Public transportation plays a key role in providing mobility to the society in a manner that contributes to sustainability. The provision of public transportation services has to be profitable to the operators, but yet affordable to the users. The public transportation sector in Palestine is owned and operated by the private sector with no governmental subsidy. The sector is suffering from many challenges, including those associated with the quality of the provided service and the fares. Protests on changes, or lack of changes, in the fare of public transportation sectors, especially when fuel prices change, had led to strikes. The purpose of this study is to come with a fair estimation of the public transportation fares on the external routes that considers acceptable levels of profitability to the operators, but ensures having reasonable public transportation prices to the public as well. The outcome of the study will contribute to solving the problems which the sector faces that are related to fare and service quality.
The study resulted in the development of robust, fair, and flexible fare estimation models considering the service levels and key operational and demand variables, based on collected data on external public transportation routes in the northern areas of the West Bank, Palestine. The analysis showed that the public transportation fare per kilometer depends mainly on the fixed cost, which is inversely proportional to the average annual traveled distance, and to a lesser extent on the variable cost, which is mainly affected by vehicle’s fuel consumption rate, average occupancy rate, the fuel price, and the profit margin determined by the Ministry of Transportation, the regulator of public transportation in Palestine.
Four models were estimated to express the fare of the shared taxi mode, the most common public transportation mode, for different routes which are classified according to the population of the community served and the route length. On the other hand, three models were also estimated to express the fare of the bus mode for routes with different characteristics.
The paper concludes with recommendations on when interventions related to public transportation fare changes can be decided by the ministry based on fuel price changes, considering the outcome of sensitivity analysis. Thresholds were defined to assist in the decision making on the timing of changes in fare, as it was found that change in fuel price should be significant enough in order to be reflected on the fare.