Cap Metro is touting its January ridership for the Red Line: it gave 32,000 rides last month, a 57% increase over January 2011. Cap Metro confesses, though, that it is recovering only 3.1% of its operating costs from fares. That’s dismal. As is its $33.98 subsidy per rider. But Linda Watson assures us, “We're running the agency like a business, we're making some good, tough decisions to make sure we're strong--not just today, but well into the future as well."
A 3.1% farebox recovery ratio and $33.98 per rider subsidy are simply unacceptable. What we need from Cap Metro is, as Watson promises, business-like behavior. This means a business plan for raising the FRR and reducing the per-rider subsidy for the Red Line. What I’d like to see, in particular, is a configuration of schedule, ridership and fares that gets the FRR up to 20%. Cap Metro knows what it costs to operate the trains. It should be able to write down some schedule, ridership level and fare structure that produces the necessary revenue. Or it should tell us there isn’t one; that’s something the public needs to know if true.
I normally would assume that there is some path to 20%. Trains are a high-fixed-cost but low-marginal-cost business. The marginal cost of carrying another passenger on a train that will be making a trip anyway is approximately zero (until you reach capacity). The marginal cost of adding another round trip should also be low, assuming the train would otherwise be sitting idle: I imagine the per-hour cost of an operator’s time is pretty low, and a train surely doesn’t use that much fuel for a 64-mile roundtrip. So the path to higher FRR should be a straightforward one of adding more fare-paying riders.
I’m not sure this is right, though. I say this based on the cost estimate Cap Metro quoted the city for adding Friday evening and Saturday service. It worked out to around $40,000 per weekend. If you assume an extra 40 runs per weekend, that works out to $1,000 per one-way, hour-long trip. Cap Metro reported an operating cost of $1,300 per hour in its last quarterly report (which you can find here), so this seems to be the right ballpark. (I don’t know why it costs Cap Metro so much. Cap Metro actually contracts with Herzog Transit Services to operate the train, so the costs, whatever they are, are built into that contract.)
We need to know if there is a path to a more reasonable FRR and per-rider subsidy, though. We need to know this because we ultimately have to decide on the optimal level of service for the Red Line. If there is a schedule, ridership and fare structure that gets the FRR up to a reasonable level (which presumably would entail a substantial boost to ridership) then that should be Cap Metro’s goal. But it might be that, given Cap Metro’s current cost structure, there is no ridership level or fare structure that will cover an acceptable portion of the operating cost. Perhaps the very best case scenario is that Cap Metro can bump the FRR to 10% only by tripling its annual operating loss. If that’s the case, then we don’t want Cap Metro to maximize its FRR, but rather to minimize its operating loss, conserving money for buses. That would mean sticking to a light schedule.
Either way, mere ridership numbers don’t tell us what we need. We need a plan.
