Friday, 7 October 2011

More on PT's (un?)profitability

On my last post I said that some networks increase costs in providing service, and now I've made some quick calculations, to see if public transport can be profitable. For a 30 min bus route, a wage of $12.50 + $6 fuel (39L/100km, $1.50/L for diesel and 20 km/h) means a service costs $18.50 to operate (excluding capital costs and admin). If fares are $1 for this trip (standard 2 zone - $2.60 but remember our tickets can be used for multiple trips) In order for the trip to break even there'd need to be 18.5(19~) passengers using it, and as I said I didn't include capital and admin, because I've got no idea how much these cost, but I'll just bump it up to 22 passengers. At peak hour most buses probably greatly exceed this, but you need to consider the empty trips those buses make going back (against peak). And how about feeder buses in car oriented areas (most of Perth). Often occupancy is less than 10
On the other hand, trains are an easy win. For a 30 min route, a wage of $12.50 +$10 fuel (excluding capital and admin) = $35 operating cost, so at $2.50 per ticket (trains are at least 2.5 times faster than buses), only 14 passengers are needed, 16 for admin and capital.
However, not all is lost for buses. Note the use of the word occupancy. A bus may pick up one passenger, drop it off and get another one, drop off and repeat until 10 passengers have been carried. The 'occupancy may have only been 1 because there was only one person in the bus, but 10 passengers used the bus for that trip. Multiply this by 100 and the increase gets quite significant. However this is an extreme example, so the bus may not reach profitability, but if managed properly it may come close.

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