diminutive
Active Member
This is exactly how the accounting works. The capital cost is incurred entirely by the 4 hours per day that requires the TTCs $10B worth of infrastructure. Small amounts of off-peak usage never justifies a higher fixed cost (capital expenditure in this case)) manage peak service; peak service needs to do that on its own.
It's not "required" though. Any given bus route that we were talking about converting to streetcar operations is more than capable of handling peak demand as is or with modest frequency increases. Most don't even operate 10 buses in peak hour. Maybe, maybe, in the peak hour streetcar operations could result in more efficient operations in some cases, but for the rest of the day it wouldn't.
To determine whether it's profitable to run off-peak service you only consider the incremental costs of running that additional service; without affixing any percentage of the capital toward it (peak period already absorbed it). The asset being used is free as it would be unused in storage otherwise.
You can't just break apart the costs, though. Making the decision to run streetcars in peak hour entails running streetcars the rest of the day (for the most part).
The argument isn't whether or not streetcars are required (they almost never are in the literal sense of that word). It's what will result in lower operating costs over the life of that asset. And even if a streetcar could produce more efficient operations during peak hour, doesn't mean it will produce lower operating costs per day of operation or whatever.