When transport systems are efficient, they provide economic and social opportunities and benefits that result in positive multiplier effects. Such as better accessibility to markets, employment, and additional investments.
One such mode of Public Transportation in India is the State Transport Bus Units (STUs). India is the world’s second biggest bus market with operating nearly 1,10,000 passenger buses daily. STUs were created with the objective of supporting social and economic development. However, most of the STUs are unprofitable in India.
Moreover, many STUs in India have poor occupancy ratio. The operational efficiency and service quality of private bus operators, which constitute 85-90% of the intercity buses in the country is far higher when compared to STUs.
The question is, why these STU’s are loss making entities and have poor occupancy ratio?
A majority of the buses run by STUs are old, and there is a shortage of funds to replace or refurbish them. Also, governments are rigid to change, they avoid new technology until it is exhaustively tested and accepted in the private sector. Their systems and processes are slow.
STUs still rely on old-fashioned ticketing and booking systems, which makes it difficult to handle tasks manually. Furthermore, although they possess a vast amount of customer data, they have limited insights into utilizing it effectively. They are not able to optimize capacity and face losses. In today’s fast-paced environment, customer expectations and demands are increasing, but STUs do not offer customized services to meet these needs.
Indian bus industry is transitioning from flat pricing to dynamic pricing and the complexity of the problem demands AI and automation. It is important for STUs to recognize the need for this technological advancement to reverse the losses and ensure sustainable profitability.
Viaje.ai is a state-of-the-art SaaS product powered by artificial intelligence, designed to assist STUs in India with dynamic pricing automation. It offers several key benefits that can revolutionize the way STUs operate and improve overall performance.
Profitability through increased occupancies
In Viaje.ai, prices of STUs are optimized based on demand and supply fluctuations in the market. The AI-DP engine of Viaje.ai can effectively redistribute passenger demand across various routes, dates, and time slots. This enables efficient resource allocation, reducing operational costs such as fuel consumption and maintenance expenses.
Reach out to our latest article for getting an in depth understanding of efficient resource allocation with real life examples.
Revenue maximization through cut-seat bookings
Viaje.ai introduces the innovative concept of cut-seat bookings, which automatically reduces the prices of seats that has gotten booked on a via route, making it attractively available to be sold to another passenger on a different via route within the same bus trip. This unique feature empowers bus companies to maximize revenue by selling a single seat multiple times for connected via routes. Viaje.ai’s intelligent algorithm optimizes the allocation of cut-seats, ensuring efficient seat utilization while maintaining passenger comfort and convenience.
For Example, A bus travels from route A to B. There are several via routes in between. A passenger is travelling from A to A1 at the fare of ₹1000 (Image 1). The occupancy of this seat will remain unutilized from 1 to B if the price of the ticket will remain the same i.e., ₹1000.
To book this seat, Viaje.ai will automatically allocate cut seat booking to a different passenger at a reduced rate of ₹500 (Image 2). This will benefit the customer because he/she is paying low fare. And there will be optimum utilization of capacity which will also maximize the revenue of the bus.
Retain customer loyalty on all days
Viaje.ai empowers STUs to implement customer loyalty programs and personalized offers based on individual passenger preferences. By leveraging AI-powered analytics, STUs can understand customer behaviour, travel patterns, and preferences. This knowledge enables the customization of fares, rewards, and promotions, fostering long-term customer loyalty and repeat business.
Providing Quality on Low Demand Days
Viaje.ai enhances profitability while simultaneously improving the quality of services provided to passengers. One such method is by offering air-conditioned (AC) buses on low-demand days, ensuring that passengers receive a higher quality experience while allowing bus operators to benefit financially. It identifies days or time periods with lower passenger volumes and adjust prices accordingly to incentivize travel on those days.
Manpower productivity increase with 100% AI and automation
Viaje.ai eliminates the need for manual fare adjustments and pricing decisions by automating the entire process. The system constantly analyses market conditions, demand trends, and operational factors to determine the most optimal pricing strategy. This automation frees up valuable human resources and allows STU personnel to focus on other critical tasks, improving overall productivity and operational efficiency.
Understanding market dynamics
Viaje.ai works on real time data analysis and predictive algorithms to determine market dynamics. It continuously monitors passenger demand patterns. STUs can gather valuable insights into peak travel times, popular routes, current ticket sales, and fluctuating demand levels. They can enhance their competitiveness while efficiently managing supply and demand.
Dynamic pricing helps STU’s to meet demand with smart pricing by catering to varying levels of demand. This ensures that the bus units capture the full potential of high-demand periods and low demand periods, boosting revenue and profitability. Viaje.ai allows STUs to optimize the utilization of their resources, maximize their revenue potential, and provides customers with more choices and flexibility. Over 30% of the India’s luxury private bus market is powered by Viaje.ai.
Wait for our upcoming article on how AI powered dynamic pricing can increase profitability for railways.
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