Ridership vs coverage: The transport planner’s dilemma

Berlin. Image: Getty.

Is your transit agency succeeding? It depends on what it’s trying to do – and most transit agencies haven’t been given clear direction about what they should be trying to do.  Worse, they’re told to do contradictory things.  It’s as if you told your taxi driver to turned left and right at the same time, and then criticised them for turning the wrong direction.

On the one hand, we expect transit agencies to pursue a goal of ridership.  Yet we also demand that provide a little service to everyone, which is called a coverage goal.  The coverage goal requires an agency to run predictably low-ridership services, for non-ridership reasons, so it’s the opposite of a ridership goal

In the fictional town below, the little dots indicate dwellings and commercial buildings and other land uses. The lines indicate roads, and the 18 buses indicate the resources the town has to run transit. Most of the activity in the town is concentrated around a few roads, as in most towns.

A transit agency pursuing only a ridership goal would focus service on the streets where there are large numbers of people – where walking to transit stops is easy, and where the straight routes feel direct and fast to customers. Because service is concentrated into fewer routes, frequency is high and a bus is always coming soon.

This would result in a network like the one below.

All 18 buses are focused on the busiest areas. Waits for service are short but walks to service are longer for people in less populated areas. Frequency and ridership are high, but some places have no service.

Why is this the maximum ridership alternative? It has to do with the non-linear payoff of both high density and high frequency, as explained more fully here.

If the town were pursuing only a coverage goal, on the other hand, the transit agency would spread out services so that every street had a bus route, as in the network at below. Spreading it out sounds great – but it also means spreading it thin.

The 18 buses are spread around so that there is a route on every street. Everyone lives near a stop – but every route is infrequent, even those on main roads, and waits for service are long. Only a few people can bear to wait so long, so ridership is low.

In these two scenarios, the town is using the same number of buses. These two networks cost the same amount to operate, but they deliver very different outcomes.

Ridership-oriented networks serve several popular goals for transit, including:

  • Reducing environmental impact through lower Vehicle Miles Travelled;
  • Achieving low public subsidy per rider, through serving the more riders with the same resources, and through fares collected from more passengers;
  • Supporting continued urban development, at higher densities, without being constrained by traffic congestion;
  • Reducing the cost of for cities to build and maintain road and bridges by replacing automobile trips with transit trips, and by enabling car-free living for some people living near dense, walkable transit corridors.

On the other hand, coverage-oriented networks serve a different set of goals, including:

  • Ensuring that everyone has access to some transit service, no matter where they live;
  • Providing lifeline access to critical services for those who cannot drive;
  • Providing access for people with severe needs;
  • Providing a sense of political equity, by providing service to every municipality or electoral district.

Ridership and coverage goals are both laudable, but they lead us in opposite directions. Within a fixed budget, if a transit agency wants to do more of one, it must do less of the other.

Because of that, cities and transit agencies need to make a clear choice regarding the Ridership-Coverage trade off. In fact, we encourage cities to develop consensus on a Service Allocation Policy, which takes the form of a percentage split of resources between the different goals.


For example, an agency might decide to allocate 60 percent of its service towards the Ridership Goal and 40 percent towards the Coverage Goal.

Major network redesigns often shift this balance, intentionally and consciously.  When we led a redesign of the bus network in Houston, we led a discussion with the elected leaders about their priorities, and they decided to shift the focus of their network from 80 per cent coverage to 5per cent coverage. They knew in advance what the result would be: a more useful network, with the potential to grow more ridership, but also many angry people in areas no longer served.

What about your city? What do you think should be the split between ridership and coverage? The answer will depend on your preferences and values.  For cities, it should be up to elected officials, informed by the public, to decide.

Jarrett Walker is an international consultant in public transit network design and policy, based in Portland, Oregon. Christopher Yuen is an associate at Jarrett Walker+Associates.

Walker is also the author of “Human Transit: How clearer thinking about public transit can enrich our communities and our lives". This article was originally written for his blog, and is reposted here with permission

 
 
 
 

High streets and shopping malls face a ‘domino effect’ from major store closures

Another one bites the dust: House of Fraser plans to close the majority of its stores. Image: Getty.

