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Gerald Chang, Doug Strobl and Anita Wasiuta

Strategic Fare Development. Gerald Chang, Doug Strobl and Anita Wasiuta. Purpose of a Fare Strategy. To develop a fare structure that promotes long term ridership growth To optimize revenue and balance user contributions with public funding. Outline. Fare Strategy Objectives Fare Guidelines

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Gerald Chang, Doug Strobl and Anita Wasiuta

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  1. Strategic Fare Development Gerald Chang, Doug Strobl and Anita Wasiuta

  2. Purpose of a Fare Strategy • To develop a fare structure that promotes long term ridership growth • To optimize revenue and balance user contributions with public funding

  3. Outline • Fare Strategy Objectives • Fare Guidelines • TransitTown Case Study • Vendor Management Strategies

  4. Payoff • By the end of this Workshop, you will: • Understand the fare strategy model • Be able to apply it yourself • Gain insight into upcoming collaboration on vendor management strategies

  5. Fare Strategy Objectives

  6. Sample Objectives • Promote long term ridership growth • Decrease reliance on public funding • Increase simplicity & understanding of fares • Increase sales of prepaid fare products • Reduce fare evasion • Reduce fare collection costs • Reduce transfer fraud

  7. Breakout Session #1 (10 min.) • Discuss fare strategy objectives • Some questions to think about: • What would I like to improve about my fare structure? • Is it easy to understand for our passengers? • Does it promote ridership growth? • Choose spokesperson and share your group’s top 3 objectives

  8. Fare Guidelines

  9. 1) Single Cash Fares • Key Benefits • Simplicity • Reduce fare disputes • Reward frequent customers • Operational efficiencies • Gaining support across Canada • Edmonton, Saskatoon, Ontario, Salt Spring

  10. 2) Promote Prepaid Products • Key Benefits • Stable & predictable revenue • Promotes more frequent ridership • Customer conversion • Importance of a strong Vendor Network

  11. JOIN A LIVE FARE STRATEGY CASE STUDY IN PROGRESS

  12. TransitTown needs a Fare Strategy • 3 years since the last strategy • Growing population w/ 150,000 people • 10% transit mode share • They want and need your help!

  13. TransitTown Revenue

  14. TransitTown Ridership

  15. Revenue & Ridership Composition $3.6 million revenue 2.5 million passenger trips

  16. Fare Comparison Highlights

  17. 4 Fare Options

  18. Revenue & Ridership Impacts

  19. Breakout Session #2 (15 min.) • Divide into groups • Review background information • Set & weigh objectives for TransitTown • Choose your fare option!

  20. Weighing Objectives

  21. Weighing Objectives Example

  22. Something Missing?

  23. RECORD PUBLIC CONSULTATIONRESULTS – over 1100 people

  24. Option 2 Option 1 Option 4 Option 1 Option 3 Option 3 Option 4

  25. Record Number of Responses • Fare Option Survey Results (1166 people) 81% of votes

  26. Option 1 Public Feedback • For: (35% of votes) • Keeps traditional fare structure • No increase to Adult Monthly Pass & U-Pass prices • Good balance between fare revenues and public funding • Against: • Does not promote prepaid products as much as other fare options

  27. Option 3Public Feedback • For: (45% of votes) • Lowest price increase of all options • Youth/Seniors get sizeable discounts on Tickets & Monthly Passes • Keeps Adult Cash fares at $2.50 and lowers prices for discount passes • Against: • Lowest revenue increase and highest impact on public funding

  28. Knowing this Information… • Does your fare option choice change at all? • If so, how and why?

  29. UPDATED SURVEY RESULTS

  30. Youth & Senior Responses • Responses by Age Group Option 3 - $2.50 single cash fare • Pros: • 20% reduction in monthly pass price • 33% discount for tickets • Cons: • Cash price increase from $1.75

  31. Youth & Senior Responses • Preferred Option for Youth & Seniors Responses appear to indicate Pros > Cons for 70% voting Option 3 Youth & Seniors All Ages

  32. Final Objectives

  33. Recommendation: Option 1 or Option 3

  34. Where is TransitTown? VICTORIA

  35. Key Lessons Learned

  36. Vendor Management Strategies - Outline • Introduction • Vendor partnerships • Components of management • Forward looking • Closing remarks

  37. Vendors as Partners • They provide an essential service • They are another face of BC Transit • They service our most loyal users • Under our current model, their importance will only continue to grow

  38. Vendors are Essential • Influence user decisions • Influence access to products • Involved with consumer’s changing preferences http://www.bankofcanada.ca/wp-content/uploads/2012/09/dp2012-06.pdf

  39. Vendors as Partners • “Best Practices” are needed to guide future direction

  40. Vendor Management Process • Composed of a series of tasks and relationships that end with the purchase of a fare product.

  41. Components Distribution Sale Reporting Relationship

  42. Our Goal is Best Practices • Online Fluid Survey reviewing your current practice • http://fluidsurveys.com/surveys/bctransit/investigating-best-practices-vendor-management/ • Investigating practices in other industries

  43. Concept for the future? BCLC

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