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 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 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" 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 - 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 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? 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 districts, towns and 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 Primary data were collected at businesses, Departments of Transport and passengers using local bus services in the studied area in 2017 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 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 CHAPTER 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 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 relates to the perceived quality: level of responsiveness, level of sympathy, level of guarantee and tangibles Group 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 CHAPTER 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 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 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 CHAPTER 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 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 (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 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 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 Less than 15 km From 15 to below 30 km Route number Number Network of routes rate (%) Overlapping route Overlapping coefficient (%/km) Bus station in the South –Bus station in the North 43,33 01 5,56 + 2, 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; passengers going on a car and 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) 11 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 / 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 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 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 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 dong of capital and dong of cost decreases, in which the decrease level of the ROE ratio of dong of cost is greater than one of 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 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 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 littres /100 km 13,381 11,313 - 4.000.000/50.000km 675 VND VND 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 14 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 15 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) 16 CHAPTER 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 17 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 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 18 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 19 LIST OF RELATED PUBLICATIONS 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 (48), pp.11 -21 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 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 (51), p.3 - 11 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 (54), p.14 -22 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 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 (56), p.14 - 22 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 April 2018, p 335 - 340 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 20 ... for the improvement of the bus services in Thua Thien Hue province Research questions - Who is the beneficiary from the efficiency of bus services? - How is the quality of bus services in Thua Thien. .. titled "Improving the efficiency of bus services in Thua Thien Hue" Research aims and objectives: 2.1 Aims :Improving the efficiency of bus servicesin Thua Thien Hue 2.2 Objectives - Analyzing, comparing... 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