Discount Transit Program A TDM Strategy for Encouraging

Discount Transit Program A TDM Strategy for Encouraging Transit Ridership ACT Canada National TDM Summit November 15 -18, 2009

Outline Background: TDM and Smart Commute Volume Incentive Discounts vs. Employersponsored Discounts 3. Discount Transit Program Pilot 4. Partnership with City of Mississauga 5. Lessons Learned and Expected Results 1. 2. Jacquelyn Hayward Gulati TDM Coordinator City of Mississauga Glenn Gumulka Executive Director Smart Commute Mississauga

Background: Transportation Demand Management (TDM) and Smart Commute

About Smart Commute Mississauga ¨ Incorporated nonprofit organization ¨ Funded by: § The City of Mississauga § The Region of Peel § Matching funding from Metrolinx § Corporate memberships

TDM Supports for Transit ¨ Employer and Commuter Research Data § Workplace site assessments and commuter surveys ¨ Commute Counselling § Route planning ¨ Incentives and Supportive Measures § Transit Pass Subsidies § Emergency Ride Home § Other incentives and special promotions ¨ Marketing and Outreach

Why Discount Transit Passes? Only 9% of employees in the city regularly use public transit as their primary commute mode ¨ Our surveys (over 5, 000 employees) suggest: ¨ § 14% are definitely willing to try public transit § 19% are probably willing to try public transit ¨ Potential demand in Mississauga § 52, 000 business to distribute passes § 425, 000 employees ¨ What would encourage commuters to try transit? § 35% lower fares § 25% tickets for sale at my place of employment § 33% a ride home in case of an emergency

Volume Incentive Discounts vs. Employer-sponsored Discounts

Volume Incentive (bulk) Discounts ¨ Volume incentive purchase (VIP) or bulk discount: § transit agency provides discounted passes to employers § employer sells discounted transit passes back to employees § employer commits to purchasing/selling a minimum number of passes per month in order to receive the discount

Employer-sponsored Discounts ¨ Employer subsidy: § employer pays for all or part of employee transit pass § usually administered through payroll deduction § employer can choose to provide a subsidy in addition to or instead of a transit-agency-provided bulk discount ¨ Success factors: § good transit service § paid parking or parking shortage § strong employer endorsement

Mississauga Discount Transit Program Pilot

Mississauga Discount Transit Pilot Project ¨ City of Mississauga provides matching transit discounts to Smart Commute Member employers who discount monthly passes for their employees § Maximum of 15% when an employer discounts by 25% ¨ Smart Commute Mississauga exclusive selling agent § Market the program to corporate members § Collect an Agent fee to cover program management (1. 5%) ¨ All participants automatically registered in Emergency Ride Home program

Discounting Schedule Employer Paid Discount City of Miss. Matching Discount Total Discount to Employee Less than 15% No Matching Employer Discount 15% 5% 20% 25% 15% 40% More than 25% 15% Employer Discount + 15%

Operational Details ¨ SC-Miss has an agreement with the City of Mississauga ¨ Legal agreements with participating employers and SC-Miss § Agree to participate for 12 consecutive months § Employees agree to participate for 12 consecutive months – Cancellation results in 6 month participation ban Employers register with SC-Miss Individual participants register online using Transit. Zone. ca ¨ Employers administer payroll deductions and pass distribution ¨ ¨

Transit Zone ¨ www. transitzone. ca ¨ web-based administration tool developed by Metrolinx ¨ interim site being tested through Mississauga pilot project

Partnership with City of Mississauga

City of Mississauga Strategic Alignment ¨ “Move” Develop a Transit-Oriented City § Visionary goal of doubling transit modal split in the next 40 years § Develop Environmental Responsibility – Action 3: Implement a parking strategy that supports public transit ¨ “Connect” Completing Our § Provide Mobility Choices Neighbourhoods – Action 15: Use incentives to encourage work commutes by public transit ¨ “Green” Live Green § Promote a Green Culture

