[URBAN NOTE] "UP Express could cost taxpayers millions in subsidies"

[rfmcdonald]

The Toronto Star's Jennifer Pagliaro writes about how, even from the start, the Union-Pearson Express seems to have made poor business sense.

Taxpayers may be forced to subsidize the Union-Pearson Express by more than $20 million annually despite a substantial increase in commuters using the airport trains since fares were lowered.

Studies prepared for the provincial transit body Metrolinx, which were previously censored, reveal officials knew much earlier that the high cost to ride the direct train between the airport and downtown would limit the number of people willing to use the service, and that even at lowered fares the train was unlikely to pay off.

At $30 for a one-way ticket, close to the original $27.50 fare without a Presto card, UP Express was projected to draw 2.3 million passengers by 2020, earning $65.2 million.

The March 2012 study by consultants Steer Davies Gleave found that at $10 a ride — close to the new reduced $12 fare — total passengers would nearly double, to almost 4 million per year, but annual revenues would dip to just $36.3 million. That’s well below the annual operating costs for the service, estimated at $69 million to $74 million over the next three years.

[. . .]

Revelations about the earlier revenue studies raise questions around Metrolinx’s promise to recover costs in three to five years.