Short Run Transit

Introduction

The environment is a deep concern of yours only you hate waiting for the bus, or find walking to the closest bus stop an inconvenience. You want to help the environment but there is no bus nearby that connects you to the existing public transit network. You live in a relatively low population density neighbourhood, but still you want to take the bus because you can't afford a car. So sign on to the short run transit website, register, you'll be provided a UPC code so that when you get on the bus, your id will be scanned and your account will be debited. The bus comes right to your door, or just at the corner of your street, and it comes every morning at exactly the same time, so you know when it will be there. The bus takes you to a nearby hub of public transit, and times the arrival at that hub with the departure of a train, if present, so little time is lost waiting. The bus at the end of the day takes you back from that hub and brings you right back to your door, or just around the corner.

Overview

With a fleet of mini-buses, a driver can go through an entire neighbourhood, picking up passengers right on their street or just at the corner, drive them to the nearby station, and then return to the neighbourhood to pick up more people and do the same. At the end of the day, at specific intervals, the same buses take you from that same station and bring you right back to your home.

Table of Contents

The Bus

Follow the link to the Hyundai County. This mini-bus comes in different configurations, seating between 15 and 29 people. The cost of one of these buses is around 40,000$CDN. The reason for picking this bus as opposed to one built in the US is because of the cleaner design, the higher fuel economy, and the lower cost. Research is still being done to determine how much it would cost to ship these buses to Canada.

Each bus will be outfitted with a bar-code scanner and a PDT of some sort that interfaces with the scanner. The PDT will connect to an LCD screen that provides information to the driver when necessary. For example, when a person gets on the bus in the morning, they will pass their barcode under the scanner, and that person's name will come up on the screen allowing the driver to wish that person a Goodmorning or Bonjour (in whatever language the customer registered with) as they enter the bus. At the end of the day when the customer gets on the bus and scans their barcode, the person's name comes up as well as a marker gets put on the map that is displayed on the screen. The driver may always take the same route, but may take any variation that is necessary since on some trips no one on street A is on the bus.

The Routes

Since people will be encouraged to sign up to this service on the website, different zones will be defined that have a high enough concentration of users. For example, a minimum number of people will be set to meet the quota of a bus trip, if that number is 10, then once 10 people in a specific neighbourhood sign up for the service, the service will begin in that neighbourhood. Based on where the people live in that neighbourhood, a route map will be constructed that the driver will follow. This route will make it such that the majority of people will be picked up right at their homes, while other people will just have to walk up the street a little to be picked up at the closest corner. With respect to the time that people are picked up, part of that decision will be based on what the customers indicate when they register, but also departing times of trains will also be included. For example, if people are being picked up in Ile Perrot and taken to the Dorval train station, the pickup time will take place in the houses of Ile Perrot in such a way that the bus will get to Dorval with enough time for people to get off the bus, and be on the next train that departs within minutes.

The Warehouse

When the buses are not running their circuit, they will be stored in a warehouse. The warehouse has a high speed garage door and a bus-wash station. At the end of each day the driver will drive the bus into the warehouse, drive through the bus-wash station which is fully automatic, and then park the bus inside the warehouse. By being indoors all of the buses will be protected from vandalism and from the environment. It will also make it so that when the bus leaves in the morning during the winter, the buses aren't frozen.

The warehouse will of course also have a full mechanic area so that a local mechanic can be called in for routine maintenance and be on call for any emergency repairs.

The Financial Picture

The purpose of this company is for trying to reduce an impact on the environment and to provide a quality and convenient service. With that in mind, huge profits will not be the purpose of the company, and anywhere that savings can be had, they will be implemented. Ideally, the number of employees in excess of the drivers will be at an absolute minimum. Some amount of initial employee investment will be needed to build systems and put them into place, but once those systems are in place, the maintenance and upkeep should be kept to a minimum, requiring only consultant time, not employee time. Some preliminary estimates are found below where very little research has been done to support the figures, but the estimates show what is possible.

Revenues

As with the existing public transport system, there will be one fee for regular users, and a different fee for students and seniors. For our purposes, the regular fare is two dollars, the discounted fare is one dollar. Since the method of payment will be mostly electronic, some amount of discount could be applied based on volume of travel, but that discount will at the beginning only be about five percent. For our purposes we'll say that that five percent is covered by a surplus charge that a customer is asked to pay if they pay cash rather than electronically. For a bus with 25 total passengers (30 seats available), if 15 of the passengers are regular fare and 10 of them are reduced, the total revenue for the bus is 40$. If this bus does six trips east in the morning and six trips west in the afternoon/evening, that makes twelve trips a day, providing 480$ a day in revenue. Five days a week brings the revenue to 2,400$ per week. With 4.33 weeks per month, this provides a total monthly revenue of 10,400$.

