One fine day, I along with my family, were traveling on a bus from Delhi to Chandigarh. While we all sat on the bus and suddenly a conversation arose saying the bus business is extremely profitable, and they earn a lot of money per trip. All the luxury bus owners have extreme wealth and earn in crores saying they have great business. Do you know the harsh reality of the bus business ?
Yes, the bus business model can be profitable and losses too. The reality is, have you ever thought of diesel charges, toll tax, driver and staff salary,daily charges and agent commission. In a Volvo bus, there are approximately 50 seats, they charge around 800 to 2500 rupees based on distance, time and demand. The bus really cost around 1.5 to 2 crore rupees. The companies only provide the body of the vehicle, but the owner has to spend his money on renovation, interior design, seat spacing and maintenance.
Many privately owned bus owners try government contracts, where they pay and commissions are fixed and sure. Most of the pay is given by the government including with a lot of subsidies, which can make it extremely profitable. Contracts are based on kilometer wise, and they will be provided money based on the travel, even if the business does do well. When everything is fixed, and it is provided on time, owners feel safe and secure.
Another hectic task is getting ticket bookings done. Many come online now and because of that, companies charge commissions. The local agents keep looking for the customers, even taking commissions from the owners.
The major concern and expense is the cost of the diesel, where buses give mileage of only 3 to 4 km per litre, approximately per trip diesel cost takes around 15,000 to 20,000 rupees making it expensive.
As it consumes more due to AC and heavy engine weight, making it costly for every trip. Half of the amount is burnt for fuel consumption. Many bus owners privately have parcels or goods carrying which they also charge. Sometimes, due to climate and bus damage or repairs, lack of customers and heavy competition makes it a tough business to manage. Even buses get damaged due to shock circuits and accidents are prone always, which makes it difficult to handle damages. The government's approval, permits and GST increases burden. Overall, a bus is expected to make profits of up to 4 to 6 lakhs, including extra charges per bus. It's all about how you manage the services. It is one of the busiest businesses, making it the most popular travel business in india.
