Analysis of MBTA highest subsidy / lowest ridership services
WORKING DRAFT
November 18, 2015
CONFIDENTIAL AND PROPRIETARY

▪
The goal of this analysis is to show the true economics – costs, revenue, and number of rides – of each mode of transit
▪
The following charts show all MBTA operating expenses 1 (excluding debt service) and revenues (both fare and own-source) allocated across modes of transit
▪
Operating expenses (excluding debt service) of $1.5B are allocated using internal
MBTA methodologies for Federal reporting
Costs for operational departments that support multiple modes are allocated based on an appropriate metric (e.g., Maintenance of Way costs allocate based on miles of track)
Headquarters and corporate costs allocated in proportion to each mode’s direct operating costs
▪
Fare revenues are allocated based on the latest CTPS 2 figures. Total fare revenue corresponds to the MBTA’s published financial statements
▪
Own-source revenues (advertising, parking, real estate, etc.) are allocated based on the mode in which they are generated, where possible, and in proportion to fare revenues elsewhere
1 Operating expenses only. Analysis does not include capital expense
2 Central Transportation Planning Staff, staff to the Boston Metropolitan Planning Organization
DRAFT Confidential – Proprietary and Predecisional | 1

FY15 revenue $243M
Non-fare revenue 1
$212M
$114M
Fare revenue 2
$87M
$11M $6M
FY15 operating expense (excluding debt service) 3
($349M)
($184M)
($437M)
($405M)
($102M)
($13M)
($323M)
($193M)
($107M) ($97M) ($95M)
FY15 operating deficit
Heavy rail 4 Light rail 4
Subway
($2M)
Ferries Bus 5 Commuter rail
RIDE
Percent of operating expenses covered by revenue 6
Farebox recovery
69%
62%
47%
42%
84%
68%
26%
24%
52%
47%
6%
6%
1 $69M of advertising, real estate, parking, and other income allocated across transit modes
2 Fare revenue allocated across modes according to CTPS figures as of 10/05/2015
3 Total operating expense is $18M less than the MBTA financial statements due to federal reporting requirements
4 Heavy Rail is the Orange, Red, and Blue Lines. Light Rail is the Green Line and Mattapan Trolley
5 Along with main bus operations, includes trolley buses, Silver Line, and outsourced suburban bus service
6 Includes fare and own-source revenue, and so is different from farebox recovery (which is calculated based only on fare revenue and operating expense)
DRAFT Confidential – Proprietary and Predecisional | 2

FY15 rides by mode
# of unlinked passenger trips
Blue Line: 21.5M
Orange Line: 65.0M
Red Line: 88.1M
174.6M
Heavy rail 1
70.1M
Light rail 1
112.9M
Bus
33.5M
1.4M
Commuter rail Ferries
2.1M
RIDE
Subway 1
1 Heavy rail is Orange Line, Red Line, and Blue line. Light Rail is Green Line (dominant share) and Mattapan Trolley
DRAFT Confidential – Proprietary and Predecisional | 3

FY15 operating deficit (subsidy) per passenger trip 1
$ per unlinked passenger trip
$5.75
$45.53
$2.86
$2.07
$1.39
$1.57
$0.61
MBTA avg.
Heavy rail 2 Light rail 2
Subway
Unlinked passenger trips in FY15
395M 175M 70M
Ferries
1M
Bus
113M
Commuter rail
34M
RIDE
2M
1 Fully-allocated operating expenses less fare and non-fare revenue, divided by annual ridership measured in number of unlinked trips
2 Heavy Rail is the Orange, Red, and Blue Lines. Light Rail is the Green Line and Mattapan Trolley
DRAFT Confidential – Proprietary and Predecisional | 4

