HUE UNIVERSITY
UNIVERSITY OF ECONOMICS
HOANG HUNG
IMPROVING THE EFFICIENCY OF BUS SERVICES IN THUA THIEN HUE
PROVINCE
SUMMARY OF
DOCTORAL THESIS IN BUSINESS MANAGEMENT
CODE: 9.34.01.01
HUE 2020
This thesis was completed at the University of Economics, Hue University
Supervisor: Assoc. Prof. Dr. Tran Van Hoa
Examiner 1: ...........................................................................................................................
Examiner 2: ...........................................................................................................................
Examiner 3: ...........................................................................................................................
This doctoral thesis will be defended at Hue University‘s Board of Examiners at:
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At………….am/pm on ………/…………/2020
This thesis can be accessibleatthe National Library of Vietnam and the library of the
Universityof Economics, Hue University.
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INTRODUCTION
1 Rationale of the study
Nowadays,Thua Thien Hue (TTH) has three companies of bus services:Thua Thien Hue
Coach Joint Stock Company, Hoang Duc Co., Ltd, Phu Loc Automobile Transport
Cooperative.More than 65 vehicles are nowrunning on 18 routes throughout the province [20].
Over the past fifteen years, TTH has had preferential policies to develop bus systems, such as
changing the enterprise management model from a one-member state-owned limited company
to a privately-owned limited liability company model funded by private equity; supporting
businesses to access capital with low interest rates to innovate facilities; converting fixed
passenger routes to bus transportation routes; reducing corporate income tax; organizing
businesses bidding for bus transportation subsidies; opening more routes; purchasing additional
equipment and means of transport; improving quality of passenger services, etc.However, the
business efficiency has not been high and contributed to make urban transportation newer.
There are many reasons leading to this situation. They are specified asthe local socio-economic
dynamism is not high; infrastructure does not keep pace with increasing needs of road traffic;
the number of buses is limited; bus quality is more and more degraded leading to the pollution
of dirt and smoke and thus people do not show their expectations of bus transportation,
enterprises mostly organize their management, supervision and operation of activities of means
of transport and drivers.The quality of bus services is not high so it has not attracted residents
access to buses.The maintenance of subsidies on 5/18 routes has created subjectiveness among
businesses greatly affecting social security, the urban face and limiting the local economic
development process. In this situation, how to improve the efficiency of bus services,
harmonize the State’sobjectives, enterprises and users of bus services, maintain the
sustainability of Thua Thien Hue province’s economy in general, and the bus businesses in
particular is much paid attention by local leaders and enterprise. Stemming from the urgent
issues posed in reality and the requirements of efficiency, the author of this paper desires to
carry out a study titled "Improving the efficiency of bus services in Thua Thien Hue".
2. Research aims and objectives:
2.1. Aims:Improving the efficiency of bus servicesin Thua Thien Hue.
2.2. Objectives
- Analyzing, comparing and evaluating the effectiveness of bus usecompared with other
tranports through such norms as the reduction of private vehicles, traffic jam,the occupying
of road surface,environmental pollution,the safety level and trip costs through evaluating
State management agencies and enterprises.
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- Clarifying the capital structure of enterprises; loan ratio compared with equity capital;
costing growth rate compared with capital growth rate; revenuegrowth rate over cost growth;
level of profit increase; actual transporting compared with capacity; the degree of demand
response through using secondary data to determine the degree of efficiency .
- Identifying factors and the impact degree of each factor on the quality of industry and
customs, and clarifying the relationship between service quality and efficiency of bus
activities in Thua Thien Hue.
The thesis, therefore, hoped to provide some implications for the improvement of the bus
services in Thua Thien Hue province.
3. Research questions
- Who is the beneficiary from the efficiency of bus services?
- How is the quality of bus services in Thua Thien Huecurrently?
- What are constitutional factors of bus service quality and which factors affect the
efficiency of bus services? The relationship among them?
- What are the benefits and and limitations of bus transportation?
- How to improve the efficiency of bus services in the coming time?
4. Research subject and scope
4.1. Research subject: Bus services are activities that are both public-utility and independent
accounting of enterprises. Therefore, the efficiency of bus service business affectsnot
onlyenterprise itself, but also the local socio-economy and passengers. Therefore, improving
the efficiency of bus services is the same as increasingefficiency and benefits for enterprises,
local socio-economy and bus users in Thua Thien Hue.
4.2. Research scope:
- Scope of content: The efficiency of bus services is in a wide range. Thus, the thesis
mainly focuses on studying and analyzing factors affecting the socio-economic efficiency of
stakeholders such as State (local), enterprises and bus users. Based on research results,
some solutions to improve the efficiency of bus transportation in Thua Thien Hue province
are proposed.
- Geographical location: Bus services are promoted in all 6 districts, 2 towns and 1 city
of Thua Thien Hue province. Therefore, the study focuses on Thua Thien Hue province.
- Time period:
Secondary data from 2013 to 2017 are used to analyze and assess the current situation of
bus services in Thua Thien Hue province.
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Primary data were collected at businesses, Departments of Transport and passengers
using local bus services in the studied area in 2017.
5. New contributions of the thesis
(i) To the State (local): The thesis has analyzed and clarified the benefits of bus use
compared to the use of public transports such as saving local budget through price subsidies
cut-down; reducing personal vehicles and traffic jams,decreasingthe appropriation of road
surface area and environmental pollution, etc. Besides, the thesis has also pointed out the
limitations and shortcomings of bus activities such as poor infrastructure for buses, the
shortage of shelters, stops, signs, parking lots, lines roads, especially transit stations. In
addition, the thesis has also revealed that the overlap coefficient of the network segment is up
to 50.53% of the route length affectingthe efficiency of bus services in Thua Thien Hue
province.
(ii) For enterprises of bus services: In addition to the safety and low cost of bus
transportation, the thesis also sheds light on the unreasonable capital structure of enteprises
because the loan is greater than the equity capital; cost growth rate is 1.5 times higher than
capital growth rate; revenue growth is smaller than cost growth; the level of revenue increase
is equivalent to the level of subsidy and the lowest rate of profit increase. Besides, the thesis
also shows that compared to the capacity,actual transporation only reaches 12.06%, the level
of demand satisfaction was only 8.53% although the local govermenthas had mechanisms and
policies to subsidize, supported investment in renovating vehicles, and reduced taxes of
corporate income as well as expanded routes. In addition, according to the assessment of
managers analyzedusingthe Structural Equation Modelling(SEM),it is shown thatamong
Response level, Empathy level, Reliability, Guarantee level, Tangibles affecting positively
the efficiency of bus services, and Investment, Subsidies, PerceivedQuality, and Costs of
positive impact on bus services, Investment (0.74) is the strongest factor of impact and the
Subsidy (0.36) isthe weakest factor on the efficiency of bus services. The remaining factors
such as perceivedquality (0.54) and costs (0.61) have a neutral impact on the efficiency of
bus services in Thua Thien Hue.
(iii) For passengers using bus services: The thesis has clarified (i) group of factors that
constitute perceivedquality, including: tangibles, demand satisfaction, level of sympathy,
reliability, level of responsiveness, level of guarantee; and (ii) group of factors affecting
Effectiveness: Subsidies, Costs, Perceived quality level. Besides, the thesis has built a SEM
model to determine the influence level and correlative relationship among the factors on
perceivedquality of bus services,the positive relationship between service quality and service
