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York Region Transit Strategic Marketing Analysis

I. Executive Summary
On January 1st, 2001, the Region of York assumed responsibility for the funding and
operations of public transit throughout the Region and the York Region Transit branch
was formed and became a part of the Transportation Services department. York Region
Transit offers seamless connections across the municipalities within York Region, as well
easy access to transit systems in neighbouring regions including Toronto, Durham, and
Peel. Since the amalgamation of transit services, ridership in York Region has grown by
almost 11 million riders, from the initial 8 million riders in 2001, an average increase of
10% per year. In 2009, roughly 19 million riders had gone through the system using a
fleet of almost 500 vehicles for rapid transit routes, conventional transit routes, mobility
transit routes, as well as special trips. Although these numbers pale in comparison to
the Toronto Transit Commission (TTC), it should be pointed out that in Toronto, 26% of
residents don’t own a car, whereas in York Region, only 4% don’t own a car thus an
increase in ridership is still quite commendable.

York Region Transit (YRT) is experiencing one of the highest growth rates in Canada due
to a vast increase in population, employment growth, environmental-friendliness, rising
fuel prices, and extensive marketing activities. The YRT system has expanded to
encompass over 120 routes as well as special routes for other trips, mobility transit
routes, and TTC contracted routes operating within York Region.

However, YRT is still quite behind in various industry standards. The rides per capita
(average number of trips by a resident) is only 19, which ranks the Region second lowest
in comparison to its bordering neighbours as well as other comparable transit
authorities in Canada. Furthermore, the net cost per passenger is over $3.50 which
places it as the top of the list. The expenditures on a per capita basis are quite high due
to the cost of doing business in such a large geographical area. Due to that cost,
average fare for a customer is around $2.50, making it the most expensive ride in
comparison to neighbouring and comparable transit authorities. With a land area of
roughly 1800 square kilometres, it is quite challenging for buses to connect with the
small communities dispersed throughout the Region as they have to cover a much
greater area to pick up passengers in comparison to neighbouring municipalities. The
recent economic downturn has also affected YRT and led to a decline in ridership which
also reduced revenues, and YRT was unable to reach its 20 million ridership goal for
2009.

The challenge for York Region Transit is to decide whether they should keep investing in
the transit infrastructure to improve ridership and support smart growth or rationalize
their existing service and reallocate resources to manage the system based on the
residents’ needs.

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II. Situational Analysis

A. Environment
1. Economic conditions and trends
i. On average, the economy was on the upswing until 2008 and then the world
was hit with a recession that is still currently ongoing. Canada was also
affected negatively due to its strong economic ties to the United States,
however the overall affect was not as bad as other countries around the
world.
2. Cultural and social values and trends
i. The push for environmental-friendliness and “going green” is as strong as
ever and public transit has always been seen as a legitimate option for
people to use in order to minimize their carbon footprint. Location-wise,
however, YRT is in a tough area as only 4% of York Region residents do not
own a vehicle, and due to the large area and distances to cover, most people
prefer to drive.
3. Political and Legal Issues
i. No political/legal issues exist. There is the obvious issue of funding
approvals, etc. to go through the York Region Council, comprised of various
councillors, mayors, etc., but that is a standard process for regional
governments throughout Canada.
4. Summary of environmental opportunities and threats
i. Public transit is seen as a great tool by people who wish to minimize their
carbon footprint and thus, YRT has a great opportunity to use the greening
initiative to their advantage and increase ridership in York Region. However,
they must also ensure that they are maximizing on their route-management
and also the usage of their fleet.
5. Implications for strategy development
i. If the proper strategy is deployed and YRT incorporates the residents’ needs
as well as properly assigns routes and vehicles based on existing and
predicted ridership, they have a great opportunity to get people on-board.
However, they need to ensure that they provide timely service in a cost-
efficient manner in order to attract more riders.

