For many public transport operators in developing countries, all income is derived from the fares paid by passengers, and control of revenue is a key requirement of a successful operation.
However, transport is susceptible to various forms of revenue leakage. This is principally because vehicle crews are to a large extent unsupervised and usually handle large quantities of cash. Poor revenue integrity is often a major problem, particularly in many of the larger transport systems. This leads to loss of income and inadequate funds to sustain the operation.
Many conventional bus systems have failed because of revenue leakage. At best, if an operator is lax in minimizing revenue loss, fares will be higher than they have to be and profits lower. This may also lead to excessive subsidy requirements.
Honesty means enhanced bus service
Revenue integrity is partly a function of the degree of honesty prevailing at all levels in the organization, as well as the effectiveness of revenue control systems. The extent to which the problem can be resolved will have a bearing on the type of service that can be provided, and on operation methods.
Good revenue integrity enables a much more organized type of service to be provided. Poor revenue integrity necessitates a less formal type of operation. Robust systems and procedures, which are workable within prevailing cultural and ethical characteristics, are usually required if revenue is to be adequately protected.
Employees and passengers may collude
Revenue may be lost through fare evasion on the part of passengers and through malpractices on the part of the operator’s own employees. There may also be collusion between passengers and employees to defraud the operator. Passengers may attempt to avoid payment altogether, or pay less than the correct charge for their journey.
Lost revenue is difficult to measure. But it can be estimated from surveys of passenger loads. This data makes it possible to estimate the revenue that should be collected and to compare it with revenue received.