MTA (New York City), 2010 WMATA (Washington, D.C.), 2011
$900M
The MTA was able to close 7.5% of its budget gap through service adjustments
$68M
WMATA was able to close 17% of its budget gap through service adjustments
$190M $32M
Budget deficit Service Adjustment Savings
▪
In 2010, the MTA’s budget gap was $900 million , and as part of the effort to close the gap, made service adjustments to save $68 million
▪
The MTA discontinued two subway and 32 bus routes, restructured four subway routes, and stopped weekend service on 14 bus routes
▪
This caused a 1% decline in bus ridership in
New York, as well as making bus and subway service less convenient for 15% of riders
Budget deficit Service Adjustment Savings
▪
In 2011, WMATA faced a budget deficit of
$190 million
▪
$32 million a year in savings was created through service adjustments, including:
– Seasonal and holiday service adjustments
– Widening headways from 6 to 8 minutes in the period between 6 am and 6:30 am
– Closing 10 entrances early on weekends and 5 entrances at 8 pm on weekdays
– Closing 3 stations altogether on weekends
Source: New York City Transit: Evaluation of 2010 Service Reductions, press releases
DRAFT Confidential – Proprietary and Predecisional | 5

Immediate Focus Opportunities
Less than 1% of Total MBTA Rides
▪
Weekend Commuter Rail: FY15 net marginal cost 2 $18M (estimated)
– Weekday commuter rail subsidy is $4.52; weekend subsidy is $23.52
– Potential options: eliminate (may require legislative approval) 1 ; replace with lower cost delivery option like buses; price at cost (based on the innovative Patriots Train / Cape Flyer / Express Bus pricing models)
▪
Late Night Subway / Bus: FY15 net marginal cost 2 $14M
– Regular service subsidy is $1.43; late night subway and bus subsidy is $13.38
– Potential options: eliminate; replace with lower cost options like ride-sharing (Uber/Bridj/Lyft) or other private transit operators; price at cost
Initial Focus Areas for Service Planning Process
1.2% of Total MBTA Rides
▪
28 High cost / low ridership (highest subsidy) Bus Routes: FY15 net marginal cost 2 $19M
– Regular bus subsidy is $2.86; high cost / low ridership (highest subsidy) 28 routes subsidy is $5.45
– Potential options: TBD – These are the initial priority routes for analysis in Service Planning
1 Any actual savings to the MBTA from commuter rail service adjustments would require reducing scope of Keolis contract
2 Incremental cost of providing this service net of fare revenues only
DRAFT Confidential – Proprietary and Predecisional | 6

WEEKEND COMMUTER RAIL
Average commuter rail daily ridership (FY15)
Ridership Number of trains
FY15 commuter rail total operating deficit per trip
600
500
400
300
200
100
0
Number of trains daily
122K
501
224
23K
Total daily passenger trips
206
17K
140 K
120 K
100 K
80 K
60 K
40 K
20 K
0 K
Total net cost of weekend operations is
$51M, estimated net marginal cost is
$18M
$4.52
Average
Weekday
Saturday Sunday Weekday
1/6 as many people travel on an average weekend day, and trains are half as full on weekends as on weekdays
1, 2
$23.52
Weekend
1 Operating deficit includes allocated own-source revenues (parking, advertising, etc.) and allocated overhead costs (e.g., HR, IT, Finance)
2 Average cost, including an allocation of fixed costs which may not vary if service is reduced
DRAFT Confidential – Proprietary and Predecisional | 7

LATE-NIGHT BUS AND SUBWAY
1M $13.38
Average bus and subway trips per day
0.4% of all bus and subway trips occur during late night service
13K
Regular service
Late night service
$1.43
Regular service
Late-night service
Net total cost of providing latenight service is
$19M, net marginal cost is
$14M
Bus and subway operating deficit per trip 1
1 Operating deficit includes allocated own-source revenues (parking, advertising, etc.) and allocated overhead costs (e.g., HR, IT, Finance. It is calculated on an average cost basis
Source: MBTA operations planning department, MBTA financials, FY15
DRAFT Confidential – Proprietary and Predecisional | 8

HIGH-DEFICIT BUS ROUTES
Comparison of high-deficit routes 1 and MBTA system average
1.6 M
20 Lowest subsidy routes
MBTA bus network average
28 highest subsidy routes
Net total cost of providing high subsidy routes is $26M, net marginal cost 2 is
$19M
$5.45
$2.86
0.8 M
$1.12
0.2 M
Annual average ridership Average operating deficit per trip
1 28 routes shown on previous page
2 Marginal cost of providing this share of bus service, net of any fare revenue collected on those routes
DRAFT Confidential – Proprietary and Predecisional | 9

