Fully aware that this isn't a fair comparison...a look at revenue sources for PVTA and the Odakyu Group PVTA revenue sources: - 49% state contribution - 19% local contribution - 16% farebox revenue - 14% federal contribution - 2% ads, interest, grants, etc
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Odakyu revenue sources: Transportation: 30% (57% of total operating profits) Merchandising: 40% (7% of total operating profits) Real Estate: 13% (25% of total operating profits) Other (hotels, resorts, restaurants, etc): 18% (11% of total operating profits)
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All of PVTA's revenue is consumed by its operations, whereas Odakyu profits in all four categories. Profit margins (income/revenue) for Odakyu are as follows: Real Estate = 17.9% Transportation = 17.6% Other = 5.8% Merchandising = 1.7%
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Odakyu earns the most in merchandising, but because of the very slim margin there, it *makes* the most in transportation.
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The Springfield area is never going to have a comparable population to the Odakyu Group's territory, and PVTA probably won't be going into real estate any time soon...is there *anything* that we can take away from Odakyu's approach?
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My takeaway is that PVTA should be trying to maximize the share of its revenue that comes from the farebox. Currently it's at 16%, how much higher could it get? Current annual farebox revenue is about $7.4 million, but our annual ridership is closer to 11.6 million...
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...which means that the average fare contribution per trip is just 64 cents, despite the fare being $1.25. Two main reasons: - about 35% of our ridership is on the UMass-based routes, which charge no fare - elderly & disabled passengers pay 60 cents instead of $1.25 per ride
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Half-price for elderly and disabled is perfectly reasonable and an industry standard, so that leaves three courses of action for improving revenue: - increase the base fare - collect fares on UMass-based routes - implement distance-based fares
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Replying to @380kmh
Query: Does UMass pay for the privilege (and thus balance the books between entities) or is it recorded as 0% fares and just "paid" by the 49% state contribution?
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Complicated...UMass & the other four colleges pay for the local contribution that's owed by Amherst and most surrounding towns, who are the real winners in this arrangement
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