Improving BEST: Fleet Re-Configuration to improve efficiency –Part 6
In general, for all modes of transport, better assets (buses in this case) and less variety contribute to profitable operations. For example, airlines restrict the number of airplane designs it operates - SpiceJet uses only Boeing-Bombardier whereas Indigo uses Airbus-ATR. Operators using diverse fleet tend to buy capacity rather than assets themselves. Thus, you buy seat capacity and let maintenance be taken care of by asset owners. Thus, the BrihanMumbai Electric Supply & Transport (BEST) can buy capacity from all Tata, Ashok Leyland, and Eicher Motors and let the manufacturers maintain the buses. Or if BEST is going to maintain the buses it can buy all the buses from only one manufacturer. It allows better negotiation and efficiency in maintenance. 
 
Maintenance costs of the BEST are 60% of its total costs and one way to reduce it is by streamlining the fleet. Improving operational efficiency of transportation can be done through better fleet composition. With huge maintenance costs at 60% of total costs, this area assumes importance for BEST.
 
Advantages
Fleet standardisation has many benefits. It improves maintenance efficiency, fewer types of machines and tools are required, inventory of parts is reduced, better discounts as purchases are high volume. In addition, the drivers, and maintenance staff get a feel for the vehicle. Further, fleet addition, specifications and contracts becomes easier and faster. However, there are risks too. It is possible the vendor can exploit by charging higher amount for parts unless adequate safeguards are built into the contract itself. Yet, with prudent non-corrupt management from BEST side, it is not impossible to achieve this. Further, BEST can explore fleet purchases internationally as well. 
 
BEST's requirements
The nature of fleet required by BEST emerges from our earlier discussion. 
 
Feeder Buses
BEST will need a smaller capacity bus for feeder role. These buses need to be comfortable but simple with easy get-on get-off access. Smaller buses will also find it easier to enter station areas or crowded inner-city lanes making BEST as convenient as taxi or auto-rickshaws. 
 
Trunk-route buses
The Trunk-transportation role needs higher capacity buses. Since it operates at two price points, it will have standard and luxury interior option. The underlying bus remains the same.
 
Shuttle services
Shuttle services to airports, long-distance railway stations, out-station buses need bus configuration that helps passengers carry larger bags. While these are large capacity buses of same make as Trunk route buses, it is only their configuration that is different.
 
Fleet configuration
BEST fleet will be of two capacities of buses - on smaller capacity, 20 seats and larger capacity 50 seats. The feeder buses need to have metro-style seating so that people can stand comfortably. It will also need larger doors and twin doors (separate for entry and exit). It needs to be fitted with ticketing system that allows easy ingress and egress.
 
The standard trunk-route buses can be a large capacity buses with normal seating and one passenger exit. The luxury bus needs to have productivity options such as a table, access to charging points etc. The shuttle needs more space to carry luggage and probably facility for additional services such as check-in. These buses need to be of the same make and outer construction. Their interior construction just needs to be different to suit the requirements. The colour may be different to indicate the luxurious variant. Similarly, the shuttle too is the same shell just interior fitment is different. The principle is minimum variation as possible.
 
Thus, we have two capacities and the larger one comes with three variants.
 
Fleet size & other vehicles
In terms of numbers, BEST needs more feeder buses than trunk-route buses. Within trunk-routes the mix between standard and luxury buses is a function of demand. Further, the choice of bus determines availability and thus how large fleet is required by BEST. Thus, we need fewer of reliable buses than unreliable ones. BEST had terrible experience with King Long buses. (Which are not the real Chinese King Long buses). Apart from the main bus fleet, any transport operator needs support vehicles, breakdown vehicles, towing vehicles, which may be selected based on reliability and other factors.
 
