With an unprecedented, sudden drop in fare and fuel tax revenue, TransLink has issued a grim warning about its financial situation and ability to continue providing essential transit services.
The public transit authority announced this morning it is losing a staggering $75 million a month, and is now in a position that requires it to seek emergency funding from the federal and provincial governments to offset the losses. The public transit authority has been deemed an essential service by the provincial government during the COVID-19 pandemic, but its revenue has been cut in half since the middle of March.
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Fare, fuel, and parking taxes combined account for over 60% of TransLink’s operating budget. Ridership supporting fare revenue, including the purchase of monthly passes, has collapsed; with much of the population staying home, including office workers and students, total system ridership is now down by over 80% from physical distancing and self-isolation measures.
At a constant revenue shortfall rate of $75 million, the public transit authority would lose $900 million against its estimated $1.8-billion operating budget for the 2020 fiscal year. In 2019, fare revenue alone generated $533 million.
Without infusion in emergency operating funding from senior governments, it is anticipated TransLink will experience cashflow issues within weeks, and may be forced to perform severe cuts to its services.
“It’s a dire situation which will force us to cancel entire routes and significantly reduce service levels on all transit modes, meaning far longer wait times and much more crowding for customers,” said TransLink CEO Kevin Desmond in a statement.
Since the onset of the epidemic a month ago, TransLink has reduced its bus services by 15% to 20%, and cut frequencies on SkyTrain, SeaBus, and West Coast Express.
Moreover, buses are operating with significantly reduced capacity, with about 50% of the seats blocked off and a ban on standing capacity to help promote physical distancing.
The introduction of rear-door only bus boarding to protect bus drivers has also led to the temporary implementation of free bus service.
Despite the drop in ridership, there are still reports of long waits on certain routes due to decreased bus frequencies and the new capacity limits for each bus vehicle. Further cuts on frequency to lower operating costs will only lead to even longer waits and more overcrowding.
There has also been increased costs from the daily widespread and intensive cleansing and disinfecting measures on buses, SkyTrain, SeaBus, and West Coast Express.
As well, the scheduled July 1 fare increase, to support public transit expansion initiatives, has been deferred, and partial refunds for unused trips have been offered to March monthly pass holders. It also made a decision to temporarily suspend the U-Pass BC program beginning in May.
“We need an emergency funding package from the provincial or federal government if reliable transit services are to continue for more than 75,000 people, who will otherwise be left stranded,” said Mayors’ Council Chair Jonathan Coté.
He notes that many people still depend on the public transit system to get around, and without emergency funding TransLink also faces the issue of having the sufficient financial resources to restart its normal service levels after the pandemic.
“Essential workers have been relying on transit to get to work every day – that’s health care workers, childcare workers, service workers,” continued Coté. “Our transit system will also be critical during the COVID-19 recovery phase and we must ensure that it’s able to quickly shift back to full-service capacity when people start returning to work.”
No layoffs have been performed at this time. TransLink employs about 7,000 people, but like municipal government workers they do not qualify for the federal government’s 75% wage subsidy as they are a public entity.