[Frostbite]

I'm not at all related to the field of transport, but I always look for new business opportunities. The idea of starting an intercity bus service came to me recently after pathetic service by a top operator. It really doesn't help when there aren't many bus operators around, at least in my state.

Now, I did some reading on the internet about this business, and learnt some stuff that might help me get started, but not enough knowledge to run the business.

I've identified a few routes where there are only 1 or two buses by an out of state operator, so that gives me an opportunity to dive in and capture the market.

The problem with this business is low profit margins thanks to high fuel expenses, high interstate taxes, GST, insurance, bus maintenance, EMI (if I finance the bus), salaries, toll fees, and other misc expenses. I should also factor in running the bus on 50% seating capacity during weekdays so there is that.

The cost of bus alone (thinking VOLVO Multi-Axle Sleeper) is something to think about. Then there is also an option of leasing buses from other operators, but don't know how they maintain their buses so kinda risky imo. I should also have a place to park it, clean it, and maintain it. Also, finding experienced drivers is hard because nobody would want to work with a new operator.

Then there is cargo where good money can be made, but I don't know much about it, so I won't talk about it here.

Do you guys think it is possible to start a service with 2 buses, and have a business for myself?

I know that there are a lot of things missing from my post, but I just wanted to keep it simple.

[GTO]

We have an existing thread on the same topic, but it is 12 years old and a lot has changed since (especially technology). Hence, we can continue on this new thread. While the experts come to your thread, I can only tell you one thing after having experience with 4 businesses....

Originally Posted by Frostbite

I'm not at all related to the field of transport, but I always look for new business opportunities.

Best advice = Work for 2 - 3 years in the business as an employee at an established company. Learn the ropes, see if this industry is for you. The bus service business can be a very dirty business. A few love it, many hate it.

[hserus]

Corruption is a significant cost that you haven’t factored in especially if you adopt the usual “saving” mechanism tourist bus operators use of registering your vehicle in the north east states to save on road tax.

Also consider that if there’s a demand for more seats then other bus operators would likely fill it, and if it remains unfilled that is a strange situation.

[RedTerrano]

One of my acquaintances had a similar idea decades ago in the 80s.

He figured out Pune Ganpatipule would be a very lucrative route and worked out all the economics correctly.
Deciding to notch up the service quality, he imported a German bus. It was luxury (real) type with A/c, huge glass roof (think vista dome) and swivel seats. Hell, it even had a built in chemical toilet.
Again, his economic calculation was still sound, despite the heavy investment.

He announced the start of the new service with much fanfare (full page newspaper ads, no internet back then) and got massive bookings weeks in advance.

Sadly his enterprise lasted only half a trip. Too late did he realise the Ghats were too winding and narrow to accommodate the huge bus.

Moral of the story: Always look beyond the obvious.

Since you sound keen to get into this line, here's a thought.
Metro is coming up in full swing in places like Pune and Mumbai.
I personally would love to use it to commute, but my problem is how do I get to/fro the station? I am sure numerous others are facing the same issue.

Perhaps a fleet of smaller vehicles which does circular rounds on a fixed route could be a solution?

[kraken]

Originally Posted by GTO

The bus service business can be a very dirty business. A few love it, many hate it.

10/10 advice right there. Transport business everywhere is mixed up with politicians, touts, corrupt local administration and most important of all formidable competition. Even if there is no competition seeing that you are doing well would cause a lot of operators (newbies and established players) to spring up and try their luck.

I've been very fascinated with the idea of a transport company, many a times what's held me back was stiff competition from very established players. And I have been told you need a very specific skill set (skill set = the stomach to belch out expletives) to deal with drivers (more experience = more arrogant / not easy to control).

[swiftnfurious]

From whatever I read / hear, this is a business to get in if you have strong political back-up.

Some years back, when Volvo was becoming a trend, there was an operator who brought in a Mercedes bus in Bangalore, at 50-100/- lesser cost compared to Volvo. They had good business and occupancy levels as I was told. However, it seemed they had an accident every single day of the trip forcing them to abandon the trip - all these are hear say, but I know that the service didn't last long.