HIGH-DEFICIT BUS ROUTES
1, 2
MBTA bus network average
High-deficit routes
71.8%
52.5%
29.0%
16.7%
Percentage of passenger boardings in minority areas
Percentage of passenger boardings in low-income areas
1 These measures track the number of people getting on the bus in minority or low-income areas, rather than directly tracking the number of minority and low-income riders. A minority census tract is one in which non-white residents make up more than
26.19% of the population. A low-income census tract is one in which the median income is less than $41,636
2 A full equity impact and service analysis will need to be done before any bus routes are changed
DRAFT Confidential – Proprietary and Predecisional | 10

HIGH-DEFICIT BUS ROUTES
Route number
52
459
18
424
449
448
436
351
78
431
211
434
465
439
5
553
191
451
170
428
43
504
201
100
202
55
92
210
Totals
Operating deficit per trip ($ lost/trip)
$44.93
$4.90
$4.69
$4.60
$4.60
$4.36
$4.21
$4.15
$4.03
$3.43
$8.14
$7.61
$7.13
$6.94
$6.91
$6.42
$6.17
$5.78
$5.69
$5.10
$5.03
$15.10
$11.27
$9.98
$9.71
$9.66
$8.49
$8.30
$5.45 average deficit per trip
Total ridership # (CY14)
2 K
39 K
24 K
35 K
14 K
110 K
22 K
34 K
251 K
56 K
51 K
244 K
53 K
184 K
286 K
143 K
61 K
405 K
19 K
230 K
185 K
274 K
338 K
228 K
476 K
413 K
230 K
287 K
4.7 M (~4%% of total ridership)
Total annual operating deficit
(CY14)
$106 K
$581 K
$268 K
$347 K
$138 K
$1,067 K
$187 K
$280 K
$2,039 K
$426 K
$367 K
$367 K
$1,183 K
$1,764 K
$828 K
$347 K
$2,068 K
$94 K
$1,694 K
$1,130 K
$869 K
$1,262 K
$1,553 K
$994 K
$2,007 K
$1,713 K
$926 K
$984 K
Route type
Early morning fare collectors
Lynn/North Shore
Special low service route
Lynn/North Shore
Lynn/North Shore
Lynn/North Shore
Lynn/North Shore
Normal
Newton
Lynn/North Shore
Lynn/North Shore
Lynn/North Shore
Burlington
Normal
Lynn/North Shore
Normal
Lynn/North Shore
Normal
Lynn/North Shore
Quincy
20 belt route
Normal
Normal
Quincy
Normal
Newton
20 belt route
Normal
$25.6M (8% of total bus operating deficit)
Route/Neighborhood description
Mattapan - Haymarket via Ashmont, Fields Corner and Dudley Station
North Beverly - Salem Depot via Cabot Street or Tozer Road
Central Square, Waltham - Dudley Square
Oaklandvale - Haymarket Station via Granada Highlands
Peabody - Haymarket EXPRESS via Goodwins Circle
Salem Depot - Liberty Tree Mall via Peabody & Danvers
Bass Point, Nahant - Wonderland via Central Square, Lynn
City Point - McCormack Housing via Andrew Station
Roberts - Downtown Boston via Newton Corner & Central Square, Waltham
Marblehead - Downtown Crossing via Humphrey Street, Lynnway, & Airport
Marblehead - Downtown Crossing via Paradise Road, Lynnway, & Airport
Liberty Tree Mall - Central Square, Lynn via Goodwins Circle
Oak Park/Bedford Woods - Alewife Station via Middlesex Turnpike
Dedham Mall or Charles River Loop -Watertown Yard via Oak Hill & Newton Center
Salem Depot - Downtown Crossing via Logan Airport & Central Square, Lynn
Ashmont Station – Andrew Station via Fields Corner Station
Eastern Avenue & Essex Street - Haymarket
Arlmont Village – Harvard Station via Park Circle
Neptune Towers – Central Square, Lynn via Summer Street
Quincy Center Station – Squantum via Montclair & North Quincy Station
Fields Corner or North Quincy – Fields Corner via Adams Street to Neponset Ave
Jersey & Queensberry – Copley Square or Park & Tremont Street via Ipswich Street
Assembly Square Mall – Downtown via Sullivan Square, Main Street & Haymarket
Quincy Center – North Quincy or Fields Corner via Hancock & Neponset Ave
Ruggles Station – Park & Tremont Streets via Tremont Street
Watertown/Newton Corner – Downtown via Massachusetts Turnpike
Fields Corner or North Quincy – Fields Corner via Neponset Ave to Adams Street
Elm Street – Wellington Station via Fellsway
Source: MBTA public bus routes, MBTA operations department, MBTA finance department. Operating deficit calculation includes all administrative and maintenance overhead as well as own source revenues, allocated according to service hours
DRAFT Confidential – Proprietary and Predecisional | 11

