Article citation information:
Girma, M.
Operational performance analysis of public bus transport services in
Addis Ababa, Ethiopia. Scientific Journal
of Silesian University of Technology. Series Transport. 2023, 118, 29-45. ISSN: 0209-3324. DOI: https://doi.org/10.20858/sjsutst.2023.118.3.
Mulugeta GIRMA[1]
OPERATIONAL PERFORMANCE ANALYSIS OF PUBLIC BUS TRANSPORT SERVICES IN
ADDIS ABABA, ETHIOPIA
Summary. In emerging
countries, improving performance in the transportation industry is a critical
concern. Bus transport companies like Anbessa, Sheger and the Public Service Employees' Transport Service
play a pivotal role in Addis Ababa's transit system. Subsequently, this study analyzes the operators' operational performance, comparing
it to industry norms. The collected data is analyzed
using the ratio analysis approach. The findings indicate that the Anbessa City Bus outperforms the other buses in several
aspects, such as fleet strength, service utilization, and vehicle utilization,
but there is a disparity in staff productivity and operational safety. Sheger City Bus, on the other hand, outperforms the market
in terms of vehicle utilization, workforce productivity, and operational
safety. However, on most of the indicators, the Public Employees Bus performs
the worst. Finally, comparing the operators' performance to industry standards,
most indications show that they fail to meet. Consequently, even if bus transit
operators are subsidized by the government in the operation of their services
for residents, the study suggests that they must make significant improvements
in how they use their resources to improve their financial and operational
performance and deliver better services compared to those provided by other
operators in the city. In addition, government incentives such as subsidies
should be allocated based on actual operational performance.
Keywords: bus
transit, operational performance, ratio analysis, Addis Ababa
1.
INTRODUCTION
1.1. Background
Public transport comprises bus
transit systems, rail systems, light rail systems, monorails, and water
transportation. The conventional bus is the most common
means of public transportation in most developing countries due to its
inexpensive operating and startup
costs, route flexibility, and permeability into towns and city centers [2, 3]. Besides, buses are considered to be the most common choice for most
commuters as it is the cheapest mode of travel [4]. Thus, one of the essential components of the well-being
of increasing and expanding metropolitan regions is the provision of adequate,
acceptable public bus transportation services [5].
However, rapid population growth and
a high reliance on private vehicles are major challenges facing many cities in
the developing world. The rapid growth of private cars
increases pressure on the city's urban transit system. This is because, as mentioned in [6], the increased use of
private vehicles impacts the quality of life in the community. It causes problems such as congestion, traffic noise, and
air pollution. In addition, it affects the operation of public transportation
in the city as well as the efficiency of transportation companies.
Therefore, promoting public
transport is the most important option to minimize problems related to urban
transport in most cities in developing countries. In
addition, it contributes significantly to alleviating traffic congestion
problems and air pollution, thus providing an alternative means of
transportation and contributing appreciably to the value of urban living [7].
Presently, Addis Ababa is
experiencing rapid population growth and rapid urbanization. In addition, the
existing public transportation system in the city has various problems, such as
congestion, overcrowding of buses, and shortage of buses. However, to minimize traffic problems in the city, the
government is placing more emphasis on local transport, regularly increasing
the number of company buses.
However,
the author of this study believes that to make urban public transport
attractive and efficient, city services must not only be properly planned,
operated and marketed but also be continuously measured and monitored. From an
operator's point of view, effective performance measurement of services is a
way to promote the operational efficiency of a city's transportation system.
Thus, the purpose of this study is to evaluate the operating performance of the
public bus transportation system in Addis Ababa from the perspective of the
operator.
1.2. Scope of study
The scope of this study is seen from a geographical and thematic point of view. Geographically, the study is focused
on Addis Ababa city. The thematic area of the study goes to analyse the
operational performance of public
bus transport in the city (that is, Anbessa City Bus, Sheger Express
bus, and PSETSE service). In terms of time frame, the study covers 2013/14 to
2018/19, which adds up to six years of assessment. The span of more than five
years is enough to produce a trend of the performance of each transit agency.
2. LITERATURE REVIEW
2.1. Performance measurement
and its importance
The term performance refers to a
measure of evaluation or comparison. This can be viewed as a quantitative or
qualitative characterization of performance [8]. It can
also be defined as the purpose of successfully carrying out one or more
activities of an organization [9].
