Generating Revenue for the CTA

Chicago needs the CTA. A big part of what is good about this city has to do with how much of the city is always within reach. Besides the grid and size of the streets there is nothing that has as much to do with that as the public transportation. The city’s economy depends heavily on how get around it and there is also the issue of air pollution and carbon output.

As I griped about here (link) the increase in fares out paces rises in transportation costs and inflation. While fares seem to be stable for the moment and rumors about the jump to three-dollar were overheated, I think that fare hikes are inevitable. The problem is if the CTA gets too expensive it will lose its utility as public transport. Hikes need to be avoided however possible. There are two ways for a company to slow down its thirst for cash flow it can address costs or revenue.  Because it is hard for me to speculate about the CTA’s costs I would like to focus on ways for the CTA generate new revenue without raising fares.

The CTA gets money from several sources the two principle ones are fares and government funding.  But, those are not the only sources of income the CTA also gets secondary income from advertisers retail tenants.  Any money coming from secondary sources is keeping the fares down or keeping money in tax payers pockets (if it can get through the bureaucracy in tact).

Examples of sources of ad revenue can be found in the advertisements on every bus and train most of them have ads both inside and outside of the vehicles.  In the stations themselves there are ads on walls.  Some stations such as the Davis stop on the Purple Line even have television screens showing ads.  There are also train stops that have businesses operating inside of train stations like the Dunkin Donuts in the Davis station.

Starting with the premise that any way of supporting the trains without increasing the tax or raising the fares is a good thing, I tried to think of ways the train system could improve and expand its secondary revenue generators. Tomorrow I am going to look at a few ways to do this by taking more coins, working more closely with smart phones, vending machines, and improving advertising.

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4 Responses to “Generating Revenue for the CTA”
  1. CharlesHo says:

    From what I can tell, the bureaucracy is the problem. Mathematically speaking, anytime more people are using a shared resource, the cost to use that should go down, not up. In Chicago that seems to be an inverse corollary where a shared resource costs each individual notably more per person to use. I think publishing online the books on exactly where all our tax money goes would reveal a great deal of this and resolve the problem. The current crop of politicians has so far sold off so many public services (parking meters, etc) that I’m just amazed people keep voting these crooks into office.

    • Casey says:

      Charles I couldn’t agree with you more on this one. The city is horribly mismanaged. Keep me updated on whatever you write about local government.

      That said, I think there are a lot exciting things the CTA could do to help itself so it wasn’t so dependent on the city bureaucracy.

  2. Tim says:

    Great post Casey. I have a car but I won’t drive downtown unless I have to. Its also worth noting…I live near a Metra stop in the city…if I get a Metra ten ride card, it comes out cheaper for me to get downtown via Metra, which will get me downtown faster and in a more relaxing manner. You are right, Chicago needs the CTA, but we need it to be lean, smart, and creative about ways to generate revenue. Also, do you have any idea how much revenue the CTA gets when it wraps the train in ads (the Target train comes to mind)?

  3. Casey says:

    I don’t know how much they make on those but I hope it is a lot. Unlike a billboard you can’t ignore a bus if it’s in front of you.

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