Smart Card Wars (Part II) (Corrected)

Correction added July 24 at 10:45pm:

Mark Dowling, in a comment later in this thread, has pointed out that a TTC report last November cited a provincial requirement for participation in Presto as a condition for funding through various programs.  (See 4th paragraph on page 7)

This report must be read in the context of the amended recommendations approved by the Commission as reported in the Minutes:

Chair Giambrone moved that recommendation no. 1 contained in the report, be amended as follows:

“It is recommended that the commission:

1. Conditionally approve the adoption of the Presto Fare Collection System subject to satisfactory resolution of the issues outlined in attachment a, subject to:

* TTC and City staff discussions with representatives of the Federal Government, Provincial Government, Metrolinx and the City of Toronto to develop operating and financial agreements necessary to resolve the issues outlined in attachment a;

* TTC staff reporting back to the commission for approval of the operating and financial agreements that have been developed;

* TTC staff developing detailed business requirements for adopting the Presto System at the TTC to the satisfaction of the commission;

* TTC staff undertaking the engineering and design work necessary for future subway infrastructure modifications to provide power and communications to support smartcards”.

The motion by Chair Giambrone carried.

Chair Giambrone moved that the final bullet in attachment ‘a’, be amended as follows:

* “TTC and the City must not be bound to fare payment exclusivity that would preclude implementation of advances in fare payment approaches and technologies, such as and including open payments, mobile phone media, etc”.

The motion by Chair Giambrone carried.

Commissioner Milczyn moved that attachment ‘a’ be amended to include the following:

* “TTC and the City expect the presto system to be designed to support open architecture;

* TTC and the city remain cognizant of our own fare policies and the system must be designed with flexibility to allow for different fare policies”.

The motion by Commissioner Milczyn carried.

Chair Giambrone moved that the commission approve the report, as amended.

The motion by chair Giambrone carried.

Therefore, when I originally reported that the link between Presto and programs other than Transit City had never been brought to the Commission, I erred.  The main article below has been updated accordingly.

In turn, this begs the question of why this issue was not raised when the Commission approved a study of a separate system from Presto, and the degree to which the conditions for acceptance of Presto, as set out in the November 2009 motion, have or have not been met.

I have also corrected the expiry date of the current Presto contract to 2016.  The original date cited, 2011, appeared in another report that I was using as reference material.

The original post from July 23, with amendments, follows below.

The battle between the Presto and TTC Open Payment factions heated up earlier today with statements by various would-be mayors, the Board of Trade, Minister of Transportation Kathleen Wynne, and TTC Chair Adam Giambrone.

The following article appears on the Ministry’s website:

Minister Kathleen Wynne Stands By PRESTO

July 23, 2010 3:36 PM

The TTC’s recent focus on a duplicate fare system is troubling and a complete waste of precious taxpayer dollars.

The PRESTO card allows transit riders around the GTA to transfer seamlessly with one card from GO Train to bus or streetcar or subway, anywhere in the GTA. And best of all, the PRESTO system is also being developed to accept other cards — like debit or credit cards.

It’s a smart system that connects us and makes the daily commute just a little easier. Already 7,600 commuters are using their PRESTO cards, and 500 more are joining every week.

The city and TTC made a commitment to PRESTO many times.

Gas Tax funding was provided to GTA Municipalities, including the City of Toronto, with the requirement that they participate in the PRESTO fare card system, provincial funding towards the cost of the City of Toronto’s replacement streetcars is also conditional upon the City’s full participation in PRESTO and we’ve communicated to the City that the 182 light rail vehicles for the four Transit City projects in Toronto must be PRESTO ready.

There are a lot of investments to make in public transit, and a lot of improvements to be made at the TTC. To waste money on a duplicate fare system makes no sense.

That’s a fascinating statement for a few reasons.

Updated July 24:  The link between Presto and other programs was reported to the Commission in a report from November 2009.  For some reason, this was not mentioned during Commission discussions of a study for a separate system based on open payments.  However, judging by the long list of conditions, many of which deal with technical and functionality issues with Presto, a related question to Queen’s Park is the degree to which this list has or will been addressed, and the implications for fares in Toronto if it is not.