Fleet ownership v Fleet rental
Currently, BEST owns its fleet of buses and vehicles. However, there is a logic in buying capacity rather than bus. Bus being a depreciating asset, bus operators have two options. Shipping companies maintain the ships so well that fetches more than the book value. Airline companies prefer to lease the planes on a medium term basis. Volvo used to offer transporters an option to buy capacity rather than buses itself. Thus, Volvo would commit to make N buses available at all times. These options need to be tested for financial viability.
 
Summary
As per BEST financial statements, running expense and Repairs & Maintenance constitutes 60% of the total expenditure. This does not include fuel, operating materials, lubes and tyres. The shabby accounting does not allow for more detailed understanding of the expenses. Nevertheless, from my interactions with personnel, maintenance is a critical issue. Standardisation of fleet will reduce some of the inefficiencies in the maintenance program. In years to come, BEST has to make a strategic choice whether to own the fleet or rent influences this decision. Yet, the logic for fleet standardisation remain strong and BEST will benefit from it.
 
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(Rahul Prakash Deodhar is a lawyer, investor and author with experience spanning manufacturing, consulting, investment banking firms. He has advised a wide range of clients including Fortune 500 companies, public and private sector banks, hedge funds and private equity funds among others. He has developed econometric models for demand forecasting in real estate, metals, airlines, and shipping. He designed MIS and planning and budgeting systems, sales networks, and operations for large corporates. He has worked with Aditya Birla Group, CRISIL and Morgan Stanley. He is author of two books – Subverting Capitalism and Democracy and Understanding Firms. He can be reached at [email protected] or at his website www.rahuldeodhar.com.
 
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    Improving BEST: Why none of the routes of Mumbai’s public transporter is profitable–Part5
    The BrihanMumbai Electric Supply & Transport (BEST) operates in two specific roles. Firstly, it is required to provide last mile connectivity to people travelling on local trains - which is the feeder role of BEST. Secondly, BEST also must provide an alternative to the local trains in serving the long-distance routes - the trunk-transportation role. In this fifth article of my series, I will look at ways to improve route planning, so that it balances the need for connectivity and profitability for Mumbai's bus operator.
     
    Feeder Routes
    BEST act as feeder transporter supporting suburban (local) trains and trunk routes journeys. This is evident from the fact that 45% of all BEST journeys are under 3kms. Thus, BEST is responsible to provide last mile connectivity for passengers travelling on trains, including passenger movement between western, central and harbour lines in non-junction stations (i.e. except Dadar and Kurla). A correlated responsibility is to serve the people moving within the feeder area. Both shuttle (between two specific points) and circle (along specific circular route) can be used to serve these requirements.
     
    In its feeder role, BEST needs to have many routes with frequent buses with lots of pick-up points covering the feeder area at regular interval. Thus, these passengers should be required to wait 3 minutes or less before boarding. These passengers will have lesser time for ticketing and their journey times may be shorter. They also do not want to pay high fares. They are balancing cost and convenience vis-a-vis bikes and shared auto-rickshaws or taxis.
     
    Therefore, feeder routes needs higher number of smaller capacity buses allocated to the feeder area. The higher number will ensure that there is a bus available every 3 minutes. Lower capacity will allow faster access through crowded roads. Now, lower capacity buses have higher cost per passenger kms (cpkm) therefore tickets will be priced higher on per km basis. Another challenge will be time for ticketing will be low. Hence, such buses are ideally suited for a prepaid electronic card system with one fare system. Go anywhere you will pay one fare on this route - say Rs10. 
     
    Trunk Transport Routes
    BEST needs to provide a substitute for cars to allow for decongestion and reducing pollution. BEST must thus operate along trunk routes and also connect different business districts during business times. This role needs larger capacity buses at specific time departures. Thus, in the morning, these buses may leave at frequency of 15 minutes and then between peak periods this frequency can drop to 1 hour. Inter-business district operations can be shuttle-service.
     
    There are two types of people on these routes - low cost and higher cost category. In the first, BEST is required to operate a low-cost alternative along trunk routes. It requires standard large capacity buses. 
     