Performance
has many dimensions, including efficiency and effectiveness. The efficiency of an enterprise
represents how the physical inputs of labor, energy,
maintenance materials, capital, and overheads are used to produce the physical
(intermediate) services defined by vehicle kilometers
of service. Effectiveness has two essential components:
(i) cost-effectiveness – the
relationship between inputs and consumed services (that is, patronage levels)
and (ii) service effectiveness – the relationship between produced
services (that is, vehicle kilometers) and consumed
services (that is, patronage levels). All of these global measures are
relative measures of different dimensions of performance [10].
Similarly,
performance measurement can be defined as the evaluation of an
organization’s output as a product of the management of its internal
resources (money, people, vehicles, facilities) and the environment in which it
operates [11]. Further, it is described as the technique to
evaluate how good or bad the performance of transit service is under a
prevailing operating condition [12].
In addition, performance measurement
involves collecting, evaluating and reporting data related to how well an
organization performs its functions and achieves its goals and objectives. The
measurements used in the process ideally relate to the results achieved by the
organization. However, descriptive measures can also be used to provide context
and identify underlying reasons for changes in performance [13, 11].
2.2. Transit performance measurement
Performance measures are a navigation
tool that assists in determining where an organization wants to go and how to
get there. Trend analysis, comparisons, target setting, system improvement, and
incentives for managers and employees are just a few of its practical
applications. It also aids in the identification of possible issues and the
most appropriate solutions [14, 15].
Measurement of
transportation performance is a dynamic method for ensuring that the quality of
offered transit services continues to improve and for allocating resources
among competing transportation agencies [8]. Performance appraisals are also an objective way to assess performance. They are usually
classified into one of two categories:
i. Efficiency measurements describe the
relationship between completed work and the resources required to complete it.
Further, the performance of transit
agencies should be assessed using standard evaluation criteria. This includes
operational performance, which could be evaluated using measures such as fleet
utilization rate, passenger volumes, staff-bus ratio, vehicle kilometers, accident rates, and breakdowns in service. The standard of services could also be assessed by
employing such measures as passenger waiting time, passenger journey times,
service affordability, and walking distance to the bus stop. Similarly, variables such as the revenue-cost ratio and
cost-per-passenger-kilometers could be used in assessing financial
performance [4]. Similarly, these are indicated
as key indicators to measure the operational performance of the public transit
system [18].
Tab. 1
Bus transport performance measures
Measures |
Description |
Fleet availability |
Number
of vehicles ousted as a proportion of total fleet stock |
Vehicle utilization |
Vehicles
covered km (Km/bus) |
Schedule outrun |
The
proportion of schedules operated |
Staff productivity |
Number
of staff per schedule for bus |
EPK |
Earning per km |
CPK |
Cost per km |
Passengers carried |
Either
absolute or per bus or km |
Load factor |
Total
passenger km / total seat/km |
Breakdown rate |
Per million vehicle km |
Accident rate |
Per million vehicle km |
Summarily,
this study attempts to analyze the operational performance of public bus transportation in the city
using the following indicators: fleet strength, fleet utilization, vehicle
utilization, service utilization, staff-bus ratio, and staff productivity, as
well as the quality of service in terms of operational safety, based on
existing literature and studies. In addition, financial indicators such as cost
per kilometer (CPKM),
earning per kilometer (EPKM), are used to assess the enterprise's
financial performance.
3. MATERIALS AND METHOD
3.1. Data collection
Secondary
data were collected from the annual reports of Anbessa City Bus, Sheger
City Bus and PSETSE. Reports, journals, and books were
also used as data sources for the research analysis.
3.2.
Data analysis
This study also uses ratio analysis to measure
operator operational performance based on selected performance indicators.
4. RESULTS AND DISCUSSION
4.1.
Operational performance
4.1.1.
Fleet strength
Fleet strength
refers to the number of buses held by each transit service provider to deliver
services for users of the service in the city. Thus, as shown in Figure 1, ACBSE has the highest
number of buses in the provision of service. The new
transit operator, that is, PSETSE,
also has a better fleet strength compared to the Sheger
bus, but the main objective of the PSETSE bus is to
provide transport service for civil servants in the city and provide taxi
service with a limited number of buses for residents of the city for a fare.
Fig. 1. Number of buses held
4.1.2.
Fleet
utilization
Thus, as
portrayed in Figure 2 above, Anbessa City Bus fleet
utilization was highest in 2017/18 (60%) but lowest in 2018/19 (37.2%). Also,
in the last two years (2017/18 and 2018/19), the Sheger
City Bus has had a high vehicle utilization rate, with the company reaching the
highest utilization rate (79.4%) compared to the Anbessa
City Bus. This means that Sheger city buses have a
high fleet utilization rate compared to other buses in the city.
