Performance Analysis of Urban Public Transport Service Enterprise in Addis Ababa: Data Envelopment Analysis

Abstract

Measuring the public transit service enterprise's performance is a powerful tool for decision-making and managerial control to assess the utilization level of various inputs to obtain the desired outputs. Thus, this study aims to measure the performance of public bus transport enterprises of Addis Ababa using the Data Envelopment Analysis method during the year 2016/17 to 2017/18. There is an absence of studies in the country examining public transport sector efficiency using the DEA approach, which makes this research a chance. The study employed an input-oriented DEA model to measure bus transit efficiency. Thus, fleet size and a total number of employees are used as inputs, while covered vehicle km and total passengers transported per year are used as an output to measure performance. Then, the enterprises' technical efficiency and operational effectiveness are analyzed based on secondary data collected from each enterprise. The overall results show Anbessa and Sheger city buses are technically efficient and operationally effective in utilizing their inputs to deliver the desired output compared to others in the city. However, outcomes for Alliance city bus and Public Service Employees Transport Service Enterprise indicate that they utilize their inputs inefficiently and consumed their services ineffectively. Hence, these inefficient enterprises need significant improvements in using their resources to enhance their performance and deliver services incompetent with other operators in the city. Besides, the Government should encourage privately owned public transport operators in the city and provide subsidies and other incentives to all based on their existing performance.

Keywords: efficiency, public transport, Data Envelopment Analysis, Addis Ababa, Ethiopia

DOI: 10.7176/PPAR/11-7-05

Publication date:August 31^st 2021