21 responses so far ↓

• 1 IanS // Sep 21, 2012 at 6:13 am

  Interesting stuff, Frances. Thanks.

  I wonder if there are any transit systems, or portions thereof, which do pay for themselves.

• 2 Ben // Sep 21, 2012 at 6:22 am

  I’ve always been under the impression that the Skytrain pays for itself, but as Frances points out, it’s reliant on feeder bus lines that don’t pay for themselves.

• 3 spartikus // Sep 21, 2012 at 8:22 am

  Apparently Tokyo & Osaka turn a profit. But they have a 50+ mode share.

  It’s important to remember roads are also subsidized.

• 4 motorcycleguy // Sep 21, 2012 at 8:52 am

  The answer is a larger fleet of smaller buses. Such a fleet would be agile to deploy as required, be able to serve more routes….and be much, much more fuel effiicient. I am told this is a problem because the labour cost per passenger would be too high. I find this very hard to believe. If a single bus driver’s wages and benefits are so high that they are not economical to operate a 25 passenger bus someone needs to make some concessions or a different job class needs to be created. I do not think this is the case….but I do think that the overhead of administration and supervisory staff is a burden. The reduction in fossil fuel use and associated degradation of air quality alone is reason enough, never mind economics. A larger number of smaller buses running more frequently in areas like Maple Ridge would actually increase ridership. Forget about paying a supervisor to sit at the side of the road and time the buses going by…..the wages spent on him could buy another small bus….with more buses who reallycares if they are on time to the minute? There will be another one soon enough after it. Are there some big bus manufacturer lobbyists we don’t know about?

• 5 IanS // Sep 21, 2012 at 9:10 am

  “It’s important to remember roads are also subsidized.”

  Why?

• 6 spartikus // Sep 21, 2012 at 9:37 am

  Because it’s important to look at the transportation system as a whole. If we wish one part of it to pay for itself, we should recognize others are subsidized. We may arrive at the same conclusions for those subsidies, or not. But you won’t get a good system if everything is compartmentalized.

  I was not in any way suggesting this was what you were doing, btw.

• 7 IanS // Sep 21, 2012 at 10:03 am

  Fair enough. My question was directed at the immediate costs of running the transit system. I wasn’t suggesting that it should pay for itself, just expressing curiousity as to whether there were any transit systems which paid for themselves.

• 8 Agustin // Sep 21, 2012 at 10:46 am

  @ IanS: Many cities throughout the world have private “public” transit systems. Presumably these make a profit, though they may have free access to the roads and potentially other government subsidies. (I’ve only seen these systems from the point of view of the user so I don’t know the story behind the scenes.)

  In Buenos Aires, for instance, bus lines are owned by private companies. (In some cases, each line is owned by a separate company.) Interestingly, the bus companies there have been lobbying for separated bus lanes (and gotten some).

  For transit issues I suggest Jarrett Walker’s blog at http://www.humantransit.org.

• 9 IanS // Sep 21, 2012 at 10:52 am

  Thanks Augustin. I’ll check out that blog when I get a chance. Like you, I would assume that the private companies must be operating at a profit, or at least in the reasonable expectation of making a profit.

• 10 Jacob // Sep 21, 2012 at 11:37 am

  Matatus!

• 11 David // Sep 21, 2012 at 3:13 pm

  I’ve heard that some light rail lines in Europe turn an operational profit and others have mentioned private rail in Asia that makes money.

  Most public transit has enormous operational loses that are covered by transfers from governmental bodies.

  Public transit provides many benefits that aren’t found on financial statements. It also provides undocumented benefits to the bottom line of other organizations. Few grasp the details, but there’s a general sense in society that having transit is a good thing. Many also understand that forcing transit to break even is unrealistic and robs society of the indirect benefits of the service.

  My guesses for lowest load factor are in South Delta: 609, C84 and C89. Closer to the core I’d guess the C19 from UBC to the beach is empty 9 months/year despite being a direct link between campus housing and a government liquor store.

• 12 IanS // Sep 21, 2012 at 3:23 pm

  “Public transit provides many benefits that aren’t found on financial statements. It also provides undocumented benefits to the bottom line of other organizations. Few grasp the details, but there’s a general sense in society that having transit is a good thing.”

  I completely agree.

  I’m not sure anyone is saying anything about “forcing” transit to break even, but I do think that finding a way for transit to pay for as much of itself as reasonably possible, at least in certain areas, would go some way to assisting in finding the funds to expand transit services. Which, I think, is something everyone can agree on.

• 13 Dan Cooper // Sep 21, 2012 at 4:33 pm

  Perhaps the perfect example – in my very humble opinion and limited knowledge – of the issue of transit (or roads, or airports…) “paying for itself” is Hankyu Hanshin Holdings Inc. of Japan. Hankyu Hanshin is a private corporation – formed of a 2006 merger – that owns two commuter railroads. It also owns a lot of other things, notably two large department store chains, a baseball team (used to also be two!) and major land holdings/real estate developments. Its railroads take you directly to…guess where…its stores and stadiums and developments. Maybe the railroads themselves makes a profit individually or maybe they don’t, but in any case every customer they deliver to another Hankyu or Hanshin business is still spending money that goes into the holding company’s overall coffers.

