Monday, March 20, 2017

A detailed look at Compass Card revenue: DayPass revenue up 260%, system breaks-even in 2016

The provincial government decided in 2007 to install fare gates to reduce what they perceived as massive fare evasion on the TransLink system. The end result was the $186.8 million Compass Card program which became fully operational in the spring of 2016. TransLink also eliminated zoned-fares for buses at the end of 2015.

While the stated goal of the Compass Card and fare gate system was to reduce fare evasion, there were two other goals: making the transit system easier to use, and collecting more detailed information on how people use the transit system.

TransLink now has more accurate data on how people use their system. The Compass Card makes using transit easier, you simply tap your card, and the system figures out the correct fare. You can also load money onto your card both online and at vending machines, plus purchase Compass Card fare products at hundreds of retailers throughout the region.

What impacts has the Compass Card and fare gate system had on revenue? I requested detailed information from TransLink about fare revenue over the last three years, and want to share that information.

When it comes to monthly passes, fare revenue has been flat between 2014 and 2016. The Compass Card system has had little impact on the purchasing of unlimited-use monthly passes.

Revenue from monthly pass fare products in 2014, 2015, and 2016. Select chart to enlarge.

Single-use tickets, FareSavers, and stored-value on Compass Card are cash-like fares; you pay per use. Between 2014 and 2015, cash-like fare revenue grew 4%. Cash-like fare revenue grew 8.6% between 2015 and 2016. There was around a 6% jump in cash-like fare revenue starting in the second quarter of 2016 compared to the same quarters in 2015. This jump works out to about $10 million. The fare gates were closed at the start of the second quarter of 2016.

Revenue from cash-like fare products in 2014, 2015, and 2016. Select chart to enlarge.

One of the biggest changes in revenue is from DayPasses. Revenue for this fare type grew from $3.7 million in 2014 to $13.4 million in 2016, a 260% increase!

Revenue from DayPass fare product in 2014, 2015, and 2016. Select chart to enlarge.

In 2016, the Compass Card system cost $8.4 million to operate and $2.8 million to maintain. The amortized yearly capital cost of the Compass Card and fare gate system over 20-years is $9.3 million. For 2016, that works out to about $20 million for capital and on-going costs.

The Compass Card and fare gate system has had a positive impact on revenue, customer convenience, and data.

While the system has resulted in increased revenue, the cost of building, operating, and maintaining the system means that at the end of the day, new revenue that can be reinvested into new transit service is modest. This isn’t surprising given previous research TransLink has done.

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