Business Sense Drives Fare to $1

Guest Essay by Mark R. Aesch 

Full text as appeared in the Rochester Business Journal, April 25, 2008

  This week was one of the most exciting and rewarding weeks in the 39-year history of Regional Transit Service (RTS).  We were able to announce to our community that we have achieved the financial strength to actually cut fares for our customers.  The price to ride an RTS bus will fall to just $1.00 later this summer, a price last seen in 1991.

            At a time when the transportation industry across the nation is raising fares, or disguising cost increases in terms of fuel surcharges, we have worked with deliberate effort in recent years to strengthen our financial position in order to offer working families and commuters an affordable alternative to record high gas prices.

            The foundation for this unprecedented reduction in fares is the direct result of our private sector approach to providing a public service combined with fresh focus on our customers and how we can better meet their needs.

            Four years ago the Transportation Authority faced a $27.5 million deficit, a massive operating gap that had the new management team initially considering significant across-the-board fare increases, massive layoffs and wholesale reductions in our service to the community.

            Refusing to accept those options, RTS management made a commitment to sound strategic planning, focused performance measurement systems and dramatic improvements in productivity. That effort has paid off and today RTS has dispersed the thunderclouds that threatened the organization's very ability to provide much needed service to the 50,000 people that take advantage of it every day.

            First, we focused on improving route productivity.  Rarely do public organizations even talk about productivity, let alone measure it.  We did both. And then improved it.  Over the course of the past four years, we have driven up the number of people that RTS picks up in each mile by more than 40%.  Further, we increased the revenue that we receive in each mile that we drive by more than 70%, without raising fares.

            Second, we stopped picking up "passengers" and started picking up "customers."  We realized that, while "passengers" are people who merely passively ride the bus, "customers" are people that make an economic decision to buy our product.  As a result, we implemented substantial improvements in customer service.  We drove our on time performance from 77% to 85%. We installed Trip Planner software on our website.  We completely altered our 35-year-old six-zone fare system and replaced it with one price for every customer.  Then we built a nationally recognized Customer Satisfaction Index to measure our customers' satisfaction.  Today, our customers are 27% happier with our service than they were four years ago. 

            Third, we worked to close that massive $27.5 million operating deficit we inherited.  Through the efficiencies we found in improved route productivity, working to ensure that the relationships we had with our major business partners provided an appropriate return to our organization, and successfully fighting to achieve equity in the distribution of state aid, we turned that projected $27.5 million loss into a $19 million gain; a $46.5 million turnaround.

            Today, we have more people riding the bus, they are happier doing it, and we are far more efficient in the manner that we provide the community service.  Our effort to provide a public sector service with a private sector mindset has resulted in successes beyond expectations.

            Today, with gas prices consuming more and more of working family's household budgets, many are considering the new customer focused public transportation system that we've built in Rochester as an affordable alternative.

            Today, we find ourselves in the financial position to make that choice even more clear.  Cutting our fare to just $1.00 makes the juxtaposition with $3.60 a gallon gasoline makes public transportation the attractive alternative people are seeking.   This is our opportunity to grow the market share.

            While dozens of public transportation systems all across the nation like New York City, Seattle, Boston and Los Angeles are either considering fare increases or have already implemented them, proudly we are driving forward with the financial strength to reinvest those resources into our current and prospective customers.

            Fifty thousand people a day take advantage of public transportation in our community.  That is more than the number of people that use the Airport, Frontier Field, Paetec Park, Blue Cross Arena, the Auditorium Theatre, Geva Theatre, Greyhound/Trailways and Amtrak- combined!

            The plan we developed four years ago to operate our organization in a more business like fashion, where data and quality performance measurement systems drive the decision making process is working.  The dividend is being enjoyed today by current customers, prospective customers, and taxpayers alike.

RTS bus schedules change four times a year as routes are constantly being re-evaluated to better serve our customers. Schedules are updated January, April, end of June and September. For advisement of schedule changes, contact Customer Service at 288-1700.