Side friction factors are all those actions related to the activities taking place by the sides of the road and sometimes within the road, which interfere with the traffic flow on the travelled way. They include but not limited to pedestrians, bicycles, non-motorized vehicles, parked and stopping vehicles. These factors are normally very frequent in densely populated areas in developing countries, while they are random and sparse in developed countries making it of less interest for research and consequently there is comparatively little literature about them. The objective of this thesis is to analyze the effect of these factors on capacity of urban roads. The present study is mainly focused on individual effect of the friction factors like pedestrians crossing the road on capacity of urban roads. Data on two sections of 4-lane divided road were collected in Hyderabad with pedestrian cross flow. These are taken as the base sections. Three basic parameters of traffic speed, volume and density are used for estimation of traffic carrying capacity of a road. For determination of speed-volume relationship in heterogeneous traffic condition, the volume calculated by total vehicles recorded for each counting period were converted into equivalent number of PCUs. Mean stream speed or weighted space mean speed is calculated and used in the present study. The present study demonstrates that mix traffic stream can be converted in to an homogeneous equivalent of passenger cars by multiplying the total traffic volume (in veh/hr) by a stream equivalency factor (K). It will avoid the problem of estimation of PCU values for individual vehicle categories in the traffic stream. The stream equivalency factor (K) will depend on traffic composition and a regression equation is developed in this study to estimate K-value on urban roads.