Also, more than passenger occupancy, the money comes from Cargo mostly on weekdays. A lot of palm greasing happens at the borders for an uninterrupted service.

By now, you should have a fair idea if this is a right line of business (LOB) for you.

[Frostbite]

Originally Posted by GTO

Best advice = Work for 2 - 3 years in the business as an employee at an established company. Learn the ropes, see if this industry is for you. The bus service business can be a very dirty business. A few love it, many hate it.

Thank you for the wonderful advice

My Uncle was in the transport business way back in the 90's so I could ask him for some pointers, but I'm afraid he will ask me to stick to my job and forget about starting a business haha.

Originally Posted by hserus

Corruption is a significant cost that you haven’t factored in especially if you adopt the usual “saving” mechanism tourist bus operators use of registering your vehicle in the north east states to save on road tax. .

Corruption is one thing that bothers me when it comes to business. I don't think that I have the heart to do wrong, so I don't know how it would fare out for me.

Yeah, I've identified a few long routes where there are either 1 or 2 buses with 95% occupancy. So I think I have a chance at it, but again I'm not really sure. I guess I have to do more in depth research and think about it.

Originally Posted by RedTerrano

One of my acquaintances had a similar idea decades ago in the 80s.

Ouch, your acquaintance must've taken a huge financial hit. How is he doing now?

Yeah, I see that a lot of people are facing issues with the metro especially in the logistics department. There is no dedicated parking area, so getting to/fro metro is one huge problem. Hmm...I'll look into this. Thanks for the amazing idea.

Originally Posted by kraken

10/10 advice right there. Transport business everywhere is mixed up with politicians, touts, corrupt local administration and most important of all formidable competition.

I have relatives who are in politics, but no way I'm going to go and ask them for backing.

That's messed up, big time. Causing regular accidents to the bus and putting the passengers in risk just shows how much rivalry is present in that field of business. This makes me double think about the whole thing.

I don't know anything related to cargo, so I cannot really speak for it.

[dkamath]

Hi @Frostbite, sharing my thoughts here, which you may find to be off-topic and can please disregard too
Living in Coastal Karnataka (Mangaluru - Udupi belt) until my job brought me to Bengaluru, I've always had and still have a passion for buses, which was my primary means of transport, and had left an ingrained desire to have one of my own, so much so that I finally did end up buying a new bus and which is operational as a Stage Carriage (classified as an "Express" bus). With this as a precursor, let me proceed to share some knowledge that I've gained on the passenger bus transport:

1) If you're really interested in starting this service, would suggest you to first begin with getting hold of operating route permits, which in your case will be the Contract Carriage type of permits for each of the pair you intend to ply

2) Once you've crossed the big hurdle mentioned above, you may consider leasing out the permit to any existing operator, so that way, you can keep a silent watch on how things go until you pick up the rope with either buying out those existing buses or purchasing new ones of your own, now that you have gained a fair knowledge on the revenue dynamics

3) Maintenance of buses is just about similar to a car ownership experience ). The present day ICV buses demand a wheel alignment every 10k kms. A new 235/80 R17.5 tyre costs 15.7k (inclusive of a 28% GST). DEF obligations will be present on a recurrig basis. Brake liners, though not expensive will be another consumable item to keep a tab on. Rest shouldn't be a bother on a daily basis

Being unsure of the place you live in, an alternative option to consider would be to invest in PSV (Private Service Vehicle) buses and attaching them to Companies for ferrying their Staff. This, though not very lucrative, revenue-wise, is one of the most hazzle-free options amongst all the others, is what I've come to learn. The maintenance is minimal as well, due to the nature of the usage.
Good luck, and cheers!

[RGK]

Originally Posted by Frostbite

Then there is also an option of leasing buses from other operators, but don't know how they maintain their buses so kinda risky imo. I should also have a place to park it, clean it, and maintain it.

Honest answer = NO.

You should work in this sector for a few years to master the complexities, as GTO indicated, and then move forward.

You cannot rely on this as your ONLY source of income. Try renting buses for a few months if you're really curious to see how it goes (Just a word of caution: mentally be ready to accept the loss.)

