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Strategic Fare Development Gerald Chang, Doug Strobl and Anita Wasiuta.

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Presentation on theme: "Strategic Fare Development Gerald Chang, Doug Strobl and Anita Wasiuta."— Presentation transcript:

1 Strategic Fare Development Gerald Chang, Doug Strobl and Anita Wasiuta

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3 1. To develop a fare structure that promotes long term ridership growth 2. To optimize revenue and balance user contributions with public funding Purpose of a Fare Strategy

4 Outline Fare Strategy Objectives Fare Guidelines TransitTown Case Study Vendor Management Strategies

5 Payoff By the end of this Workshop, you will: Understand the fare strategy model Be able to apply it yourself Gain insight into upcoming collaboration on vendor management strategies

6 Fare Strategy Objectives

7 Sample Objectives 1. Promote long term ridership growth 2. Decrease reliance on public funding 3. Increase simplicity & understanding of fares 4. Increase sales of prepaid fare products 5. Reduce fare evasion 6. Reduce fare collection costs 7. Reduce transfer fraud

8 Breakout Session #1 (10 min.) Discuss fare strategy objectives Some questions to think about: What would I like to improve about my fare structure? Is it easy to understand for our passengers? Does it promote ridership growth? Choose spokesperson and share your group’s top 3 objectives

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10 Fare TypeGuideline Sample Fare Structure CASH FARE RegularBase Fare$2.00 DiscountEqual to Base Fare$2.00 Alternative Discount Base Fare less 15%$1.75 handyDARTEqual to Base Fare$2.00 TICKETS (10) Regular9 times Base Fare$18.00 Discount9 times Base Fare less 15%$15.50 MONTHLY PASS Regular20-30 times Base Fare$50.00 Discount20-30 times Base Fare less 15%$42.50 DAY PASS Regular2.5 times Base Fare$5.00 Discount2.5 times Base Fare less 15%$4.25 TRANSFERS60 minutes in One Direction

11 1) Single Cash Fares Key Benefits Simplicity Reduce fare disputes Reward frequent customers Operational efficiencies Gaining support across Canada Edmonton, Saskatoon, Ontario, Salt Spring

12 Key Benefits Stable & predictable revenue Promotes more frequent ridership Customer conversion Importance of a strong Vendor Network 2) Promote Prepaid Products

13 JOIN A LIVE FARE STRATEGY CASE STUDY IN PROGRESS

14 TransitTown needs a Fare Strategy 3 years since the last strategy Growing population w/ 150,000 people 10% transit mode share They want and need your help!

15 TransitTown Revenue

16 TransitTown Ridership

17 Revenue & Ridership Composition 2.5 million passenger trips $3.6 million revenue

18 Fare Comparison Highlights

19 4 Fare Options

20 Revenue & Ridership Impacts

21 Breakout Session #2 (15 min.) Divide into groups Review background information Set & weigh objectives for TransitTown Choose your fare option!

22 Weighing Objectives

23 Weighing Objectives Example

24 Something Missing?

25 RECORD PUBLIC CONSULTATION RESULTS – over 1100 people

26 Option 2 Option 4 Option 1 Option 3 Option 4 Option 1

27 Record Number of Responses 81% of votes Fare Option Survey Results (1166 people)

28 Option 1 Public Feedback For: (35% of votes) Keeps traditional fare structure No increase to Adult Monthly Pass & U-Pass prices Good balance between fare revenues and public funding Against: Does not promote prepaid products as much as other fare options

29 Option 3 Public Feedback For: (45% of votes) Lowest price increase of all options Youth/Seniors get sizeable discounts on Tickets & Monthly Passes Keeps Adult Cash fares at $2.50 and lowers prices for discount passes Against: Lowest revenue increase and highest impact on public funding

30 Knowing this Information… Does your fare option choice change at all? If so, how and why?

31 UPDATED SURVEY RESULTS

32 Youth & Senior Responses Option 3 - $2.50 single cash fare Pros: »20% reduction in monthly pass price »33% discount for tickets Cons: »Cash price increase from $1.75 Responses by Age Group

33 Youth & Senior Responses Preferred Option for Youth & Seniors Youth & Seniors All Ages Responses appear to indicate Pros > Cons for 70% voting Option 3

34 Final Objectives Criteria/ObjectivesMeasured byOption 1Option 2Option 3Option 4 1 Provides a balance between user contributions and public funding Forecasted annual revenue increase $140,000$250,000$75,000$230,000 2 Promotes ridership retention and growth Forecasted potential decrease in annual ridership -1.75%-3.10%-0.65%-3.20% 3 Viewed favourably by the public Support through public consultation 36%4%45%15% 4 Increased operational efficiency & less fare disputes for drivers Use of a single cash fare No Yes

35 Recommendation: Option 1 or Option 3 Criteria/ObjectivesMeasured byOption 1Option 3 1 Provides a balance between user contributions and public funding Forecasted annual revenue increase $140,000$75,000 2 Promotes the highest ridership retention Forecasted potential decrease in annual ridership -1.75%-0.65% 3 Viewed most favourably by the public Support through public consultation 36%45% 4 Increased operational efficiency & less disputes for drivers Use of a single cash fareNoYes

36 Where is TransitTown?

37 Key Lessons Learned Setting Clear Objectives Power of Public Consultation Evolving Guidelines

38 Vendor Management Strategies - Outline Introduction Vendor partnerships Components of management Forward looking Closing remarks

39 Vendors as Partners They provide an essential service They are another face of BC Transit They service our most loyal users Under our current model, their importance will only continue to grow

40 Vendors are Essential content/uploads/2012/09/dp pdf Influence user decisions Influence access to products Involved with consumer’s changing preferences

41 Vendors as Partners “ Best Practices” are needed to guide future direction

42 Vendor Management Process Composed of a series of tasks and relationships that end with the purchase of a fare product.

43 Components Distribution Sale Reporting Relationship

44 Our Goal is Best Practices Online Fluid Survey reviewing your current practice Investigating practices in other industries

45 Concept for the future? BCLC

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