Summary of doctoral thesis in business management improving the efficiency of bus services in thua thien hue province

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:
..................................................................................................................................................
..................................................................................................................................................

At………….am/pm on ………/…………/2020

This thesis can be accessibleatthe National Library of Vietnam and the library of the
Universityof Economics, Hue University.


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.
1


- 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.

2


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
3


efficiency. As a result, it can be determined that empathy level (0.94) and reliability (0.61)
make the strongest impact, the level of assurance (0.11) makes the weakest impact on the
perceived quality;the cost (0.79) and the perceived quality (0.68) make the strongest impact
and the price subsidy (0.66) make the weakest impact on the service efficiency in Thua Thien
Hue. The remaining factors such astangible means (0.58) and Responsive level (0.44), and
price subsidy (0.66) take a neutral effect on the quality and efficiency of bus services in Thua
Thien Hue,which have notbeenidentified in any previous study.

4


CHAPTER 1. LITERATURE REVIEW AND RESEARCH METHODS
1.1.1. Identify the research model of the efficiency of bus services from literature review
(i) Efficiency from the viewpoint of State (local) management: The thesis uses FSA,
CBA and MCA models to analyze benefits for the community and society through local
budget savings;infrastructure development; reduction of subsidy level; reduction of
environmental pollution; decrease of personal vehicles; reduction of traffic jam and road
occupying.
(ii) Effeciency from the enterprise's point of view: The thesis uses FSA, CBA, MCA
models to analyze factors such as capital structure of enterprises; revenue growth rate; profit
margin; performance of input use; average acquisition cost per passenger; energy saving;
saving of investment costs; operating frequency; capacity utilization coefficient; accessibility
and route networks; degree of demand response; and analysis methods of EFA, CFA, SEM
model to determine the factors that constitute the quality of services for bus transportation and

ones affecting the efficiency of bus services as well as their correlative relationship.
(iii) Efficiency from the passengers’ perpective: The thesis uses CBA analysis model to
evaluate benefits if passengers use buses instead of personal vehicles through fuel cost saving,
time saving, saving of overall costs for a trip and safety assurance. Besides, the thesis also
uses the EFA analysis model through the variables: tangibles, level of sympathy, reliability,
level of sympathy, level of guarantee, subsidies, costs. As a result, the thesis builds a SEM
model to clarify the influence level, the correlative relationship among the factors that make
up the perceivedquality, the factors affecting theefficiency of bus services,the relationship
between the perceived quality of bus services and the efficiency of bus services in Thua Thien
Hue.
1.2. RESEARCH MODEL OF THE THESIS
On the theoretical basis, the studies have referenced and adjusted variables and scales
to suit the context and characteristics of the study field and area, the variant SERVQUA
model is used for measuring the relationship between theperceived quality and the efficiency
of bus services in Thua Thien Hueas proposed in Figure 1.1.

5


The level
ofresponsiveness

Invest

Level o f sympathy
Subsidies
Reliability

EFFICIENCY
Perceived quality

Level of
guarantee
Cost

Tangibles

Figure 1.1. Proposed research model
(Source: Author's proposal)

1.3. RESEARCH METHODS
1.3.1. Qualitative research methods
In order to identify the factors that make up theperceivedquality and efficiency level of
bus services, expert interviewswere conducted with a semi-structured questionnaire. The
interviews were done through same questionnaires. The questionnaire consists of many
factors which are composed and listed by group. Group 1 relates to the perceived quality:
level of responsiveness, level of sympathy, level of guarantee and tangibles. Group 2 relates
to the Efficiency: Investment–Subsidies - Perceivedquality- Costs. All
enterprise

managers

involved

in the interviews agreed

upon

lecturers and

the perceived quality.

Regarding the factor of efficiency, the experts requested to add Investment factor.
1.3.2. Quantitative research method
- Select and develop a scale;
- Comparative method;
- Financial Statements Analysis (FSA);
- Multi-criteria analysis (MCA);
- Cost- benefit analysis (CBA);
- Exploratory factor analysis (EFA);
- CFA and SEM model ;
- Data access method;
- Other research methods.