Second, claims of a duplicate system bear closer examination.  There are 7,600 Presto cards in circulation with 500 more per week.   That’s going to get us up to something over 20,000 by the end of 2010.  The TTC sells over 450,000 Metropasses every month, and has many, many more regular users who pay token fares.  That’s a bit of a jump for the scale of Presto implementation.  Duplication?  Duplicating what?

Third, I believe that the only reason Presto moved on open payment capability was the competition from the TTC’s proposal.  Without that pressure, we could have sailed through a region-wide rollout unable to deal with credit cards or smart phones for fare payment.

Presto isn’t even planning to roll out in Toronto in a big way for a few years, by which time it will also support open payment technology.  Where is the wasted money?  Meanwhile, the TTC needs a new fare system by 2012 when new streetcars will start rolling down the streets of Toronto and use all-door loading.

TTC Chair Giambrone responded with this letter which also appears on his Facebook page.

TTC Chair Giambrone Clarifies PRESTO position

July 23, 7:00 pm

Recent media reports have made it clear that there is confusion about the relationship between PRESTO and the TTC’s proposed Open Standards electronic fare system.

The TTC has been a full participant in PRESTO since 2004 and confirmed its participation as recently as last November. It simply imposed conditions such as open and transparent procurement and an ability to adapt to new technology.

The fact is that funding has not been committed to implement PRESTO on the TTC. In 2004, $140 million was committed, divided evenly between the City, Queen’s Park and Ottawa, based on incomplete estimates that did not account for necessary capital work. The most recent estimate puts the cost of implementation at $490 million – leaving a $350 million shortfall.

The City needs increased funding just to operate the TTC, and to keep it safe and reliable. With its recent cuts to the Transit City light rail plan the Province has made it clear that they also cannot afford new spending on transit projects.

Given that no money is available to bring PRESTO to the TTC, the Commission prudently chose to explore partnerships with the financial sector to find a more cost effective, off-the-shelf solution. I am confident that a public-private partnership to deliver electronic fare collection to the TTC will be achieved in 2010.

Adopting an Open Standard system instead of custom-built, proprietary smart card such as PRESTO is the right thing to do. Even PRESTO staff have indicated that they intend to move towards accepting Open Standard fare payment as early as 2011. The two fare systems will be totally compatible and allow riders to move seamlessly between TTC and other regional transit operators.

PRESTO staff have reportedly expressed concerns that moving to Open payments may affect their business case. The project is governed by a contract between the Province and Accenture. Given that this contract has not been made public or shared with TTC staff I cannot comment on its specifics. This contract needs to be made public before an informed public debate can take place.

Should anyone question the TTC’s cost of Presto implementation, it should be remembered that Ontario already has a $250-million contract with Accenture for the trivial amount of use that Presto gets compared to the size of the TTC’s network.  What has that quarter-billion paid for?

In a separate Facebook post, Giambrone reviewed media coverage including this comment.

From the Star:

“Metrolinx said its next generation of readers – expected to be available in 2011 – should accommodate open payment options. But there are questions about how Presto’s revenue model would be affected if its card has to compete with others for transactions.”

The facts: A regional farecard was promised by the McGuinty Liberals in the 2003 election. Seven years later a phased rollout is just beginning, and Presto staff expect it to reach the TTC by 2015 at the earliest. TTC riders can no longer afford to wait. If we can skip a generation of technology we should, especially when we have good reason to believe an open payments system will be much more cost effective.

Media coverage of this is in The Star.

Mayoral candidates (and others) choose to portray Toronto and especially the TTC as a barrier to the transit improvements Presto may bring.  Without getting into the various statements, I can’t help feeling that if Presto were a TTC scheme, the candidates would all hate it as a reminder of the Miller era.  They need to focus on what various fare systems can do, how much they will cost, and when they will be implemented.

Will the first act of a new Mayor be commit Toronto, sight unseen, to a system that needs to scale up massively to handle TTC requirements, may lack flexibility and may cost more than an alternative?  Wouldn’t they demand that we review whether Presto is actually a good deal?  Or would a new Mayor be so keen to curry favour at Queen’s Park that he would sign first, and hope that any problems afflicted someone else later.

