How much is the UPX losing?

Metrolinx says ridership is rising on the UP Express, but the data say it is flat or in decline. According to the Globe

[Metrolinx claims] that overall ridership went up from June to August, not giving the actual totals and not mentioning the fact that the latter month had an extra six days of service. In true terms, separate figures show ridership in August was 17-per-cent lower than in June. In the first two weeks of September, ridership dropped nearly 4 per cent more.

 

The author, Oliver Moore, says that Metrolinx is “playing fast and loose” with ridership numbers for the UP Express.

Steve Munro, an influential transit blogger, has a breakdown of the UP Express numbers. It’s ugly reading. 2475 people take the train daily—about 18 people per trip. And, despite claims that the UP Express just had to be completed by the Pan Am Games, few Pan Am visitors seem to have taken it.

From Steve Munro. Pan Am Games in blue square.
From Steve Munro. Pan Am Games in blue square.

 

Munro says that “UPX is not achieving even its week 1 target, and it has a long hill to climb [to the] projection of 5k riders, let alone the level needed to break even on operations.”

That last part is important: the UP Express is not covering its day-to-day costs, and is not paying back the half-billion dollars it cost to build. How much is it losing? I have asked for the numbers (I’ve not yet received a response) but I think it is possible to hazard a guess.

The UPX will be able to cover its operating costs when it has about 6700 daily riders. If we assume the average fare is $24 (a guess), daily cost-recovering revenue would be $161,736. At 2500 daily riders, it makes only $57,600.

The UP Express is, if these calculations are correct, losing about $100,000 a day.¹

The CEO has said that this will improve, and that ridership will double by the end of its first year of operations. Metrolinx is, according to the Globe and Mail, reaching out to government employees and corporations, which raises “the prospect of provincial officials riding the train at lower cost than the citizens who paid for it.”

 


 

¹ Obviously, this is a rough guess. Metrolinx may have significant sources of revenue other than the fare-box, for instance. That optimism could, however, be tempered if you factor in the capital costs. The line cost about $450 million to build. Amortized over 25 years at 0.1% interest (an extremely low rate), it costs about $1.5 million a month to pay off—another $50,000 a day.

Author: Adam Norman

I am raising my two children in Weston.