Presentation on theme: "Strategic Fare Development Gerald Chang, Doug Strobl and Anita Wasiuta."— Presentation transcript:
Strategic Fare Development Gerald Chang, Doug Strobl and Anita Wasiuta
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
Outline Fare Strategy Objectives Fare Guidelines TransitTown Case Study Vendor Management Strategies
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
Fare Strategy Objectives
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
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
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
1) Single Cash Fares Key Benefits Simplicity Reduce fare disputes Reward frequent customers Operational efficiencies Gaining support across Canada Edmonton, Saskatoon, Ontario, Salt Spring
Key Benefits Stable & predictable revenue Promotes more frequent ridership Customer conversion Importance of a strong Vendor Network 2) Promote Prepaid Products
JOIN A LIVE FARE STRATEGY CASE STUDY IN PROGRESS
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!
Revenue & Ridership Composition 2.5 million passenger trips $3.6 million revenue
Fare Comparison Highlights
4 Fare Options
Revenue & Ridership Impacts
Breakout Session #2 (15 min.) Divide into groups Review background information Set & weigh objectives for TransitTown Choose your fare option!
Weighing Objectives Example
RECORD PUBLIC CONSULTATION RESULTS – over 1100 people
Record Number of Responses 81% of votes Fare Option Survey Results (1166 people)
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
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
Knowing this Information… Does your fare option choice change at all? If so, how and why?
UPDATED SURVEY RESULTS
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
Youth & Senior Responses Preferred Option for Youth & Seniors Youth & Seniors All Ages Responses appear to indicate Pros > Cons for 70% voting Option 3
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
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
Where is TransitTown?
Key Lessons Learned Setting Clear Objectives Power of Public Consultation Evolving Guidelines