B. Industry
1. Classification and definition of industry
i. The public transit industry is a public service industry that can be operated
either as a public or private corporation. Their main function is to provide
passenger transportation services for the general public. Transportation

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authorities can operate on a municipal, regional, provincial, or federal

capacity and their size of operations determines the fleet size and their
routes. Operations can range from a few hundred vehicles (buses, trains,
vans, subways, etc) to thousands of vehicles depending on the size and scope
of operations.
2. Analysis of existing competitors
i. Since transit is mostly on a municipal/regional level, there is not a lot of
competition in the region’s service area. However, there are situations
where transit authorities cross boundaries into other regions but those
routes are agreed upon by both parties to maximize efficiency on both ends.
Taxicab drivers are an alternative competition as they provide better and
quicker service but at a higher price.
3. Analysis of potential new entrants
i. Due to the size and scope of operations, the potential for new entrants is
highly unlikely. However, there may be amalgamations that may take place
where small transit authorities are picked up by their larger neighbours in an
effort to centralize and merge transit services in a region.
4. Analysis of substitute products
i. Substitutes include the private modes of transportation such as residents’
own vehicles. Taxicab services are also another substitute as well as carpool
and ride-share alternatives.
5. Analysis of suppliers
i. The major supplier would be the vehicle manufacturers for the buses, vans,
subways, trains, etc. There are normally various parts suppliers available and
YRT would select from the lowest priced OEM supplier.
6. Analysis of buyers
i. The main buyer is the passenger that would potentially be boarding a bus or
vehicle. Depending on their requirements/needs and their rating of the
service, they may become a regular passenger or just stop going on a bus if
their experience was not satisfactory.
7. Summary of industry opportunities and threats
i. Although there is very little threat from any new entrants, YRT faces a
challenge based on the size of York Region as well as the fact that most
people do drive and do not take public transit. However, they have a great
opportunity to expand their operations and if they provide timely and
efficient service in the proper areas, coupled with the growth occurring in the
Region, they have a great opportunity to succeed.

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8. Implications for strategy development

i. If YRT can successfully expand their operations and take the residents’
requirements as well as the Region’s size and expected growth into full
consideration, they have an excellent opportunity to grow and succeed for
the future. If, however, they decide to stick to current operations, they may
be missing out on a large number of new potential passengers.

C. Organization
1. Objectives and constraints
i. York Region Transit was formed on January 1st, 2001 when the Regional
Municipality of York assumed responsibility for the funding and operation of
public transit throughout York Region. YRT’s mission is “…to provide quality
public transit services which support the economic vitality, environmental
sustainability, and health of the Regional community.” York region
encompasses quite a large area, therefore the main challenge for YRT is to
connect the various towns and cities within the Region via public transit in an
efficient way.
2. Financial Condition
i. YRT is funded through both fare box revenue (ie fares collected from
passengers) and through taxes. YRT’s revenue/cost ratio (how much money
YRT recovers out of revenues in comparison to the costs) is 40% which is the
4th lowest compared to neighbouring transit authorities and similar transit
authorities in Canada. However, since it is part of a government
organization, the profit/loss figures are not crucial to operations as YRT can
gain additional funding from the Region as needed.
3. Management philosophy
i. Management is focused on providing quality public transit services as well as
quality customer support for its transit operations. Management is also
aiming to maximize the potential for success with new transit service
strategies and significantly increase ridership and cost recovery.
4. Organizational structure
i. Due to the current size and scope of operations, YRT is a branch of the
Transportation Services department at the Regional Municipality of York. It
is an assumption that when the size of operations will increase, YRT will
become a self-contained organization, similar to the TTC. The General
Manager of Transit operations reports to the Commissioner of
Transportation Services, who reports to the CAO of York Region. Underneath
the GM of YRT are various units including Marketing & Customer Service,
Service Planning, Mobility Plus, Facilities & Fleet, Enforcement, Operations,
and Finance, each with its own manager and subunits/staff.

