For one thing, they actually prioritize making money, since profitability means they can stick around reliably, year after year, instead of begging for unreliable funding from politicians:https://twitter.com/380kmh/status/841680140069396480 …
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For one thing, they actually prioritize making money, since profitability means they can stick around reliably, year after year, instead of begging for unreliable funding from politicians:https://twitter.com/380kmh/status/841680140069396480 …
Diversification is a strategy to help accomplish this--but that's not a free pass to run the transport side of your company at a loss! Odakyu only gets gets 32% of its revenue from transport, but 56% of its income from there:https://twitter.com/380kmh/status/841678653096366080 …
Making a profit also means focusing on the *entire* market, with special attention to occasional travelers--regular commuters tend to buy passes, and so despite making up >50% of passengers, they contribute <50% of revenue:pic.twitter.com/OU5vX91vRN
Where diversification is concerned, priority is on businesses that cultivate transit use and boost ridership: condos, houses, leased space at and around stations, hotels, restaurants, spas, daycares, supermarkets, department stores...https://twitter.com/380kmh/status/841687484564176898 …
In the USA, we hear a lot about "transit dependent" riders as the main priority--but they're only a subset of the potential ridership, and can't, by themselves, ensure a profit. Put profitability first, and you'll have ample resources to help them: children, tourists, the elderlypic.twitter.com/YVAQmJe4k1
If we look at another profitable suburban railway, we see again that while the hotel department brings in the most *revenue,* it is the transport department that brings in the most *income* after expenses, interest, taxes, depreciation and amortizationpic.twitter.com/uoeT6Kwx4s
Think about that. We know, in America, that hotels, real estate, etc, are all financially viable and profitable businesses. Yet Japan shows us that you can get higher margins from transit--something we think is impossible!
What's the goal? "Stable, high profitability in our railway operations!" For every 3 households in their service area, they have 2 daily riders. Nice ratio--20 times higher than the equivalent for Boston's commuter rail!pic.twitter.com/9jlzA6loL2
When we look at the largest railway in Japan, the same principle holds up: transport provides a higher share of income (71%) than of revenue (68%)...pic.twitter.com/Yw8CEipSXa
...more of that revenue comes from ordinary ticket holders (occasional riders) than from pass holders (regular riders), and more of it comes from ordinary trains than from high speed rail--especially ordinary trains in the suburban/commuter networkpic.twitter.com/M49Q8UWPP7
30% of trips in Tokyo are made by transit--I'm not sure how much higher that share is if you focus on "trips to work," as is typical of mode share reports in the USA.pic.twitter.com/ILd9iVftEU
It's not in the USA, but Toronto has done very well when it comes to higher transit mode share *for commuting,* tho again, I wonder how this compares to overall travel. Remember, focus on the ENTIRE market, not just commuters!pic.twitter.com/nYcDRrskYv
How to stay in business once you're already making money? Raise demand, add value! Get more people to use your trains, and make it a better experience for them every time they come back:pic.twitter.com/lrsKwfsbd7
And finally: what do they use all that money for? East Japan Railway was formed during the privatization of the old national railway, so it still has to pay down its predecessor's debt--something I expect any American railways seeking profitability would also have to think about:pic.twitter.com/nEXGwfSqGj
Let's make it happen here, too! Don't let people trick you into thinking "for profit" is a bad thing when it comes to railways
#TrainTwitterpic.twitter.com/2zHTW7dN2V
Not like in America!
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