Thursday, September 6, 2012

TransLink rolling out Fare Gates

Translink will be rolling out new Fare Gates which automate the process of validating tickets. This a great initiative. In the article, it denotes that having this system in place will generate $4 million dollars annually. Let's be honest though -- $4 million at SkyTrain's scale (500,000 daily users) is chump change -- There's more tha. At best case, let's say 50% of the people in daily usage are 3-zone and out of the 50% we have 10% that are not paying for 3-zone bus passes and end up paying twice a day at $5 a ticket (2 ways).

250,000 * 0.9 * $7.55 ($151/20 work days assumption) = $1,698,750
250,000 * 0.1 * $10 = $250,000
Total = ~$2million revenue per day based on 3-zone daily users (best case scenario). These super rough numbers don't even count 1-zone and 2-zone. Based from experience on using the SkyTrain every work day even sometimes on weekends for the last 7 years -- There's no shortage of people coming from Surrey. I actually think most customers are from Surrey based on how packed it is during rush hour (7am to 9am and 4pm to 7pm).

Taking this even farther, I don't believe the goal for Fare Gates is to make the customer's transportation experience better -- it isn't to make their lives more easier, safer, or more comfortable. It is to ensure they can implement more automation and reduce the man-power (guards) required to keep the operation going. This is just what needs to happen to run at their scale. So the question I have is will reducing the number of guards at each station make customers feel more safe? I doubt that.

Let's think for a second and say TransLink lays off 1,000 guards. Let's also assume that each guard is about $100,000 per year (base salary, vacation, health insurance, sick days, etc). That's $100,000,000 in savings with a $20,000,000 investment in automation (FareGates). Furthermore, I'd like to describe my perspective as a daily user.

The fundamental problems (as a daily user of SkyTrain) are scale and safety. People think of TransLink as a fantastic way of getting between Surrey and Downtown Vancouver. It is; however, it comes with its own set of problems. Those problems include drug addicts / violent drunks causing problems on the train, civil disputes randomly starting, and gradual rising costs of monthly transportation passes.

I fully understand that when running a business, the most expensive resource in staying alive is the people. People are expensive. Moving forward, automation is the key to saving operational costs -- but I think that TransLink will need to be more vigilant than ever to ensure the safety of their customers and the scalability of the system as a whole. There are far too many people using SkyTrain during rush hour and customers need a way to feel safe and comfortable without costing an arm and a leg on monthly transportation passes.
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