Operating Costs and Performance Measures

Operating Expenses

Concepts

Operating expenses are those expenses incurred by transit agencies that are associated with operating mass transportation services (vehicle operations, maintenance and administration). Reconciling items are expenses that vary as transit agencies have different accounting practices due to local ordinances on accounting treatments. Regarding performance measures, the NTST excludes reconciling items such as depreciation, interest expenses, leases and rentals.

Comments

Figure 17: Total Operating Expenses 1998 - 2007

Operating expenses increased nearly 42 percent over the last 10 years. The modes showing the highest increases were light rail, demand response and vanpool. These increases reflect the addition of new systems during the same period.

Figure18: Total Operating Expense by Mode — 2007

Operating Expense by Function and Object Class

Concepts

Operating expense data is reported by mode, function and object class. Function refers to the activity performed or cost center of a transit agency. Object class refers to groupings of expenses on the basis of goods or services purchased.

The four functions are:

1.     Vehicle operations

2.     Vehicle maintenance

3.     Non-vehicle maintenance

4.     General administration.

Comments

The transit industry is labor intensive. Salaries and wages and fringe benefits account for nearly 78 percent of the total directly operated expenditures. Fifty-three percent of total expenditures are devoted to vehicle operations.

Cost Effectiveness (Operating Expense per Unlinked Passenger Trip)

Concepts

Cost effectiveness is the relationship between service inputs and service consumption.

Service input is the quantity of resources expended to produce transit service, expressed in either monetary or non-monetary terms. Examples include operating cost (dollars expended for operations, maintenance and administration), employee hours (total operating, maintenance or administration), capital investment and energy (fuel cost or volume).

Service consumption is the amount of service used by the public expressed in either monetary or non-monetary terms. Examples include unlinked passenger trips, passenger miles and operating revenue.

Comments

Overall, operating expense per unlinked passenger trip increased 20 percent over the last 10 years. With the exception of heavy rail, all modes had increases greater than inflation.

Figure21: Operating Expense per Unlinked Passenger Trip 1998 – 2007

(*) Adjusted for all years prior to 2007 to correct a bias reported by a large heavy rail operator.

Figure 22: Operating Expense per Unlinked Passenger Trip for Bus and Rail Modes 1998 - 2007

Cost Efficiency (Operating Expense per Vehicle Revenue Hour)

Concepts

Cost efficiency is the relationship between service inputs and service outputs.

Service output is the quantity of service produced by a transit operator, expressed in non-monetary terms. Examples include vehicle hours (total and revenue), vehicle miles (total and revenue), capacity miles (total vehicle capacity times revenue mileage), service reliability (miles between system failures) and safety (number of accidents).

Comments

Overall, operating expense per vehicle revenue hour increased by approximately 10 percent over the last 10 years.

Figure23: Total Operating Expense per Vehicle Revenue Hour 1998 – 2007

Service Effectiveness

Concepts

Service effectiveness is the relationship between service outputs and service consumption.

Comments

Unlinked passenger trips per vehicle revenue hour decreased by 8 percent from 1998 to 2007. This was due in part to increased service supplied for bus mode in low density urbanized areas and increased demand for low capacity modes such as demand response and vanpool.

Figure24: Unlinked Passenger Trip per Vehicle Revenue Hour 1998 – 2007

(*) Adjusted for all years prior to 2007 to correct a bias reported by a large heavy rail operator.

Figure25: Unlinked Passenger Trips per Vehicle Revenue Hour by Mode 1998 - 2007

Load Factor

Concepts

Average load factor is the ratio of passenger miles traveled per vehicle revenue mile.

Comments

• Commuter Rail average load factor increased by 3 percent in the last 10 years, but in the last 3 the increase was approximately 10 percent. No other mode had such increase in the last 3 years, indicating a higher demand for commuter trips.
• Light Rail average load factor decreased 11 percent in the last 10 years and 6 percent in the last 3.
• Heavy Rail average load factor increased by 6 percent in the last 10 years and 4.1 percent in the last 3. The data was adjusted to correct a bias reported by a large operator.
• Bus average load factor decreased approximately 2.5 percent in the last 10 years and increased 3 percent in the last 3. Bus combines systems that operate in areas with small population density and systems that operate in large urbanized areas, with high demand for service. It should be noted that in the last 10 years, 70 new systems were added to the NTD. Most of these systems operate in small population density areas and contributed to decrease load factor. On the other hand, large systems contributed to increase load factor. In the last 3 years, the increase in large areas outpaced the negative contribution of small areas which resulted in a net increase of 3 percent.

Figure26: Load Factor by Mode 1998 - 2007

Service Utilization

Concepts

Average service utilization is defined in the NTST as the ratio vehicle revenue miles per directional route miles.

Average service utilization is inversely proportional to average headway, i.e. the higher the average service utilization, the smaller the average headway and vice-versa.

The geographical expansion of transit service may contribute to reductions in average service utilization if the average headway of expanded areas is greater than the average headway before the expansion.

Comments

• Commuter Rail average service utilization increased 15 percent in the last 10 years and 7 percent in the last 3. 5 new systems were added in the last 10 years and one in the last 3. These facts indicate an expansion in commuter rail markets combined with an increase in service frequency to meet a higher demand for service.
• Light Rail average service utilization decreased slightly in the last 10 years (2 percent), and increased 7 percent in the last 3. 6 new systems were added in the last 10 years, and 2 in the last 3 years. As for commuter rail, new markets were added, and in the last 3 years there was a significant increase in service frequency.
• Heavy Rail average service utilization increased 9 percent in the last 10 years and 1.5 percent in the last 3. Only one system was added in the last 10 years, and no new systems were added in the last 3.
• Bus average service utilization decreased nearly 3 percent in the last 10 years and remained unchanged in the last 3. 70 new systems were added in the last 10 years and 21 in the last 3. It should be noted that while new rail systems were indeed new, most bus systems added in the last 10 years have always been in operation, but not reported to the NTD for not meeting reporting requirements. The 2000 Census changed the boundaries of many urbanized areas by including areas that before the Census were rural (less than 50,000 population). It also created new urbanized areas. All transit providers in these new and expanded areas had to start reporting to the NTD.

Figure27: Motor Bus Service Utilization 1998 – 2007

Figure28: Commuter Rail Service Utilization 1998 – 2007

Figure29: Heavy Rail Service Utilization 1998 – 2007

Figure30: Light Rail Service Utilization 1998 - 2007