  As I commented on another thread, the problem here (for a society generally) is related to this same benefit to the particular corporation: your local railroad takes you to the Hankyu or Hanshin Store and the Hanshin Ballpark and a Main Station, but it doesn’t necessarily take you to or from anywhere else – unless you go to a transfer point, likely all the way to a Main Station and pay a separate fare to some other public or private transit line to ride back out to where ever it is you want to go.

  For a place like Vancouver, it’s all connected: buses, ferries, skytrain, freeways, little side streets…and with the same purpose only for society as a whole rather than just one corporation. Does a little side street in the semi-rural suburbs “pay for itself”? Not individually, but that’s not the point. A civilized and – moreoever – economically successful society allows people to get from anywhere to anywhere.

• 14 Voony // Sep 21, 2012 at 9:31 pm

  Not sure why my yesterday comment didn’t show up, may be the hyperlink

  From Translink financial sheet:

  revenue per boarding: ~$1.2

  99B line cost per boarding $0.69

  Considering the revenue per boarding, and cost per boarding (searching BPSR translink will get you the figure for all bus route , you can see where the subsidies go…surprise surpirse…

• 15 Silly Season // Sep 21, 2012 at 10:33 pm

  @Voony,

  I agree that buses do not have the rate of return that the SkyTrain has—a few years ago SkyTrain revenue alone was estimated at 104% return. In other words, Skytrain revenue paid for the trains annual operating costs.

  The buses, significantly less so, even after looking at peak hours at the 99B! In fact once you factor buses into the equation, the overall return to the system is 56%. So, hello subsidies.

  This is not a slam against bus service, which is more frequent and very efficient in the bigger muni centres. Operating over the vast geographical area that TL serves, means that bus service is a very expensive proposition out to the much less dense munis and neighbourhoods. Less dense, means less frequent, and less fare revenue to offset costs.

  Two things TL should do: get out of the road and bridge business (which was foisted on it by the prov. government) and look at smaller buses on those routes where ridership is under a 40 or 50% load. That could apply to those routes in every city where bus travel falls off after peak hours.

  Now, you’d have to deal with the unions on this stuff too. Fun!

• 16 Voony // Sep 21, 2012 at 10:55 pm

  @ “Silly Season”

  Not sure my post is well understood:

  $1.2 (revenue) /$0.69 (cost) means 174% cost recovery…so B line in that aspect perform much better than the skytrain (and if you include the capital cost, order of magnitude better !).

  The point is that most Vancouver route present a pretty decent financial sheet and on the metric (revenue per boarding)/(cost per boarding) break even (even if I agree that a route can’t work independently of other, this performance metric is still one of the less worst).

  add to that the fact, that a Vancouver dwelling pay more translink property tax than a suburban one (due to relative cost of the real estate),…
  It is not hard to guess who is subsidizing who…

• 17 Silly Season // Sep 22, 2012 at 9:02 am

  Sorry @Voony,

  Yes, I misread your post (missing the “cost” side of the equation; thought you were talking revs in both cases).

  Although I’m scratching my head as to 174% cost recovery?? Can you please expand

  How do we reconcile your “break even” remark with subsidies needed to run the transit system. In other words, if it averaged out at a break even point,across the system, how is it that there is chronic underfunding, even now to maintain current routes? And that doesn’t explain “subsidies” to keep routes at current levels?

• 18 Voony // Sep 22, 2012 at 10:52 am

  cost recovery is revenue/expense(cost).

  the fact is that while most Vancouver bus present decent financial sheet in term of cost recovery, it is not the case in the suburbs…
  and even reputed jam packed bus there don’t perform well:
  bus 321 on KGH (to be doubled by a B line):
  $1.2/$1.69 = 71% cost recovery…

  packed bus 410 (NewWest-Richmond present similar figure…

  the reason here is not that the bus is empt (it is full), b ut that people stay too long on the trip – (boarding/hour is low, revenue is per boarding, but drivers are paid by the hour! – giving the bus a very low productivity…
  That is mainly what plague the bus system: in the suburbs people tend to do long trip on bus – too long for what they paid. A frequently omitted point.
  (A way to resolve it, is to introduce more express service, on a model suggested here http://voony.wordpress.com/2011/07/19/bus-410-express/ )

  …And obviously there is all those “empty” buses providing “social service” (i.e. not justified by a demand/supply model) which tend to be more concentrated in the suburbs than in Vancouver proper…

• 19 rico // Sep 23, 2012 at 6:32 pm

  Just a quick note. My quick read of the Translink numbers is that they are not including generalized costs….ie costs are just for the specific bus line and do not include things like administration and overhead costs. In general I assume that it wont change the general which routes perform well vs poorly debate but it would affect cost recovery numbers.

• 20 Chris Keam // Oct 20, 2012 at 10:42 am

  “The answer is a larger fleet of smaller buses. ”

  Couldn’t possible be more in favour of this solution. Run minibuses as suburban feeders to and from main lines in the peak periods and have them service restaurants and pubs in suburbagatory in the evening hours so that people can go out and enjoy a meal and a drink or three.

• 21 Lee L. // Nov 5, 2012 at 4:55 pm

  Well blow me down!!
  Something from Chris Keam that didnt involve a bike. And… something I think is a good idea. Blow me down again.
  Just musing ….
  I wonder what it would be like if the mini buses were filled with paid positions ( unionized of course ) to holler soccer chants all the way home?

  Ticka tacka ticka tacka HOY! HOY! HOY!
  Ticka tacka ticka tacka HOY! HOY! HOY!

  They have that in Europe you know.

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