What Should We Do About Fares?

In my previous article, I reviewed the TTC staff report about the proposed fare increase, but didn’t say much (except in the comment thread) about my overall view on the situation.

The most important fact about Tuesday’s TTC decision, whatever it will be, is that it will not set, once and for all, either the fare and service levels for 2010, nor general fare policy for the future.  Any attempt to do so runs directly into the limitations of the TTC’s mandate and the simple truth that neither the City nor Queen’s Park have clearly stated how much the TTC might get in operating subsidies for 2010.

For next Tuesday, as I have said many times, I support the proposed 25-cent token fare increase with all other fares rising proportionately.  The attempt to grab $5 extra a month from Metropass holders is an unfair, precipitous action brought forward by TTC staff who have always fought against making the pass “the better way” to travel.  That the scheme was announced by a press release rather than by a formal proposal from the Commission itself raises serious questions about who is setting policy at the TTC.

If the Commission adopts this fare scheme, the TTC will still be about $50-million in the hole going into the 2010 budget process.  At this point we have no idea what sort of tradeoffs this might entail, and the Commission is asked to implement a fare change without all the facts on the table.

As I mentioned in my previous article, TTC staff claim that the system’s costs will rise by 7% per annum for the foreseeable future, but they do not quantify the source of this magnitude of change.  Some factors listed in the staff report are non-recurring or have a limited effect on future budgets.

Next Tuesday, as we always see when fare increases are on the table, there will be many groups calling for various changes in fare structures ranging from a complete freeze to new discounts for certain groups of riders.  I believe that the Commission, and by extension the City, should not be making fare policy on the fly.  We are all badly served by “debate” that is inevitably presented as a decision that must be taken today lest the sky fall tomorrow.

Among the proposals we will likely hear are:

  • A complete freeze on fares.  This is extremely unlikely as both the City and Queen’s Park are in no mood to dole out more transit subsidies.  That 7% annual increase would have to be absorbed through internal economies and service cuts.  Moreover, we would face the same debate again next year.  Everyone talks about the “fair” proportion of subsidy and fare revenue, but once you pick a level (68% by fares is the current magic number), then fares must increase every year to make up their proportion of a rising total budget.
  • Scale the increase in pass pricing to the token rate rather than bumping the pass fare multiple from 48.4 to 50.4.  This keeps everything on the same balance, and leaves in place the general policy (originated in the Ridership Growth Strategy) that the multiple should fall over time.
  • Extend Student Pass pricing to university-age students.  This proposal has the support of Chair Adam Giambrone as reported by spacing’s website and would cost the TTC $2.5-million annually.  The likely implementation date would be September 2010, and so its effect on next year’s budget would be small.
  • Create some sort of discount fare for people on some form of social assistance.  This really is beyond the TTC’s mandate and ability.  If the City (or any other agency) wants to give some group, however defined, TTC fares at a discount, they are free to do so through their own budget.

Any new fare scheme must be considered in the context of Smart Cards which will be implemented over the next 4 years or so.  For example, the creation of a new class of tickets for the socially disadvantaged is meaningless if tickets themself will cease to exist.  Conversely, if all fares will be paid via some form of Smart Card or even a credit card, there will be equity issues about how those with limited means would use and manage such fare media.  The demographics of TTC ridership is very different from the commuter market now enjoyed by Presto for its demo program.

A broader question of any form of concession fare will be how one qualifies to receive it.  Some people are formally clients of various welfare systems, others are merely poor.  Why should one group have access to cheaper transit but not another?  This is a debate that belongs before the social agencies and City Council, not the TTC.

The TTC has a problem of its own in the declining proportion of riders who pay the “standard” token fare.  Metropasses have represented more than half of all adult riding for a few years, and this proportion will continue to grow.  Moreover, if capping is built into Presto (such as is already available on the customer loyalty program from GO, or other systems), then people will get “Metropass” pricing simply by using the system a lot.  This will be quite different from today where one must conciously buy a pass (if the TTC doesn’t run out) and worry about whether the up front cost will be recovered in the coming month.

Fewer and fewer riders will “pay retail” for transit, and the link between revenue and ridership will be tenuous.  The philosophy by which the City makes transportation available to its citizens will change from a per usage charge to a flat rate once a certain threshold is passed.  There may be several thresholds — time based, zone based, calendar based — but we should not use the limitations of old ticket-and-transfer based systems to dictate the options for future fare structures.

