Re: Driven By Customer 'Service' Parte Dos
Stupid question: Since the T operates in the red do they lose more money with every new rider?
At first?
No.
Later? Yes.
Heres why:
The system runs exactly the same every weekday. If there is a cholera outbreak and nobody rides, or if everyone randomly chooses to ride, service level is the same.
Same amount of staff, same amount of gas, same amount of electricity etc.
So each additional rider is $1.70 in pure "profit". Theres no additional cost to the MBTA.
So as ridership goes up, losses per person goes down.
What happens is eventually ridership reaches a certain point where additional service is needed. So as soon as an additional bus or train is dispatched, costs jump. So yes, that "last" person cost a whole lot of money.
Example:
MBTA system has...
Fare: $1
Cost per bus to operate: $80
100 riders. They fit on 3 buses (capacity 120)
So you make $100 revenue, you spend $240.
MBTA loses $140
20 people decide to start riding.
120 riders. They fit on 3 buses (capacity 120)
Now you make $120 in revenue, and still spend $240
MBTA loses $120
Now 5 more people decide to ride.
125 riders. Now you need 4 buses (capacity goes to 160)
$125 in revenue, but now you spend $320
MBTA loses $195.