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.

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.

Icon Worship

Ok, enough hating on the CTA. This post is actually in honor of the closing of a cool local business. Erik Kittlaus will print you a t-shirt with whatever L stop you want on it, but only if you order before Sunday.
I love these shirts because so many L stops and bus lines have such an emotional cache that comes with them. Every dot on the redline is a favorite bar, an old job or an ex-girlfriend’s house.
So what’s your most important stop on the CTA? What bus or train stop has the best story or holds the most memories for you?

CTA Blue Line Train Sign

I can’t see the blue line without thinking about leaving town.
Today’s Podcast is in the previous post. Next podcast tomorrow, 8:00ish.

Public Transit and the Inevitable Fair Hike

How much should public transportation cost?  How long will it cost $2.25?  After looking at what the CTA has said about why rates go up North and Clark draws its own conclusions.