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5. Organizational culture
i. Organizationally, YRT is one big and happy family as all units work together to
support each other. Due to its operations, the branch is also quite distinct
from the other branches in the Transportation Services department and as
such, they do not really collaborate with other branches. The Transportation
Services has recently gone through a re-org in an effort by the Commissioner
to solve this ‘silo-issue’, but it has not affected YRT’s structure at all and thus
the verdict is still out as to whether or not the re-org was useful. Overall,
however, the culture is extremely friendly and positive.
6. Summary of the firm’s strengths and weaknesses
i. Dual funding from both fare box collections and tax funding.
ii. Committed, competent, and experienced group of staff.
iii. Operations are always being streamlined and new routes and services being
planned based on passenger needs to keep everyone happy.
iv. Implementing cutting edge technology on YRT vehicles as well as
implementing business intelligence tools to improve operations and provide
real-time information and updates for passengers.
v. Operate a fairly new and advanced fleet and provide customers with real-
time updates on stations on next bus as well as WIFI internet on the bus.
vi. Still quite young in terms of operations (9-years) and serving a large region
trying to connect various towns and cities scattered throughout the region.
vii. Very low revenue/cost and very high cost of operations.
viii. Economic downturn has slowed growth in ridership and consequently
revenues.
ix. Operations pale in comparison to TTC.
7. Implications for strategy development
i. Organization-wise, YRT is a very strong-linked branch with a dedicated group
of staff. There are some service issues that need to be resolved so that they
can increase ridership and subsequently increase revenues so that they can
have a better revenue/cost ratio and also be able to expand operations on
their own and not rely on funding via tax dollars.

D. Marketing Strategy
1. Objectives and Constraints
i. YRT has performed extensive marketing to promote new routes, services and
vehicles. Their banners can be found lining up the streets serving a constant
reminder of their transit service. YRT also holds numerous community
events to showcase their operations and business and also conduct surveys
to determine passenger needs. YRT is also in the process of redesigning their
website to revamp the look and feel of the site and provide passengers with
the relevant information that they need. The graphics and images used in

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the promotional material is quite attractive and generates a sense of

‘coolness’, excitement and buzz towards public transit use.
2. Analysis of target markets
i. The target market is any passenger that would potentially be boarding a bus
or vehicle. Depending on their requirements/needs and their rating of the
service, they may become a regular passenger or just stop going on a bus if
their experience was not satisfactory. Although York Region is one of the
fastest growing regions in Canada, the fact of the matter is that only 4% of
Region residents do not own a personal vehicle. Couple that with the fact
that the transit service has large distances to cover in order to connect
various cities and towns, and it is clear that YRT is faced with a big challenge
of capturing the target market.
3. Analysis of marketing mix variables
i. The product that YRT offers public transit service for all York Region
residents. The price/fare of using YRT depends on the distance of the trip
and also based on the age group of the passenger1. They have a trip planning
tool available online which will outline the trip from the starting destination
all the way to the end destination based on the timings the passenger
provides2. YRT has done a good job in promoting and marketing their
services and business to the residents of York Region through newspaper
advertisements and website updates. Overall, YRT has done a fairly good job
in terms of setting up their marketing mix.
4. Summary of marketing strategy’s strengths and weaknesses
i. Great exposure to residents and passengers to showcase YRT.
ii. YRT organizes numerous showcases, community events and open houses to
showcase YRT and their fleet for all.
iii. YRT conducts surveys throughout the year to see what passengers and
residents are thinking and plan ahead to incorporate those needs into the
short-term or long-term plans.
iv. User-friendly and informative website for passengers to navigate to find
schedules, calculate trip times, provide service updates as well as any
upcoming community events.
v. Website is also being redesigned to become even more interactive.
vi. Print and web-based advertisement is quite attractive and generates a sense
of ‘coolness’, excitement and buzz towards public transit use.
vii. Due to limited routes and fleet, the marketing presence is quite limited
compared to a large transit neighbour like the TTC.
viii. Size of marketing team is based on the operations so it is currently a group of
6-7 staff.

1
http://yrt.ca/fares/index.asp
2
http://tripplanner.yrt.ca/hiwire?.a=iTripPlanning&.s=388ee55a

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ix. Size and scope of operations also restricts marketing to only be placed along
routes and the highly populated areas.
x. Budget is also restricted as the current cost-recovery by YRT is not very
impressive, and thus marketing budget is limited.
5. Implications for strategy development
i. The marketing and promotion strategy currently employed by YRT is quite
effective and useful based on the current size of operations. They have done
a good job at marketing the YRT name and service through various banners
lined across their most popular routes, advertisements in newspapers and
setting up a very good website which will become even better with the
pending website redesign, and also holding various community and special
events highlighting the YRT service and its successes. YRT needs to ensure
that when they do expand their operations, that they continue with that
marketing strategy and generate further buzz and attraction for residents to
notice and also want to use public transit.