    The second type needs BEST to operate higher-speed trunk routes in comfort. Here BEST is competing with private cars or private taxis (Uber, Ola and hired cars), which are more comfortable, higher priced but convenient option. BEST may address this market through luxury AC buses and convert them into productive workplaces giving high-speed Wi-Fi, charging stations and folding tablet-ops. This functionality is not feasible in all high-end cars. 
     
    Future Route Planning
    The route planning strategies discussed above are classical. However, for the future, BEST needs to have modern route planning strategies. Thus, it is possible to use algorithms and apps to create pre-committed routes that users have paid in advance. Today, school bus operators use algorithms to optimise their pick-up and drops. The same principle can be used for long-haul trunk routes with pre-booked capacity. Thus, passengers on the app can indicate they want to travel between the two points at certain frequency at certain time of their choosing and the algorithm can try to assign a bus to them. Once such a bus is allotted, then the passengers pre-book this special bus for a month and pay monthly. These special routes will never make a loss. We can also operationalise the route once break even capacity is reached. We will discuss in details some ideas like efficient route strategies such as pre-committed routes and flex-capacity deployment across routes in subsequent articles. 
     
    Flexible capacity deployment
    The ideal bus-level capacity utilisation in any route is about 70% and peak utilisation should be 90%. Ideally, there is some buffer capacity always available. The bus capacity and demand determines the frequency. Generally, frequency is higher at peak times and low at lean times. Thus, the fleet is idle in the lean time. To improve fleet utilisation between lean times, BEST can look at alternatives and deploy the buses for new routes, which only operate at lean times. The route to be chosen depends on people movement in volumes. For example, at lunch times there is a movement from offices to restaurant complexes. In effect, the bus-on-road to idle-buses ratio has to be brought down intelligently.
     
    Summary
    At present BEST does not give data with respect to capacity utilisation of various routes. Still, with better route planning we can improve BEST service utilisation and facilitate return to profitability. In the next article, we look at how fleet design ties in with these and how that can further create efficiencies.
     
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    (Rahul Prakash Deodhar is a lawyer, investor and author with experience spanning manufacturing, consulting, investment banking firms. He has advised a wide range of clients including Fortune 500 companies, public and private sector banks, hedge funds and private equity funds among others. He has developed econometric models for demand forecasting in real estate, metals, airlines, and shipping. He designed MIS and planning and budgeting systems, sales networks, and operations for large corporates. He has worked with Aditya Birla Group, CRISIL and Morgan Stanley. He is author of two books – Subverting Capitalism and Democracy and Understanding Firms. He can be reached at [email protected] or at his website www.rahuldeodhar.com.)
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    Improving BEST: How better coordination helps increase usability and relevance –Part4
    In the second article in this series, we looked at making BrihanMumbai Electric Supply & Transport (BEST), a part of Mumbai's urban transportation solution, rather than function as a stand-alone bus operator. Transportation is a problem of volume and flow, not merely volume of passengers. Any urban transportation solution requires coordinated planning across agencies. Thus, we need coordination between BEST, trains, metros, Airports, Long distance bus services, Municipal Corporations and Traffic Police, which is absent today. We also need inputs with respect to long-distance trains, and buses. This also involves the Municipal Corporation of Thane, Navi Mumbai, Kalyan-Dombivli and their transport arms. At a basic level, agencies can share passenger load and timetables. On the strategic level, it can encompass developing complementary infrastructure that eases passenger convenience.
     
    Timetables and load factors
    Coordination implies sharing timetables, passenger loads and timings. It allows for complementary capacity deployment. Thus, if lot of people on the Thane local get off the local trains at Ghatkopar, then BEST needs to provide commensurate capacity for last mile connections at Ghatkopar. BEST can also develop proper feeder capacity at various bus stations too so that outstation bus passengers will find it easy to use BEST services. Similarly, in collaboration with Airports, BEST can develop special services for Airport shuttle. These luxury services can include check-in facilities and other traveller-friendly services at cheaper costs than most taxis and with higher safety.
     
