CHICAGO: Transit Developments

[emathias]

Originally Posted by Standpoor

Can you name a business sector in this country that does not give out discounts for frequent/bulk customers? Especially one where the marginal cost of adding a customer is minimal. It is better to take the guaranteed money up front and allow them to ride as much as they want. The increased use is not going to cost more but changes in revenue will. ...

You're wrong on this.

Increased use on the CTA absolutely increases costs. The incremental cost of adding 1 rider is negligible. The incremental cost of adding, say, 1 ride per week for every pass-holder in the system is millions of dollars per year. If half of all riders use a pass, that means about 270 million rides a year are with a pass. Using conservative numbers and rounding, that's about 5 million rides per week. If the average rider with a pass takes 2 rides per day, that leaves us with about 357,000 unique pass riders in the system in any given week. If each of them took an extra trip every other week, that translates into 9 million extra rides per year. And I've tried to keep that as a conservative number.

In their Crowding Reduction Plan, the CTA estimates that to meet the demand created by 22 million extra riders they are adding $16 million worth of bus and train service. In order to pay for that plan, they're reducing service in areas that haven't had growth. With passes, the extra use is probably more randomly distributed. So $16 million to serve 22 million riders - that puts a large-scale incremental cost of additional rides at about $0.73 (72.7 cents).

So, while the incremental cost of one user can be considered to be "free" or negligible, with a large system you can't look at it that way or you end up screwed. Using the CTA's own numbers, the true incremental cost of increased ridership is about 73 cents.

I will admit that that is a lot lower than the $2.25 rail fee. But considering that their true average revenue per rider ranges from $0.98 to $1.01 most years in recent memory, it's not nearly as big of a drop, and some ride types have always made other ride types possible to maintain an overall viable *system* instead of just a collection of piecemeal segments.

[electricron]

Originally Posted by Standpoor

Can you name a business sector in this country that does not give out discounts for frequent/bulk customers? Especially one where the marginal cost of adding a customer is minimal. It is better to take the guaranteed money up front and allow them to ride as much as they want. The increased use is not going to cost more but changes in revenue will.

Discounts are appropriate in a competitive marketplace with companies fighting for market share. CTA doesn't have any competition that's cheaper than it is, therefore it really doesn't need to grant discounts.

If they eliminated all discounts, they could - believe it or not - actually reduce the standard fares and continue to collect the same amount of revenues. That raising the standard fares to keep discounted fares around probably turns more customers away.

[Standpoor]

Originally Posted by emathias

You're wrong on this.

Increased use on the CTA absolutely increases costs. The incremental cost of adding 1 rider is negligible. The incremental cost of adding, say, 1 ride per week for every pass-holder in the system is millions of dollars per year. If half of all riders use a pass, that means about 270 million rides a year are with a pass. Using conservative numbers and rounding, that's about 5 million rides per week. If the average rider with a pass takes 2 rides per day, that leaves us with about 357,000 unique pass riders in the system in any given week. If each of them took an extra trip every other week, that translates into 9 million extra rides per year. And I've tried to keep that as a conservative number.

In their Crowding Reduction Plan, the CTA estimates that to meet the demand created by 22 million extra riders they are adding $16 million worth of bus and train service. In order to pay for that plan, they're reducing service in areas that haven't had growth. With passes, the extra use is probably more randomly distributed. So $16 million to serve 22 million riders - that puts a large-scale incremental cost of additional rides at about $0.73 (72.7 cents).

So, while the incremental cost of one user can be considered to be "free" or negligible, with a large system you can't look at it that way or you end up screwed. Using the CTA's own numbers, the true incremental cost of increased ridership is about 73 cents.

I will admit that that is a lot lower than the $2.25 rail fee. But considering that their true average revenue per rider ranges from $0.98 to $1.01 most years in recent memory, it's not nearly as big of a drop, and some ride types have always made other ride types possible to maintain an overall viable *system* instead of just a collection of piecemeal segments.

Granted service level does correlate with ridership but costs=service level, not costs=ridership. The extra runs on surviving routes are going to cost $16 million dollars regardless if they run 20% full or 100% full. It is fundamentally different from say a car where each extra car sold requires extra inputs.

Furthermore, I do not believe that you can accurately divide the costs between those 22 million riders. First, the CTA is already accommodating those extra riders so it is not necessary to spend that money. Second, the increased service cannot be parceled out to each individual new rider. Take for instance the Brown line. There will be 2 extra peak am run, and 0 extra peak pm, with dozens of off peak extra runs where the Brown line already runs 4 car trains. Is the increase in passengers on the Brown solely in off peak? If they run only 4 car trains, why do we need so many extra runs? So you cannot just divide the new riders by the new service and say that is how much those new riders cost.