6


CHAPTER 2. THEORETICAL AND PRACTICAL BACKGROUND
2.1. THEORETICAL BACKGROUND
2.1.1. Concept of efficiency
Dajani and Gilbert (1978) states that efficiency is the extent to which transport services
meet personal and community goals. Fielding and Lyons (1993) defined that the efficiency
is the level that consumed services corresponds to the goals set by the government. In
addition, according to Gleason and Barnum (1982), efficiency is the extent to which a goal
has been achieved. Regarding service users as passengers, Yeh et al (1996) revealed
thatefficiency is the extent to which transport services meet the needs of passengers; In
Hensher and Prioni (2002)’s opinion, the efficiency for users is service quality.
2.1.2. Perspectives of efficiency:
- From the traditional point of view: Effeciency is the ratio between obtained results
and the spent, or in contrast, the cost per product unit or product value.

- From the modern viewpoint (i) Dynamic status of the relationship between input and
output: (ii) Time factor is considered as an important factor in the difference calculation ; (iii)
Financial, social and environmental efficiency: financial efficiency must be consistent with
the updated trend, the local and national sustainable growth and development strategies.
2.2. THEORETICAL BACKGROUND OF EFFICIENCY IMPROVEMENT
2.2.1. Concept of Efficiency improvement
Efficiency improvement is an economic category reflecting the enterprises’ capacity to
use the workforce, materials and financial resources to achieve greater efficiency and lower
costs. It is considered to be more effective asthe present value of the future obtained value is
greater than theinitial capital .
2.3. THEORETICAL AND PRACTICAL BACKGROUND OF EFFICIENCY
IMPROVEMENT OF BUS SERVICES
2.3.2.1. Concept of bus:
According to the Circular No. 65/2014/TT -BGTVT dated November 10, 2014 of the
Ministry of Transport, it is defined that bus is a vehicle with a capacity of 17 passengers or
more. There are 3 types of buses: minibuses accommodating up to 40 passengers, average
busesaccommodating from 41 passengers to 60 passengers, andlarge buses with a

capacity of 61 passengers or more [5].
Busis a passenger vehiclewhich is designed with 17 seats or more and has a floor space
for passengers standing at 0.125 m2 as prescribed.

7


2.3.2.2. Public passenger transportation by bus
According to Decision 34/2006/QD-BGTVT, Public passenger transportation is a service
to transport passengers by car along a fixed route with stops for picking up, dropping off and
in which the vehicle is run according to the chart.
According to Decision No 13/2015/QD-TTg, it can be understood that bus transportation

is a service that passengers are transported on a fixed route by bus, with stops for picking up,
dropping off and in which the vehicle is run according to the chart. Bus service is a type of
transportation with fee collection as prescribed and the vehicle is operatedbased on a
prescribed chart and itinerary to serve the needs of daily travelingfor city residents.

8


CHAPTER 3. CURRENT SITUATION OF BUS SERVICES IN THUA THIEN HUE
3.1.CHARACTERISTICS OF BUS SERVICES IN THUA THIEN HUE
3.1.2. Characteristics of transportation and bus services
3.1.2.1. Characteristics of transportation
From 2013 to 2017, the proportion of road passenger transportation increased steadily,
specifically in 2013 it reached 92.5%, in 2017 it reached 96.1% compared to the local
transport. Tohave an overview of the uptrend, please see Chart 3.1.
120

111.5
109.4

100

94.3

92.5

106.3
106.1

106.9

105.9

106.4
105.1

96.1

94.9

94.1

80

60

40

20

17.516.5

16 14.8

18.617.5

19.718.7

20.719.9

0

2014/2013

2013

2014

2015

2015/2014

2016

2016/2015

2017/2016

2017

Vận chuyển hành khách địa phương (triệu HK)

Vận chuyển hành khách đường bộ (triệu HK)

Transport of local passengers (million passengers)
Road passenger transportation (million passengers)
Proportion of road transport / local transportation

Tỷ trọng vận chuyển đường bộ/vận chuyển địa phương

Figure 3.1. Proportion of road passenger transport
3.1.2.2. Features of bus services in Thua Thien Hue province

Table 3.4. The proportion of bus transport compared to road transport in the period of
2013 - 2017 in Thua Thien Hue province
(Unit: Million turns)
Year
Targets

Year

Year

Year

Year

Year

2013

2014

2015

2016

2017

Road transport

11.991 14.810 16.503 17.544 18.717

Bus transport

0.768

1.150

1.397

1.763

1.862

Bus / road transport density (%)

6,40

7,77

8,47

10,05

9,95

(Source: Statistical Yearbook of 2013 - 2017 and Department of Transport of TTHProvince)
As shown in Table 3.4, during the period of 2013 - 2017, the average annual bus
transport took over 8.5% of the total number of passengers

using road transport

services.Although the number of vehicles was not bigand there are a few routes, a relatively
abundant of passengers use bus services. This shows that passengers tend to use bus
services more and more.