Traditional retail is in the centre of a storm – and British department store chain House of Fraser is the latest to succumb to the tempest. The company plans to close 31 of its 59 shops – including its flagship store in Oxford Street, London – by the beginning of 2019. The closures come as part of a company voluntary arrangement, which is an insolvency deal designed to keep the chain running while it renegotiates terms with landlords. The deal will be voted on by creditors within the month.

Meanwhile in the US, the world’s largest retail market, Sears has just announced that it will be closing more than 70 of its stores in the near future.

This trend of major retailers closing multiple outlets exists in several Western countries – and its magnitude seems to be unrelated to the fundamentals of the economy. The US, for example, has recently experienced a clear decoupling of store closures from overall economic growth. While the US economy grew a healthy 2.3 per cent in 2017, the year ended with a record number of store closings, nearly 9,000 while 50 major chains filed for bankruptcy.

Most analysts and industry experts agree that this is largely due to the growth of e-commerce – and this is not expected to diminish anytime soon. A further 12,000 stores are expected to close in the US before the end of 2018. Similar trends are being seen in markets such as the UK and Canada.

Pushing down profits

Perhaps the most obvious impact of store closures is on the revenues and profitability of established brick-and-mortar retailers, with bankruptcies in the US up by nearly a third in 2017. The cost to investors in the retail sector has been severe – stocks of firms such as Sears have lost upwards of 90 per cent of their market value in the last ten years. By contrast, Amazon’s stock price is up over 2,000 per cent in the same period – more than 49,000 per cent when considering the last 20 years. This is a trend that the market does not expect to change, as the ratio of price to earnings for Amazon stands at ten times that of the best brick-and-mortar retailers.

Although unemployment levels reached a 17-year low in 2017, the retail sector in the US shed a net 66,500 jobs. Landlords are losing longstanding tenants. The expectation is that roughly 25 per cent of shopping malls in the US are at high risk of closing one of their anchor tenants such as a Macy’s, which could set off a series of store closures and challenge the very viability of the mall. One out of every five malls is expected to close by 2022 – a prospect which has put downward pressure on retail real estate prices and on the finances of the firms that own and manage these venues.

In the UK, high streets are struggling through similar issues. And given that high streets have historically been the heart of any UK town or city, there appears to be a fundamental need for businesses and local councils to adapt to the radical changes affecting the retail sector to preserve their high streets’ vitality and financial viability.


The costs to society

While attention is focused on the direct impacts on company finances, employment and landlord rents, store closures can set off a “domino effect” on local governments and businesses, which come at a significant cost to society. For instance, closures can have a knock-on effect for nearby businesses – when large stores close, the foot traffic to neighbouring establishments is also reduced, which endangers the viability of other local businesses. For instance, Starbucks has recently announced plans to close all its 379 Teavana stores. Primarily located inside shopping malls, they have harshly suffered from declining mall traffic in recent years.

Store closures can also spell trouble for local authorities. When retailers and neighbouring businesses close, they reduce the taxable revenue base that many municipalities depend on in order to fund local services. Add to this the reduction in property taxes stemming from bankrupt landlords and the effect on municipal funding can be substantial. Unfortunately, until e-commerce tax laws are adapted, municipalities will continue to face financial challenges as more and more stores close.

It’s not just local councils, but local development which suffers when stores close. For decades, many cities in the US and the UK, for exmaple Detroit and Liverpool, have heavily invested in efforts to rejuvenate their urban cores after years of decay in the 1970s and 1980s. Bringing shops, bars and other businesses back to once derelict areas has been key to this redevelopment. But today, with businesses closing, cities could once again face the prospect of seeing their efforts unravel as their key urban areas become less attractive and populations move elsewhere.

Commercial ecosystems featuring everything from large chain stores to small independent businesses are fragile and sensitive to change. When a store closes it doesn’t just affect employees or shareholders – it can have widespread and lasting impacts on the local community, and beyond. Controlling this “domino effect” is going to be a major challenge for local governments and businesses for years to come.

Omar Toulan, Professor in Strategy and International Management, IMD Business School and Niccolò Pisani, Assistant Professor of International Management, University of Amsterdam.

This article was originally published on The Conversation. Read the original article.