The TTC has, to its credit, brought forward multi-year plans for service including the Ridership Growth Strategy, the Transit City Bus Plan, and of course the Transit City LRT network.  Metrolinx has a Regional plan, aka The Big Move, but it lacks three critical components:  funding for local services to feed the regional network, funding for capital construction beyond an initial group of projects, and an overall philosophy of fare and revenue integration for the GTA.

The TTC, Metrolinx and the regional systems must conduct broad discussions about exactly transit is going.  That doesn’t mean drawing lines on maps, but determining how a network will operate, who will pay for it, what sort of fare structure will be implemented, what standards will exist for local and regional services.

Metrolinx, which prefers to operate in relative secrecy these days, may not be the ideal entity to begin this discussion.  Toronto should lead the way as the largest part of the regional transit network, and should emphasize openness in this process.

Transit is a large and expensive part of the municipal and provincial budgets, and we need an open discussion about options and goals.  Even if we cannot afford everything we might want today, the options, the possibilities, need to be on the table.  That approach informed RGS and other proposals.  You can’t have an informed discussion if you don’t look at alternatives.  You can’t react to changing cirsumstances (a new government more favourable to transit funding) without having ideas “ready to go”.

Election years are not the best times to start major consultations because every politician, and not a few advocates, tend to jockey for position and headlines rather than for serious, well-informed debate.  But that debate must start, if only to force those who would lead Toronto to show their hand, to talk in paragraphs, not sound bites, about their visions for transit.  Citizens must also articulate their view of transit.  What sort of service do they want?  How much will they pay in fares, in taxes?  Where should the transit system be in five years?

That’s the real challenge for public transit, and this won’t be decided on Tuesday afternoon by the TTC.

12 thoughts on “What Should We Do About Fares?

  1. If the ttc is giving discounts to people who work for large corporations they should also consider the same discounts for other groups. If it’s not part of their mandate to help the poor, then likewise they shouldn’t be helping us bankers.

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  2. What some people would see as a problem, others would see as a success.

    Metropass users are dedicated TTC users, who use the system more than twice a day, five days a week. That means that they are using the system in off peak periods, when the system has the capacity to absorb extra riders at little or no incremental cost. They are unlikely to have a car, thus not adding to the numbers of cars producing congestion and pollution.

    Toronto is not designed to have all of it’s inhabitants and visitors using cars, and anything which keeps people using the TTC is good public policy, and good for Toronto.

    Steve: The irony is that Council talks a good line about the benefits of transit, but expects the riders to pay for it.

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  3. On Metropasses (Metropi?) If anyone wants to get/use one, I strongly recommend the discount plan.

    a – It’s cheaper.
    b – They mail it to your house 7-14 days before the month begins.
    c – you are “locked in” for a year. The fare increase begins in January, but I won’t be paying the new rate until June

    All of this saves me $10 on a ‘normal’ metropass, but I’d be quite willing to pay $10 more for these things.

    Secondly, on fares. The only way we are ever going to fix things is if we somehow convince Queen’s Park to fund all public transit trips in the province to the tune of one dollar per ride, and then adjust it for inflation with each year. How much money would that be? For the TTC about $400 million a year. Put in another way, if every penny of that $400 million was put into reducing fares, the Token would go from it’s proposed $2.50 to $1.75. If you could mandate each municipality also fund a dollar per trip, that would help. It would not make much of a difference for Toronto, as the City already funds this amount (apx).

    Steve: Actually, the City has recently been paying only about half this amount, although it varies by year. The remainder is made up from one time grants and in some cases transfer of gas tax revenue from the capital to the operating account.

    The feds could be our saviour on capital costs. In the US, that’s right the “Right-Wing, anti-Transit United States of Low Taxes” the federal government gives all cities a grant of 80% of cost to buy any public transit bus – so long as it’s “Made in the USA”. This is why our main bus companies are cross border, 49% of the Bus is made here in Canada, then it’s sent off to the US for the other 51%. If we buy a bus, it’s then sent back. Our feds could step in with their own 80% “Made in Canada” plans. While bus purchases are not the be-all-end-all, hopefully we could apply this to all vehicles.

    If we were able to do the two things I’ve outlined above, I strongly believe that public transit in this city and indeed across this country would take off like a rocket. Pardon the pun.

    Steve: At this point, I spliced two comments from Nick together as they are really one longer thread.

    According to a press release from the government…

    “Ontarians took almost 735 million trips on municipal public transit in 2007, according to the Canadian Urban Transit Association. Riders took another 51 million trips on GO Transit that year.”

