METRO doing better than most transit agencies nationwide

Agency is expanding service

Steve Hawley, Aug 27, 09.

While many US transit agencies are struggling with higher costs, lower revenue, and sweeping service cuts, the Metropolitan Transit Authority of Harris County (METRO) has kept its costs down and is even expanding its routes, beginning implementation of the Quickline Signature bus service.

Transportation for America recently released a report documenting budget deficits and service cuts affecting transit agencies in major cities such as Atlanta, Boston, Chicago, New York City, and Phoenix. These agencies have faced soaring fuel costs and dwindling sales tax revenues in the last few years, forcing many to cut service and significantly raise their fares and often impacting low-income communities.

METRO has faced the same challenges, but President & CEO Frank Wilson attributes the agency’s relative success to a change in philosophy over the last five years. METRO’s operating ratio - its return on every dollar of investment - has risen from 13 percent to 21 percent in that time, Wilson says, largely as a result of eliminating unproductive bus routes in 2004 and overhauling the fare system in 2008. METRO raised its fares from $1.00 to $1.25 and got rid of steep discounts available to more affluent riders who could afford to pay for an annual pass with one lump sum.

Instead of cutting service, METRO is expanding service, adding its first Quickline Signature bus service in June and a Swiftline bus service earlier this week, a precursor to Quickline service. Both routes operate during rush hour and are designed to significantly cut down travel time by reducing the number of stops. METRO plans to add several more Quickline routes over the next few years, in addition to completing a 30-mile extension of the light rail system.

Wilson explained METRO’s philosophy in a recent interview with Houston Tomorrow:

Our pension costs are going up, our fuel costs went through the roof, our medical costs go up like everybody else’s. We’re eating those cost increases through efficiencies, by spending less money. ... We lost some riders [with the service cuts in 2004], but we held our costs flat, and now all those savings have built up, now we’re starting to add service back that people are actually using.
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We’re not after the last rider at any cost, we’re looking at making sure METRO is fiscally sound and providing good, sound, stable, reliable services over the long haul, and sometimes you have to do tough things in business, and we’ve done them. And our numbers and our charts and our records show that we’re getting good results from it. Thirteen to 21 [percent operating ratio] - that’s not an easy number to move, by the way. We’re still battling, and it really is an uphill battle.

Despite - and in part because of - its recent progress, METRO has also been coping with lower ridership recently. Wilson said that three recent trends have reduced transit demand throughout its service area: lower fuel prices, the 2008 fare increase, and higher unemployment. As fuel prices dropped, more people returned to their cars instead of taking transit, and while Wilson said the fare increase - the first in 14 years - was necessary, it also drove away some riders. Finally, rising unemployment means that fewer people need to commute. Overall, Wilson said that the agency lost 12 percent of its riders, significantly better than the 20 percent loss the agency anticipated.

METRO still has a lot of work to do, according to Wilson. A good bus system, he said, has an operating ratio of 30 percent, while a combined bus and rail system is expected to have an operating ratio of 50 percent. Wilson expects METRO’s operating ratio to exceed 30 percent and possibly 40 percent after the new light rail lines open in 2012 and 2013, but he is unsure if the agency can ever reach 50 percent due to its massive service area, which covers 1,200 square miles.

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