, commercial spaces for offices and more. However, these spaces are usually empty. Retail majors Big Bazaar and More, which earlier operated out of the TTMCs in the Shanthinagar and Jayanagar TTMCs respectively, have since moved out leaving the Bangalore Metro Rail Corporation Limited (BMRCL) and the Regional Transport Office (RTO) of Bengaluru South (KA-05) as the only major occupants in these two.

Cities such as Bengaluru feature a mixed group of people from varying income groups and each of these would need to be targeted independently. Given the rapid expansion of the city, and the acute lack of services that BMTC has in major pockets, profit is important for it to expand its services and get more people to embrace public transport. Bringing buses under centrally sponsored schemes such as the Jawaharlal Nehru National Urban Renewal Mission (JnNURM) – where the Centre-funded 35 per cent and the state 50 per cent – of the cost of a bus, is not a sustainable model.

At the same time, looking at imposing a congestion charge to force the shift to public transport won’t work as the city has a very weak public transport network.

Profits are important, BMTC needs to maintain buses and pay salaries. Demanding that public transport should not look at profits is a completely wrong line of reasoning and will hurt the system more.