Transportation is an essential element to any economy. Bus companies play a pivotal role in the provision of transport services. Given the popularity of buses, the fares charged by different bus companies to various destinations are always keenly watched. More often, there are variations in the bus fare prices depending on some factors. These factors that determine bus ticket prices will be discussed to see their influence on final bus fare prices.
Price of oil
One of the standard factors that determine bus fare prices is the price of oil. Oil plays a significant role in the determination of bus fare prices since it is the primary facilitator of bus movements. Needless to say, a hike in the price of oil will result in an increase in the in the bus fare prices and an equivalent vice versa should there be a decrease in oil prices.
Competition is yet another factor that determines bus fare prices. A competitive market with many bus companies plying the same route will see a general decrease in bus fare prices. In equal measure, a monopolized market will have relatively higher fare prices due to lack of competition. Therefore, competition plays a major role in the determination of bus fare prices.
Another significant determinant of bus fare prices is demand. When the demand for travel is high, the bus fare prices increase significantly, and vice versa happens when the demand is low. Demand is a factor that influences many other things related to travel services.
Distance is also an important factor that determines the fare price of a bus. There are calculations done by bus services providers to determine the bus fare price for certain distances. It is not necessarily automatic that a far distance will attract higher bus fare. There are many instances where it is cost effective to use a bus for longer distances than using a bus for shorter distances.
Depending on the season, bus fare prices may vary significantly. During holidays, bus fare prices are always relatively higher than on regular days. This increase in price during holidays and peak season is still associated with high demand for travel services.
The government plays a role in the determination of bus fare prices. Through taxation, the government can decide whether bus fare prices will increase or decrease. Since bus companies cannot bear the extra burden, an increase in tax will be passed on to the traveler making the bus fare to increase in price.