Bus subsidies cost HCMC $21 mln

Around 3,000 public buses ply on 200 routes, of which 110 are 50 percent subsidized, according to the Centre for Management and Operations of Public Transport.

In May the Department of Transport increased the fare on 51 routes by VND1,000 (4.3 cents), and tickets now cost VND5,000-7,000 (22-30 cents) depending on the distance.

The department said the fare increase is commensurate with rising incomes, and is expected to increase revenues by VND92.5 billion ($4 million) a year.

A city report in May said public buses were losing passengers to ride-hailing services, which were offering competitive prices. The buses only carry 10.7 percent of the total number of commuters, it said.

"The development of services like Grab, Go-Viet and Be has increased competition for buses, attracting passengers who travel short distances. These services are flexible and priced competitively."

Last year the department had said ride-hailing motorbikes affected the revenues of bus companies after the number of passengers fell by 3 percent to 571 million to miss the target by 10 percent.

Seven bus routes were discontinued due to heavy losses, it had said.

As many as 12 companies operate public buses in HCMC. They carried 304 million passengers in the first half of the year. Every year the city provides them subsidies of over VND1 trillion ($43.1 million).