The Taipei Mass Rapid Transit (MRT) has operated at a loss every year since it opened in 1996, but could balance its books with an average fare hike of just NT$0.5 (US$0.02), a Taipei Rapid Transit Corp representative said.
The Taipei MRT has failed to generate a profit, despite increasing passenger numbers, Taipei Rapid Transit Corp planning division director Wu Chun-yo (吳俊佑) said.
“That branch of the corporation loses money every year, it is just a matter of by how much,” he said.
In bad years the MRT runs up a deficit of between NT$700 million and NT$800 million, he said.
However, the company last year posted a NT$300 million deficit, the lowest in its history, because it took steps to boost passenger numbers on weekends, Wu said.
“We rolled out single-day passes for families and groups, and deals were struck with Taipei 101 and businesses in the Yongkang Road (永康) area to give gifts to tourists using the single-day pass,” Wu said. “Those measures have increased ridership and therefore fare revenue.”
“After [Taipei] Mayor Ko Wen-je (柯文哲) took office, he demanded that the operational efficiency of the MRT be maximized to offset losses in transit operations,” he said.
The MRT last year branched out its business operations, including initiatives to rent office space at its stations, Wu said.
Rent from office space generated revenue of NT$68 million and rent from online vendor Catch Power Co’s merchandize retrieval boxes — located in 108 MRT stations — generated another NT$15 million, he said.
The expansion of commercial space in MRT stations was followed by an increase in the number of visitors, resulting in greater opportunities for paid advertisement, Wu said.
Business operations peripheral to urban transit has more than made up for the deficit that transit operations have incurred, with the company’s bottom line having risen from NT$500 million in 2015 to NT$1.5 billion last year, he said.
“When the then-Muzha (木柵) Line opened in 1996 it was the MRT’s only service and it had a daily ridership of 30,000 people. Now the urban transit network has a daily ridership of 2.03 million,” Wu said.
“The chronic deficit in the transit arm is caused by the need to set aside funds every year in anticipation of buying new carriages,” he said.
“The Taipei MRT services also differ significantly from those in New Taipei City in terms of profitability, with most of the revenue-generating lines in Taipei passing through places where businesses sustain traffic,” he said.
In contrast, New Taipei City lines tend to make less money or operate at a loss, such as the Blue Line section that goes to Tucheng District (土城), Wu said.
Total ridership in the Taipei MRT was 730 million last year, Wu said, adding that a small increase in minimum fares — from NT$23 to a hypothetical NT$23.5 — would be sufficient for the transit arm to turn a profit.
However, the Taipei City Government has no plans to hike ticket prices in the short term due to policy concerns, Wu said.
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