Discount Transit Program

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					Discount Transit Program
A TDM Strategy for Encouraging Transit Ridership
            ACT Canada National TDM Summit
                 November 15-18, 2009
Outline
1. Background: TDM and Smart Commute
2. Volume Incentive Discounts vs. Employer-
   sponsored Discounts
3. Discount Transit Program Pilot
4. Partnership with City of Mississauga
5. Lessons Learned and Expected Results

               Jacquelyn Hayward Gulati   Glenn Gumulka
               TDM Coordinator            Executive Director
               City of Mississauga        Smart Commute Mississauga
     Background:
Transportation Demand
  Management (TDM)
 and Smart Commute
About Smart Commute
Mississauga
 Incorporated nonprofit organization
 Funded by:
       The City of Mississauga
       The Region of Peel
       Matching funding from Metrolinx
       Corporate memberships
TDM Supports for Transit
   Employer and Commuter Research Data
     Workplace site assessments and commuter surveys
   Commute Counselling
     Route planning
   Incentives and Supportive Measures
     Transit Pass Subsidies
     Emergency Ride Home
     Other incentives and special promotions
   Marketing and Outreach
Why Discount Transit Passes?
   Only 9% of employees in the city regularly use public
    transit as their primary commute mode
   Our surveys (over 5,000 employees) suggest:
     14% are definitely willing to try public transit
     19% are probably willing to try public transit
   Potential demand in Mississauga
     52,000 business to distribute passes
     425,000 employees
   What would encourage commuters to try transit?
     35% lower fares
     25% tickets for sale at my place of employment
     33% a ride home in case of an emergency
Volume Incentive Discounts
 vs. Employer-sponsored
        Discounts
Volume Incentive (bulk) Discounts
   Volume incentive purchase (VIP) or bulk
    discount:
     transit agency provides discounted passes to
      employers
     employer sells discounted transit passes back to
      employees
     employer commits to purchasing/selling a minimum
      number of passes per month in order to receive the
      discount
Employer-sponsored Discounts
   Employer subsidy:
     employer pays for all or part of employee transit pass
     usually administered through payroll deduction
     employer can choose to provide a subsidy in addition to
      or instead of a transit-agency-provided bulk discount
   Success factors:
     good transit service
     paid parking or parking shortage
     strong employer endorsement
Mississauga Discount
  Transit Program
        Pilot
Mississauga Discount Transit
Pilot Project
   City of Mississauga provides matching transit discounts
    to Smart Commute Member employers who discount
    monthly passes for their employees
      Maximum of 15% when an employer discounts by
       25%

   Smart Commute Mississauga exclusive selling agent
      Market the program to corporate members
      Collect an Agent fee to cover program management
       (1.5%)

   All participants automatically registered in Emergency
    Ride Home program
Discounting Schedule
 Employer Paid   City of Miss. Matching    Total Discount to
   Discount             Discount              Employee
 Less than 15%        No Matching         Employer Discount
     15%                  5%                     20%
     25%                 15%                     40%
 More than 25%           15%              Employer Discount +
                                                 15%
Operational Details
 SC-Miss has an agreement with the City of
  Mississauga
 Legal agreements with participating employers
  and SC-Miss
     Agree to participate for 12 consecutive months
     Employees agree to participate for 12 consecutive months
       – Cancellation results in 6 month participation ban
 Employers register with SC-Miss
 Individual participants register online using
  TransitZone.ca
 Employers administer payroll deductions and pass
  distribution
Transit Zone
 www.transitzone.ca
 web-based
  administration tool
  developed by
  Metrolinx
 interim site being
  tested through
  Mississauga pilot
  project
 Partnership with
City of Mississauga
City of Mississauga
Strategic Alignment
   “Move” Develop a Transit-Oriented City
     Visionary goal of doubling transit modal split in the
      next 40 years
     Develop Environmental Responsibility
       – Action 3: Implement a parking strategy that supports public
         transit

   “Connect” Completing Our Neighbourhoods
     Provide Mobility Choices
       – Action 15: Use incentives to encourage work commutes by
         public transit

   “Green” Live Green
     Promote a Green Culture
Focus on Ridership Growth
   Mississauga Transit Ridership Growth Strategy
     Target to increase ridership by 25% over five years
     Fare incentives including transit fare discounts are a key
      objective of the Ridership Growth Strategy