III. SWOT Analysis

A. Strengths:
i. Dual funding from both fare box collections and tax funding.
ii. Committed, competent, and experienced group of staff.
iii. Operations are always being streamlined and new routes and services being
planned based on passenger needs to keep everyone happy.
iv. Implementing cutting edge technology on YRT vehicles as well as
implementing business intelligence tools to improve operations and provide
real-time information and updates for passengers.
v. Operate a fairly new and advanced fleet and provide customers with real-
time updates on stations on next bus as well as WIFI internet on the bus.
vi. Great exposure to residents and passengers to showcase YRT.
vii. YRT organizes numerous showcases, community events and open houses to
showcase YRT and their fleet for all.
viii. YRT conducts surveys throughout the year to see what passengers and
residents are thinking and plan ahead to incorporate those needs into the
short-term or long-term plans.
ix. User-friendly and informative website for passengers to navigate to find
schedules, calculate trip times, provide service updates as well as any
upcoming community events.
x. Website is also being redesigned to become even more interactive.
xi. Print and web-based advertisement is quite attractive and generates a sense
of ‘coolness’, excitement and buzz towards public transit use.

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B. Weaknesses:
i. Still quite young in terms of operations (9-years) and serving a large region
trying to connect various towns and cities scattered throughout the region.
ii. Very low revenue/cost and very high cost of operations.
iii. Economic downturn has slowed growth in ridership and consequently
revenues.
iv. Very large land area (approx. 1800 square kilometres), thus it is quite
challenging for buses to connect with the small communities dispersed
throughout the Region.
v. Operations pale in comparison to TTC.
vi. Due to limited routes and fleet, the marketing presence is quite limited
compared to a large transit neighbour like the TTC.
vii. Size of marketing team is based on the operations so it is currently a group of
6-7 staff.
viii. Size and scope of operations also restricts marketing to only be placed along
routes and the highly populated areas.
ix. Budget is also restricted as the current cost-recovery by YRT is not very
impressive, and thus marketing budget is limited.
x. Rides per capita (average number of trips by a resident) is only 19, very low
compared to bordering neighbours and other comparable transit authorities
in Canada.
xi. Net cost per passenger is over $3.50 which places it as the top of the list.
xii. Average fare for a customer is around $2.50, and the fare price may increase
depending on the distance travelled in the trip, making it the most expensive
ride in comparison to neighbouring and comparable transit authorities.
C. Opportunities:
i. Funding always available by York Region Council to expand operations.
ii. High growth of both residents and businesses in York Region provide an
excellent opportunity to expand operations.
iii. Fairly new fleet so operations can always be expanded without a huge
toll on the vehicles.
D. Threats:
i. Very little threat from any new entrants.
ii. Challenge is the size of York Region and how to connect from one end to
another.
iii. Almost everyone in York Region have a vehicle so they drive and do not have
an incentive to use public transit.
iv. If they are unable to sustain operations, there is always the threat of YRT
being merged with a larger transit authority like the TTC or GO Transit
(Government of Ontario Transit), but that is highly unlikely.

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IV. Problems Found in Situational Analysis

A. Statement of Primary Problem:

York Region Transit faces a challenge of determining whether or not they should
keep investing in transit services, routes, planning, etc. and improve ridership or if
they should rationalize their existing service and reallocate resources and services to
better manage the system.
1. Evidence of problem: The operation costs are quite high, the fares are also high
compared to other transit authorities and the revenue/cost ratio is quite low
meaning that YRT is unable to recover its operating costs through its revenue
collections and is thus operating in a hole which is being filled by tax dollars
every year.
2. Effects of problem: If YRT continues to expand and the routes and services are
not used by the public, then their operations will fall into a much bigger hole.
This will also lead to much larger consequences such as major cutbacks and even
merging YRT into another transit authority.

