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According to the owner of Tu Vien transport firm, a north-south trip costs VND50 million, of which the fuel alone costs VND30 million. He also has to pay VND1 million for lubricant, VND5 million for tolls, workers’ salaries and other expenses. Drivers have to rent rooms in Hanoi as they are not allowed to stay at bus stations to reduce costs.
He said the input costs have become unbearable and he is selling vehicles to shift to another business.
Two 45-seat buses have been liquidated, while the other is lying idle in Di An City in Binh Duong province. Vehicles will degrade if unused. But if he continues to run them, he would have to incur a loss of VND5-7 million for each trip.
“If you run businesses at a loss, you’ll think of shutting down,” he said.
Tu Vien is not alone. The idea of selling vehicles and stopping business has become more common among passenger transport in HCM City. Another car owner at Mien Dong Bus Station has sold two 45-seat cars because the more they run, the bigger losses they bring.
According to Dao Ngoc Tuan, the owner of Tuan Duyen transportation firm, in the past, before the Ukraine-Russia war broke out, expense on diesel was VND15 million, but it has soared to VND30 million.
In principle, transport firms can raise ticket prices to cover the increased costs. However, if they do, they won’t be able to attract clients. Adjusting ticket prices is unfeasible and ticket prices have been kept unchanged over the last seven years.
Tuan Duyen has two cars and one of them is lying idle at Yen Nghia Station in Ha Dong, Hanoi. With the cost of VND50 million for every north-south trip, not including the amortization fee, and the number of passengers just 40 percent of that pre-pandemic, the owner cannot make a profit. He said in the past, there were 35-40 passengers when the cars left stations, but there are now only 10 passengers.
Tuan has thought of selling vehicles, which he believes is the best solution. However, the problem is that he doesn’t want to sell cars at low prices, and no one wants to buy cars at high prices at this time.
Meanwhile, because of bank debts, other transport firms are still resigned to run their cars, because if they stop running, they will be insolvent and go bankrupt.
Pham Thanh Duyen, owner of Duyen Ha which provides trips between HCM City and Gia Nghia City, complained that while fuel prices have soared, transport firms still have to pay high taxes and fees.
From HCM City to Gia Nghia, which covers 210 kilometers, cars have to go through three toll collection stations in Binh Duong, two in Binh Phuoc and one in Dak Nong, and pay a toll of VND540,000. Meanwhile, he has to pay tax to the Saigon Cooperative of Transport Service and Tourism even if the cars run for only 10-20 days, or lie idle.
Estimating that he incurs a loss of VND2-3 million for each trip, Duyen intends to sell his five cars and stop the 30-year business.
Struggling to survive
According to Nguyen Lam Hai, head of the transportation plan division of the Mien Dong Bus Station, since early March 2022, 66 out of 153 firms have the plans to adjust ticket prices with the average increase of 24 percent.
The number of cars departing in the first 19 days of May was equal to 89 percent of the same period last year, while the number of passengers was 10,000-10,500 each day, or 52 percent of that in pre-pandemic period.
Also according to Hai, 30 percent of transportation firms have given back ticket stalls to the bus station because they have few passengers and they try other ways of selling tickets to cut costs. The bus station has helped firms ease their difficulties by offering the stall rent by 40 percent.
Meanwhile, at the Mien Tay Bus Station, according to its head of the operation department Tran Nhan Hau, the number of passengers is just equal to 50 percent of that in pre-pandemic period. Since March, when the petroleum prices began soaring, 51 out of 127 firms have raised the ticket prices by 10-20 percent.
Chair of the HCM City Association of Inter-provincial Passenger Automobile Transport and Tourism Le Trung Tinh commented that the situation is really bad. “We still could not ‘come to surface’ after the pandemic when we are ‘sunk down’,” he said.
Tran Chung