Generating Revenue for the CTA (2 of 2)

Last week I outlined some rough ideas for generating more money for the CTA, this week I take those ideas more in depth.

Coinstar and the CTA Card

Coinstar is a great partner to grocery stores.  They have machines that take change and (for a small percentage) return paper bills.  It’s a device with low upkeep costs and a simple purpose that generates them income at all hours of the day.  It’s a logical partner for the CTA.

The CTA card creates a system where money is taken out of the general economy and turned into a resource that can only be redeemed at one place.  Any time the CTA can get someone to put money on a CTA card they have done a good thing.  If a customer puts money for fares on a card and doesn’t use the service they have already collected the payment, if through some enticement the customer puts money on a card uses the service when they might not have otherwise this is also good because taking on extra passengers doesn’t generally increase cost.  The CTA could modify the machines they already have or partner with Coinstar to make the machines for them.

Unlike a gas station or a car dealer there is no added cost for usage of the CTA’s service.  If people use the CTA more there is more profit.  Why not make it easier for riders to give the CTA their money?

Smart Phones and Bus Tracker

The CTA’s bus tracker is so useful and it’s one of the greatest things a smart phone does. But, I think this is just one of a couple ways the CTA can be using emerging technologies to improve its service and make more money.

One concern when riding the CTA is having correct change.  Especially now that the fair is 2.25 it is a particularly unlikely amount of money for a person to have.  There are a couple ways to get around this: a person can always have a well stocked CTA card or always have a pocket full of quarters.  Neither of these solutions appeals to me. I don’t want to take my money and put it in a position where it can only purchase one thing or get holes in my pants pockets from carrying around quarters.

What if you could with a credit card instantly purchase a bus fair over your phone? People already use their phones to make purchases online, why couldn’t those purchases be bus and train rides? If people are already on the CTA’s website checking on their bus it would only be logical for them to buy their tickets there.

I think Bus Tracker could also be made better, both in its utility to the customer and in its profitability for the CTA.  Anything that can improve Bus Tracker has the potential to make more people ride the CTA.  Bus Tracker could send a text message every time your bus passed your stop.  It would be easy enough to write an iphone app that would notify a person through text message every time a bus was passing (or even better when there was one in five minutes) so that if you were at a lunch you could wrap up early to get on the right bus or if it was cold outside you would not have to spend a minute extra waiting in the cold.  Unlike Bus Tracker where you would have to actively watch you could just relax and wait for your phone to ring.

Vending Machines

The Dunkin Donuts at the Davis street station does a brisk business.  While it is great that the franchises of that store pay rent to the CTA it would be better if all the money spent on coffee went directly to the Transit authority.  I am not suggesting that the CTA try to administer coffee shops or bake donuts, but I think that there is plenty of money to be made by taking advantage of vending machines.  It would be easy to sell coffee and snacks at CTA stations.  If they wanted to take the system one step further they could adopt something from the technology used at gaming places like Dave and Busters where by anyone who plays video games first puts money on a card. The CTA already has tens of thousands of cards in circulation why not create machines that could take those cards and provide coffee, snacks or newspapers.

Advertising

There is plenty of advertising in CTA buses and trains, but they could be monitized more effectively

The value of the advertising space the CTA already has was illustrated when a private company put up a number of bus shelters around the city for the sold the ad space on them.  There is enough money from potential advertisers that this company put up the money to build and maintain these shelters.  Meanwhile, I know from being at the Francisco stop last night that there are a number of shelters that the city has already built that don’t even facilitate advertising.

It’s difficult for any agency with ties to the government to be as dynamic and innovative as other companies in the private sector.  The post office has long had trouble competing with federal express and the CTA has survived for generations.  But that doesn’t mean it can’t be improved, and its too important that it keeps surviving for our generation to ignore it or take it for granted.

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Comments

2 Responses to “Generating Revenue for the CTA (2 of 2)”
  1. Chris Caton says:

    Good post, Casey. Have you checked out the CTA budget proposal for 2010?

    http://www.transitchicago.com/assets/1/finance_budget/2010budgetbook.pdf

    Although increasing revenue through secondary income strategies is great, the CTA will benefit best by slashing their labor costs, which currently make up some $870 billion of the $1,272 billion CTA budget (or about $1.54 out of every $2.25 ride). It’s a huge expense.

  2. No I haven’t seen the budget proposal but I can’t wait to read this!

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