York Region Transit Strategic Marketing Analysis: I. Executive Summary
York Region Transit Strategic Marketing Analysis: I. Executive Summary
York Region Transit Strategic Marketing Analysis: I. Executive Summary
I. Executive Summary
On January 1st, 2001, the Region of York assumed responsibility for the funding and
operations of public transit throughout the Region and the York Region Transit branch
was formed and became a part of the Transportation Services department. York Region
Transit offers seamless connections across the municipalities within York Region, as well
easy access to transit systems in neighbouring regions including Toronto, Durham, and
Peel. Since the amalgamation of transit services, ridership in York Region has grown by
almost 11 million riders, from the initial 8 million riders in 2001, an average increase of
10% per year. In 2009, roughly 19 million riders had gone through the system using a
fleet of almost 500 vehicles for rapid transit routes, conventional transit routes, mobility
transit routes, as well as special trips. Although these numbers pale in comparison to
the Toronto Transit Commission (TTC), it should be pointed out that in Toronto, 26% of
residents don’t own a car, whereas in York Region, only 4% don’t own a car thus an
increase in ridership is still quite commendable.
York Region Transit (YRT) is experiencing one of the highest growth rates in Canada due
to a vast increase in population, employment growth, environmental-friendliness, rising
fuel prices, and extensive marketing activities. The YRT system has expanded to
encompass over 120 routes as well as special routes for other trips, mobility transit
routes, and TTC contracted routes operating within York Region.
However, YRT is still quite behind in various industry standards. The rides per capita
(average number of trips by a resident) is only 19, which ranks the Region second lowest
in comparison to its bordering neighbours as well as other comparable transit
authorities in Canada. Furthermore, the net cost per passenger is over $3.50 which
places it as the top of the list. The expenditures on a per capita basis are quite high due
to the cost of doing business in such a large geographical area. Due to that cost,
average fare for a customer is around $2.50, making it the most expensive ride in
comparison to neighbouring and comparable transit authorities. With a land area of
roughly 1800 square kilometres, it is quite challenging for buses to connect with the
small communities dispersed throughout the Region as they have to cover a much
greater area to pick up passengers in comparison to neighbouring municipalities. The
recent economic downturn has also affected YRT and led to a decline in ridership which
also reduced revenues, and YRT was unable to reach its 20 million ridership goal for
2009.
The challenge for York Region Transit is to decide whether they should keep investing in
the transit infrastructure to improve ridership and support smart growth or rationalize
their existing service and reallocate resources to manage the system based on the
residents’ needs.
1
Haider Abbas
A. Environment
1. Economic conditions and trends
i. On average, the economy was on the upswing until 2008 and then the world
was hit with a recession that is still currently ongoing. Canada was also
affected negatively due to its strong economic ties to the United States,
however the overall affect was not as bad as other countries around the
world.
2. Cultural and social values and trends
i. The push for environmental-friendliness and “going green” is as strong as
ever and public transit has always been seen as a legitimate option for
people to use in order to minimize their carbon footprint. Location-wise,
however, YRT is in a tough area as only 4% of York Region residents do not
own a vehicle, and due to the large area and distances to cover, most people
prefer to drive.
3. Political and Legal Issues
i. No political/legal issues exist. There is the obvious issue of funding
approvals, etc. to go through the York Region Council, comprised of various
councillors, mayors, etc., but that is a standard process for regional
governments throughout Canada.
4. Summary of environmental opportunities and threats
i. Public transit is seen as a great tool by people who wish to minimize their
carbon footprint and thus, YRT has a great opportunity to use the greening
initiative to their advantage and increase ridership in York Region. However,
they must also ensure that they are maximizing on their route-management
and also the usage of their fleet.
5. Implications for strategy development
i. If the proper strategy is deployed and YRT incorporates the residents’ needs
as well as properly assigns routes and vehicles based on existing and
predicted ridership, they have a great opportunity to get people on-board.
However, they need to ensure that they provide timely service in a cost-
efficient manner in order to attract more riders.
B. Industry
1. Classification and definition of industry
i. The public transit industry is a public service industry that can be operated
either as a public or private corporation. Their main function is to provide
passenger transportation services for the general public. Transportation
2
Haider Abbas
3
Haider Abbas
C. Organization
1. Objectives and constraints
i. York Region Transit was formed on January 1st, 2001 when the Regional
Municipality of York assumed responsibility for the funding and operation of
public transit throughout York Region. YRT’s mission is “…to provide quality
public transit services which support the economic vitality, environmental
sustainability, and health of the Regional community.” York region
encompasses quite a large area, therefore the main challenge for YRT is to
connect the various towns and cities within the Region via public transit in an
efficient way.
2. Financial Condition
i. YRT is funded through both fare box revenue (ie fares collected from
passengers) and through taxes. YRT’s revenue/cost ratio (how much money
YRT recovers out of revenues in comparison to the costs) is 40% which is the
4th lowest compared to neighbouring transit authorities and similar transit
authorities in Canada. However, since it is part of a government
organization, the profit/loss figures are not crucial to operations as YRT can
gain additional funding from the Region as needed.