B. Statement of Secondary Problem:

York Region Transit also needs to modify its marketing and promotion strategy in
accordance with the primary problem so that they do not do any over-marketing or
any under-marketing of the YRT service. Furthermore, they need to implement
sound business intelligence and decision making tools in order to provide both staff
and passengers with up to date and relevant information in order to make quick
decisions for operations and trip planning. The business intelligence tool is also
necessary to integrate various aspects of Transit (scheduling, bus dispatch, bus
location, fare management, fleet management, etc) into the BI tool and generate
the right information for the decision makers in the organization.
1. Evidence of the problem: Marketing is currently focused on the main service
areas, and people in areas where there is no transit service do not get much
exposure to YRT. Also the various systems in Transit are not very well linked
together which creates a disconnect and delays the processing and
interpretation of information to provide sound business decisions for both
internal staff and external users.
2. Effects of problem: By properly marketing and promoting to the market in the
Region’s service area, YRT can ensure that their marketing dollars are spent
efficiently and effectively. But all that depends on whether or not the service
levels and routes are increased or if they decide to maintain current operation
levels. The business intelligence and decision making tools are items that should
be looked at and implemented properly regardless as that is something which
will assist YRT as well as passengers in the decision making process.

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V. Strategic Alternatives for Solving Problems

A. Description of strategic alternative 1:

Proceed with the current service levels and rationalize and reallocate existing
resources, services, and routes.

1. Benefits of alternative 1:
i. Current service levels are maintained.
ii. Fleet levels and staff levels will stay the same.
iii. Services can be streamlined to save money and reduce costs as well
as improve the revenue-cost ratio.
2. Costs of alternative 1:
i. Ridership will stay quite consistent as no new routes are being added.
ii. Loss of potentially new service areas and routes.
iii. Fleet levels and staff levels will stay the same.
iv. Population and business growth may exceed YRT’s load and lead to
problems.

B. Description of strategic alternative 2:

Keep investing in public transit by creating new routes, providing more services,
adding more to the fleet to improve ridership.

1. Benefits of alternative 2
i. Keeps YRT growing along with the population and business growth in
York Region.
ii. Excellent opportunity to increase ridership levels throughout the
Region.
iii. Greater exposure to various areas in York Regions by creating new
service areas and routes.
iv. Fleet levels and staff levels will increase.
v. Ability to connect various towns and cities within the Region and
provide residents with more commuting options.
vi. If ridership and revenues increase, the revenue-cost ratio will be
improved and YRT could also possibly lower ticket prices to attract
even more passengers.
2. Costs of alternative 2:
i. Both capital costs and operating costs will increase.
ii. Risk of failure in the sense that ridership may not increase.
iii. The revenue-cost ratio may increase if ridership does not increase.

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iv. Will initially need York Region Council approval to receive increased
funding dollars to implement changes.

C. Other strategies and options for consideration:

Modify marketing and promotional strategy based on whether or not operations
and services are expanded, Implement sound business intelligence and decision
making tools to provide correct, relevant, and timely information for all decision
makers.

VI. Selection of Strategic Alternative and Implementation

A. Statement of selected strategy:

Strategic Alternative 2 is the selected strategy in this case along with the
implementation of the minor strategies and options listed above.

