An Improved Method to Predict Annual Transit Fare Revenues from Mid-Year Results

by Richard P. Guenthner, Marquette Univ, Milwaukee, WI, USA,
Samuel R. Seward, Marquette Univ, Milwaukee, WI, USA,



Document Type: Proceeding Paper

Part of: Managing Urban Transportation as a Business

Abstract:

Effective short-term financial management of transit systems requires the same three general actions necessary to manage all service oriented industries: 1)monitoring of short term (usually monthly) revenues in order to predict annual levels, 2)monitoring of short term costs, again to predict annual levels, 3)making fare adjustments, service level adjustments or unit cost reductions to maintain the desired revenue-cost balance. In the transit industry, early predictions of revenue levels are especially critical because fare revenue is only indirectly controllable by management and at least 90 days are typically required to make any significant service level changes. This paper describes the development of a method for predicting annual transit revenues early in the year so that necessary adjustments can be made. Also, applications of the model results are discussed.

Subject Headings: Revenues | Financial management | Fares | Benefit cost ratios | Systems management | Mathematical models | Management methods

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