In the thread about new streetcars, part of the discussion turned on the question of fare collection. I’ve been thinking about this for a while and planned to write about this topic, but when I actually started, realized that there’s more here than will fit in one article.
One major topic in all discussions is the question of flat fares versus fare-by-distance, and this inevitably gets pulled into questions about “equality” in the way that we price transit so that riders are not penalized by things like zone boundaries and operator service territories. However, any fare system brings its own benefits and problems. We may solve problems for one group of riders, and create a new set of problems for others.
This article considers fare-by-distance by analogy to the existing TTC system. It is intended as a “back of the envelope” calculation to give readers a general sense of the numbers and is not intended to be a prescription for any particular implementation. What is important is that anyone talking about fare structures cannot simply wish away problems of any system by saying “everything will be fixed with Presto!” or similar, simplistic bilge.
For 2008, the projected revenue (almost entirely fares) for the TTC was $887-million for a ridership base of 466.7-million. That gives an average revenue per trip of $1.90. Note that this stirs together all the fare media and classes of riders including:
- Monthly, weekly and daily passes
- Adults and concession fares
- Token and cash fares
- Other income such as advertising
Worth noting is the average per-trip subsidy of $0.65. That translates to a $303-million subsidy requirement. Any change in subsidy arrangements (higher/lower per trip) must address this very substantial funding line in the TTC’s budget.
In looking at fare-by-distance, we must first determine how much to charge based on current riding habits. This is rather challenging because we do not have average trip length information. Some trips are quite long, others, especially those taken with passes where there is no marginal cost, are extremely short. For the sake of argument, I am going to use Canadian Census commuting information.
The Toronto Census Metropolitan Area (which includes a lot more than Toronto City proper) has a median commuting distance of 9.4 km. The map linked here shows that this value is much higher in the outlying areas and much lower downtown. The median commuting distance for the City itself is only 7.5 km. (The median, as opposed to the average, is the value where half of the commutes are above and half are below.)
If we take these median values as the average trip length (that’s a big leap, but I have to start somewhere), then the revenue per kilometer is $.253 (if we use the Toronto City median) or $.202 (if we use the CMA median). One caveat here is that the distances reported by Statistics Canada are “crow fly” values and the actual commutes will generally be longer. This would tend to lower the revenue per kilometer based an actual trip paths.
That range from 7.5 to 9.4 km is interesting from another point of view. If we draw a circle around Queen and Yonge with an 8 km radius, the east and west boundaries are almost exactly the old Queen line, Neville to Humber. The north boundary is Lawrence Avenue. This area roughly duplicates the old TTC zone 1 which was mainly the pre-amalgamation City of Toronto. In other words, the median commute distance is roughly on the scale of the old City measured outward from downtown.
What this would mean is that on a purely fare-by-distance model, fares would likely be lower within the old zone 1 and higher outside of it. For example, the distance from Queen and Yonge to Steeles is 16.6 km, and a strictly fare-by-distance calculation would expect to receive $3.80 (plus subsidy) from such a trip. Distance to the outer corners of the 416 are even longer. Going north to Richmond Hill adds another 5 km, for a trip that is close to three times the median value. I am quite sure that the residents of Richmond Hill and environs expect to pay one, standard TTC fare to get downtown, not three.
By contrast, the GO Transit fare from Richmond Hill to Union is $4.78 based on a 10-trip ticket, or about $4.30 for a monthly pass. Therefore the revenue GO gets from such a commuter is in the same ballpark as TTC fare revenue redistributed on a distance basis.
I repeat that this is a rough estimate for the purposes of discussion, but it’s a discussion nobody wants us to have. Metrolinx and Queen’s Park buried any questions about revenue tools, and by extension fares, well into the next decade. If there is to be any integration of regional and local systems, the question of fare levels and structures must be addressed.
Fare-by-distance inherently penalizes the long-haul rider. Yes, in theory, they pay the cost of using more service to make their trip, but the larger issue is that this fare may deter them from moving from auto to transit. Many discussions of cross-boundary fare integration have, at their core, an implicit assumption that fares for cross-border riders will go down. This would be true for short commutes, say from the southern 905 into the northern 416, where the trip length is lower than, say, 8km.
However, the long trips would pay more, and fare-by-distance would allow the TTC to charge suburbanites, who have been highly subsidized in their travel to downtown, a fare proportionate to the length of their trip. This is quite likely completely contrary to the planning goals Toronto and Queen’s Park have for moving more people onto transit.
How you collect the money — the technology, the inspection regime — is immaterial to this discussion. I don’t care if the fare card is GO Green or TTC Red, the question is how much I will have to pay to use it. This is the sleeping issue in regional transit integration, and it will be the transit equivalent of road pricing for politicians.
We need to understand and agree first on the nature of GTA fares and the social goals we hope to achieve by increasing transit use. Can we justify a higher subsidy on the basis that the alternatives — driving those who can afford it into cars, and penalizing those who live on the outskirts but must commute by transit — are more expensive than improved subsidies and service?
Once we answer these questions, then we can turn to specifics of the technology. What we don’t need is a razzle-dazzle show that employs armies of consultants and technicians to build a “solution” to what is really a political, policy question.