    735 + 51 = 786. The TTC’s ridership in 2007 was about 450.

    60% of the funds from Queens Park, if my plan were adopted, would go to Toronto, and the total cost would be under one billion dollars. Since GO does not belong to a city, the provincial government should fund it $2 per rider. If they did, this would mean an INCREASE beyond it’s current subsidy, quite a hefty one.

    Steve: GO “belongs” to the cities when it suits Queen’s Park which levies a GO Transit fee against the regional municipalities.

    Toronto has the lowest subsidy in Ontario (per rider) and the $1 subsidy per rider would not cost the city all that much extra (though it would take a bite out of the budget). AFAIK no other city funds transit this little, and so this new ‘law’ would not affect them at all.

    Steve: See comment above re the level of City funding. The high point in the past decade was a bit over $200-million, and so $1 per rider would more than double that historic high level.

    There are some cities too small to have transit, they would be exempted until they reached a certain population and density level.

    This might not decrease the rate of fare increase overnight, but in the long term it should. The TTC would now have a reliable stream of income, with a set increase, this could put pressure on the Union to accept lower increases, as the math would be simple for the TTC to show for propaganda purposes.

    In a dream world, the feds would start to operate some sort of VIA Bus service. They could buy all those bus routes Greyhound does not want to run anymore (and those that they do even). But this is a battle for another time.

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  4. Extend Student Pass pricing to university-age students. This proposal has the support of Chair Adam Giambrone as reported by spacing’s website and would cost the TTC $2.5-million annually. The likely implementation date would be September 2010, and so its effect on next year’s budget would be small.

    I have to say I find it really shocking that university students here in Toronto pay full fare (or at best the VIP fare for a monthly Metropass). I was paying approximately $25/month for a U-Pass in Vancouver while attending UBC. Now I’m paying $96/month for the Toronto equivalent… even though there are vastly more universities and colleges served by the TTC than in Vancouver.

    Very odd. I would have thought the sheer density of post-secondary institutions here would have resulted in much stronger lobbying for post-secondary TTC pricing.

    Steve: There has been lobbying, but the TTC’s attitude has always been that any group seeking special funding should do so through the relevant agency (students via their universities, the poor via social assistance, etc.). Children’s, students under 18 and seniors get a break partly for historical reasons. There was a time when the TTC was paid a special subsidy earmarked for seniors, but that was rolled into the base subsidy long ago.

    Some of the arm’s length attitude goes back to the pre-subsidy days (see preceding comment) when the TTC was much less intertwined with the City government and Council.

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  5. “I have to say I find it really shocking that university students here in Toronto pay full fare (or at best the VIP fare for a monthly Metropass). I was paying approximately $25/month for a U-Pass in Vancouver while attending UBC.”

    Apples and oranges. The Admiral’s proposal does not involve a contribution through the university/student fees and therefore taxing those who did participate in the programme – the Vancouver equivalent does.

    Steve: I presume you meant to say “taxing those who did not participate”.

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  6. “I have to say I find it really shocking that university students here in Toronto pay full fare (or at best the VIP fare for a monthly Metropass). I was paying approximately $25/month for a U-Pass in Vancouver while attending UBC.”

    Apples and oranges. The Admiral’s proposal does not involve a contribution through the university/student fees and therefore taxing those who did not participate in the programme – the Vancouver equivalent does.

    I wasn’t meaning it as a direct comparison as much as a stark contrast between the vastly different ways the two transit systems deal with post-sec students. Even those post-sec students without the U-Pass in Vancouver (only the two major universities, Simon Fraser and UBC, have had it until recently) pay only the 1-zone monthly rate for unlimited (i.e. all 3 zones) travel… which currently is $73/month.

    Given that Toronto has more post-sec institutions, I would have thought lobbying for a better post-sec deal would have been a lot more effective and evident.

    And just a quibble: a U-Pass is not a tax in the conventional sense of the word. You as an individual get something tangible out of it rather than the money being abstracted into a tiny portion of various services; whether what you get from the mandatory fee is of use to you or not is debatable but transit ridership soared in Vancouver when it was instituted there, and I don’t think that’s because all the people already taking transit started making more trips. The fact that it gets talked about like a tax or some kind of TTC theft is part of the problem I see with getting good transit funding in this city. You want more and guaranteed funding for transit. It’s a good thing. A U-Pass gives you guaranteed funding and encourages transit use among a population who are then more familiar with using transit and, one would hope, less likely to stop using it once they finish their university degrees.