In Tamilnadu, a seat tax (individual tax based on the number of seats in the bus) is required to be paid every three months (3500.00 per seat or berth per entry) is an additional expense.

Note: Some of the renowned KPN's routes are still not operational.

[PrasannaDhana]

Unless transport business is something your parents and grandparents left you with, don't even get into it.

For the inexperienced, it's one of those businesses which will easily drive you into losses.

A good Volvo multiaxle AC bus costs over 1.25 crores today. Bus route costs a substantial amount too. Then finding responsible and trustworthy employees is another big challenge.

Initial costs and taxes aside, the upkeep will surprise you in a shocking way.

Moreover, it's a service industry which means you need to satisfy your customers every bloody time. It's quite a challenge unless you have the funds to invest and the heart to involve yourselves full time in the business.


I run a small fleet of school buses, believe me, I have tried outsourcing them a few times, but the areas where I operate, I wasn't able to. If I had the opportunity to outsource transport, I would do it in a blink of the eye.

[lamborghini]

Would it be feasible to start with smaller coaches instead of full blown buses?

That way the capital outflow is less, the coaches would give better flexibility and understanding of how to go about doing this; and if nothing else - these smaller coaches can also be rented out for events : airport transfers during weddings / corporate events, etc.

[condor]

Revenue from buses is not just from the passenger fare, but from the cargo. Unless you have a good size fleet and network, sub-contracting will be required for this part.

Originally Posted by Frostbite

I'm not at all related to the field of transport, but I always look for new business opportunities. The idea of starting an intercity bus service came to me recently after pathetic service by a top operator. It really doesn't help when there aren't many bus operators around, at least in my state..

The last line seems to be the trigger for your line of thought and the discussion for this thread. Have you done a ground-level survey to study the demand ?


Btw, looks like you have a business opportunity right here:

Originally Posted by PrasannaDhana

I run a small fleet of school buses, believe me, I have tried outsourcing them a few times, but the areas where I operate, I wasn't able to. If I had the opportunity to outsource transport, I would do it in a blink of the eye.

[vjbox]

Just curious, for instance can one not buy a couple of buses ( provided they can afford that upfront investment) and lease it to travel/ tour operators who would manage the servicing, etc?

What sort of a returns can one expect from such an arrangement, will it generate a decent passive income?

[Gansan]

I have no background in the transport business, but was always interested in getting into it if an oppurtunity presented itself. I used to travel by private onmibus frequently between Chennai and Tuticorin, during 2006-2008. They were the Volvo look alike coaches built on Ashok Leyland chassis - the kind with passenger luggage compartment in the bottom and air suspension. They also had luggage racks on the roof. They had reclining seats but no Ac. At that time the fare was around Rs 500 or so. The buses had 38 seats, so a collection of Rs 19000 if full.

At that time diesel price was Rs 35 or so. I did a layman's back of the envelope calculation. I guessed the FE of the buses to be about 2-3 kmpl. How did I know this? Because at that time the MTC in chennai was running a FE campaign for it's bus drivers, and all the buses had a sticker which proclaimed "our goal is 4 kmpl". So I surmised the FE was less than that figure, perhaps 2.5 kmpl at the most. The omnibus would not have returned much more, considering the speeds at which they were driven on the highways. Tuticorin-Chennai was 600 km approx, so the busses would have required about 240 litres of diesel one way, which would have been about Rs8400, or equal to 17 seats. Salaries, maintenance, depreciation and other costs would have equalled probably another 7 seats, so the remaining 8 seats alone will turn a profit, if the bus was full. The real profit in my estimation was from their parcel service, huge quantities of cargo they carried on the roof, and also from the courier service they ran, the documents/packages of which were also carried on the same bus.

The notion I got was we should not even think about it unless we have inherited the business, and also have considerable political clout. Almost all the bus services I had used or observed belonged to politicians or the families had political connections.

[balenoed_]

For an intercity service, don't you need at least 3 buses. In the event of a break down of one. Sorry about this trivial comment, but just curious.