9


3.3. EVALUATION OF EFFICIENCY OF BUS SERVICES IN THEVIEWPOINTS OF
STATE MANAGEMENT AGENCIES, ENTERPRISES AND PASSENGERS
3.3.1. Evaluate the effeciency of bus services from the perspective of State management
agencies
3.3.1.2. Evaluate the effeciency of bus services through distance and route overlapping
coefficient
Most of the major routes are on National Highway 1A such as routes 01, 05, 11, 12, 13,
06, 08, 09, 14, 07, 15, 16 with overlapping coefficient of over 43.33% in road length.
Especially, overlapping coefficient accounts for 81.25% for two routes, Dong Ba - Phu Bai Canh Duong and Dong Ba - Lang Co.Averagely,the coefficient of overlapping routes across
the network is up to 50.53%. Moreover, the bus route network is still inadequate because most
of the routes mainly focus on the two directions, the North (27.78%) and the South (44.44%)
and the routes are on National Highway 1A.The average length of route is great.There is no
transit stops and only 5 routes have the starting point at the South Bus Station. On the
contrary, there are up to 10 routes with the samestarting point at Dong Ba Bus Station, 01
route with the starting point at the Northern Bus Station and 02 routes with same starting point
in Phu Bai Industrial Zone.
Table 3.9. Distance and overlapping coefficient of bus routes in Thua Thien Hue
TT

Route
distance

1

Less than 15
km

2

From 15 to
below 30 km

3

4

Route
number

Number Network
of routes rate (%)

Overlapping route

Overlapping
coefficient
(%/km)

Bus station in the
South –Bus station in
the North

43,33

4

01

5,56

+ 2, 3

02

11,11

+5

01

5,56

From 30 to + 1, 12, 13
below 45
+ 6, 8, 9,
km
14

03

16,66

Bus station in the

North
Da Vien Bridge

04

22,22

Dong Ba-Phu Bai

+ 7, 15, 16

03

16,66

+ 10, 17

02

11,11

+ 11

01

5,56

Over 45 km

+ 18

Dong Ba - Phu Bai Canh Duong
Dong Ba-Phu Bai
Dong Ba –Dien
Truong

65,0
50,0
44,44
81,25
36,36
33,33

01
5,56
Total
18
100,0
50,53
(Source: Thua Thien Hue Provincial Department of Transport and author's calculations)

10


3.3.1.4. Assess the efficiency in reducing personal vehicles
Table 3.11. Reduce the number of vehicles on the road in the period 2013-2017
(Unit: Turn)
Amount of
Hit the traffic on the road
passsenger

Year
using bus
Bus
Car
Motorcycle
CarMotorcycl(1)
transportat (3=2/40n) (4=2/5n)
(5=2/2n)
Bus(6=4-3)
Bus(7=5-3)
ion (2)
768.246
19.206
153.649
384.123
134.443
364.916
2013
28.754
230.036
575.091
201.281
546.336
2014 1.150.182
34.931
279.455
698.638
244.523
663.706
2015 1.397.277

44.095
352.767
881.918
308.671
837.822
2016 1.763.837
46.560
372.481
931.204
325.921
884.644
2017 1.862.409
Total 6.941.951
173.548
1.388.390 3.470.975 1.214.841
3.297.426
(Source: TTH Province’s Departmentof Transportation and author's calculation)
Assuming an average of 40 passengers taking a bus at a time; 5 passengers going on a car
and 2 passengers on a motorbike, we can identify how many motorbikes and cars whicha bus
canreplace. The results showed that if using buses instead of personal cars, the number of turns
decreased by 1,214,841; similarly, if using buses insteads of motorbikes, there will be
3,297,426 turns. Thereby, it can be said that using buses helps the State save the investment in
road transport infrastructure, reduce traffic jams, decrease the risk of traffic accidents, save
State administrative costs and reduce travel time caused bytraffic jams.
3.3.2. Evaluate bus services from the enterprises’ point of view using SFA, MCA and CBA
methods
3.3.2.1. Assess the effeciency based on the background of assets and capital
Table 3.19. Results of inputs for bus services in the period of 2013 - 2017
Year
Targets

