I'm actually now feeling sorry for UPX, given this
http://www.theglobeandmail.com/news...n-at-lower-fare-report-finds/article29657207/
The Globe claims the per passenger subsidy is $46. I'm wondering what accounting is being used for this. How much of the fixed cost and capital amortization is found in that number? Is the accounting common to, and shared with, GO Transit and VIA? VIA passenger counts aren't that much higher than the typical UPE train on this line, now that the commuters are using UPE. Is VIA's subsidy $46 pp also?
As the article states:
A Globe and Mail assessment of the most recent available data shows that fare and other revenues fell $23.3-million short of operating costs over the first eight months of UPX operation.
They're only looking at operating costs, and no amortization of the capital. It's fair to say that it doesn't look at VIA or GO in this analysis, as those are separate operations.
This was an analysis based on the oh-so-publicized ridership figures (and
average fare paid, $22.50) that sparked the fare change. Now that there are many more riders, the
per rider subsidy will be much lower, as it's distributed between more people. With the fares lower, there's more cost recovery to make up, and there's every chance that the
overall subsidy is higher, but the
per rider subsidy will be down.
To look at some numbers a bit, and see what we can glean from their analysis
Cost per person: $22.50/pax + $46 subsidy/pax=
$68.50 total/pax
Subsidy per day: ($23.3M subsidy/8mos) / (240days/8mos) =
$97,083 subsidy/day
People per day: ($97,083 subsidy/day) / ($46 subsidy/pax) =
2110 pax/day
Daily Operating Cost: 2110pax/day * $68.50 total/pax =
$144,535 total/day
Annual Operating Cost: $144,535/day * 365days =
$52,755,275 total/year
Now, with the fare change, let's say ridership has doubled but average fares are down to $7. That ridership estimation is probably conservative, based on anecdotal evidence.
Operating costs will be virtually unchanged.
New cost per person: $144,535 total/day / 4220pax/day
= $34.25/pax
New subsidy per person: $34.25/pax - $7/pax =
$27.25 subsidy/pax
New subsidy per day: $27.25 subsidy/pax * 4220pax/day =
$114,995 subsidy/day
With a doubling of passengers, and a reduction of average fare to $7, we see the subsidies change:
Per person subsidy: $46 to $34.25 (drop of $11.75)
Total daily subsidy: $97,083 to $114,995 (increase of $17,912)
With a $7 average fare,
6778 passengers per day is the magic number to recover the same revenue as before the fare drop, and it would mean a per rider subsidy of $14.
To break even on a daily operating cost of $144,535 at a $7 average fare would require ridership of
20,647 per day
Numbers are fun!
