Demand and Cost Models for Small Urban and Rural Transit

Small Urban & Rural Transit Center

Demand and Cost Models for Small Urban and Rural Transit: Do They Really Work?

SURTC Research SeminarSeptember 12, 20071:30 p.m. - 2:30 p.m.


Role of Demand ModelsNeed demand forecasts to:•Determine scale of operation (number

of vehicles, staff, facilities)•Determine spatial aspects of demand to

set routes, service areas•Develop revenue estimates•Determine of transit options are cost-

effective


Role of Operating Cost Models

Use operating cost models to:•Prepare budgets and obtain funding

•Evaluate service options•Analyze performance


Typical Approaches to Demand Forecasting

For existing systems – project past trendsFor new systems•Statistical models that consider

demand-related factors such total population, target group population, density, and quantity of service

•Comparative demand estimates based on trip rates from similar areas and services


Typical Approaches to Cost Modeling

Regression cost models with vehicle miles, hours, number of vehicles as independent variablesUse average expense/hour or expense/mile from similar systemsBudget based on inputs, e.g., driver hours, fuel, insurance, administrative salaries, rentFor existing services, use a unit cost model based on actual expenses or budget projections


Theme of This PresentationWhen it comes to planning for rural transit systems, experience and hands-on involvement beats modeling and statistical analysis.This is especially true when forecasting demand and estimating expenses.


What’s wrong with rural transit demand models?

Most, if not all, models calibrated using limited data setsData from rural transit systems unreliable due to problems of data collection and interpretationModels fail to capture significant and important intangibles such as system image, reliability, attitude of management, etc.Resulting projections are no more likely to provide planning guidance than much simpler methods


What’s wrong with cost models?Lack of uniform definition of line items, and operating statistics for rural systems (may change with new federal reporting requirements)Some costs “hidden” if system is part of larger agencyLegitimate differences in cost/service philosophy hard to capture


Need Versus DemandNeed – potential ridership without consideration of actual level of service, fare, quality of serviceDemand – actual ridership as determined by service characteristics and price.


Why try to estimate need?Gain political supportBuild community supportStall – avoid hard part – implementation


How to determine need?Mobility Gap – difference between number of trips taken by households with vehicles versus no vehiclesSurvey of residents/potential usersExpert knowledge of area (representatives of local human service agencies)


Transit DemandActual number of one-way passenger trips per yearDepends on:•Population of Service area•Quantity of service provided•Quality of service•Fare


TCRP Report 3: Workbook for Estimating Demand for Rural Passenger Transportation (1995)

Estimate actual ridership levels – two categories •Program-related trips•Non-program (general public) trips



Program-related demand•Number of participants for various

types of programs (mental health, job training, meals, nursing homes, etc.) times an annual trip rate

•Trip-rate factors based on survey of 39 agencies



Non-program-related demand•Estimates demand for three categories

of transit dependent including: elderly, disabled, low income

•Includes per capita trip rates modified by quantity of service as measured by vehicle miles of service per square mile of service area


Some ObservationsNeed cannot be objectively definedNeeds assessments will result in ridershipestimates 7-10 time higher than actual experienceActual demand for rural transit services will be greater than that which can be providedDemand forecasting models are subject to great error


Some ObservationsThe cost of making an error in demand estimates is usually small• Passenger revenue makes up a small part of

the total budget of a system (10-25%) therefore a large error in estimating revenue has a relatively small impact on overall finances

• If ridership is underestimated, additional resources can be acquired to respond to demand

•Therefore, don’t spend much time on demand forecasts


Focus on Supply – Supply Determines Actual Demand

If you assume that the demand for public transportation exceeds a transit system’s ability to provide rides, then the supply of transit that can be funded will determine the demand actually experienced by the system.


Example of Supply Determining Demand

Say you are trying to serve an area with 20,000 personsIf you can afford to operate 5 vans then you will probably provide about 15,000 hours of service a year and can transport 3 persons per hour so actual demand will be 45,000 one-way trips.If you can only afford 3 vehicles then demand will probably be around 27,000 one-way trips


Very basic transit planningService area population = 20,000Likely demand between 1 and 4 trips per capita or 20,000 – 80,000 one-way trips per yearVehicle hours required to meet demand assuming •4 one-way trips per hour 5,000 –

20,000•2 one-way trips per hour 10,000 –

40,000


Relationship of Trips/Capita and Vehicle Miles/Square Mile North Dakota Systems 2004

Lowest Quartile•Trips/Capita .12 - .41•Vehicle miles/sq. mi. 4.4 – 34.4

Highest Quartile•Trips/Capita 1.87 - 3.44•Vehicle miles/sq. mi. 7.4 – 174.6


Very basic transit planning (Continued)

Vehicles required --•2 one-way trips per hour 10,000 –

40,000 = 5 to 20 vehicles•4 one-way trips per hour 5,000 –

20,000 = 3 to 10 vehicles



Operating Expense assuming $30/hour•2 one-way trips per hour 10,000 –

40,000 hrs = $300,000 - $1,200,000•4 one-way trips per hour 5,000 –

20,000 hrs = $150,000 - $600,000



Funding requirementsTotal Expenses $150,000 - $1,200,000Passenger Rev. 20,000 200,000Deficit $130.000 $1,000,000


Keys to a Successful Rural Transit System

A mover and shaker to advocate for change/a new serviceA good technical plan•Service design• Fares• Scheduling

Strong management• Entrepreneurial• Risk taker•Good organization

Money


River Cities Public Transit Pierre, South Dakota


Which System is RCPT?

66.056.338,96634,002592,170215,242System C

66.283.856,60028,590437,444110,182System B

80.181.401,74823,502140,15932,920System A

Veh Mile/Sq MilesTrips/CapitaArea (sq mi)PopulationVehicle milesOne-Way Trips


River Cities Public Transit Service Area


RCPT Service Area Population (2000 Census)


RCPT Services – March 2006


RCPT Ridership and Vehicle Mile Trends

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

2000

2001

2002

2003

2004

2005

2006

2007

(Projecte

d)

Fiscal Year

One

-way

trip

s, V

ehic

le M

iles

Vehicle MilesOne-way passenger trips


Older Vehicles in RCPT Fleet


Sprinter


Scheduling/Dispatching Display


RCPT Service Sector Productivity

Table 3.6. Estimated Trip Rates for River Cities Public Transit Services (January 2006 Data)

Service Sector One-way Trips Per CapitaPrimary Service Area (Pierre/Ft. Pierre) 8.22Harrold/Highmore Work Shuttle 1.03Lower Brule Service 2.34Total System 6.10


Why the models wouldn’t work for RCPT

Unique service mix•24/7 taxi•Strong emphasis on school-aged ridersHigh levels of funding allow service expansions to low density/low ridership, high need areasIntentional decisions that result in higher expenses (better paid drivers, levels of service)Community involvement and image


A Key Demand Statistic: RidershipHabit = one-way trips/capita

Fare Structures in the Transit Industry, American Transit Association, (1933)•Problem defining service area and

service area population•361 rides/capita – San Francisco to 39

rides per capita in Gary Indiana•Duluth – 110 rides/capita, Madison

Wisc. 92

Documents

Demand and Cost Models for Small Urban and Rural Transit