From Me to You…….
Only two topics are discussed in this issue: the just-completed track renewal project and the upcoming fare increase
2008 TRACK WORK COMPLETED
The good news is that the 2008 track construction project is done. Most connecting bus-bridge services operated as planned and Union Pacific Railroad completed the work on schedule. What caused disruption to the service during the trackwork period were mechanical problems on both freight and passenger trains, some difficulty in buses handling the number of wheelchair-bound passengers transferring to/from trains, and the usual errant problems along the right-of-way (trespassers, brush fires, and a few vehicles on or close to the tracks).
NEW FARES IN EFFECT AUGUST 12
The bad news I need to convey is about fare changes in August. As you might have noticed, we did not implement the planned June fare increase that we announced in January. It was my judgment that it was not fair to ask riders to dig deeper in your wallets in June, just as the track project was getting underway, with a midday bus bridge and less-than-reliable service performance during this time. So, we decided to postpone the new fares until August and the fare changes will go into effect on August 12.
WHY THE INCREASE?
As you know, our trains operate on diesel fuel. For those of you who buy gas where diesel fuel is also sold, you might have noticed that diesel fuel is hovering above $5 per gallon. In past years, fuel has not been a major cost driver in our budget. However, this year (and likely for future years) fuel has become, and will most likely remain, a major cost factor, as diesel fuel prices have more than doubled in the last 12 months. Additionally, this year Amtrak reached accord with its labor unions after seven years of negotiations. The resulting contractual labor increases (up to 20%) are partially borne by all operations throughout the Amtrak system, including the Capitol Corridor.
While I never like increasing fares, I dislike cutting service even more. In order to continue operating all of the Capitol Corridor trains that more and more of you are riding (some 157,000 of you in May, the highest single month ever), we must raise fares. Now, some 56% percent of you are using discounted tickets (10-rides and Monthly tickets), mostly during peak travel times; but use of these discounted tickets generates only 30% of our revenue. Most regular riders travel during peak travel times (Monday-Friday) when we must also operate the maximum number of trains, employing the maximum number of train employees. The weekday peak travel times are, by nature of the demand for travel during this time period, the most costly time of day for us, yet we are generating the lowest fare per passenger.
Our primary effort for 10 years has been to INCREASE service in order to attract riders, and it certainly has worked better than anyone ever expected. Today, even with the fare increases we have had over the years, your fare per mile on our trains is still a fraction of your cost to drive by car. The American Automobile Association (AAA) estimates a cost-per-mile of $0.55 to drive a fuel-efficient vehicle, not including bridge tolls and parking. In comparison, the average cost-per-mile is between $0.11 and $0.15 cents using a monthly ticket on Capitol Corridor. Fares are three to four times higher on the Northeast Corridor for similar distances.
When we increase fares, we try to keep the increment the smallest we can, while maintaining the high quality and frequency of your train service.
One-way ticket prices will not change very much, but some of you will see a significant change in the price of your Multi-Ride tickets. The discount for 10-Ride tickets is currently about 40% below the price of 10 full-fare tickets; and the discount jumps to about 50% for Monthly tickets, even when used only for business trips five days a week. Full-fare tickets cost an average of $0.22 cents to $0.30 cents per mile traveled; this rate is about equal to BART fares per mile in the San Francisco Bay Area. However, the fare-per-mile for the Capitol Corridor Multi-Ride tickets, especially Monthly tickets, is now to the point where we cannot generate the needed revenue to sustain the service quality and quantity without a change in the price of these discounted tickets.
So, while the full-fare tickets will generally only increase a small amount, Multi-Ride tickets will increase more. The amount of increase depends upon the distance between the stations where you start and complete your trip, the maximum load points of the trains; and the discount rate in relation to the price of a full-fare, one-way ticket between those two stations.
REVENUE MAINTAINS QUALITY SERVICE
Our goal is to generate enough revenue to maintain the quality and quantity of train service you have come to expect, and still be a reasonably priced option along the I-80, I-680 and I-880 highway corridors. Our only sources of operating funds to run the Capitol Corridor trains are your passenger fares and an annual allocation of state subsidy. However, state subsidy has been almost flat for seven years. There is neither a local tax contribution, nor a federal funding contribution. About half the cost of your transportation is paid in state subsidy, and your fares generate the other half.
CAPITOL CORRIDOR STILL A BARGAIN
Even with the new fares, most of you already know we are pretty good bargain compared to the cost of traveling any other way along the I-80, I-680 and I-880 highway corridors, and usually we are a more reliable and less stressful way to travel.
This fare change is a decision we did not make lightly, and I wanted you to know what we are doing, when and why. I also want to assure you that we are doing everything we can to deliver you the best train service we can at a competitive and affordable price (we know our service is not cheap), but we also know we are a relatively inexpensive way to travel along our route versus travel on the road, in the air, or on rails. This is your train service, and we know that having the train as a travel choice is important to you, especially now in the time of higher gas prices.
Thank you for riding the Capitol Corridor. As always, your input is welcome. You can contact us at www.capitolcorridor.org or by calling 877.974.3322