Fig. 2. Fleet utilization (%)
PSETSE's primary purpose is to provide morning
and evening services for Federal and AACA personnel
work purposes; however, it also provides regular taxi services on a limited
number of buses for urban residents. With this fleet utilization, the company
only considers the number of buses operating in the city's public transport
system.
As the fleet
utilization results show, Anbessa
City Bus has a high fleet utilization rate compared to other bus companies in
the city. However, as with Urban Bus Toolkit 2011, 80-90% fleet utilization is
considered reasonable. Apart from the Sheger
Municipal Bus result in 2017/18, the other results show that both companies
meet the criteria. This demonstrates the need to maintain fleet utilization
rates for both companies to improve operational efficiency.
4.1.3.
Vehicle
utilization
Commonly referred
to as 'bus productivity', is a key metric for operating public transport
networks and indicates efficient use of working capital. This is the number of kilometers a vehicle has traveled on that route in one day. It also shows vehicle
operational efficiency in terms of the effective utilization of vehicles in the
system.
As a result, vehicles are better used
when they cover more useful kilometers on the road.
The chart below shows the fleet productivity of transit companies in each city
(Figure 3a).
Fig. 3a.
Vehicle productivity: km/bus/year |
Fig. 3b.
Vehicle productivity: km/bus/day |
Thus as Figure 3b shows, vehicle productivity for Sheger and Anbessa buses is
almost similar; for instance, vehicle productivity for the Anbessa
bus was high (117 km/bus/day) in 2013/14 but the lowest in 2017/18.
For the Sheger City Bus, the result was high (136 km/bus/day)
in 2017/18.
However, compared
to all operators, PSETSE's
vehicle productivity is the lowest in all years. Because as mentioned above,
the company offers a taxi service with a limited number of buses to support
other regular public transportation in the city. Thus, the vehicle productivity
results show that PSETSE makes a big difference in
providing transportation services to urban users. Also, compared to the WB
standard, all operators offer their services based on the standard.
4.1.4.
Service utilization
This shows how
much of the provided capacity is being used by regular users. Hence, it mainly
depends on the number of passengers transported and the effective kilometers generated by
each city's mass transit system. The graphs below show data for each operator's
traffic and items, such as the average number of passengers per bus per year
per day (Figure 4a).
Fig. 4a.
Service utilization (total passengers/bus/year)
As
mentioned above, Anbessa City Bus has the highest
number of passengers during the given period compared to other public bus
companies. PSETSE has the least number of passengers.
This means that the services provided by PSETSE are
not as well utilized as other operators in the city, affecting the company's
effectiveness.
In addition,
Figure 4b shows the number of passengers per day
on the bus, indicating that the ratio of the number of passengers per day on
the bus during this period was the highest for Anbessa
City Bus and the lowest for PSETSE.
This means that the Anbessa City Bus service is very well used compared to other buses.
On the other hand, the PSETSE service is least used
by urban users. Details
of the results are shown below.
Fig. 4b.
Service utilization (passengers/bus/day)
4.1.5. Staff-bus ratio and staff productivity
Although a larger ratio signifies more
job creation, it also indicates lower employee productivity and higher
establishment costs. Hence, a smaller ratio is always required, as it signals
excellent employee efficiency.
The term "staff" refers to the
total number of people employed by the company, which includes the operational
crew, mechanical staff, and administrative personnel. In light of this, the
following graphs depict the result of the staff-bus ratio and manpower
productivity for bus transit operators in the city over time.
4.1.5.1. Bus-staff ratio
(BSR)
As shown below, BSR for both transit
service agencies is nearly similar for all providers in the city. But, to some
extent, it is the highest for Anbessa City Bus and
reached 8.8 in 2018/19 and lowest for PSETSE; because
BSR for PSETSE is different
from others, and it is calculated based on only the number of buses operated as
a taxi in the city for the years considered (Figure 5).
Fig. 5. Bus-staff ratio
4.1.5.2. Manpower
productivity
Employee
productivity is the ratio of input to output. The number of people employed by
the institution is the input, and the services provided are measured in
effective kilometers
(km/staff/day). Figure 6 presents the employee productivity in km/staff/day for
each operator in the city over time.
Fig. 6. Manpower productivity:
km/staff/day
As shown, Sheger City Bus staff productivity peaked in
2017/18 (22.9 km/staff/day) and declined to 13.2 km/staff/day in 2018/19.