Focus on Ridership Growth ¨ Mississauga Transit Ridership Growth Strategy § Target to increase ridership by 25% over five years § Fare incentives including transit fare discounts are a key objective of the Ridership Growth Strategy ¨ Proven strategy for growing ridership § TTC V. I. P. (10% - 12% discounts) 220, 000 passes sold in 2005 § Winnipeg (Eco. Pass) – City provides 10% match on discounts of 30% or more – 45% increase in ridership among participating employers with a similar program – Net monthly transit revenue increase of 30%

GTHA Precedents ¨ In the GTHA, Municipalities have led the way, offering sponsored transit passes to their employees ¨ TTC Volume Incentive Purchase (VIP) program ¨ York Region Ride. Saver pilot project ¨ City of Brampton Employee Annual Pass Program ¨ Hamilton – HSR Employee Commuter Pass

Why Partner with SC – Miss? ¨ Discount transit for municipal employees would support: § Efforts to continue to be an employer of choice § Ongoing internal trip reduction program § Support for commute options when paid parking is introduced ¨ Program is an opportunity to demonstrate leadership while providing incentives for other employers to discount passes ¨ Mississauga Transit can benefit from relationships with employers already established by SC - Miss ¨ Promote transit more successfully when paired with other TDM supports (i. e. ERH) ¨ Program supports area TMA, SC - Miss

Timeline and Process ¨ Proposal for program presented to Mississauga Transit by SC- Miss (initially presented June 2007) ¨ Mississauga City Council Approval of Pilot (October 2008) ¨ Legal Agreement (April 2009) ¨ Pilot Operation (April 2009 – November 2010) ¨ Pilot Evaluation (April 2010 – November 2010)

Terms of 18 Month Pilot ¨ Evaluate after 12 months based on: § § Mode shift and fare switching (survey) Fare box counts by transit operators Pass sales Employer and employee satisfaction surveys ¨ Results to be assessed by SC-Miss and City of Mississauga ¨ 6 months to develop & implement evaluation recommendations ¨ Recommendations to be presented to City of Mississauga Council regarding feasibility of ongoing program § City staff involvement from: – Mississauga Transit – Transportation Project Office – Transportation and Works, Business Services (Finance and Marketing)

Marketing Campaign ¨ Developed with Mississauga Transit Marketing staff support ¨ Two waves § 3 weeks in June 2009 § 3 weeks in September 2009 ¨ Elements § § § § On-bus advertising (In-bus and Bus tail ads) Transit terminal poster In-transit brochures Banner stands Brochures (Employer and Employee) Outdoor signs Web ads

Financial Impact on Mississauga Transit ¨ Projected Participation for Pilot § Employers: 5 -7 § Employees: 686 passes / month – Assumes 200 existing riders, 235 new riders, 255 ticket users convert to passes ¨ Projected Total Investment: $215, 000 § Investment in Discount from Mississauga Transit: $185, 000 – 15% discount x 686 passes = $10, 290 / month x 18 months = $185, 220 § Marketing Costs: $30, 000 ¨ Projected Revenue: $508, 000 § Based on 35% increase in ridership at participating employers § Return on Investment: 236% ¨ Additional financial impact of City’s participation in pilot for municipal employees: $216, 000

Results to Date ¨ Two employers participating § City of Mississauga § Mc. Cormick Rankin / Ecoplans ¨ Third employer just signed ¨ In negotiations with several other employers

Lessons Learned & Results

Lessons Learned ¨ Requiring employers to invest is a significant barrier for many employers § “It’s the employees responsibility” § May contradict fair and equitable policies ¨ Managing the program through payroll deductions is a barrier for many employers § Difficult to get payroll to buy-in § May not have the capability § Employer subsidy is a taxable benefit ¨ Smart Commute membership as a condition of participation is a barrier for many employers especially smaller employers. ¨ Restricting access to employers from within the City of Mississauga limits participation ¨ 12 month commitment for employers and employees is a barrier to participation

Expected Results ¨ Individual: significant commute savings, convenience ¨ Employer: increase access, employee retention, save on parking ¨ Smart Commute: engage employers, incite commuters, generate revenue from agent fees ¨ Transit: increase ridership and loyalty, generate revenue, support infrastructure and service improvements, marketing

Thank You glenn@smartcommute. ca 905 -896 -5941 jacquelyn. haywardgulati@mississauga. ca 905 -615 -3200 ext. 5384