    Coordination improves planning
    Corporations can also design easier access for BEST buses to train stations. They can ease the congestion of at railway stations, which currently act as bottlenecks and impact bus timetables. At present, one of the important issues the access to commuters that is clogged by taxis and auto-rickshaws in most stations. Due to this, the aim of access points to allow crowds to diffuse out quickly gets defeated. The faster the crowd disperses the better infrastructure can serve others. For example, If Churchgate station had alternative exits on the Bombay Hospital side, where buses can pick up all passengers, it can ease congestion. More passengers will opt for BEST buses too.
     
     
    Strategic Coordination will improve entire city experience
    Corporations can take into account transportation requirements before approving residential and commercial projects. This is the primary reason why urban transportation solution and strategies across the world are not applicable in India. Thus, when new complexes are developed, they should have a convenient shaded access point where BEST buses can easily pick up the residents or workers in the building. If this coordination is ensured then you will encourage more people to use BEST.
     
    Coordinating ticketing
    Another area of strategic coordination is ticketing. Urban transportation is better served through single card payment system. The precedents are well established including Swiss Pass, London's Oyster cad, Singapore's EZ-Link, Japan's Pasmo and Hong Kong's Octopus. The card-system reduces time at ticketing centres and eases movement of people. India should take lessons from Japan's Pasmo and Hong Kong's Octopus, which both handle as much traffic as Mumbai experiences. Though, at present, Indian railway stations do not have enough space for access to card based turnstiles but some day that investment will have to be made. BEST will also need to make commensurate investment.
     
    At present, if BEST is going to act as feeder service to local trains, we need to give the BEST traveller an advantage in ticketing. Thus, a passenger should be able to buy railways ticket from the BEST bus itself. Alternatively, the Railway Monthly pass can be a smart card that you can use as pre-paid card for BEST. BEST and railways can issue monthly passes together i.e. the monthly pass system can be merged into one. 
     
    Coordinated fare systems
    There has to be correlation between fares in BEST buses, taxis and auto rickshaws, trains and these fares have to be rooted in costs. In my opinion, fares are too low for taxis and auto rickshaws. One way to determine ratio of taxi-bus fares is by area of road occupied per 100 passengers. This will create incentives favouring mass-public transport vis-a-vis taxis. But fares cannot be increased without having alternative capacity of low cost transportation already operating. Such kind of decisions lead to chaos.
     
    Coordination in the Future
    At this stage, we need to remember that coordination is bigger issue in Mumbai. The coordination that will work will also involve Municipal Corporations from Thane, Navi Mumbai, Kalyan-Dombivali and Mira-Bhayandar and their respective transport departments. Needless to say, if we develop an e-card it should work on all transport systems. India may also consider and leapfrog the city level card system by creating one card for entire country, which can be used domestically in all public transportation. 
     
    Summary
    With better coordination, we can improve the fundamental building blocks of BEST rescue. Coordination by itself can create more convenience leading to better capacity utilisation for BEST thus aiding profitability. However, it is not entirely in control of BEST management. In the upcoming articles, we look at strategies that are under the control of BEST management. We start with route planning.
     
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    (Rahul Prakash Deodhar is a lawyer, investor and author with experience spanning manufacturing, consulting, investment banking firms. He has advised a wide range of clients including Fortune 500 companies, public and private sector banks, hedge funds and private equity funds among others. He has developed econometric models for demand forecasting in real estate, metals, airlines, and shipping. He designed MIS and planning and budgeting systems, sales networks, and operations for large corporates. He has worked with Aditya Birla Group, CRISIL and Morgan Stanley. He is author of two books – Subverting Capitalism and Democracy and Understanding Firms. He can be reached at [email protected] or at his website www.rahuldeodhar.com.)
     
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