Moreover, the productivity of Anbessa City Bus
employees has been about the same for many years, reaching a peak (17.6) in
2013/14. However, the productivity of Sheger Municipal Bus employees is better than the Anbesa Municipal Bus in the city.
4.1.6.
Operational
safety
As seen in Figure
7, accidents/100,000 km for Anbessa City Bus is the lowest at 9.76 in
2015/16 but the highest in 2018/19 (that is, 12.7). Similarly,
it is the lowest for the Sheger City Bus. This
implies that the occurrence of an accident is high for Anbessa
city buses.
Fig. 7.
Operational safety (accidents/100,000 km)
4.2.
Financial
performance
Financial performance is a specific
measure of how well an organization can utilize resources from its core
operations and generate revenue [19]. It is also used
as an overall measure of a company's general financial health over time and can
be used to compare similar companies in the same industry [20]. Therefore, this section will be devoted to analyzing the financial performance of the city's
public bus companies based on the costs, revenues and profits of each company
from 2013/14 to 2018/19.
4.2.1.
Earning per kilometer (EPKM)
Figures 8 and 9
show traffic revenue per kilometer
(revenue from ticket sales) and total revenue per kilometer
for each operator in the city. Thus as highlighted in Figure 8, traffic revenue
is high for Anbessa City Bus in 2016/17 (that is,
14.7 birr/km), for the Sheger City Bus, 17.4 birr/km
in 2018/19 and 59.2 birr/km for PSETSE.
The result showed
that PSETSE
earned the highest amount of birr compared to others, particularly in 2014/15
(that is, 59.2 birr/km). But the main reason for this result was the fleet
utilization for PSETSE during the given year, which
was 76.5%, the highest for the enterprise. However, the
result shows the others earned fewer amounts of birr from traffic revenue as
they aim to provide urban transport services for the residents at reasonable
fares.
Similarly, Figure
9 shows the total revenue/km for all transit service providers in the city.
Here also, PSETSE
revenue/km is the highest compared to others and growing from year to year.
This is because the enterprise obtained a huge amount of revenue from the city
and the Federal Government for regular transport services that were delivered to
civil servants in the city.
Besides, Anbessa and Sheger city buses also obtained revenue from the City
Administration as a subsidy to run their operation effectively in the city.
4.2.2.
Cost per kilometer
(CPKM)
The
result for the cost/km of transit service providers in the city is shown in the
next figures. Thus, as
Figures 10 and 11 depict, operating cost per km was highest for Sheger City Bus in 2015/16 and 2018/19,
that is, 38.2 birr/km and 42.6 birr/km, respectively. For Anbessa City Bus, the operating cost per km increased year to year and
reached its maximum in 2018/19, which is 36 birr/km.
Fig. 8. Traffic revenue/km |
Fig. 9. Total
revenue/km |
Similarly,
the total cost per kilometer for Sheger city buses compared to Anbessa is the highest in the given year. As the results show, Sheger City Bus has less income per kilometer
than Anbessa City Bus, and the fare is higher
(Birr/km). This affects the profitability of the company because there
is a difference between income and expenses.
Fig. 10. Operating cost/km |
Fig. 11. Total cost/km |
4.2.3.
Net profit margin
per kilometer (NPMKM)
Analysis
of the net profit margin is conducted based on the total revenue and total cost
of each enterprise in a year. Thus, Figure 12 shows the
general profit/loss for each enterprise, and as shown, Sheger City Bus lost the
highest amount of birr in 2018/19 compared to others.
Similarly,
Figure 13 shows the net profit/loss per kilometer for each transit operator
over the years. Thus, the result shows that Anbessa City Bus obtained a net
profit of birr 1/km in 2018/19 for the first time in the previous six years. However, Sheger City Bus also
obtained a net loss (-22.3 birr/km) in the same year.
In general, bus
companies in the city have been operating at a loss for many years, as the
profit and loss results demonstrate. Businesses and governments should
therefore consider the operational and financial performance of operating
services in their cities and work toward improving them.
Fig. 12. Net Profit/loss |
Fig. 13. Net profit/loss per km |
4.3. Comparison of
public bus transit performance
Finally,
this study analyzes and compares the performance of each operator in the city over the
years based on their individual average analysis.
Hence, a result
of the operational performance of the Anbessa City Bus shows that the enterprise
performed very well in service utilization compared to others. It means the Anbessa City Bus transported 768
passengers per bus/day on average for six years. In
other words, the supplied service of Anbessa City Bus was well-consumed by customers in the city. But
the result for PSETSE showed that it is the lowest
consumed service in the city (that is, 102 passengers/bus/day). Moreover, the Sheger City Bus transported on average 546 passengers/bus/day for
three years.
