Designing business model framework for public bus transportation authorities: A fuzzy approach

Abstract

Covid-19, which has taken the world under its influence, has also deeply affected the public transportation sector. While public transportation is sustainable with subsidies, the gap between expenses and incomes has grown with the effect of Covid-19. The sector, which meets the majority of its revenues from tickets, decreased by ninety percent during the days of curfews during the pandemic period. Expenses such as disinfection, mask, etc. increased with the addition of additional items. Despite all the difficulties, public transportation continued to serve without stopping during the pandemic period. For this reason, public transportation is seen as a backbone for the cities. Especially in developed and developing countries, it plays a critical role to overcome traffic jams. To achieve this, the service quality of public transportation is seen as a key point. The service quality of public transportation depends on different factors such as operation, repair and maintenance, audit, and management. From the management side, the business model provides a holistic perspective due to taking into account activity, value, and financial status. Business models represent a critical tool for strategic management. It provides managers with an integrated perspective to shape business operations regarding the activity, value, and finance dimensions. When activity composes of key partners, key resources, and key activities, value includes value proposition, customer segments, channels, and customer relationships. Lastly, the finance block comprises revenue streams and costs from Business Model Canvas (BMC) perspective. It serves to understand, communicate, share, change, measure, simulate, and learn more about the different aspects of the firms. According to the type of organization, the business model can be varied such as profit-based or social-based. This thesis presents a business model canvas framework for public transportation organizations including impact factors and their external environment. Impact factor includes social and environmental issues for public bus transportation such as elderly people, disabled people, electric buses, and green transportation. From an external view, PESTEL analysis is taken into account which is political, economical, social, technological, legal, and environmental. Taking into account impact factors and the external environment provides managers or policymakers with a holistic perspective to manage effectively. The main and sub-criteria of the model are designed according to the literature under three hierarchical levels. While the first level of the model is the main criteria which are internal and external environment criteria, the second level comprises sub-criteria of internal and external environment criteria which are business model canvas and PESTEL analysis. Finally, the third level is related to the sub-criteria of the business model and PESTEL analysis. In addition, this thesis aims to query the viability of a new strategic action tool specifically geared to the interests of public bus transportation authorities (PBTAs) around the globe and explore the degree of homogeneity in their responses as well as their possible drivers of them. To answer its research question, the study first offers a generic business model design for a PBTA, which integrates an extended version of the business model canvas with external environmental factors in order to enhance its sustainability. Subsequently, the importance attributions of international transportation experts to different model components are evaluated by using the Spherical and Intuitionistic Fuzzy AHP method. The proposed model is evaluated by experts from four continents: America, Asia, Australia, and Europe. International experts are selected according to their experience. They are selected from different departments which are planning, operation, innovation, strategy development, and finance with more than ten years of experience. There are different methods in the literature such as Multi-Attribute Utility Theory, Analytic Hierarchy Process (AHP), Analytic Network Process (ANP), Fuzzy Set Theory, Case-Based Reasoning, Data Envelopment Analysis, Simple Multi-Attribute Rating Technique, Goal Programming, Elimination and Choice Translating Reality (ELECTRE), Preference Ranking Organization Method for Enrichment Evaluation (PROMETHEE), Simple Additive Weighting, Multicriteria Optimization and Com promise Solution (VIseKriterijumska Optimizacija I Kompromisno Resenje-VIKOR), Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS), and The Weighted Aggregated Sum Product Assessment (WASPAS). Analytic Hierarchy Process (AHP) is mostly used method due to its ease of application, flexibility, applicable to many subjects. But in some circumstances such as vagueness, complexity fuzzy logic is preferred to classical AHP. In fuzzy logic, there are different fuzzy sets. Some of those are Ordinary, Interval-Valued, Intuitionistic, Neutrosophic, Nonstationary, Hesitant, and Spherical. In this problem, fuzzy logic is applied to the model with two extensions which are Intuitionistic Fuzzy Sets (IFS) and Spherical Fuzzy Sets (SFS) to evaluate the proposed model. A solution set is also provided with a traditional AHP in order to check the robustness of the former methods. According to the results, the internal environment is ranked as the most important criterion at the first level for all methods. Whereas the activity element is ranked first at the second level, key partners are ranked first at the third level for all methods. The relative similarity of the results obtained by the traditional and Intuitionistic Fuzzy AHP model suggests that the Spherical Fuzzy AHP model may have better potential to handle the vagueness of the business modeling problems. Sensitivity analyses show that the model is sensitive to expert judgments. From the convergence-divergence perspective, the expert opinions tend to converge more on the internal components of the model and diverge on the external components, especially regarding economic and technological factors. A strategic response action set is also designed to facilitate the adoption of the model by PBTAs. The strategic responses include short and long terms actions, separately. When unexpected conditions such as pandemics trigger short-run responses, the long-run term is mobilized by the planning process. Innovation of the business model is important as designing it. Changing political, economical, social, technological, and legal conditions, the business models can be needed to redesign to survive in the business ecosystem. Development of the proposed business model can be tracked using defined performance indicators time by time. This study contributes to the works of both academicians and practitioners in terms of designing and evaluating public transportation business models. The study not only extends the research on the strategic management of the public bus transportation domain but also contributes to the convergence and divergence debate by offering a reconciliatory duality perspective.