For many American public transportation, the future looks very grim when it comes to money. Despite the recent growth in ridership, there continues to be budget deficits for transit systems. Chicago, in 2007 was close to cutting dozens of bus lines and raising fares to solve its $158 million shortfall. Last year, New York's Metropolitan Transportation Authority had estimated a $1.78 billion deficit by 2010. In response, the agency had to raise prices for unlimited ride MetroCards and cut the pay-per-ride bonus down from 20% to 15% when buying a certain amount of credit. But transport systems do not always have to jack up the prices to ride the bus or increase sales taxes to guarantee funding. Here are five ways a transit agency could increase revenue without angering loyal riders by raising fares, or upsetting taxpayers.
1. Advertising on transit can generate a steady source of revenue. Transit riders are frequently stuck in a subway car with nothing to look at except for advertisements pasted above the windows (unless one has reading material). Many cities have huge commercial posters in subway stations, which are viewed by thousands each day. Transport for London received £35 million ($70 million US) in the fiscal year 2005-2006 for advertising in the Tube.
2. Have companies "sponsor" stations and trains. The Portland Streetcar has several stations sponsored by businesses. Upon arrival at the station, the train will announce the stop's name along with the business who had sponsored the station. In addition, the Portland Streetcar posts the name of the business on the station shelter. Portland charges $500 per month for one stop. To have a company's written inside a train (and announced at least once per route), Portland Streetcar charges $20,000 per year.
__3. Allow wireless / phone companies to use space within the subway. __New York announced in September last year that the subway will earn $46 million over the next decade by allowing Transit Wireless LLC to install and to operate cellphone service within subway stations. Transit Wireless LLC plans to allow major cellphone providers (like Verizon or Cingular) to use its services within the subway, at a price of course.
4. Invest in real estate near transit stations (or future transit stations). As opposed to just focusing on transportation, agencies should look at the areas surrounding its stations and invest in surrounding properties. Hong Kong's MTR subway built residential units and sold 7 billion Hong Kong dollars($899 million US) worth of real estate in 2007. Nearly half of its net profit in 2007 was because of real estate.
5. As a last resort, transit companies should raise the fare for single journey tickets, but continue to provide an affordable monthly pass for regular riders. In addition to passes, several transit systems allow passengers to purchase tickets in bulk at a cheaper price (in Paris, the carnet of 10 tickets costs less than purchasing 10 tickets individually). Sometimes these tickets get lost, misplaced, or forgotten meaning the transit agency can make a bit more money off those who misplace their packet of tickets.