B. Justification for selection of strategy:

The logical way to move forward is to increase operations, routes and service levels
as that is what the residents and passengers want, based on the surveys conducted.
Furthermore, the environmental-friendliness and greening initiative that both
people and organizations, including YRT, are focusing on is a great initiative to run
with and by purchasing a fleet which is environmentally friendly (ie hybrid vehicles,
etc.), YRT can showcase that and attract more passengers. Furthermore, the surveys
conducted by YRT clearly show that almost 70% of respondents want to see more
frequent services, longer service hours, better coverage area and more destinations
added, which further fuels the need to invest in an expansion. On the way to
implementing these items, YRT can also increase their marketing and promotion
efforts to showcase the expanded service hours as well as the increase in
destinations to show the residents of York Region that YRT is listening to their needs
and implementing the changes as they had requested. By expanding the service
area, YRT can appeal to people who were originally driving to their destinations and
provide them with a cheap, quick, and environmentally friendly alternative. With
the expansion of service, YRT would also need to implement sound business
intelligence and decision making tools in order to connect the various systems and
components of scheduling, vehicle location, dispatching, fare management, and fleet
management. By having various systems poll their information together, YRT would
be able to not only make sound service and route decisions in real-time, but also
provide passengers with this service through their website so that customers can
also plan a trip on a real-time basis from start to finish. By generating more relevant
and timely information from the systems, YRT and it’s passengers will be able to
effectively and efficiently plan trips and services to best fit their expanded coverage
area and not be losing money on routes and service hour expansions and getting

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into a bigger financial hole.

C. Description of implementation of strategy:

Fleet, route, and service expansions will probably have to implemented over a five-
year span due to the large scope and service area that YRT is looking at. There is a
lot of research and planning that would be required to first determine which
population areas are growing, what their demographics are to determine if they will
even need transit, and where they would likely need to connect to. They also would
need to plan an easy and convenient way to connect to both future and existing
connections to not only YRT routes, but also routes to neighbouring transit
authorities, especially the TTC as that is the main transit gateway into Toronto. They
must also ensure that they maximize the potential for success with the new service
and route strategies to ensure that there are significant gains in ridership levels and
cost-recovery. Once the routes and service expansion is all planned out, then the
marketing strategy needs to be rolled out to inform residents that better and more
timely service is coming soon. They should also promote transit usage as a practical
and wise alternative to private vehicle use and push the eco-friendly message.
Throughout the five-year plan, YRT should also start their business intelligence work
and start linking their various systems into one another to not only feed real-time
data, but also to analyze, report and predict transit usage for staff so that they can
determine the best options and alternatives to maximize their existing services and
routes and also to ensure that their new services and routes are successful as well.
This continual improvement in service and infrastructure will result in increased
ridership, cost-recovery, and rides per capita for YRT and will place them in a very
good position to succeed even further in the future.

VII. Summary

YRT can place itself in a very successful position by focusing on further investments in
public transit to expand routes, services, and fleet size to match the population and
business growth in York Region. The public polls clearly outline that people would like
to see the coverage area, destinations, service levels, and service hours to be expanded
and YRT should listen and grow further.

YRT should also be promoting the whole environmental friendliness initiative, as part of
their expanded marketing and promotion strategy, and remind passengers and
residents that they can significantly reduce their carbon footprint by switching over to
public transit, and with the added fact that services and routes would be increased, it
would be a great situation for both YRT and it’s passengers.

The marketing and promotion strategy should focus on the new service and route
improvement and highlight items such as the added hours and destinations. The

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showcases and community events should also continue on as they would be another
great way to make people aware of the ongoing expansion. Furthermore, tours of the
new buses would also generate good publicity. Once again, the eco-friendliness
message should be constantly brought to the public’s attention and by placing a dollar
value in savings in their advertisements and promotions, the message would become
even clearer for them. The website redesign would also be a timely addition to the
marketing strategy as that would also be a way to showcase that YRT is expanding and
revamping itself to fit the public’s needs.

The linkage of various systems and tools for bus location, dispatching, scheduling, fares,
and fleet management with a proper business intelligence and decision making tool
would also provide a wealth of information for YRT staff to use in order to streamline
their services even further as the data would be real-time and could be compared to the
historical data in order to determine which routes need to be service more or less and
which areas would benefit from a service expansion. The information can also be
shared with the public using the website to provide real-time travel planning
information so that people can plan their trips from start to finish right from their
computers and then head out and hop straight onto a bus.

The expansion, marketing strategy and business intelligence strategy will all position YRT
for further success in the future as York Region grows at the astounding pace as it is. By
having these measures in place within the next five years, YRT would be in a much
better situation to assess the following five years to determine whether or not their
expansion strategy is in line and successful in increasing ridership and revenues.

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Appendix I – Maps, Statistics, and Figures

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Results of a Survey Conducted by York Region Transit in 2009

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