Then we get into what electricron is talking about. Once service levels are set, how do you maximize revenue. CTA has plenty of competition and plenty of cheaper competition. You can bike, walk, a car pool is probably cheaper, and if you go to and from work Metra is cheaper. Driving alone is faster but not cheaper. So CTA competes both on time and money but competition alone isn't the only reason to give discounts. My own feeling is that you make discretionary trips as cheap as possible. Those are the trips that riders are more likely to use an alternative. For instance, every once in awhile I go to Whole Foods. I can either walk or take the train. If I had to pay for each trip to Whole Foods, I would be more likely to walk. Cta would then provide the same level of service, get less revenue, and have fewer trips.

I do not think we have enough data to suggest one way or the other what the effect of eliminating all discounts will have on revenues. Electricron's statement that revenues will rise has about as much credence as my statement that if pass discounts are eliminated, standard fares would need to be raised to collect the same amount of revenues because riders will be less likely to make enough trips to cover the pass fare. We just don't know the price sensitivity of riders.

[J_M_Tungsten]

I'm surprised no one else has commented on this.
http://my.chicagotribune.com/#sectio.../p2p-73503657/

[denizen467]

^ This part of Lower Wacker is lit much brighter than the E-W segment was. Maybe they were able to use LEDs or something, which would not have been available a decade ago. Especially in the middle, around maybe Monroe where there's a merge/intersection, there is extra lighting producing something like a night-baseball/football-stadium level of brightness. I think this is ideal for potentially dangerous intersections and would like to see it in more places for safety, especially with the continuing increase in bicyclists (though on Lower Wacker itself I think cycling is not permitted), but because of light pollution it may only be realistic in underground places like this.

[ardecila]

Cycling on Lower Wacker is a rush. Sounds like I have a whole new course to check out.

The lit feeling of a space is psychological more than anything else. I'm guessing the new Lower Wacker includes an extensive new set of wall sconces that light up all the vertical surfaces. There's only so much that direct downlighting can do. Also, if they're using LEDs, the light may be in the blue-white spectrum which "feels" brighter to us because it's such a stark contrast from the yellowish nightlighting we're all used to.

[emathias]

Originally Posted by Standpoor

...
Furthermore, I do not believe that you can accurately divide the costs between those 22 million riders. First, the CTA is already accommodating those extra riders so it is not necessary to spend that money. Second, the increased service cannot be parceled out to each individual new rider. ...

First, the CTA is accomodating them and has determined that to continue to do so, they need additional money. That is not in dispute.

Second, of course it can be unless you believe that math and statistics are some sort of fairy magic. I do not believe that, but you're welcome to believe whatever you like.

[Rizzo]

Originally Posted by denizen467

^ This part of Lower Wacker is lit much brighter than the E-W segment was. Maybe they were able to use LEDs or something, which would not have been available a decade ago. Especially in the middle, around maybe Monroe where there's a merge/intersection, there is extra lighting producing something like a night-baseball/football-stadium level of brightness. I think this is ideal for potentially dangerous intersections and would like to see it in more places for safety, especially with the continuing increase in bicyclists (though on Lower Wacker itself I think cycling is not permitted), but because of light pollution it may only be realistic in underground places like this.

Pedestrians and bicyclists are allowed to use the service drives on lower wacker. Not allowed in the inner traffic lanes, but they may cross them at intersections

[VivaLFuego]

Originally Posted by Standpoor

I do not think we have enough data to suggest one way or the other what the effect of eliminating all discounts will have on revenues. Electricron's statement that revenues will rise has about as much credence as my statement that if pass discounts are eliminated, standard fares would need to be raised to collect the same amount of revenues because riders will be less likely to make enough trips to cover the pass fare. We just don't know the price sensitivity of riders.

Large transit agencies and a wide array of professional engineering consultants and academic institutions absolutely study these questions extensively and continuously.

[Standpoor]

Originally Posted by emathias

First, the CTA is accomodating them and has determined that to continue to do so, they need additional money. That is not in dispute.

Second, of course it can be unless you believe that math and statistics are some sort of fairy magic. I do not believe that, but you're welcome to believe whatever you like.