Unit

Total revenue
Total cost
Total capital
Total labor
Total profit
Capital efficiency
Cost performance
Labor efficiency

(trđ)
(trđ)
(trđ)
(n)
(trđ)
(V)
(V)
(%)

2013

2014

2015

2016

2017

2014 2015 2016 2017
/2013 /2014 /2015 /2016
(%)
(%)
(%)
(%)

7.238 7.626 2714 14.012 16.457
3.671 1.936 4.377 17.936 15.468
5.718 6.168 15.166 15.764 16.923
183
177
225
264
269
3.567 5.690 -1.663 -3.924 9.89
1,26 1,23
0,17
0,88
0,97
0,97 0,14 4,96 1,09
1,97 3,93
0,62
0,78
1,06
1,99 0,15 1,25 1,36
39,55 43,08 12,06 53,07 61,17 1,08 0,27 4,40 1,15
(Source: TTH Department of Transport and the author's calculation)

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Table 3.19 shows that the efficiency of capital use decreased steadily over the years,
specifically in 2013 it reached 1.26 rounds, up to 0.97 rounds in 2017, only 1.09% compared
to 2016. For cost efficiency, in 2014 it was 3.93 rounds;in 2017, a decrease of 1.06 rounds
an achievement of 1.36% compared to 2016. 2015 got the lowest cost efficiency, reaching
0.62 rounds. For labor efficiency, 2017 got the largest, reaching 61.17% and compared to
2016 an increase of

1.15%. For labor efficiency, it tend to be increasing proportion;

specifically, 39.55% in 2013, 43.08% in 2014 and up to 1.08% compared to 2013.Similar to
2016, it reached53.07. % and61.17% in 2017. Compared to 2016, there is an increase by
1.15%.
Table 3.20. ROE ratio of bus services in the period of 2013-2017
Year
Targets
ROE ratio /1 VND of
capital
ROE ratio/1 VND of
cost
ROE ratio / 1 labor

2014 2015 2016 2017
2013 2014 2015 2016 2017 /2013 /2014 /2015 /2016
(%)
(%)
(%)
(%)

0,03

0,02

0,01

0,01

0,01

0,89

0,51

1,12

0,94

0.05

0.09

0.05

0.01

0.02

1.83

0.56

0.28

1.18

4,62

4,10 18,65 4,97

4,39

0,88

4,54

0,26

0,88

(Source: TTHDepartment of Transport and the author's calculation)
The ROE ratio with 1 VND of capital decreased. In 2013 it reached 0.03 times while in
2017 it decreased to 0.01 times, compared to 2016 an achievement of 0.94%. The ROE ratio
with 1 VND of cost has shown a decrease.In 2013 it reached 0.05 times while in 2017 it
decreased to 0.02 times.Compared to 2016 it only increased by 1.18%. The ROE ratio with
1 employee in 2013 increased 4.62 times while in 2017 it decreased to 4.39%. Compared to
2016 it reached 0.88%. Thus, the ROE ratio on 1 dong of capital and 1 dong of cost
decreases, in which the decrease level of the ROE ratio of 1 dong of cost is greater than one
of 1 dong of capital . It means thatthe cost growth is 1.5 times greater than the capital
growth.

3.3.2.7. Evaluate efficiency based on trip costs
- The average cost for a motorbike trip is VND 15,166.
- The average cost for a car trip is VND 66,252.
- The average cost for a bus trip is VND 14,560.