Also, as shown
in the result for fleet utilization and vehicle productivity, Sheger City Bus had a better result, that
is, 67.6% and 113.3 km/bus/day, respectively. The next one is Anbessa City Bus, with 52%
of fleet utilization and 108.3 km/bus/day during the years under study. Moreover, the result for fleet utilization and vehicle productivity
for PSETSE
buses is the lowest in the city.
Moreover,
the result for the bus-staff ratio and km/staff/day for Anbessa City Bus and Sheger city buses are nearly the
same; it is 7.4 and 15.1 km/staff/day for Anabessa
City Bus, and 6.7 and 17.1 km/staff/day for Sheger
City Bus during the years (Figure 14).
Further,
the performance of public bus service operators in the city is compared with
some general standard indicators of the Urban Bus Toolkit [4]. Thus, Table 10 shows that in most indicators, public bus operators of the
city have been found deficient and below standard categories. This indicates
that they have delivered services with poor performance. Details
for others are presented in Table 2.
Fig. 14. Operational performance result
on average over the years
Tab. 2
Performance comparison with
general standards
Indicators |
Standard Value |
Within standard range |
Deficient than standard |
Better than
standard |
Fleet utilization |
80 - 90 |
Sheger (79.4%) near to 80 |
Anbessa bus, PSETSE |
None |
Staff-bus ratio |
3 to 8 |
Anbessa, Sheger buses |
Anbesa bus in 2018/19 |
None |
Vehicle-km bus/day |
210 to 260 |
None |
All |
None |
Passengers volume |
1,000 - 1,200 SD bus 80 1200 - 1500 SD bus 100 |
None |
All Operators (Anbessa is best, PSETSE is the least
relatively) |
None |
Accident rate |
1.5 - 3 |
None |
All Operators (Sheger is better, 3.95, in 2010 and near to
the range) |
None |
Therefore, the
operational performance of the city's public bus companies is rated as
low-to-standard and poor-to-standard for most performance parameters [4]. However, Sheger
City Bus' vehicle utilization to bus-staff ratio is
somewhat better than other buses. On the other hand, PSETSE
buses are the worst performing public bus service in the city. Usually, all
shipping companies in the city. In particular, PSETSE needs to identify the root causes of its
poor performance and close the gaps to improve its capabilities.
5.
CONCLUSION
In this study,
the operating performance of public bus companies was analyzed using the ratio
analysis method. Based on the results obtained, Anbessa City Bus performed well compared to other
operators on the following indicators: Fleet strength, service utilization, and
vehicle utilization. However, it presents problems for employee bus
rates, employee productivity and operational safety metrics. In contrast, Sheger City Buses excelled in vehicle utilization, staff-bus ratios,
staff productivity, and operational safety indicators.
Additionally, PSETSE scores are among
the lowest for most operational KPIs. In particular, PSETSE's service utilization rate was the lowest among the
others. This means that the services provided by PSETSE
are as underused as others in the city, affecting the effectiveness of the
company. This relatively shows the existence of wasted resources in the
industry. Thus, even if PSETSE has a role to play in
providing taxi services to residents, the government should consider how the
company should operate taxi services. That is, either provide public transport
services independently or leave the sector.
Furthermore, when
comparing the performance of the city's bus companies to the prevailing
standards, they fall below par on most metrics.
The results, therefore, show that bus operators, when
subsidized by the government to run services to residents, will significantly
improve their use of resources to improve their financial and operational
performance. This suggests that there is a need,
unlike other operators, the need to provide competent services to residents of
the city.
In addition, to
improve the productivity of bus operations as a whole, it is imperative to
improve the conditions in which the buses run within the city.
Primarily, one of the biggest challenges in running bus transport in cities is
the use of mixed traffic in dense environments. Therefore, it is important to
develop dedicated lanes for city buses. Effective parking regulations and
parking fees should also be considered to free up roads and sidewalks for buses
and other modes of transport to move smoothly around the city. Finally, these
and other options should be evaluated to improve the productivity of bus
operations and the vitality of the system to meet the city's growing
transportation needs.
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Received 10.10.2022; accepted in
revised form 19.12.2022
Scientific Journal of Silesian University of Technology. Series
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[1] College of Urban Development
and Engineering, Ethiopian Civil Service University, Addis Ababa, Ethiopia.
Email: muleraddis@yahoo.com. ORCID:
http://orcid.org/0000-0002-5548-8010