What a bunch of patronizing bs. The CTA system is mostly fixed costs associated with service levels. You said that "true" cost of each individual new rider is $.73 but your math is not accurate. Are you actually saying that if my cousin comes to town, it costs the CTA $.73 for him to ride compared to if he did not ride. Fixed costs=/=marginal cost. All I am saying is that the marginal cost of each new rider is ridiculously small, so the CTA should try and run with as many people on the trains as possible. It is like flying standby on airlines. Once the plane leaves the airport, its costs are set so you might as well get somebody in the seat, even if their fare is low.

Nor can you just divide $16 by 22 to get marginal costs. The increased service will be used by new riders, old riders, and will run empty sometime, it will not be solely attributable to new riders. You cannot say that those new riders add $.73 of costs per rider. That $16 million dollars is fixed. It will be spent whether ridership increases or decreases. It will be spent whether it is new riders or old riders. Average total cost was $2.05 per rider in 2011. It is my belief that average fixed costs per rider is much closer to $2.05 then it is to $1.32.

Originally Posted by VivaLFuego

Large transit agencies and a wide array of professional engineering consultants and academic institutions absolutely study these questions extensively and continuously.

This is exactly my point. The CTA clearly has people working on this and feels that this redistribution plan is more efficient than previous service levels. They have worked quite a bit on it and I hope that they are correct, even though their conclusions are still just an educated guess. However, the CTA does not provide enough info to the public to allow electricron nor myself to adequately gauge what will happen to revenues once the pass price increases go into effect.

I am much more on the page that believes that this new strategy is a way to shed under-performing routes and shift costs to third parties without having to expend a lot of political capitol or get into a large fight with the unions over job cuts. I do not believe that it is about de-crowding as much or new riders per se. Until someone can explain to me how this plan is going to de-crowd the brown line when there is 0 increase in the pm peak and huge increases off peak when the line runs 4 cars, I will not believe that this change is necessitated by increased ridership.

[ardecila]

source

[emathias]

Originally Posted by Standpoor

What a bunch of patronizing bs. The CTA system is mostly fixed costs associated with service levels. You said that "true" cost of each individual new rider is $.73 but your math is not accurate. Are you actually saying that if my cousin comes to town, it costs the CTA $.73 for him to ride compared to if he did not ride.

You either didn't read what I wrote or you're intentionally creating a straw man. I said very clearly - this is a direct quote - "The incremental cost of adding 1 rider is negligible."

Originally Posted by Standpoor

Fixed costs=/=marginal cost. All I am saying is that the marginal cost of each new rider is ridiculously small, so the CTA should try and run with as many people on the trains as possible. It is like flying standby on airlines. Once the plane leaves the airport, its costs are set so you might as well get somebody in the seat, even if their fare is low.

I'm not really sure what that statement has to do with the discussion. Nobody's saying the CTA shouldn't get more people to ride, but when you have crush loading at times when a lot of people wish to ride, or increment between scheduled runs is long enough to discourage choice riders, then adding service to increase ridership makes sense.

Originally Posted by Standpoor

Nor can you just divide $16 by 22 to get marginal costs. The increased service will be used by new riders, old riders, and will run empty sometime, it will not be solely attributable to new riders. You cannot say that those new riders add $.73 of costs per rider. That $16 million dollars is fixed. It will be spent whether ridership increases or decreases. It will be spent whether it is new riders or old riders. Average total cost was $2.05 per rider in 2011. It is my belief that average fixed costs per rider is much closer to $2.05 then it is to $1.32.

If you actually read what I wrote, I never said that each rider, by himself, cost 73 cents. What I said was, "The incremental cost of adding, say, 1 ride per week for every pass-holder in the system is millions of dollars per year." That's obviously a statement about cumulative impact, and it's very disingenuous of you to pretend otherwise.

If you want an example, you're right, adding one stand-by passenger to an airplane costs the airline a few dozen dollars in fuel and other consumables. But if you have a million passengers every day, the airline is either going to have standby passengers who don't get to fly and will never even try to fly on that airline again, or they at least plan to start adding planes, which costs a lot more than a few dozen dollars per passenger. In other words, to repeat myself for the fourth (and last, even if you still don't get the concept): just because the incremental cost for 1 person is effectively zero doesn't mean that the incremental cost for a million people is still zero. It will be magnitudes higher, in nearly all cases. One extra visitor to NYTimes.com costs effectively zero. One million incremental monthly visitors to the NYTimes probably costs something on the order of an extra dime per user, allocated across all the new incremental users. That's just the way these things work.