Expenses

If each trip took approximately half an hour, six trips would take three hours. Add an extra half an hour for contingencies and the morning shift is 3.5 hours, as is the afternoon shift making a day be a seven hour day. If our wage is eighteen dollars an hour, the driver cost is 126$ a day or 2,730$ per month. Operating costs include fourty cents per km for fuel and fifteen cents per km of maintenance. If each trip were about twenty km's, this adds to 3,432$ per month in operating costs. If the total cost of the bus is about 51,000$ to purchase it and ship it, amortized over ten years at 5.0% brings a monthly payment to be 540.93$. The warehouse rental costs at two thousand, insurance at 750$, total expenses per month add up to be 9,453$.

Fortunately for us the expenses work out to be less than the revenue, by 947$. Not enough to keep any extra staff, but this is only for one bus. If we had five buses, the profit would be 4,735$ per month. This would be enough to hire one full time administrator and to hire various contractual people when needed.

Marketing

This presents the greatest challenge to this business. How can we actually get people to stop using their cars and come on to this short run transit system in the numbers needed to start this business? Some amount of market research would need to be done prior to anything else. Different geographical areas could be targeted and then polled. Flyers could be placed on cars that are parked downtown or that are parked at existing public transport hubs. A case would need to be made to show that using public transit and our short-run transit system is less expensive than using the car. If there is enough positive feedback and interest in the idea based on the market research, a big ad campaign would then need to take place. Tie the advertising to traffic reports on radio stations, and if the budget allows, also to traffic reports on TV stations. Have all the media point to a clear and well explained website that allows people to sign up.

Once there is enough momentum, change the add campaign to focus on word of mouth. Spend less money on the radio and TV advertising, and put money into the pockets of the people using the business if they bring new people in. Allow a user to get a discount on their use for twelve months following the date that they sign someone up and that someone uses the system for twenty days.

Of course, ensure that each bus is marked very clearly with contact information so that as the bus passes through the neighbourhood, people living in that neighbourhood can see what is going on.

The Website

The website will first prompt for english or french language users. A study should be done to find the top three other languages in the region to also provide that language on the website. Once in your language there is a brief explanation on what the service is and how it works. On the menu on that first screen are options to register, option to log in to your account, option to see where the existing buses are currently going, and where the next scheduled routes are going to be.

When a customer is registering, they will be prompted for all of the information that relates to their commute. They will be asked where they live, where they work, what time they start work, what is the allowable range of time that they can be picked up from their home, what time they end work, what is the allowable range of time that they can be picked up from the public transit hub near their home at the end of the day, what their expeected frequency of use would be and so on. Once they have completed their registration, the customer will be provided an id number and an image of a barcode that contains that id number. Drivers will get to know their passenger's names because once they get scanned in on the bus, their name will pop up on the driver's screen. So even though the customer is being referred to as a number in the system, when they are using this company's services, they are treated as a person. The customer will be instructed to acquire some avery labels that allows them to print this barcode out on a sticker, and then stick that barcode onto any piece of ID that they already have. This barcode gets scanned on the bus and is what keeps track of how often the customer uses the service.

Other Notes

Some amount of value-added services may be added to this basic service. For example, coffee and croissants may be provided for an additional charge (again, paid for with the barcode). Perhaps some system for depositing dry cleaning in the bus in the morning and picking it up cleaned at night. If a fridge can be outfitted on the bus, some amount of basic groceries could be made available on the return trips at night such that if any customer needs to pick up milk or bread on their way home, they can buy it from the bus.

At any time that the bus is idle, during a break in the middle of the day, during an evening or night, over weekends, the bus will be available for rental for anyone to rent. Markup for this service will be somewhat higher since it is exclusive use.

Companies will be encouraged to find areas where their own employees live in reasonably close proximity, if there is enough interest, a bus can be hired to take people from their neighbourhood all the way to their business door.

Daycare? Offer a day care service where somewhere between the neighbourhood and the public transit hub the children can be dropped off.