Determinants of profitability in public transport: a case of savings and credit cooperatives (Saccos) in Eldoret, Kenya

Abstract

Profitability is the primary goal of all business ventures. Without profitability the business will not survive in the long run. So measuring current and past profitability and projecting future profitability is very important. Profitability is earned by carrying out business activities such as Transport business. Public Transport is perceived to be the most important sector of economy that provides transport services to the public. In Public Transport, profitability is realized through daily transport services offered to the general public. The purpose of this study was to establish the determinants of profitability in Public Transport. The study was steered by the following objectives: to establish how infrastructural factor is determinant of profitability on Public transport, to establish how the service route factor is determinants of profitability on Public Transport and to establish how urban mobility factor is determinant of profitability in Public Transport. The study was conducted through a survey research design. The study targeted the management and drivers from different SACCOs in Eldoret town. The study selected four SACCOs operating within Eldoret namely: Chepkoilel SACCO, Mailinne SACCO, North Rift SACCO and Eldoret SACCO. The study employed the use of purposive sampling to select the management staff while stratified sampling was employed to select the various Public transport operators in the various routes. The study used the Krejcie and Morgan formulae (1970) which gave a sample size of 165 respondents when a researcher targets 294 respondents. The study used both questionnaires and interview schedules to collect data. The study adopted both quantitative and qualitative analysis in order to achieve the objective of the study. In quantitative techniques the researcher used descriptive statistics such as frequencies and percentages to analyze the data. The data was coded using the statistical package for social scientist (SPSS), analyzed and presented in form of tables, frequencies and percentages. The study findings revealed that government regulation, infrastructure, service route and urban mobility patterns determined the profitability in the Public Transport. These factors were found to have a direct effect of the profitability. The study based on the findings recommended that government as a regulator should involve the entire stakeholder in formulation of policies so as to ensure fairness to all parties involved; introduction of e-payment in the Public transport to curb corruption and national and county government should invest more in road infrastructure so as to enhance Public transport business.