Ever since its passenger rail service began in 2017, SMART has proven to be an extraordinarily expensive operation. The FY20-21 Budget was based upon a projected fare and parking revenue of $2.66 million an annual ridership of 475,000 and a projected annual operating cost of $31.38 million. In other words it was anticipated that every one-way trip would cost SMART $66 and that since fares were projected to average only $5.53 per trip, the taxpayers were to be saddled with paying the other $60.47 per trip.
Thanks to COVID-19, since the FY20-21 Budget was prepared the situation has gotten dramatically worse.
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In July SMART operated 16 trains per weekday but with an average ridership of only 410 riders a day. Meaning that despite the lower train count the average cost per rider has now climbed to over $150 per trip with riders still only paying about $5.53 of that amount. It bears repeating that even before COVID, SMART’s operating cost per passenger was 2 to 11 times that of other Bay Area transit operators.1
To compensate for its operating losses SMART continues to draw upon its dwindling financial reserves, to the tune of $7 million a year. It is anticipated that absent additional revenues SMART’s reserves will dry up “by 2022 or 2023”.
Given these circumstances it is incumbent on the SMART Board to zero in on how to increase ridership and reduce costs. This is no time to be wasting resources in pursuit of service extensions or other capital improvement programs. Instead of distracting itself with unrealistic improvement proposals the Board should immediately switch gears and bring in a team of operating and financial experts qualified to effectively address the problems at hand.