    Steve: Another factor in all of this is that whenever fares go up, there is inevitably a call for reduced fares for the working poor and those on social assistance, both of which are portrayed as more deserving than post-secondary students. The political dynamic is not very attractive.

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  7. One other issue with this proposal is that currently, the tens of thousands of VIP passes are issued from campus offices. If this became equivalent to the second-level pass, this will transfer those sales to TTC collector booths with consequent effects on lineups and cash handling. Those could be sold from agencies on campus I suppose, but presumably this would involve a fee to the agent for each one sold, so TTC loses there too.

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  8. “‘Extend Student Pass pricing to university-age students. This … would cost the TTC $2.5-million annually.” Does this account for any increase in ridership that will happen because this group has lower fares?

    Steve: Since that is a ridership increase induced by the lower fare, that is riding and revenue the TTC would not get otherwise. Depending on when/where it occurs, it would have negligible additional cost in service.

    “If all fares will be paid via some form of Smart Card … there will be equity issues about how those with limited means would use and manage such fare media. ”

    Why? All the proposals I’ve ever seen is that users will able to top up with cash at stations and ticket agents. If TTC were bold enough to introduce an Oyster-style monthly cap (so you never pay more than the Metropass price), then that would help those whose current cashflow doesn’t allow them to by a Metropass.

    Steve: The issue about equity involves people who don’t have or cannot get credit cards. Any new system must accept a range of payment media, and the billing/charging machinery must be able to deal with both stored value and bill-later schemes with the fare charged based on usage. Both of them run into problems trying to determine what is a “linked trip” for the purpose of figuring out whether a change of vehicle was a transfer.

    This would be eliminated by charging based on time used and/or distance. Where top-up schemes run into problems for a stored value card is a rider who is leaving a surface vehicle, but their card does not have enough value to pay the fare. Ideally this should be handled by allowing the balance to go negative to some value which would be repaid the next time the card is topped up.

    These are all subtleties that must be built into any new system. The limited market and locations Presto has to deal with today are child’s play by comparison.
    Possibly controversial suggestion… seniors should only get a discount if they travel at off-peak times.

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  9. Possibly controversial suggestion… seniors should only get a discount if they travel at off-peak times.

    Better yet, raise fares somewhat, but everybody gets a discount if they travel off-peak. As with the green-shift for power use, a lot of costs in the TTC are determined by peak demand, so encouraging off-peak use through reduced fares might actually save the TTC and its users money.

    Steve: This sort of thing is easier to do with a smart card where the fare is not tied to the fare medium (ie adult tokens, seniors’ tickets, etc). However, I suspect that the seniors who have to travel at peak will continue to do so. Those who don’t like crowds avoid the peak already.

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  10. On the subject of off-peak fares, Steve wrote, “This sort of thing is easier to do with a smart card where the fare is not tied to the fare medium.”

    I would suggest that another way to implement this easily is with a move to time-based fares. In Melbourne, they use time-based fares where you get at least 2 hours for your fare if paid/validated before 6 pm. After 6 pm, your fare is valid until the end of the operating day, effectively giving you a discount that is an incentive to use transit in the evening, without actually collecting less money from you.

    While many people leaving work between 4 and 6 would probably like to get home right away, some might opt to stay to 6, or do something near work and travel after 6 if it meant that they could save a fare they might need to use later in the evening, thus shifting some of the peak load to off peak times.

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  11. Calvin Henry-Cotnam writes:

    “While many people leaving work between 4 and 6 would probably like to get home right away, some might opt to stay to 6, or do something near work and travel after 6 if it meant that they could save a fare they might need to use later in the evening, thus shifting some of the peak load to off peak times.”

    So, if I’m poor, I have to leave later or start earlier? As a manager, I’m not looking forward to the discussion. “Oh please, don’t have me leave at 5 as I just have to wait until 6 anyways to avoid the higher fare!” Are you all ready for that sort of city with those sort of discussions?

    If this discussion was about health care, I know what people would be saying: thus begins a two tier system.

    We have serious anamolies in this city of poor residential pockets miles away from where people are working. Any discussion of zones and off peak fare deals will create pain for the working poor. I know that is inconvenient thinking; but the transit system in this city is a social service that allows people with just enough money to get around and get a job.

    I like Steve’s idea of a full fare discussion before the implementation of the Smart Card. But, the social complexities of these things are not so simple.

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