I have a few questions for Minister Wynne:

  1. It has been no secret since late 2009 that the TTC was examining an alternative to Presto to obtain better functionality at lower cost, and that the only money Queen’s Park has on the table to date is 1/3 of $140-million, or less than 10% of the estimated rollout cost of Presto for the TTC.  With the links of Provincial funding being contingent on accepting Presto, why has this not been raised sooner, and why has Queen’s Park not addressed the substantial implementation costs for the project?
  2. What are the terms of the Accenture contract?  As reported by the TTC quite some time ago, this is a 10-year contract expiring in 2016.  How much more will Queen’s Park pay to extend this contract and expand it to the scale of TTC operations, or is this included in the base price?
  3. What are Presto’s technical capabilities for handling fares with the complexity of travel on the TTC?  Will TTC riders be forced into a less attractive or more expensive fare model to fit within the constraints of the regional system?
  4. Why has there been no public discussion about fare policy and the implications for operating subsidies of consolidated fares across boundaries between the TTC and other systems?  That’s the “big win” so many riders are waiting for, but it’s the one nobody who funds transit wants to talk about.

I will be meeting with Presto staff on Monday, July 26 to learn about their capabilities and plans in detail, to the degree that they choose to share the information.

37 thoughts on “Smart Card Wars (Part II) (Corrected)

  1. So what exactly is open payment? For instance, I don’t know anyone who has a VISA PayWave (RFID) credit card, and in Canada, only RBC and TD currently offer them. Won’t an open payment system that accepts non-RFID credit and debit cards slow the system down if people have to swipe or insert a chip card and enter a PIN? What about VISA chargebacks? Has the TTC thought this through? How can a system that allows payment by cell phones and all forms of debit and credit cards (magnetic, chip, rfid) be cheaper to implement than a single standardized card? The next thing you know the TTC will be holding out for a biometric payment system — insert your finger into the turnstile please …

    Steve: Chipped credit cards are supposed to support RFID. The whole point here is that the banking industry approached the TTC saying “we’re ready”.

    The whole point of open payments is that a card, or cell phone, or anything capable of an RFID exchange using payment industry standards, can be used to identify a customer. Regular users may opt to register their cell phone and have their account billed to a credit card for a monthly bill. Casual users, including tourists, could use their credit card directly, or could purchase an RFID card to use more or less the way Presto is today. The point is that there is one common back-end billing system regardless of the medium used to identify a customer. A new setup is not required for each new card or device. That’s what “open” is all about.

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  2. 7th paragraph should read quarter-billion, not quarter-million.

    Steve: Fixed. Thanks for catching the error.

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  3. The Province is clearly jittery. With so many scandals swirling around them currently, from G20 to HST to EcoGate to the police raid on MTO, I can sympathize the McGuinty Liberals are under a lot of stress right now and want to neutralize another potential scandal before it takes form. The unfortunate thing for them, though, is that they’re their own worst enemy, whether in “eFare” or other past scandals.

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  4. Honestly, given your work background, that you are unaware that a high percentage of the costs for automated fare collection are in the backend systems and processes. I’m sure that for Presto, the challenges in dealing with inter-bureacracy squabbling, foot dragging, disbelief, denial have been severe even by Ontario standards. So there is no duplication? Really?

    Of all the foot-draggers, the TTC is probably the worst. This is the organization that seems dead set against anything open. Look at the trip planner – long-delayed – and now not integrated with Google. Now all of a sudden, the TTC is embracing something ‘open’? hahaha – what do they say now in these forums – is it “ROTFLMAO”.

    For years the TTC’s position has been basically ‘we’re fine with things the way they are’. This is from a Commission Report – quoting the Ridership Growth Strategy:

    As stated in the March, 2003 staff report entitled, Ridership Growth Strategy:

    The TTC actively monitors progress in (innovative technologies) to assess the applicability of these emerging technologies to our current systems and procedures. However, the TTC’s extremely-limited funding requires it to take a cautious approach to spending passengers’ and taxpayers’ money on projects and systems which are not fully proven technically, or for which the ridership benefits are not clear. The TTC’s primary role is that of service provider; research and development related to new technologies is outside the scope of the TTC’s core transit service business. This results in the TTC having other properties test and develop new transit technologies, and then adopting these technologies when they are proven to be reliable means of improving service and increasing ridership.

