Ridership rates have increased due to a rise in gas prices and a lower unemployment rate
(PRWEB) October 24, 2014
Participants in the Public Transportation industry operate passenger transit systems over fixed-routes and regular schedules within a metropolitan area. Transportation systems involve the use of multiple modes of transportation including subways, streetcars and buses. The majority of routes transport individuals over a short distance for relatively inexpensive fares. Due to the high capital cost associated with running a large public transportation system, industry operators rely on government subsidies. IBISWorld Economic Analyst Daniel Carusotto says in the new report, “as a result, government funding is a key driver of industry revenue.” Over the five years to 2014, government stimulus programs, such as the Building Canada Plan and the Infrastructure Stimulus Fund, have fuelled industry revenue growth. Over the period, IBISWorld expects industry revenue to increase moderately.
The Public Transportation industry has a moderate level of market share concentration. This industry is heavily subsidized by federal, provincial and local governments, and revenue per establishment fluctuates with the overall level of public transportation spending. However, the municipalities with the highest ridership rates generally receive the largest subsidies, leading densely populated areas, such as Toronto and Montreal, to command a high market share. In addition to government funding, Public Transportation industry revenue is fuelled by ridership rates. Ridership rates have been positively affected over the past five years by several key trends, including a rise in the price of oil and a lower unemployment rate. “Higher oil prices increase the cost of driving personal automobiles, leading cost-conscious consumers to use public transit,” Carusotto says. Additionally, a falling unemployment rate over the period has spurred demand from commuters. These trends, coupled with higher passengers fares, have led fare-generated revenue to increase greatly over the period.
In the five years to 2019, IBISWorld expects government funding and ridership rates to continue to increase, positively affecting industry revenue. Government spending will continue to be strong, as demand for industry services rises due to increasing population densities in urban areas. As a result, over the next five years, industry revenue is expected to increase. Additionally, industry operators will continue to reduce their environmental footprint by sourcing green materials for industry projects and operating vehicles that release fewer emissions.
For more information, visit IBISWorld’s Public Transportation in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry operates local and suburban passenger transit systems. This includes light rail, subways, streetcars and buses. These establishments operate with fixed routes and schedules, and enable passengers to pay on a per-trip basis (whether or not they also accept payment methods such as monthly passes).
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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