OTTAWA - Cost Efficiency:
Operating Cost per Revenue Hour
Inflation-Adjusted Annual Operating Cost per Revenue Service Hour (2002 CAD)
Annual Operating Cost per:
|
1982
|
1987
|
1992
|
1997
|
2002
|
|---|---|---|---|---|---|
Revenue Hour, 2002 CAD
|
66.26
|
89.53
|
101.62
|
104.89
|
105.31
|
2002 USD
|
US$ 42.20
|
US$ 57.03
|
US$ 64.73
|
US$ 66.81
|
US$ 67.08
|
Index (1982 = 100)
|
100
|
135
|
153
|
158
|
159
|
The decline in annual revenue passengers from 1984 to 1998 was only part of the challenge facing OC Transpo management during this period. Inflation-adjusted “supply-side” unit operating costs rose sharply from 1982 (a fact ignored by Kain (1992)). This upward trend was stabilized after 1992 but the “price” of doing so included a 24-day strike at the end of 1996.
Readers are again reminded that conversion from Canadian to U.S. dollars does not incorporate adjustment for differences in wage levels between the two countries.
Operating Cost per Vehicle-km
Inflation-Adjusted Annual Operating Cost (2002 CDN)
Annual Operating Cost per:
|
1982
|
1987
|
1992
|
1997
|
2002
|
|---|---|---|---|---|---|
Bus km, 2002 CAD
|
2.71
|
3.18
|
3.38
|
3.34
|
3.33
|
Bus mi, 2002 USD
|
US$ 2.78
|
US$ 3.27
|
US$ 3.47
|
US$ 3.44
|
US$ 3.42
|
Index (1982 = 100)
|
100
|
118
|
125
|
124
|
123
|
Standard equivalent km, 2002 CAD
|
2.72
|
3.00
|
3.10
|
3.13
|
3.05
|
Standard equivalent mi, 2002 USD
|
US$ 2.80
|
US$ 3.08
|
US$ 3.18
|
US$ 3.21
|
US$ 3.14
|
Index (1982 = 100)
|
100
|
110
|
114
|
115
|
112
|
Revenue km, 2002 CAD
|
3.27
|
3.86
|
4.09
|
4.16
|
4.10
|
Revenue mi, 2002 USD
|
US$ 3.35
|
US$ 3.97
|
US$ 4.20
|
US$ 4.27
|
US$ 4.21
|
Index (1982 = 100)
|
100
|
118
|
125
|
127
|
125
|
The lower rate of change in the “standard equivalent km” indicator from 1982 to 1992, relative to “bus km,” reflects increased usage of articulated buses.
Trends - Cost Efficiency:
Inflation-adjusted annual operating cost per vehicle-hour and per vehicle- km
(1982 = 100)
The upward trend in OC Transpo “supply-side” unit operating costs from 1982 to 1992, adjusted for inflation, is obvious. This trend reflects factors in addition to labor cost escalation, as documented below.
Operating Cost per Scheduled Peak-Period Bus
Inflation-Adjusted Annual Operating Cost per Scheduled Peak-Period Bus (2002 CAD)
Operating Cost per Peak Bus
|
1982
|
1987
|
1992
|
1997
|
2002
|
|---|---|---|---|---|---|
2002 CAD
|
180,865
|
213,447
|
242,768
|
228,139
|
231,795
|
2002 USD
|
US$ 115,201
|
US$ 135,953
|
US$ 154,630
|
US$ 145,312
|
US$ 147,640
|
Index (1982 = 100)
|
100
|
118
|
134
|
126
|
128
|
The principal factor which determines bus transit system fixed costs (“overhead”) is vehicle fleet size. This in turn establishes factors such as operating base and maintenance facility size. Operating cost per scheduled peak-period bus is commonly interpreted as an indicator of overhead costs. Among the factors contributing to the large real increase from 1982 to 1992 were “infrastructure” (i.e. transitway) management and maintenance costs “new” to OC Transpo.
Labor Cost: Operator Cost per Platform Hour
Inflation-Adjusted Annual Operator (Driver) Cost per Platform Hour (2002 CAD)
Operator Cost per Platform Hour
|
1982
|
1987
|
1992
|
1997
|
2002
|
|---|---|---|---|---|---|
2002 CAD
|
27.81
|
31.00
|
36.66
|
33.75
|
34.17
|
2002 USD
|
US$ 17.71
|
US$ 19.74
|
US$ 23.35
|
US$ 21.50
|
US$ 21.76
|
Index (1982 = 100)
|
100
|
111
|
132
|
121
|
123
|
“Platform hours” include vehicle operator (driver) time aboard vehicles. This includes revenue service, “layovers” at line terminals, and “deadheading:” operation of vehicles from and to garages (“pull-out” and “pull-in”), and non-revenue operation of vehicles between terminals.
Inflation-adjusted labor costs increased significantly from 1982 to 2002. From 1982 to 1992, consecutive annual real (inflation-adjusted) increases averaged about 3 percent. Annual increases from 1987 to 1992 averaged about 3.5 percent. OC Transpo managed to slow this trend, and held the long-term increase to an “annual percentage rate” of about one percent. However, the “price” of doing so included the 1996 strike noted above.
Overhead: Semi-Fixed Cost per Platform Hour
Inflation-Adjusted Annual Semi-Fixed Cost per Platform Hour (2002 CAD)
Semi-Fixed Cost per Platform Hour
|
1982
|
1987
|
1992
|
1997
|
2002
|
|---|---|---|---|---|---|
2002 CAD
|
11.92
|
17.21
|
20.24
|
19.71
|
20.05
|
2002 USD
|
US$ 7.59
|
US$ 10.96
|
US$ 12.89
|
US$ 12.55
|
US$ 12.77
|
Index (1982 = 100)
|
100
|
144
|
170
|
165
|
168
|
Ratio of Semi-fixed Cost to Total Operator Cost (per Platform Hour)
|
0.20
|
0.25
|
0.25
|
0.25
|
0.26
|
The large percentage increase in real semi-fixed (“overhead”) costs from 1982 to 1992 reflects, in part, infrastructure (transitway) costs new to the undertaking. The “annual average” rate of increase from 1982 to 1987 was about four percent, but this trend did not continue after 1987. The ratio of “overhead” to operator (driver) cost increased during the early years of transitway operation but remained stable after 1987.
Trends - Operating Cost per Revenue Hour,
Operator Cost per Platform Hour and Semi-Fixed Cost per Platform Hour
(1982 = 100)
The long-term increase in real operating cost per revenue hour occurred at an average “annual percentage rate” of about 2.5 percent. As noted about, the long-term increase in real operator cost per platform hour occurred at an average annual rate of about one percent.
Components of Annual Operating Cost per Platform Hour (2002 CAD)
The majority of the supply-side unit operating cost increase experienced by OC Transpo from 1982 to 2002 reflects factors other than increases in real unit labor (operator) costs. The chart above illustrates major components of operating cost per platform hour. Although operator (driver) cost accounts for the largest discrete share for any given year, the “Semi-Fixed Cost” and “Maintenance Cost” components experienced relatively larger increases from 1982.