Originally Posted by Standpoor

... increases off peak when the line runs 4 cars, I will not believe that this change is necessitated by increased ridership.

Obviously none of us really know, but increased frequency makes choice riders more likely to ride because their total trip time cost (on average) goes down.

[Rizzo]

Originally Posted by ardecila

source

I couldn't believe my eyes when I saw them painting this. It was like an early Christmas present.

This will save lives. Dearborn is a major bicycle commute route home Since Michigan, State, Wabash, LaSalle, Clark, and Wells are not designed to safely accommodate cyclists in the northward direction, this will get a large amount of bicycle traffic.

[J_M_Tungsten]

That bike road is awesome!!! They'll just have to be careful of pedestrians standing on the edge of the curb during rush hour. Those people are dangerous.

[ardecila]

Yes. This will easily become the busiest bike route in Chicago, surpassing Milwaukee and Kinzie. Once it is successful, I can easily see it getting further upgrades, maybe even a physical barrier (planters/curb). It would be awesome if they created a bike storage facility at Daley Plaza, as well, where the eternal flame currently sits.

Taxi hails might be a problem, too. However, with such a prominent bike lane, the mayor might finally lean on CPD to do some enforcement.

[Rizzo]

I agree getting a cab might be a problem, but it was technically a problem for everyone. The cabs would block the old school bike lanes further north AND vehicular traffic in the left lane. So multiple motorists and bicyclists were held up by one person.

That's why I like taxi stands. But with this messed up parking ownership, the city can't create more valet or taxi zones unless they pay for it. Pedestrians occasionally walk in the cycle tracks, but they've 99% of the time stepped out of the way for approaching cyclists and those buffer zones look wide. That hash-out at the end also looks appropriately sized for standing armored trucks or UPS/FedEx vans.

[denizen467]

Originally Posted by Hayward

Pedestrians and bicyclists are allowed to use the service drives on lower wacker. Not allowed in the inner traffic lanes, but they may cross them at intersections

That's great; the more segregated lanes the better, and this makes bike connections across the Loop really fast. It would be cool if there could be a subterranean bikeway built under Monroe, since it seems provisioned for it, without having to wait for a more-complicated, full-fledged busway project. It could go as far east as possible, though the Grant Park Garage and IC trench might be an impenetrable barrier preventing linkage as far as Columbus.

The Dearborn striping is rather revolutionary for the Loop. Did people also notice -- Desplaines has been striped with a cycle track and a detached parking lane, too. The cycle track looks to be only one-way, though. Desplaines has always had lots of underutilized capacity, so maybe something protected and two-way will evolve here. Although Fifield's and other upcoming towers may change the complexion of Desplaines yet again.

[ardecila]

Originally Posted by Hayward

That hash-out at the end also looks appropriately sized for standing armored trucks or UPS/FedEx vans.

Supposedly there are marked loading zones, separate from the parking. I'm not sure if that refers to the hatched areas or something else.

Originally Posted by denizen467

It would be cool if there could be a subterranean bikeway built under Monroe, since it seems provisioned for it, without having to wait for a more-complicated, full-fledged busway project.

I agree that underground stuff is cool, but I really don't see a need for it here. The upcoming Central Loop BRT will include a one-way couplet of cycle tracks on Washington and Randolph (although the westbound bus lane will be on Madison).

Part of the need for building underground is because the surface is too congested, but instead we can choose to re-allocate surface space and intentionally reduce capacity for drivers. Carrot and stick. If we can deal with the political ramifications of reallocating roadspace (and so far Rahm has dealt with it easily) then many problems can be solved at low cost, and our need for building underground is only to speed up crosstown and regional trips, with projects like the Clinton subway or the Metra subway. Even this is reduced, though - projected crosstown travel times on the Western BRT are not much longer than on the Red Line.

[Marcu]

Looks like Metra is confirming that the Union Pacific North line will be getting a new stop at Peterson/Ravenswood. That's great news for the Edgewater residents in this area. Transit options are somewhat limited here and as a result, development is more autocentric than it needs to be (the White Castle comes to mind).

http://www.dnainfo.com/chicago/20121...north-railroad

[ardecila]

Whoo! One small step towards decent regional rail. I hope the city responds by upzoning this area. The TOD ordinance would apply here but it's only valid in certain zoning categories.

IIRC this station is being designed in conjunction with the new Auburn Park station at 79th on the Rock Island. The recycled design saves money. Hopefully the design isn't crappy... Metra has a mixed record with urban stations, to say the least.