A Dissertation Report Submitted to Mzumbe University, Dar es Salaam Campus College in Partial Fulfillment of the Requirements for the Award of Masters Degree of Business Administration in Corporate ManagementThis study presents the impact of transaction costs on transportation business in Tanzania. Specifically the study examine comprehensive strategies used by daladala and buses owners in Dar es Salaam Region in reducing transaction costs in doing transportation business, determine how daladala and buses owners co-ordinate their actions to address sustainable transportation business in Dar es Salaam Region; and find out how drivers of daladala and buses participate in reducing transaction costs with the means of improving transportation business in Dar es Salaam Region. The study was covered by taking sample of 70 respondents. Purposive and simple random sampling techniques were used to get a sample of (70) respondents. The study used case study design in which both qualitative and quantitative approaches of data collection were adopted. Data were collected using questionnaires, interviews and documentary review. The results of the study shows that; strategies used by daladala and buses owners in Dar es Salaam Region in reducing transaction costs in doing transportation business are Setting of Contract of Employment, provide traffic rules Manuals to drivers and Settings Vehicle speed equipment in Daladala. Moreover, the findings of this study revealed that transaction costs at the local level are about 30 percent of the total operational cost of transportation cost as recommended by DARCOBOA staff. Moreover,