FY15 Total Net Variable Cost by Mode
$60M
Immediate Focus Opportunities
(Less than 1% of Total MBTA Rides) 1
Focus of Service Planning Process
(1.2% of Total MBTA Rides) 1
$19.3M
$51.7M
40
$14.4M
20 $18.0M
0
Weekend Commuter Rail Late Night Subway/Bus Highest-Subsidy 28 Routes
Total
1 Based off total of 395M rides across the MBTA over the last twelve months.
Note: $52M is the total net marginal cost of operating these services (including fare revenue from these services) – if alternative delivery models were adopted, the costs of these alternative delivery models would reduce total savings
DRAFT Confidential – Proprietary and Predecisional | 12

DRAFT Confidential – Proprietary and Predecisional | 13

Route number
Operating deficit per trip ($ lost/trip)
SL1a
SL2
SL5
9701
71
21
73
77
SL1
SL4
121
72
117
116
32
17
104
7
31
88
Total
Total ridership #
(CY14)
Total annual operating deficit (CY14) Route type Route/Neighborhood description
$0.01
755 K $4 K Bus rapid transit Logan Airport-South Station
Design Center – South station $0.78
1,737 K $1,356 K Bus rapid transit
$0.81
3,585 K $2,895 K Bus rapid transit
Dudley Station - Downtown Crossing at Temple Place
Cambridge Street - Huntington Avenue - Ruggles
$0.81
27 K $22 K
$0.84
$0.84
1,713 K
1,479 K
$1,443 K
$1,246 K
Normal
Normal
Watertown Square - Harvard Station via Mt. Auburn Street
Ashmont Station - Forest Hills Station via Morton Street
Waverley Square - Harvard Station via Trapelo Road
$1.00
1,823 K $1,821 K Normal
Arlington Heights - Harvard Station via Massachusetts Avenue
$1.01
$1.02
2,422 K
2,670 K
$2,455 K
$2,720 K
Normal
Bus rapid transit
Logan Airport-South Station
Dudley Station - South Station at Essex Street
$1.05
$1.06
141 K
2,028 K $2,127 K
$149 K
Bus rapid transit
Normal
Wood Island Station - Maverick Station via Lexington Street
Huron Avenue - Harvard Station via Concord Avenue
$1.21
$1.29
269 K
1,697 K
$324 K
$2,194 K
Normal
Normal
Wonderland Station - Maverick Station via Beach Street
Wonderland Station - Maverick Station via Revere Street
$1.33
1,971 K $2,626 K Normal Wolcott Square or Cleary Square - Forest Hills Station via Hyde
Park Avenue
$1.42
3,467 K $4,913 K Normal
$1.50
1,017 K $1,531 K Normal
Fields Corner Station - Andrew Station via Uphams Corner &
Edward Everett Square
$1.55
1,269 K $1,967 K Normal
Malden Center Station - Sullivan Square Station via Ferry Street
& Broadway
$1.57
1,277 K $2,009 K Normal
City Point - Otis & Summer Streets via Summer Street & South
Station
$1.60
2,131 K $3,410 K Normal
$1.62
$1.12 average deficit per trip
Mattapan Station - Forest Hills Station via Morton Street
1,214 K $1,963 K Normal
32.6M (~28% of ridership) $31.1M (10% of total bus operating deficit)
Clarendon Hill - Lechmere Station via Highland Avenue
Source: MBTA public bus routes, MBTA operations department, MBTA finance department. Operating deficit calculation includes all administrative and maintenance overhead as well as own source revenues, allocated according to service hours DRAFT Confidential – Proprietary and Predecisional | 14