Whenever I read social media away from this forum I see people complaining about the huge profits that TfL make from their outrageous fares.
I presumed that these adverts were to counter these views rather than have a go at any other operators.
I don't know how other operations work but bus companies are paid on the basis of how well they run their services with bonuses for more regular services and penalties for less regular ones. The number of passengers does not directly influence the amount the bus companies earn.
Most people on social media have no clue about the details of TfL's finances. They just think relatively expensive fares means big profits because that's a nice simplistic line from the media and politicians. The reality is much more nuanced but that rather defeats the media "line". I don't feel the adverts are 100% truthful because the message is over simplified but clearly most people aren't interested in the fine detail.
The basic fact is that Government and Mayoral policy is to try to get each TfL mode to the point where revenues exceed operating costs. LU is already there and DLR, Overground and Trams aren't too far behind. Buses are more difficult. This means each mode will make an operating profit eventually. The surplus is then used to defray some of the capital investment costs.
Government have lopped off more than £250m per annum from TfL's revenue grant and it is only deft financial foot work by TfL that has avoided service cuts but from my reading of the numbers some capital investment has been cut or postponed to get through the hurdle of each spending round. We have a Spending Review this year for revenue and it will be interesting to see what the Treasury and DfT dole out to TfL. We are getting to the point where investment projects will deliver new and improved infrastructure but operators won't be able to properly fund the incremental running costs (station staff, drivers, maintainers). That's where you get to economic madness.
It is also worth saying that the transfer of West Anglia to TfL was on the basis that it was financially neutral to the DfT and Treasury - i.e. no subsidy whatsoever from them to TfL in respect of the services. The North London Railway services that transferred in 2007 do attract a grant payment from DfT to TfL.
On your second point most of the operations have performance based contracts in place - certainly true for LOROL, MTR Crossrail and DLR. TfL have increased the "hurdles" in recently let contracts making it much tougher for operators. The Crossrail regime is particularly onerous once services run through the tunnels and it will be interesting to see if MTR can make money running the service. LU's performance regime is now "internalised" and will be set on the basis of Directorate targets on cost efficiency, budget savings, lost customer hours, engineering parameters for asset performance. The regular performance reports are published so it's easy to see how things are going.
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Are TfL contracts not run as concession agreements as opposed to rail franchises.
The risk is being taken by TfL.
How much of the *profit* would even go to a private operator?
Farebox revenue risk is held by TfL although operators get a share of improved revenue where fare evasion is demonstrably reduced. TfL take the revenue risk because it is better able to "hedge" against economic fluctuation. It also means that we do not have operators "gambling" as to how well or badly the economy will go and other factors like population growth and then also needing "escape clauses" if things go badly wrong. Personally I think this makes far more sense on commuter networks where there is little scope to play fancy games with ticket products and pricing.
The contracted operators have risk in terms of contracted service performance, staff performance and ambience. Obviously some of the service performance risk is held by Network Rail via the disruption attribution process as they're responsible for infrastructure, signalling and power assets. The operators will have a set level of return within their bid costs for the contract. If they want to earn more money then they need to reduce the cost of operation and / or perform highly to earn performance bonuses.
