Institute of Transportation, MOTC

　　With the increased oil price, high costs of raw materials and strong competition in the market, unparalleled challenge faced the regional bus services. In order to improve the operation performance and environment of public transit, government has conducted the subsidization of public transportation. Under the constraint of limited resources, it is an important issue that how to allocate the subsidy to the relative efficiency routes rationally. The purpose of this study is to categorize the subsidy routes based on the concept of “rural route”, and evaluate the operation performance for each group in order to discuss the appropriateness of existing subsidy. This study uses the real data of subsidized regional bus service in 2010. Geospatial information science and cluster analysis were applied to categorize the subsidy routes. And DEA is utilized to evaluate the operation performance of all the routes in each group. Finally, this study addresses the managerial implications based on a matrix of route transformation proposed by this study, and offers suggestions to the future research.