3. Management philosophy
i. Management is focused on providing quality public transit services as well as
quality customer support for its transit operations. Management is also
aiming to maximize the potential for success with new transit service
strategies and significantly increase ridership and cost recovery.
4. Organizational structure
i. Due to the current size and scope of operations, YRT is a branch of the
Transportation Services department at the Regional Municipality of York. It
is an assumption that when the size of operations will increase, YRT will
become a self-contained organization, similar to the TTC. The General
Manager of Transit operations reports to the Commissioner of
Transportation Services, who reports to the CAO of York Region. Underneath
the GM of YRT are various units including Marketing & Customer Service,
Service Planning, Mobility Plus, Facilities & Fleet, Enforcement, Operations,
and Finance, each with its own manager and subunits/staff.
4
Haider Abbas
5. Organizational culture
i. Organizationally, YRT is one big and happy family as all units work together to
support each other. Due to its operations, the branch is also quite distinct
from the other branches in the Transportation Services department and as
such, they do not really collaborate with other branches. The Transportation
Services has recently gone through a re-org in an effort by the Commissioner
to solve this ‘silo-issue’, but it has not affected YRT’s structure at all and thus
the verdict is still out as to whether or not the re-org was useful. Overall,
however, the culture is extremely friendly and positive.
6. Summary of the firm’s strengths and weaknesses
i. Dual funding from both fare box collections and tax funding.
ii. Committed, competent, and experienced group of staff.
iii. Operations are always being streamlined and new routes and services being
planned based on passenger needs to keep everyone happy.
iv. Implementing cutting edge technology on YRT vehicles as well as
implementing business intelligence tools to improve operations and provide
real-time information and updates for passengers.
v. Operate a fairly new and advanced fleet and provide customers with real-
time updates on stations on next bus as well as WIFI internet on the bus.
vi. Still quite young in terms of operations (9-years) and serving a large region
trying to connect various towns and cities scattered throughout the region.
vii. Very low revenue/cost and very high cost of operations.
viii. Economic downturn has slowed growth in ridership and consequently
revenues.
ix. Operations pale in comparison to TTC.
7. Implications for strategy development
i. Organization-wise, YRT is a very strong-linked branch with a dedicated group
of staff. There are some service issues that need to be resolved so that they
can increase ridership and subsequently increase revenues so that they can
have a better revenue/cost ratio and also be able to expand operations on
their own and not rely on funding via tax dollars.
D. Marketing Strategy
1. Objectives and Constraints
i. YRT has performed extensive marketing to promote new routes, services and
vehicles. Their banners can be found lining up the streets serving a constant
reminder of their transit service. YRT also holds numerous community
events to showcase their operations and business and also conduct surveys
to determine passenger needs. YRT is also in the process of redesigning their
website to revamp the look and feel of the site and provide passengers with
the relevant information that they need. The graphics and images used in
5
Haider Abbas
1
http://yrt.ca/fares/index.asp
2
http://tripplanner.yrt.ca/hiwire?.a=iTripPlanning&.s=388ee55a
6
Haider Abbas
ix. Size and scope of operations also restricts marketing to only be placed along
routes and the highly populated areas.
x. Budget is also restricted as the current cost-recovery by YRT is not very
impressive, and thus marketing budget is limited.
5. Implications for strategy development
i. The marketing and promotion strategy currently employed by YRT is quite
effective and useful based on the current size of operations. They have done
a good job at marketing the YRT name and service through various banners
lined across their most popular routes, advertisements in newspapers and
setting up a very good website which will become even better with the
pending website redesign, and also holding various community and special
events highlighting the YRT service and its successes. YRT needs to ensure
that when they do expand their operations, that they continue with that
marketing strategy and generate further buzz and attraction for residents to
notice and also want to use public transit.
A. Strengths:
i. Dual funding from both fare box collections and tax funding.
ii. Committed, competent, and experienced group of staff.
iii. Operations are always being streamlined and new routes and services being
planned based on passenger needs to keep everyone happy.
iv. Implementing cutting edge technology on YRT vehicles as well as
implementing business intelligence tools to improve operations and provide
real-time information and updates for passengers.
v. Operate a fairly new and advanced fleet and provide customers with real-
time updates on stations on next bus as well as WIFI internet on the bus.
vi. Great exposure to residents and passengers to showcase YRT.
vii. YRT organizes numerous showcases, community events and open houses to
showcase YRT and their fleet for all.
viii. YRT conducts surveys throughout the year to see what passengers and
residents are thinking and plan ahead to incorporate those needs into the
short-term or long-term plans.
ix. User-friendly and informative website for passengers to navigate to find
schedules, calculate trip times, provide service updates as well as any
upcoming community events.
x. Website is also being redesigned to become even more interactive.
xi. Print and web-based advertisement is quite attractive and generates a sense
of ‘coolness’, excitement and buzz towards public transit use.
