27
Jan

2010

The Public Transit Model

Post by Steven Dale

A Thought Experiment:

Imagine no such thing as public transit had ever existed. Instead, you had a vision last night and dreamt up the concept today.

You decide this is a great idea and call it “public transit.” You want to sell this public transit thing to an investor, (public or private, it doesn’t matter) and you develop the following business model:

  • Your public transit idea sells a completely, 100% perishable commodity: Space. Your business is not transit, after all, your business is selling space on transit vehicles for a variable amount of time. Every minute that a seat or square foot of revenue-generating space goes empty, it’s gone for good. There’s no opportunity to recoup.
  • You use the airline industry as a perfect example to explain the previous concept because that industry experiences the very same phenomenon.
  • The space you sell costs billions of dollars worth of infrastructure to build and further billions to maintain and staff.
  • Your target market are commuters, but the majority of them drive private automobiles, bike and walk to work.
  • Those commuters who buy your product are anticipated to use monthly passes that entitle them to infinite use of your service. Pass-holders will be allowed to give those passes to others, entitling those people to additional and unlimited use of the service.
  • Your target market are commuters so the majority of your revenue will come from two 3-hour rush hours. During these times – which you call “crush load” – service requirements will be beyond that which you can effectively provide, frustrating your core target market.
  • The other 75% of weekday hours, nights and weekends your public transit business continues to operate with limited service that will lose millions of dollars per year.
  • The forecasting method you use to forecast ridership (revenues) and the price to build infrastructure (expenses) has been continually shown to produce inaccuracies of 50-100%.
  • The cost to build, staff, operate and maintain your public transit business is well in excess of the revenue it generates.
  • You have no complementary stream of revenue to offset the losses your public transit business experiences.

You put together your business plan, hire a graphic designer to make it look spiffy and send it out into the world.

What kind of response do you think you’d get? Would you get any takers? A meeting? Would you get in the door? Would you get the secretary’s name?

I’m not for public transit or against public transit and I don’t believe public transit is right or wrong. What we need is not more public transit or less public transit. What we need is better public transit.

We need a new model and we need you to figure out what that model might be.



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Analysis / Just For Fun / Thoughts / Urban Planning & Design
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