Want to start an intercity bus service: Is it a lucrative 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.

BHPian Frostbite recently shared this with other enthusiasts.

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 I feel. 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.

Here’s what GTO had to say on the matter:

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….

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.

Here’s what BHPian RedTerrano had to say on the matter:

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?

Here’s what BHPian kraken had to say on the matter:

10/10 advice by GTO 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).

Here’s what BHPian hserus had to say on the matter:

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.

Check out BHPian comments for more insights and information.

Source: Read Full Article