The
farebox
A fare is the fee paid by a passenger for use of a public transport system: rail, bus, taxi, etc. In the case of air transport, the term airfare is often used. Fare structure is the system set up to determine how much is to be paid by various pa ...
recovery ratio (also called fare recovery ratio, fare recovery rate or other terms) of a
passenger transportation system is the fraction of operating expenses which are met by the
fares paid by passengers. It is computed by dividing the system's total fare
revenue
In accounting, revenue is the total amount of income generated by the sale of goods and services related to the primary operations of the business.
Commercial revenue may also be referred to as sales or as turnover. Some companies receive rev ...
by its total operating expenses.
Fare structures
There are generally two types of fare structures: a simple, flat rate fare structure (pay a fixed fare regardless of time of day and/or travel distance) or a complex, variable rate fare structure (pay a variable fare depending on time of day and/or travel distance). A variable fare structure is typically associated with a higher recovery ratio, though it may simply be the case that such systems are implemented only on more profitable networks or modes such as commuter rail. Variable-rate fares require a higher initial investment in fare ticketing technologies such as the use of
contactless smart card
A contactless smart card is a contactless credential whose dimensions are credit-card size. Its embedded integrated circuits can store (and sometimes process) data and communicate with a terminal via NFC. Commonplace uses include transit ticket ...
s,
turnstile
A turnstile (also called a turnpike, gateline, baffle gate, automated gate, turn gate in some regions) is a form of gate which allows one person to pass at a time. A turnstile can be configured to enforce one-way human traffic. In addition, a ...
s or fare gates, automated
ticket machine
A ticket machine, also known as a ticket vending machine (TVM), is a vending machine that produces paper or electronic tickets, or recharges a stored-value card or smart card or the user's mobile wallet, typically on a smartphone. For instanc ...
s, as well as IT infrastructure.
Farebox ratios around the world
The farebox recovery ratio is the ratio of fare revenue to total transport expenses for a given system.
These two figures can be found in the financial statements of the operators. Oftentimes the operator runs multiple modes of transport (e.g. subway and bus), and there is no data for individual modes (segment analysis). In this case the operator is considered as one system, or a group of modes are collectively considered one system.
Fare revenue is not the same as "transport" or "operational" revenue, as there are often secondary sources of revenue such as lockers and paid restrooms and advertisement revenue. Fare revenue is a subset of transport revenue, which is in turn part of total revenue along with "non-transport" or "non-operational" revenue.
Total "transport" or "operational" expenses are a part of total expenses along with "non-transport" or "non-operational" expenses. Total transport expenses may include expansion projects if they are paid for by the operator.
Africa
Asia
Please note that, the "
operating ratio In finance, the operating ratio is a company's operating expenses as a percentage of revenue. This financial ratio is most commonly used for industries which require a large percentage of revenues to maintain operations, such as railroads. In railro ...
" ( ja, 営業係数 ko, 영업계수) commonly published by some Asian systems like those in Japan is different from farebox recovery ratio even after inverting the number to turn cost per unit revenue into revenue per unit cost, as that figure cite all operation revenue instead of only the fare revenue.
["JR&私鉄全路線の収支 「営業係数」計算式を大公開", 週刊東洋経済臨時増刊 鉄道完全解明2014, p.61-62, February 20, 2014]
Europe
North America
Canada
United States
Oceania
South America
References
{{DEFAULTSORT:Farebox Recovery Ratio
Public transport fare collection
Transport economics
Rail transport-related lists