12


Thus, the cost for a bus trip is only 96.3% compared to cost of a motorbike trip and
21.98% compared to cost of car trip. Therefore, the cost of bus use is the cheapest.
(Refered to Table 3.21).
Table 3.21. Comparion among trip costs of motorbikes, cars and buses
Motorbike
Targets
Quota
Registration fee
5% car value
License plate
=VND 1,500,000
registration fee
400,000
First registration
0 VND
fee
Road maintenance
VND 100,000/year
fee
Insurance
80.000/year
Fuel

2,25 littres /100 km
VND
Tires
450,000/10,000 km
Chain gear
250,000/20,000km
Cooling water
25,000/20,000km
Battery
300,000/20,000km
10% fixed cost
Depreciation
/year
Total

Car
Average
cost
/trip
1,284

Quota

1,027

10% car value
=30,000,000
1,000,000

0 VND

VND
2,569
2,055
3,636
422
117
12
140
3,854
15,116

Bus
Average Average
cost
cost
/trip
/trip
25,698
856

-

240,000/30 months

205

-

VND 1,560000/year

455

-

VND 520,700/year
7 littres /100 km

13,381
11,313

-

4.000.000/50.000km
675
VND 0
VND 0
1,000000/50,000km
70
2,000,000/60,000km
750

-

10% fixed cost
/year

12,849

-

66,252
14,560
(Source: Author’s analysis)

3.3.3.5. Accreditation of research hypotheses through SEM model
* CFA analysis of Bus service efficiency
There are 10 measurable factors in affirmative factor analysis (CFA) model: (1) Degree
of empathy in service supply ; (2) Reliability in service supply ; (3) The level of demand
satisfactionin service supply ; (4) Level of Guarantee in service supply ; (5) Tangibles in
service supply; (6) Perceived quality; (7) Investment; (8) Subsidies; (9) Costs; (10)
Efficiency, as shown in Figure 3.4.

13


Figure 3.4. Estimate the standardization

Figure 3.5. Estimate the

of CFA according to the evaluation

standardization of SEM according to

of managers and employees

the evaluation of managers and
employees
(Source: Survey results in 2017)

Table 3.43. Value of standardized SEM model of Bus Services

Factor Estimates Relationship Variable Factor Estimates Relationship Variables
Tangibles
0.75
Subsidies
0.36


Level of
Perceived
demand
0.53
0.54


quality
satisfaction
Perceived
Reliability
0.24
Costs
0.61
Efficiency


Quality
Level of
0.38
Investment
0.74



sympathy
Level of
0.39
Efficiency
0.27

guarantee
(Source: Survey results in 2017)
* Factors affectingperceived quality of bus services
Perceived quality= 0.54 + 0.75*Tangibles + 0.53*level of responsiveness + 0.24*
Reliability + 0.38* Level of sympathy+ 0.39*Level of Guarantee
- Tangibles affect the most to the perceived quality with the impact level of 0.75. It
means that as the perceived quality increases by 1, the tangibles increase by 0.75.
- Finally, the Reliability affects at the lowest level to the perceived qualitywith the impact
level of 0.24. As the perceived quality increases by 1, the reliability increases by 0.24.
* Factors affecting Bus services efficiency
Bus service efficiency = 0.27 + 0.36* Subsidies + 0.61* Costs + 0.74* Investment +
0.54*Perceived quality + (0.75* Tangibles + 0.53* Level of responsiveness+ 0.24* Reliability +
0.38* Level of sympathy+ 0.39* Level of Guarantee)
The Investment factor has the highest impact on the effeciency.It means that when the
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efficiency of bus transport increases by 1, the Investmentincreases by 0.74. Finally, the
Subsidies has the lowest impact on the efficiency.It means that the efficiency of bus services
increases by 1, the Subsidies increases by 0.36.
3.3.3. Evaluate efficiency of bus services from passengers' perspective
3.2.3.6. Overall accreditation of SEM model of bus services from the perspective of passengers