   Proven strategy for growing ridership
     TTC V.I.P. (10% - 12% discounts) 220,000 passes
      sold in 2005
     Winnipeg (EcoPass) – City provides 10% match on
      discounts of 30% or more
        – 45% increase in ridership among participating employers with a
          similar program
        – Net monthly transit revenue increase of 30%
GTHA Precedents
 In the GTHA, Municipalities have led the way,
  offering sponsored transit passes to their
  employees
 TTC Volume Incentive Purchase (VIP) program
 York Region RideSaver pilot project
 City of Brampton Employee Annual Pass
  Program
 Hamilton – HSR Employee Commuter Pass
Why Partner with SC – Miss?
   Discount transit for municipal employees would support:
     Efforts to continue to be an employer of choice
     Ongoing internal trip reduction program
     Support for commute options when paid parking is introduced

   Program is an opportunity to demonstrate leadership
    while providing incentives for other employers to
    discount passes
   Mississauga Transit can benefit from relationships with
    employers already established by SC - Miss
   Promote transit more successfully when paired with
    other TDM supports (i.e. ERH)
   Program supports area TMA, SC - Miss
Timeline and Process
   Proposal for program presented to Mississauga Transit
    by SC- Miss (initially presented June 2007)

   Mississauga City Council Approval of Pilot (October
    2008)

   Legal Agreement (April 2009)

   Pilot Operation (April 2009 – November 2010)

   Pilot Evaluation (April 2010 – November 2010)
Terms of 18 Month Pilot
   Evaluate after 12 months based on:
       Mode shift and fare switching (survey)
       Fare box counts by transit operators
       Pass sales
       Employer and employee satisfaction surveys

   Results to be assessed by SC-Miss and City of Mississauga
     City staff involvement from:
       – Mississauga Transit
       – Transportation Project Office
       – Transportation and Works, Business Services (Finance and
          Marketing)

   6 months to develop & implement evaluation recommendations

   Recommendations to be presented to City of Mississauga Council
    regarding feasibility of ongoing program
Marketing Campaign
 Developed with Mississauga Transit Marketing
  staff support
 Two waves
     3 weeks in June 2009
     3 weeks in September 2009
   Elements
       On-bus advertising (In-bus and Bus tail ads)
       Transit terminal poster
       In-transit brochures
       Banner stands
       Brochures (Employer and Employee)
       Outdoor signs
       Web ads
Financial Impact on
Mississauga Transit
   Projected Participation for Pilot
      Employers: 5-7
      Employees: 686 passes / month
        – Assumes 200 existing riders, 235 new riders, 255 ticket users
          convert to passes

   Projected Total Investment: $215,000
      Investment in Discount from Mississauga Transit: $185,000
         – 15% discount x 686 passes = $10,290 / month x 18 months =
           $185,220
      Marketing Costs: $30,000

   Projected Revenue: $508,000
      Based on 35% increase in ridership at participating employers
      Return on Investment: 236%

   Additional financial impact of City’s participation in pilot for
    municipal employees: $216,000
Results to Date
   Two employers participating
     City of Mississauga
     McCormick Rankin / Ecoplans

   Third employer just signed
   In negotiations with several other employers
Lessons Learned & Results
Lessons Learned
   Requiring employers to invest is a significant barrier for many
    employers
      “It’s the employees responsibility”
      May contradict fair and equitable policies

   Managing the program through payroll deductions is a barrier for
    many employers
      Difficult to get payroll to buy-in
      May not have the capability
      Employer subsidy is a taxable benefit

   Smart Commute membership as a condition of participation is a
    barrier for many employers especially smaller employers.
   Restricting access to employers from within the City of Mississauga
    limits participation
   12 month commitment for employers and employees is a barrier to
    participation
Expected Results
 Individual: significant commute savings,
  convenience
 Employer: increase access, employee retention,
  save on parking
 Smart Commute: engage employers, incite
  commuters, generate revenue from agent fees
 Transit: increase ridership and loyalty, generate
  revenue, support infrastructure and service
  improvements, marketing
        Thank You
        glenn@smartcommute.ca
             905-896-5941
jacquelyn.haywardgulati@mississauga.ca
         905-615-3200 ext.5384