Via the RGJ today, RTC Washoe is moving ahead with plans to make the anticipated needed cuts to the bus transit system, while it prepares to move full steam ahead on “jobs creation” in the road construction business once it receives its anticipated newly inflation indexed gas tax funding from the legislature in the upcoming legislative session.
That’s a fine how-do-you-do, isn’t it? At a time when transit ridership is actually up as people look for ways to avoid making trips in their cars, the bus service is being cut. And the culprit is the voters of course, who refused to pay additional sales tax to keep the buses running.
STOP! This tried and true formula, “It’s your fault, voters, for not raising taxes, and now the promised cuts must be made,” is a textbook example of the wrong-thinking approach to transit planning in small-to-medium sized cities across the country.
It’s flat out absurd. I’ve done some number crunching based on FY07 numbers in the draft 2040 RTP. Cross-referencing those numbers with the results of an onboard ridership survey from April, 2006 reveals some problems in the RTC’s business model that I’ve alluded to here before. In short, farebox recovery is too low. The bus does not even come close to paying its own way. And it could be making a lot more money.
Now, before you cry foul on behalf of the poor, take into account that I’m considering the poor here. And if you read further, you’ll see how.
Let’s take a look at the statistics from the April, 2006 ridership survey first.
Percentage of Washoe RTC transit riders with cars
The study shows that 60% of riders of the RTC’s buses have no car. This would probably appear at first to be a troubling statistic, but it ignores the reality that the remainder of the riders have one or more car. That is, they’re choosing to use the bus.
Income levels of Washoe RTC riders
Next let’s take a look at the income levels of the riders of the RTC. 27% of riders are clearly not doing well economically. But, let’s be a bit generous and say that 45%, the first two categories of riders, are not doing well. That is to say, these people are of a high likelihood to require some form of subsidy to ride the bus. In classic transit system planning this subsidy level is achieved primarily through keeping fares at a level which can be considered low, as defined by a comparison of the fare to reference consumer price index (CPI) levels. Still, it is worth noting here that 55% of riders would likely qualify for no subsidies or very little fare subsidy, based on the next set of data: ages of riders and household composition.
Ages of Washoe RTC riders
The age category is the one that really starts to turn this thing around. 63% of the system’s riders are between the ages of 15 and 44 years. The survey shows that 55% of riders are in one or two person households.
Washoe RTC number of people in riders’ households
Now let’s get into the transit system’s financials from the draft RTP.
First, let’s take a look at the fare structure for cash fares only.
Averaging these numbers, we get an average fare of $1.15.
The average fare on RTC ride is $1.15, which when multiplied by average daily ridership * 365, equals $10,167,604.25. Yet RTC’s total farebox revenue in FY 07 for its 8.8 million riders per year, is some $3 million less. On a transit system with an average fare of $1.15, where the only people who ride free are generally not allowed to be out in public without supervision, the system is collecting $0.81 cents per rider.
Now let’s get into the nuts and bolts of this thing. The RTP does not clearly define the term ridership so I’ll take a stab at it and say that on any given day, 24,223 people are riding the bus. It doesn’t look like we’re counting trips. But if we were counting trips, and we assume that a rider pays the average fare of $1.15 per way, the average rider would then be paying $2.30 per day to use the system. If that were the case, RTC’s farebox revenues would be $20,335,263.70.
If the RTC were collecting a little over the cost of a single adult ride per day per rider, the taxpayer subsidy to the system would be 25%. The subsidy ratio would be almost the complete opposite of the way the system operates today.
At first, it seems that the culprit could conceivably be monthly passes. But perhaps not. With the average monthly pass costing $43.75, assuming every rider in the system was using a monthly pass, the revenue collected for the year, if I’m doing my math right, would be $12,717,075. Monthly passes certainly are not as profitable as single ride charges, but if monthly pass revenue accounted for all the system’s revenue, the system would still be at a considerably higher farebox recovery ratio than it is today: 48%.
Perhaps someone familiar with the RTC’s actual definitions of the numbers I’m playing with could show up to this blog and debunk all these assumptions. If passengers were paying what is clearly listed in the RTC’s numbers as cost per passenger, that is $3.00, the system would be breaking even. The average revenue per passenger according to my math is $0.81.
Now, what do we do about the poor? Well, if everyone who can pay their own way on the system pays their own way on the system, remember earlier from the survey where I estimated 45% of system riders might require a subsidized fare. 45% of the 8.8 million total riders is 3,978,638.55. Assume for a moment that the subsidized fare is $1 per ride. The total yearly public subsidy for a break even system is less than $4 million. That is less than 1/4 of the total public subsidy for the transit system today.
What gives?
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