Reader Comments: Fares and Fare Collection

Another set of comments from the backlog:

Alex S. writes:

The only pre-paid bus service right now that this post describes is Viva in York region.  You have stations every so often where you buy your tickets and board anywhere on the bus.  I think that this would be to costly to implement system wide, especially in Toronto.  If this kind of thing did happen, I would imagine it would only be on high density routes.

Steve:  One of the things that bothers me a lot about the purveyors of various ticketing and smartcard technologies is that the main goal seems to be to sell a lot of hardware.  Viva, as a bus service, was funded at a level most transit systems only dream of.  They could afford to buy and install all of this equipment, and I’m sure that someone had, in the back of their mind, the idea that these might evolve into more general purpose systems.  That is certainly the intent behind various stored value smartcard media.

My feeling about this is that the transit systems provide a ready-made market for the banking industry, and that industry should bear the cost of outfitting any system.  Indeed, if the smart card account were cross-linked to your bank account, you should be able to go to a bank machine to load up value on the card.  The TTC doesn’t print its own currency for use by riders, and there’s no reason it or any other system should bear the full cost of installing and maintaining ticket vending equipment.

Joe writes:

Hi Steve, can you comment on the subject of purchasing metropasses?  Every month end we witness lines of passengers snaking around collector booths waiting to buy a metropass.  I live near Broadview, and the collector often runs out of passes, forcing me to have to travel out of my way to other stations to obtain a pass.  This is most frustrating and inefficient.

Why can’t the TTC come up with an easier solution to obtaining a metropass?  If you can buy tokens from vending machines why do metropass users have to line up or ride the subway desperately looking for stations that have them in stock?

If they want us to use them, it sure doesn’t look like it.  The current system is stuck in the 70s.  Will the proposed smart card bring us into the 21st century and remove the dreaded month end metropass headache?

Steve:  I too live near Broadview Station and see the month-end lineups to buy passes.  As a subscriber to the monthly discount plan, I get my pass in the mail which is quite handy, but obviously not every rider wants to buy a pass every month.  [Mind you, now that they are both transferrable and tax deductible, the argument that someone might be on vacation for half a month doesn’t hold up as well as it used to.]

TTC management never liked the Metropass.  It was shoved down their throats by the Commission in 1980 when the “it won’t work here” argument disintegrated with Hamilton’s introduction of a pass.  I think that it suits some people in the TTC just fine to run out of passes because it limits the “loss” they perceive these passes to represent.

When we move to smart cards, watch for these same bean counters to cook up a fare system that creates a substantial fare increase for frequent users.  We will have to fight it and we will win, but the forces of darkness will never stop trying to undo the benefits of flat-rate fare structures.

We have a weekly pass, a day pass that’s good all day, and a transferrable Metropass thanks to Commissioners like the embattled Howard Moscoe leading the charge.

2 thoughts on “Reader Comments: Fares and Fare Collection

  1. The TTC does seem to be working on better ways to sell Metropasses.  At Finch station, there’s a Metropass vending machine that takes credit or debit cards.  Of course, it seems to be out of service more often than not, but it’s there.


  2. “When we move to smart cards, watch for these same bean counters to cook up a fare system that creates a substantial fare increase for frequent users. We will have to fight it and we will win, but the forces of darkness will never stop trying to undo the benefits of flat-rate fare structures.”

    The “benefit” of flat-rate pricing is that core commuters (the 9 to 5, Monday through Friday crowd — not a reference to the center of the city) get to contribute a smaller share of total fare revenue even though they account for a larger share of total trips taken.  That is flat-out unfair (pardon the pun).  It also flies in the face of economics.  First, core commuters determine peak service requirements, and an hour of peak transit service is more expensive to operate than an hour of baseline transit service.  Second, research done over decades has shown that core commuters are least sensitive to price increases.  Sweetening pass discounts while hiking the cash fare does not maximize revenue or ridership at a given level of operating subsidy.

    The TTC was one of the last Canada/US transit properties to maintain an economically sound pass program.  Disproportionate increases in the cash fare, coupled with the introduction of the Metropass Discount Plan and now the transferable Metropass, the (non-GTA) Weekly Pass and the valid-before-9:30-AM Day Pass, have put an end to that.

    Those interested should consult the full USD60.00 version of “Fare Elasticity and its Application to Forecasting Transit Demand” (American Public Transit Association, 1991).

    For an economically sound fare policy experiment that was never permitted, because of political pressure, see this report from AC Transit: .  (AC Transit is the 3rd-largest public bus operator in California.  It serves the eastern half of the San Francisco Bay Area, including Oakland and Berkeley.)

    For a technology feature that would provide a palatable way to revive the TTC’s old, economically sound pass program, see the daily price capping aspect of Transport for London’s Oyster Card.  A smart card system with a *monthly* price cap capability could help the TTC balance the needs of occasional riders with the needs of core commuters.

    Of course, I do not support the use of technology for its own sake. I’d just do away with all these silly passes and have everyone pay a uniform, much-lower cash fare. (Frequent riders could buy tokens for the same price.)  The change would be revenue-positive and ridership-positive.

    Steve:  Your argument is sound in the context you make it and I’ve left your text unchanged so that readers can hear the whole thing.  However, you have missed two important parts of the environment in which the fare system operates:

    We want to encourage people to use transit as a matter of public policy, and in particular, we want to encourage them to use it whenever possible.  This may allow people to avoid buying a second car and increase the overall demand and political support for more transit.  The flip side of this, of course, is that we have to provide more.  The irony of the current political situation at the city is that the TTC can mess around with the fare structure fairly independently of the Budget Advisory Committee, but let them try to run one more bus, and the world caves in.  The mismatch in approaches to improving transit’s effectiveness is a direct result of a broken political arrangement.
    People who drive cars (the primary “competition”) don’t think of paying for using the car every time they get in.  The cost is decoupled from the actual experience.  Passes achieve the same relationship for transit riders.  I disagree about your cost analysis re core riders — I take a lot of “extra trips” because I have a pass, but these are trips when the TTC has some surplus capacity and when the cost of providing more, if required, is comparatively small.  Therefore I am rewarded with a lower cost/trip overall.  Unless we were to implement fare-by-distance, we would have a strong disincentive for people to use the system for many short-hop trips.  Fare-by-distance would penalize the very long-trip commuters we are trying to get off the road system.

    The bottom line here is that the fare structure is more than just an economic model for the transit system, but a way of achieving broader goals for transit and the city.


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