The Costs of Transit Fare Prepayment Programs: A Parametric Cost Analysis
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1982-02-15
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Edition:Technical Report
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Abstract:Despite the renewed interest in transit fare prepayment plans over the past 10 years, few transit managers have a clear idea of how much it costs to operate and maintain a fare prepayment program. This report provides transit managers with the specific tools and resources needed to estimate' the operating costs of existing programs and to forecast the expenses that will be incurred in programs that are being planned. The tools presented in this report are in the form of parametric equations using standardized costs. A review of the general findings in this report is also presented in a separate executive summary document. Following a presentation of the approach to cost modeling used in this study, the authors describe in detail the costs of the 12 principal program functions. Parametric cost equations are developed and planning information is provided for each program function. Major cost comparisons and guidelines are presented in the last two chapters of this report. This report shows that large fare prepayment programs incur a higher unit cost than small programs primarily because large transit companies spend significantly more money on advertising and on sales commissions to public outlets. The operating costs per prepaid plan sold range from $0.lU in small fare prepayment programs to $1.02 in very large programs. The average unit cost for all 11 fare prepayment programs analyzed in this study is $0.63. On a per trip basis, fare prepayment operating costs vary from one to five cents. The average cost per prepaid trip for all 11 programs is 2.2 cents.
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