Figure 3.5. Estimated results of standardized SEM model on the efficiencyO&C in
Thua Thien Hue through evaluating passengers
(Source: Results of data processing in 2017)
From the results of estimating the general normalized value of SEM analysis of
perceivedquality, it is shown through the following equation:
Perceived quality = 0.69 + 0.61*Realibility + 0.94*Level of sympathy + 0.44* Level
of Responsiveness + 0.58* Tangibles + 0.11*Level of Guarantee
- MCDC Level of sympathy impacts the most on perceivedquality (0.94). It means that
when the quality of bus services increases by 1, the level of sympathy increases by 0.94.
- Level of Guarantee has the lowestinfluence on the perceived quality (0.11). It means
that the quality of bus services t increases by 1, level of Guarantee increases 0.11.
* Factors affecting bus service efficiency
Efficiency of bus services = 0.87 + 0.66* Subsidies + 0.79* Costs + 0.68*Perceived
quality + (0.61* Reliability + 0.94* Level of sympathy + 0.44* Level of responsiveness +
0.58* Tangibles + 0.11* Level of Guarantee)
Therefore, based on the passengers' evaluation, level of sympathy has the strongest
impact, the perceived qualitythe second and Subsidies the third. Level of Guarantee has the
lowest impact on bus services.

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Table 3.38. The overall standardized value of the SEM model for bus services through
passengers’ point of views.
Factor
Tangibles
Level of
responsiveness
Reliability
Level of

sympathy
Level of
Guarantee

Estimates Relationship
0.58



0.44



0.61



0.94



0.11



Variable

Factor

0.66



0.68



Costs

0.79



Efficiency

0.87

-

-

-

-

Subsidies
Perceived
quality
Perceived
quality

Estimates Relationship

Variable

Efficiency

(Source: Survey results in 2017)

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CHAPTER 4
PRACTICAL IMPLICATIONS AND SUGGESTIONS
4.2. SOLUTIONS TO IMPROVE EFFICIENCY OF BUS SERVICES IN THUA THIEN
HUE PROVINCE4.1.2. Solutions to improve bus services efficiency in Thua Thien Hue
4.1.2.1. Group of solutions to improve the efficiency of bus services from the perspective of
State management agencies
* Managing and investing in developing transport infrastructure;
* Shortening the distance to the station and increasing accessibility to bus systems.
* Adjusting and opening more bus routes;
* Completing fare policies and supporting the rennovation of bus transportation.
* Applying environmental standards for buses.
4.1.2.2. Group of solutions to improve the efficiency of bus services from the perspective of
bus services:
* Improving the efficiency of corporate financial mechanism;
* Adjusting, selecting means of transport and routing capacity;
* Applyingthe management system of smart busesand enhancing information in bus
transport activities;
* Improving the quality of means of transport and raising consciousness of the staff;

* Reducing waiting time and improvingthe perceivedquality of bus services.
4.1.2.3. Solutions toimprove the efficiency of bus services in the passengers’ opinions.
a. Group of solutions regarding raising benefits for bus users:
* Benefits of cost savings for trips;
* Benefits of saving road surface when using buses;
* Benefits of safety level when using buses;
* Benefits of reducing environmental pollution as using buses;
* Benefits of reducing traffic congestion as using buses;
* Raising awareness raising of bus use.
b. Group of solutions regarding improving efficiency of bus use
* Solutions toimprove the perceivedquality of bus services;
* Solutions to improve the satisfaction level of bus services.

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4.2. CONCLUSION
Firstly, for state management agencies (local):
Compared to the use of other public transports,the thesisanalyzed and clarified benefits
of bus use in the community and society such as saving local budget through subsidies;
reducing personal vehicles; reducing traffic congestion; decreasing the occupying of road
surface area; reducing environmental pollution, etc.Besides, the thesis also pointed out the
limitations and such as poor infrastructure for buses, shortage of shelters, stops, signs, parking
lots, road markings, especially unavailable transit stations. In addition, the thesis also pointed
out that the overlaping coefficient of routesall over thenetwork is up to 50.53% of the route
length, which greatly affects the efficiency of bus services in Thua Thien Hue.
Secondly, for bus enterprises:
- The studyresults have shown the advantages of bus use such as high level of safety, low
trip costs, and reduction of fuel consumption, reduction of personal vehicles, reduction of
road surface occupancy, reduction of environmental pollution, etc., the thesis also shows that

