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Now, you begin the operations at, say, 50% subsidies, charging 750 for average expenses of 1450-1500. You will not feel the pinch for sure. For, these subsidies add up to much less than 0.01% of your revenues. Add to it, the hefty 30-35% operating margins. Your stake holders won’t mind, your top and bottom lines won’t notice and your employees will feel sooo grateful. A winner in the real sense of the word! Right?

Great! You are a real master businessman. That’s why you have come this far with me.
We will begin with optimizing cost and improve resource utilization.
As a first step, we will aim to minimize expenses. Methods no bar! Just use any means. It sure works. I assure you. Try clubbing long routes together, commutation time not withstanding. This is bound to introduce economy of scale, thus reducing your costs by some 20-25%, at least.
Remember, don’t pass on this cost reduction to the commuters!

So, now you’ll have to shell out around 1150-1200 i.e. almost 35% in subsidies.
As in any socialist society, the flag-bearers of license-raj will ensure a consistent upward trend in fuel prices. You can safely assume the prices to keep increasing gradually, the global prices don’t matter.

So, every year or so, you can count on this price rise to make commuters shell out more. Keep up the good work of cost optimization.
In no time, you may find that the average cost has gone down to, say, 1050-1075. All this, in spite of rise in fuel prices! But rising fuel price is a fact, is a fact is a fact. This you must pass on to the commuters.

You can flatly announce:
Due to steep rise in fuel prices and other such factors, we are forced to revise your contribution to this effect. There have been serious reforms in the resource management and utilization. Due to this, we have seen a continuous decline in cost per head. Our innovations and improvisation have brought down the expenses to around 1050-1075 per person; even though the fuel prices have sky-rocketed.
Keeping the above factors in mind, it becomes inevitable to revise your contribution to 1000 from the existing 750.

Let’s look at it again. Now all you are subsiding is meager 5-7% of the costs! How’s that?

Wasn’t it great? Feel like thanking me? Jumping with excitement?

I am really sorry for you. You have come to the wrong place!
You weren’t supposed to be here in the first place. Please go ahead with your business.

If you are not really excited about all this, please come along.
You are the one who belongs to this place. Let’s move forward.

The rosy (or cozy) pictures painted about your organization in the beginning very clearly implies a pretty decent growth rate as well.
If it’s true, you can truly exploit the economies of scale.

Yes, we will now look at an intelligent, though perverted, variation of the economy of scale.
The law of averages and all those stuff have never sounded so sweet as they will now.

Say you have a 50 seater vehicle.
How many commuters do you allocate to this vehicle?
What 50? You must be crazy! Go for 55-60.
Yes you heard it right! How on earth do you expect every one to turn up anytime? It’s impossible!
You can study the trend for a week and come up with the approximate figures. I bet daily turn-out will never go beyond 85%. Never!
Ok, let’s assume it does.
So what? How many times it happens?
May be once a month! Or twice!
Your folks must be considerate enough to accommodate such exceptional turn-outs. I am not asking you to bank on their cooperative qualities. Simply don’t give them other options.

Too eager to wait? Ok, here you go:

A 10 – 15% over-subscription will obviously lead to proportional, but inversely, effect on the expenses.
This means your expenses have come down to around 950 per head.
And how much are you charging them?
1000.

Hmmm…, so what’s the situation now?
Seems you have started earning profits!

Hey wait, now it’s time to review the fuel prices. It has increased by around 10-15% over your last revision of the charges.
Won’t it be imperative to pass this on to the commuters?
Of course!
Please go ahead! And remember “Sky is the limit”.

Hats off to your Business Skills! Bon Profits!