The first report of the Bus Industry Taskforce, chaired by John Lee and set up in May by the state Labor government, was released on Monday.
Transport Minister Jo Haylen said the government had given in-principle support to seven key recommendations made by the taskforce.
"The taskforce report is clear that on-time running and reliability has deteriorated over recent years and passengers expect and demand a better service," she said in a statement.
"We promised the people of NSW we would take decisive action to help deliver better bus services for our communities and this Bus Industry Taskforce First Report provides a clear roadmap on what we need to do.
"We want better contract and performance management, better service planning and a thriving industry that will attract new bus drivers - ultimately this will give the hundreds of thousands of people who rely on our buses the service they deserve."
The taskforce found that driver shortages should have been predicted and better managed.
It also noted an unacceptable lack of basic driver facilities at layover areas.
It further suggested a focus on other transport infrastructure and capital investment, such as for rail, had come at the expense of the provision of basic bus services.
This included real-time bus tracking, which has resulted in more than 10 per cent of buses not being visible to passengers - widely known as "ghost buses".
The 76-page report also noted a focus on savings during the latest retendering period for bus services provision had led to a loss of operators with local knowledge.
"I was disappointed to learn that only two per cent of the capital budget is allocated to buses when they move over 40 per cent of public transport passengers," Mr Lee said.
"To make matters worse the former government failed to reinvest the millions of dollars made from privatising Sydney Buses back into vital services, especially in underserviced areas."
20°C