Friday, January 06, 2012

More On The Latest BC Ferries FOI Docs


The FOI request that led to the document dump was generated by Andrew McLeod of The Tyee who led his piece on them with something that we and others have long suspected was sloshing around in at least some of the limbic systems of David Hahn's loyal apparatchiks:

A 2007 study produced for British Columbia Ferry Services Inc. found the publicly owned company could maximize its revenues by raising regular fares by 75 per cent, if the province's ferry commissioner would allow such a large hike.

The proposal included charging more at the times when people were most likely to want to travel, and dropping fares at other times. A more recent report suggests that hike could be made without seriously decreasing traffic levels, a finding disputed by critics who say ferry fares are already too high....

And how much more did BC Ferries' paid consultants reckon they could have gouged out of us....errrrr....generated in 'extra revenue' if the Ferry regulator had caved and allowed them to do so?


..."The elasticities derived in this study show that there is significant pricing flexibility and that by using time of day, route, trip purpose pricing the overall revenues of BC Ferries can be increased under the caps set by the regulator," the TEMS report said.

"BC Ferries is clearly in a position to begin to increase revenues by using a flexible pricing policy," it said. "The overall potential revenue gain for the seven routes studied from using a flexible pricing system is $21.8 million or an increase of 10.8 per cent over the existing fare structure in 2010."..


As Chris Montgomery of 'On The Waterfront' notes after reading the released documents, there was some concern from the consultants themselves about demographics and all that 'elasticity' that is required to make this kind of price jacking really work, not to mention the state of the economy...

1. There’s a “major transition” in traffic patterns under way at Ferries. There are demographic shifts and changes in ownership of island properties (meaning a shift from commuting to temporary visits), both of which are complicated by recessions and the after-effects of 9-11. The conclusion: it would be foolish to expect any sort of short-term growth in ridership.

2. Price and ridership really are linked. But the pricing-demand rubber band isn’t as elastic as many people think .

3. Mostly, ridership appears to be linked to the health of the economy in general. With a recession, it falls. With a healthy GDP, it grows...

So if the Hahniacs remaining at BC Ferries were to get their way and were to institute the gouging with the blessing of the 'new' regulator, which way do you reckon overall ridership would slide on the major route money-shakers?



Kim said...

I'm already a prisoner on Vancouver Island. Where's My TransCanada Highway?


Kim said...

sorry, thats

Anonymous said...

Price gouging on, when people need the services the most, is down to a fine art.

It will be the same, with the stupid smart meters. The price will be gouged to the time, when families need hydro the most, dinner times and such.

Same with gasoline, the price is gouged for Easter, May long week-end and summer vacations.

So of course, it makes perfect sense to price gouge ferries, during the time when people want to travel the most. The million dollar salary's, are hell on the BC Ferries.

The BC HST, has done the worst damage of all. Revenue is really down in BC. Citizens spend billions shopping in the U.S. They can save up to 50%, by doing so. They save mega-bucks gassing up their vehicles in the U.S.

Food costs are so high, we see the underground markets cropping up all over BC. I saved $3,000 for an emergency bathroom reno, through the underground. I pay $6.50 for a chicken, as to $15.00 in the super market. All my meat, eggs and vegetables are all through the underground.

As a senior on a pension, I would have to leave BC. My pension was good when I retired. However, the price gouging in BC is terrible. I even had to sell my car. BC really is not a good place to live, unless you are among the 99%.

Norm Farrell said...

The consultants have a good idea. Taking advantage of people financially when there are no other choices could be a great way to raise revenues if it is widely applied.

For example, we could close every street to the downtown core at 6am and only permit entry of commuters prepared to pay a user fee. Maybe $25 for each person and $500 for each vehicle. Do the same in the opposite direction when people are trying to leave the city. We could raise plenty and only inconvenience those that have to use the streets and sidewalks.

It would be fair because those people choose to live or work in the downtown. They could live and work elsewhere if they don't want to pay road and sidewalk tolls.