Management & Operations

Creativity, abstract thinking boost transit revenues

Posted on February 1, 2005

It’s no surprise that revenue generation is a difficult but potentially significant part of a transit agency’s agenda. With tight operating budgets everywhere, finding new and exciting ways to earn money is a worthwhile effort that can lead to improved or increased services. Although fare increases seem to be the most common maneuver, there are other ways to increase revenue. One way is to create a more comfortable environment for riders that will lead to increased ridership. The Milwaukee County Transit System (MCTS) installed systems made by Transit Television (TTV), which offered the equipment without charge. The TVs have increased the popularity of some bus routes, and Marketing Director Joe Caruso said buying into TTV’s efforts was a way to get “leverage for future budgets.” Another comfort-enhancing effort occurs every morning at St. Cloud (Minn.) MetroBus, where newspapers are sold to bus riders. Executive Director David Tripp said that the program required little to no upfront investment aside from establishing a relationship with the local newspaper and ensuring that papers get onto the buses each morning. Despite these efforts, going beyond the “increased ridership” mantra and becoming more creative is an important step toward realizing revenue increases. Selling old equipment on eBay is an excellent way to recoup funds spent on vehicles. MCTS has sold out-of-service replica trolley buses online, and the sales enabled the authority to make more than it would have through other avenues, Caruso said. Another new-to-transit idea mirrors the sports-centered tradition of selling naming rights. According to the New York Post, the New York Metropolitan Transportation Authority (MTA) recently offered private businesses the opportunity to name subway lines, stations, bridges and other structures. MCTS, similarly, has sold naming rights to bus routes in the past. Not every agency has the prestige to sell naming rights, but there are other advertising opportunities related to transit infrastructure. Curt Simon, general manager of Omaha (Neb.) Metro Transit, suggested selling businesses ad space on transit-owned or -leased buildings. And if that’s not a possibility, other uses of transit facilities can be lucrative. For instance, despite their size, even small agencies can utilize surplus equipment and space to make up budgetary shortfalls. Extra building or garage space can be rented to clients and neighboring agencies. Simon added that Omaha Metro leases the use of its vehicle tracking systems to other fleets, such as emergency services and local taxi companies. Bus advertising is another reliable source of income and one that is growing exponentially. Advances in advertising strategies have seen full bus wraps envelop six of St. Cloud MetroBus’s 32 full-sized transit buses, resulting in as much as $10,000 per bus. According to Tripp, that equates to a fare increase of nearly five cents per rider on those buses. All this is easily done when there are clients with a budget big enough to fully wrap a bus, but not every transit authority has that kind of resource. However, third-party ad agencies, through nationwide contracts, have helped smaller systems bring in Fortune 500 advertisers. Roadway Media, a transit advertising company in Brookline, Mass., specializes in university transit ads. David Page, principal of the company, said Roadway can provide small clients with potential bus advertisers who benefit from nationwide campus transit exposure. — LANE ROBERTS

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