Bus

Transit Systems Find Creative Ways to Generate Revenue

Posted on January 8, 2013 by Nicole Schlosser

Page 3 of 3


The Chicago Transit Authority’s partnership with Groupon best aligned with riders coming into the city for festivals and weekend activities.
The Chicago Transit Authority’s partnership with Groupon best aligned with riders coming into the city for festivals and weekend activities.
Daily deal promotion
While looking into different revenue opportunities to diversify its non-farebox revenue last year, CTA decided to make some of its passes available through Groupon, the popular deal-of-the-day website.

With Groupon’s estimated 36.9 million active customers and nearly 900,000 daily page views, CTA spotted an opportunity to advertise to a national and international audience.

CTA partnered with Groupon to offer discounted 3-Day passes to riders, marking the first-ever partnership between the Chicago-based daily deal site and a U.S. transit agency to sell fare media, according to CTA. The ongoing discount started at the end of June.

Groupon pre-purchased 250,000 3-Day passes and paid CTA $1.8 million upfront. Each pass is sold for $7.53 wholesale and offered to Groupon members for $9 instead of $14, the current price of a 3-Day pass. The offer has a limit of four per person. Groupon will own the cards it purchases until they are sold and is responsible for selling the passes.

The deal was a win-win for the agency, bringing it an immediate influx of capital and hundreds of thousands of potential new riders over the summer.
Additionally, the discounted rate will encourage more people to use the 3-Day pass, which offers a better value than the pay-as-you-go option. The CTA Groupon also cultivates new riders and eventually captures permanent local customers, expanding the ridership base.

Groupon is selling the passes on its Chicago, Indianapolis, Milwaukee and Detroit websites, as well as travel discount sites. The deal-of-the day service also reaches out-of-towners through the company’s “Getaways” section, which offers deals on hotels and travel.

CTA’s 3-Day passes are heavily used by tourists and this deal will help further expand that market, particularly for festivals and weekend activities, such as the Air and Water Show, or Lollapalooza, that draw large numbers of out-of-town visitors.

“We felt [the deal] best aligned with out-of-town visitors coming to town for summer vacation or the holiday season,” Eric Reese, GM, business development, CTA, says. “If you’re coming in for a three-day weekend, you’ll have an easy way to get around the system.”

Groupon can mail the fare cards to customers so they can get them before they even arrive in Chicago, making it easier for them to use CTA trains and buses.

“[It’s] a great way to get to a different customer base than we normally have an opportunity to [reach],” Reese says.

The contract allows Groupon and CTA to offer the passes for the same price within the next 12 months.

CTA is watching the results of the partnership and will re-evaluate whether it makes sense to do again after all the passes are sold.

Customers and tourists have received the deal very positively, Reese says.

“In general, it has helped CTA overcome the hurdle of getting out-of-town guests on the system more easily, because they don’t have to figure out how to buy a pass,” he explains. “There’s one option for them, they know where to get it and it’s easy to purchase. It’s already in their pocket when they arrive at the station.”

View comments or post a comment on this story. (0 Comments)

More News

New Flyer lands Texas bus order

The contract includes 10 firm orders, with options to purchase an additional 18 buses, and establishes a new partnership.

Virginia agency adding 8 ARBOC Spirit of Mobility

The order will replace older, existing buses in the fleet and supplement three ARBOC buses purchased in 2017.

Iowa DOT approves contract to add Vicinity buses

There are no minimum or maximum bus quantities, with orders from the various agencies subject to funding and agency needs.

BYD enters new market in Europe with Danish bus order

The order was placed by Anchersen, a Danish bus company, which operates on 19 of Movia’s routes in Copenhagen.

Montgomery County, Md. breaks ground on BRT corridor

Starting in 2020, the 14-mile, 11-station BRT will run between Burtonsville and downtown Silver Spring

See More News

Post a Comment

Post Comment

Comments (0)

More From The World's Largest Fleet Publisher

Automotive Fleet

The Car and truck fleet and leasing management magazine

Business Fleet

managing 10-50 company vehicles

Fleet Financials

Executive vehicle management

Government Fleet

managing public sector vehicles & equipment

TruckingInfo.com

THE COMMERCIAL TRUCK INDUSTRY’S MOST IN-DEPTH INFORMATION SOURCE

Work Truck Magazine

The number 1 resource for vocational truck fleets

Schoolbus Fleet

Serving school transportation professionals in the U.S. and Canada

LCT Magazine

Global Resource For Limousine and Bus Transportation