7
Haider Abbas
B. Weaknesses:
i. Still quite young in terms of operations (9-years) and serving a large region
trying to connect various towns and cities scattered throughout the region.
ii. Very low revenue/cost and very high cost of operations.
iii. Economic downturn has slowed growth in ridership and consequently
revenues.
iv. Very large land area (approx. 1800 square kilometres), thus it is quite
challenging for buses to connect with the small communities dispersed
throughout the Region.
v. Operations pale in comparison to TTC.
vi. Due to limited routes and fleet, the marketing presence is quite limited
compared to a large transit neighbour like the TTC.
vii. Size of marketing team is based on the operations so it is currently a group of
6-7 staff.
viii. Size and scope of operations also restricts marketing to only be placed along
routes and the highly populated areas.
ix. Budget is also restricted as the current cost-recovery by YRT is not very
impressive, and thus marketing budget is limited.
x. Rides per capita (average number of trips by a resident) is only 19, very low
compared to bordering neighbours and other comparable transit authorities
in Canada.
xi. Net cost per passenger is over $3.50 which places it as the top of the list.
xii. Average fare for a customer is around $2.50, and the fare price may increase
depending on the distance travelled in the trip, making it the most expensive
ride in comparison to neighbouring and comparable transit authorities.
C. Opportunities:
i. Funding always available by York Region Council to expand operations.
ii. High growth of both residents and businesses in York Region provide an
excellent opportunity to expand operations.
iii. Fairly new fleet so operations can always be expanded without a huge
toll on the vehicles.
D. Threats:
i. Very little threat from any new entrants.
ii. Challenge is the size of York Region and how to connect from one end to
another.
iii. Almost everyone in York Region have a vehicle so they drive and do not have
an incentive to use public transit.
iv. If they are unable to sustain operations, there is always the threat of YRT
being merged with a larger transit authority like the TTC or GO Transit
(Government of Ontario Transit), but that is highly unlikely.
8
Haider Abbas
9
Haider Abbas
1. Benefits of alternative 1:
i. Current service levels are maintained.
ii. Fleet levels and staff levels will stay the same.
iii. Services can be streamlined to save money and reduce costs as well
as improve the revenue-cost ratio.
2. Costs of alternative 1:
i. Ridership will stay quite consistent as no new routes are being added.
ii. Loss of potentially new service areas and routes.
iii. Fleet levels and staff levels will stay the same.
iv. Population and business growth may exceed YRT’s load and lead to
problems.
1. Benefits of alternative 2
i. Keeps YRT growing along with the population and business growth in
York Region.
ii. Excellent opportunity to increase ridership levels throughout the
Region.
iii. Greater exposure to various areas in York Regions by creating new
service areas and routes.
iv. Fleet levels and staff levels will increase.
v. Ability to connect various towns and cities within the Region and
provide residents with more commuting options.
vi. If ridership and revenues increase, the revenue-cost ratio will be
improved and YRT could also possibly lower ticket prices to attract
even more passengers.
2. Costs of alternative 2:
i. Both capital costs and operating costs will increase.
ii. Risk of failure in the sense that ridership may not increase.
iii. The revenue-cost ratio may increase if ridership does not increase.
10
Haider Abbas
iv. Will initially need York Region Council approval to receive increased
funding dollars to implement changes.
11
Haider Abbas
VII. Summary
YRT can place itself in a very successful position by focusing on further investments in
public transit to expand routes, services, and fleet size to match the population and
business growth in York Region. The public polls clearly outline that people would like
to see the coverage area, destinations, service levels, and service hours to be expanded
and YRT should listen and grow further.
YRT should also be promoting the whole environmental friendliness initiative, as part of
their expanded marketing and promotion strategy, and remind passengers and
residents that they can significantly reduce their carbon footprint by switching over to
public transit, and with the added fact that services and routes would be increased, it
would be a great situation for both YRT and it’s passengers.
The marketing and promotion strategy should focus on the new service and route
improvement and highlight items such as the added hours and destinations. The
12
Haider Abbas
showcases and community events should also continue on as they would be another
great way to make people aware of the ongoing expansion. Furthermore, tours of the
new buses would also generate good publicity. Once again, the eco-friendliness
message should be constantly brought to the public’s attention and by placing a dollar
value in savings in their advertisements and promotions, the message would become
even clearer for them. The website redesign would also be a timely addition to the
marketing strategy as that would also be a way to showcase that YRT is expanding and
revamping itself to fit the public’s needs.
The linkage of various systems and tools for bus location, dispatching, scheduling, fares,
and fleet management with a proper business intelligence and decision making tool
would also provide a wealth of information for YRT staff to use in order to streamline
their services even further as the data would be real-time and could be compared to the
historical data in order to determine which routes need to be service more or less and
which areas would benefit from a service expansion. The information can also be
shared with the public using the website to provide real-time travel planning
information so that people can plan their trips from start to finish right from their
computers and then head out and hop straight onto a bus.
The expansion, marketing strategy and business intelligence strategy will all position YRT
for further success in the future as York Region grows at the astounding pace as it is. By
having these measures in place within the next five years, YRT would be in a much
better situation to assess the following five years to determine whether or not their
expansion strategy is in line and successful in increasing ridership and revenues.
13
Haider Abbas
14
Haider Abbas
15
Haider Abbas
16
Haider Abbas
17
Haider Abbas
18