the actual transport compared to the capacity only reaches 12.06% and

the level of

responsiveness isonly 8.53%, etc.. As a result, enterprises did not attain expected efficiency
although they have been trying hard to improve service quality, invest in renovating facilities
and the local authorities have also had incentive policies through extending routes, reducing
land rental taxes for stations and sites, corporating income taxes, etc.
- In addition, the study results show that the capital structure of bus services in Thua
Thien Hue is not really sustainable because the equity of enterprises accounts for 15.20%
compared toloans and the ROE of 1 VND capital decreases and the capital put into business is
not effective enough. Moreover, the thesis also clarified the capital structure of enterprise is
not reasonable because the cost growth rate is 1.5 higher than the capital growth rate (The
scale of enterprises does notincrease in spite of cost increase), the revenue growth is
lowerthan cost growth and the revenue growth is equivalent to the level of subsidies and the
rate of profit margin is the lowest.
- Through the assessment of the –managers and staff on the effciency of bus services, the
study has indicated that Investment has thestrongest impact (+0.74), the Cost the second
(+0.61), the perceivedquality the third (+0.54) and finally the Subsidies the lowest (+0.36)
on the efficiency of bus services in Thua Thien Hue. Therefore, enterprises need to pay more
attention to Investment and Costs because they affect the most to the efficiency of enterprises.

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Thirdly, for bus users:
The thesis has identified the factors, the impact level of each factor, the relationship of
perceivedquality to the efficiency upon regression function, regarding Reliability group
(+0.61); group of sympathy level (+0,94); responsiveness level group (+0.44); group of
tangibles (+0.58); guarantee group (+0, 11); group of subsidies (+0.66); perceived quality

(+0.68) and costs group (+0.79). Hereby, it is determined that level of sympathy and subsidies
make the most strongest impact; levels of guarantee and responsiveness are the weakest.
Furthermore, the thesisalso clarified the positive relationship between the perceivedquality of
services and the efficiency of bus services in Thua Thien Hue province, which has not been
mentioned before.

Finally, the study results also indicated that the efficiencydepends

mostlyon the costs of enterprises, the service quality and the level of State subsidies for this
activity.
Based on the study results, the thesis proposes 3groups of solutionsfor local authorities
and bus transportation enterprises to improve the operational efficiency of the bus services in
Thua Thien Hue and contribute to of local socio-economic development.
4.3. RECOMMENDATIONS
4.3.1. Recommendations tothe Party and State
4.3.2. Recommendations to the Government, ministries and departments
4.3.3. Recommendationsto the People's Committee of TTH Province
4.3.4. Recommendations to the Department of Transport
4.3.5. Recommendations to bus enterprises

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LIST OF RELATED PUBLICATIONS

1. Hoang Hung, Nguyen Dang Hao (2017), Barriers in the intention to use cruise monitoring
equipment to manage transport activities at enterprises in Thua Thien Hue province. Central
Vietnam Journal of Social Sciences, No. 4 (48), pp.11 -21.
2. Hoang Hung, Tran Van Hoa (2017), Barriers in the intention to use buses as means of
transportation in Thua Thien Hue province, Journal of Economics and Development, Hue

University Journal of Science, No. 5C (126), p.101 - 114.
3. Hoang Hung, Tran Van Hoa (2018) Factors affecting passenger satisfaction with bus
services in Thua Thien Hue province. Journal of Economics - Politics - Society, Central
Vietnam Journal of Social Sciences, No. 1 (51), p.3 - 11.
4. Hoang Hung, Nguyen Anh Tai, Nguyen Dang Hoang Tu (2018). Factors affecting the
quality of driver training in Thua Thien Hue. Journal of Economics - Politics - Society,
Central Vietnam Journal of Social Sciences, No. 4 (54), p.14 -22.
5. Hoang Hung, Tran Van Hoa (2018), The impact of service quality on the efficiency of bus
servicesin Thua Thien Hue. Education and Society Journal, Special Issue November 2018, p.
298-303.
6. Hoang Hung, Tran Van Hoa (2018), Research on the relationship between service quality
and the efficiency of bus services in Thua Thien Hue. Journal of Economics - Politics Society, Central Vietnam Journal of Social Sciences, No. 6 (56), p.14 - 22.
7. Hoang Hung, Tran Le Uyen Phuong (2019), Measuring the competitiveness of Thua Thien
Hue Coach Joint Stock Company in Thua Thien Hue province. Education and Society
Journal, Special Issue 1 April 2018, p. 335 - 340.
8. Hoang Hung (2019), Quantifying benefits, encouraging and creating a mechanism for
passengers to use bus services in Thua Thien Hue. Education and Society Journal, Special
issue of June 2019, p. 270 - 276.

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