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Post by chris on Mar 30, 2005 7:59:59 GMT
How are LU profits and costs spread out? How can you work out how much each line has made or lost in a year? E.g. If someone buys a one day rail card, how does the money made on that get spread? Which line does it go to, or which station? Or is it put into one big account for all use? And how do you know that one line isn't making a loss. e.g. Circle line. That is not really needed apart from getting to an interchanging station, all all of it's stations are served by other lines.
Basically, who do the profits go to and how do you deciede who gets what? I hope i haven't made that sound more confusing than it is.
Cheers
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Post by citysig on Mar 30, 2005 17:57:34 GMT
The lack of any reply so far from any of my colleagues may mean they also find it as confusing as the rest of us. But to the best of my knowledge and as simply as possible:
There are books full of mathematical equations to work out everything from ticket sales to penalty payments to/from the infracos.
Generally, the individual sections of the operating companies (SSL, BCV, JNP) each have a wedge of the budget each year. This is then divided for the different lines they control. Within each "business unit" the individual lines will no doubt be funded differently, but more based on size rather than performance or usage - though of course the latter will normally be greater on the larger lines, as by definition they serve more stations.
The line-by-line figures are kept. With lines such as the Circle, the money comes more from the H&C side of SSL rather than the District side.
I don't think there is any part of the underground which would be classed as a "loss-leader." Most lines run services based on demand, and I don't recall many areas which do not require a train every few minutes.
Passenger flows are monitored, and obviosuly there are certain parts of each line which may appear less-used, but these calculations are a separate book of equations altogether.
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Colin
Advisor
My preserved fire engine!
Posts: 11,346
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Post by Colin on Mar 31, 2005 9:34:26 GMT
London Underground is a Government owned company so, to a certain extent, profits and losses are not an issue for any one part of the company. That said, because of the PPP contracts, some clever d*ck has worked out a cost for everything. For example; if a train is not in service because of a defect, Metronet or Tubelines has to pay LUL a 'fine'. If a train is not in service because LUL fail to supply a driver, LUL has to pay Metronet or Tubelines a 'fine'. It's similar with stations. If a ticket machine has a fault the contractor's are fined, but, if LUL fail to ensure it's working when it should, LUL pays. There's also the issue of shared cost with National Rail Train Operating Company's. Again some clever d*ck has worked out a percentage of ticket sales which LUL pays the TOC's and vice versa. At the end of the day all the elements of the company say what budget they want. The finance people say yes or no, then they have meet the set target. This is when the fares are set to meet the planned budget, taking the factor's of likely fines and income from other sources (TOC's, etc) into account.
Personally, I'm glad i drive a train. I admire the people who do all the number crunching, it's certainly not for me !
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Post by citysig on Mar 31, 2005 10:19:07 GMT
Personally, I'm glad i drive a train. I admire the people who do all the number crunching, it's certainly not for me ! And let's face it there are plenty of them to give each other a purpose hand (I'm talking about them and not train operators of course ;D ) For every little piece of the original d*ck's plan, there is a team of people trying to justify their own large salaries by thinking up new ways to make people accountable. Don't get me started. I'm grumpy enough as it is on nights. |
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solidbond
Staff Emeritus
'Give me 118 reasons for an Audible Warning on a C Stock'
Posts: 1,215
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Post by solidbond on Mar 31, 2005 10:33:18 GMT
As a little point on this, the main line rail companies take a percentage of the money they receive from the sale of Travelcards and give a percentage to LU. The percentage given to LU is dependant upon the station which sells the Travelcard. So a £1000 Travelcard sold at Upminster or Barking, will generate more money for LU than the same Travelcard sold at Fenchurch Street, Basildon etc. This caused the original winner of the LTS franchise, LTS Rail, to lose their contract, as it was discovered that they had been sending Travelcards from Fenchurch Street to sell them at Upminster, thereby reducing the amount of money they had to give to LU. This was discovered after they had been awarded the franchise, but before it had actually commenced. As a result, the franchise was re-awarded.
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