Transit operators to seek emergency bailout as ridership revenue plunges

via The Globe and Mail

Canadian transit agencies are putting together a request for an emergency government bailout in the wake of massive ridership declines brought on by the COVID-19 outbreak.

Several of the most heavily used transit providers in the country are seeing passenger volumes that are much lower than normal as people stay home from work and other destinations that have shut down. With many agencies heavily dependent on the fare box to fund operations, there are concerns declines will mean unsustainable drops in revenue.

“For many transit agencies, there could be definite problems with having cash crunches as they’re meeting their payroll and their benefits and all their overhead, and maintaining their vehicles,” said Marco D’Angelo, president of the Canadian Urban Transit Association (CUTA).

He said CUTA expects to have a formal assistance request to government by next week and is working with its 118 member agencies to determine how big it needs to be.

“You know, we’re on Day 4 of a major ridership decline,” Mr. D’Angelo said Thursday. “We want to be accurate when we make our ask … but we know it’s going to be a significant need for funding for our systems.”

The Toronto Transit Commission is the busiest agency in the country and carries about 10 million riders over a normal week, bringing in about $25-million in revenue. The TTC agency says ridership is down in recent weeks but that it does not yet have reliable figures it can release.

report released Thursday, based on location data shared anonymously by users of the trip-planning app Moovit, pegged Toronto’s transit ridership decline over the last 10 days at 28 per cent, and accelerating. While the company would not reveal how many users it had in Toronto – making it unclear how representative its sample might be – a decline of that scale would cost the TTC about $7-million a week.

“We do not have the ability to absorb major losses in either revenue or unplanned overtime,” TTC spokesman Stuart Green said. “We budget for overtime, we budget for around $1.3-billion in [annual fare-box] revenue. If there’s a significant hit to either of those … we don’t have the ability to absorb that without support from one of our government partners.”

Other Canadian agencies are also reporting major ridership losses.

The STM, in Montreal, says it has seen daily ridership drop 70 per cent, from one million to 300,000. A spokesman for TransLink, which serves the Vancouver area, said the agency had seen major declines in recent days. On Tuesday, the most recent day for which he could provide numbers, boardings were down 52 per cent to 684,000, from about 1.43 million on the same day last year.

TransLink has asked passengers to board only through the rear doors on buses, beginning Friday, to minimize contact with the driver. The agency also said it would suspend fare collection on its bus network, which will further depress revenues.

Ridership at GO Transit, the regional commuter agency for the Toronto area which usually carries close to 300,000 daily, was down 80 per cent Wednesday morning. Anne Marie Aikins, a spokeswoman for Metrolinx, which oversees GO Transit, said that in a normal week the agency takes in more than $11-million from fares.

“[Revenue loss] isn’t the concern that I think people are thinking about right now,” she said. “But it is something that we will … have to manage, with our government partners.”

CUTA says it is hearing from many of its member agencies that ridership is down by two-thirds to three-quarters, undermining budgets.

The biggest part of transit operating budgets is labour costs, meaning service cuts to meet reduced ridership doesn’t translate into major savings as agencies continue to pay employees who are idle. While some agencies have cut routes or frequency, others, including the TTC, are trying to provide full service to allow as much mobility as possible during this pandemic.

Mr. D’Angelo said he had not heard concerns in Canada that reduced cash flow could force a halt to operations at any transit agencies, as is feared in parts of the United States.

Ridership has plummeted at major U.S. transit agencies and the American Public Transportation Association is anticipating 75-per-cent drop in fare-box revenue over the remaining six months of their fiscal year.

In a bulletin Tuesday to its members, urging them to lobby Congress, the association warned that transit providers would need almost US$13-billion to offset direct costs and lost revenues related to the outbreak.