    “In light of these facts, TTC staff re-iterate their original position regarding smartcards, which is that the TTC’s unique inter-modal integration, and simple, low-tech fare collection system, results in the TTC’s current system operating quite well, with no pressing or urgent need to scrap or replace it.

    These facts, coupled with the high initial capital cost of implementing an AFC system in Toronto, and the projected increases in workforce and annual operating costs associated with an AFC system, lead to the conclusion that the TTC should not, at the present time, proceed with the procurement of a smartcard-based AFC system.”

    Now all of a sudden the TTC’s riders “can’t afford to wait” – and the TTC is bent on jumping towards the bleeding edge. You don’t see anything strange here?
    Look, any AFC system once installed becomes proprietary system that integrates components from different vendors and customized programs. Comparing the decision to Beta vs VHS is completely disingenuous.

    Steve: I concur that the back end systems are important, but the argument in favour of the scheme proposed for Toronto (based on the recent New York implementation) reduces the amount of “back end” that is the transit system’s responsibility.

    That said, I agree that the TTC as an organization is woefully slow to change its ways, and are not exactly technology savvy. A huge challenge will be to maintain the momentum, such as it is, of Giambrone’s push for change once there is no longer a tech-savvy person running the show.

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  5. There is a certain heavy handedness to the Minister’s remarks. “Do this or else … “. Like a child, they say play by my rules or we’ll take our toys home (funding from the gas tax, funding for replacement streetcars).

    Fascinating that she uses the word “commitment” in that she expects the City and the TTC to be dependable in their commitments. No mention that the Province has pulled the same trick itself. After all, if we were to hold it to the same level of “commitment”, then we would expect Transit City and the rest of the Big Move projects to be developed according to the timelines at time of their respective announcements.

    The Provincial Liberals have been more transit-friendly than other previous governments, but actions like these erode that perception. Hard not to think of them as the “enemy” when the Minister sprouts words like these to get the TTC to fall in line.

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  6. This part of Wynne’s statement struck me as interesting: “provincial funding towards the cost of the City of Toronto’s replacement streetcars is also conditional upon the City’s full participation in PRESTO.”

    She must be referring to the CLRV/ALRV replacement fleet (famously dismissed by Smitherman as “what streetcars ya talkin’ ’bout?”).

    The feds turned down a request for infrastructure money; as I recall the City and TTC decided to pony up the entire cost out of their capital budgets.

    So is Wynne referring to whatever the provincial subsidy is for general TTC capital spending? Because I don’t recall any money from the province or federal government earmarked for the streetcar replacement programme. Does this mean that Wynne is seriously threatening all the TTC’s capital spending plans?

    I guess the Spadina/York extension is going to be chock-full of Presto machines.

    By the way, the Metrolinx and Presto bumpf all say “PRESTO”. Is there some convoluted acronym behind PRESTO, or is it just another UNIX?

    Steve: Queen’s Park is paying 1/3 of the cost of the new streetcars with the City funding the other 2/3. Meanwhile Queen’s Park gets to crow about how this will generate jobs in Thunder Bay.

    As for the all-caps name, that’s branding, and I don’t like writing in all-caps. It is not an acronym, although I’m sure there’s an intended reference both to the Italian “presto” meaning “very fast” in musical usage, as well as to rabbits appearing out of top hats. They would, of course, be Ontario-grown rabbits.

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  7. I’d like to echo Dave R’s comment the timing of this announcement seems highly suspect given the fact that Mr. Giambrone is obviously attempting to pad the resume and stay relevant. That said people often find religion during major life changes and the thought of the TTC orchestrating some serious competition between the banks and Accenture for the privilege of providing a modern payment system is something I’d prefer to see much more of. Pushing back the province on their dubious claims of leaving money on the table after the TC cuts seems appropriate as well.

    Steve: This idea was first presented in detail at a TTC meeting in November 2009, and had been under discussion before that, probably even before David Miller announced he would not run for re-election. The political context, obviously, has evolved since then.

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  8. This is the 2nd time that Ms. Wynne is threatenning the City/TTC in as many months. Its extremely frustrating and infuriating. I have a few choice words that I would by personally happy to deliver to the Minister.

    At the end of the day- I would prefer Toronto become a city state. We can manage our affairs and wish the province of Ontario best of luck without the tax dollars coming out of Toronto~!

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  9. In November 2009, our host posted a link to a TTC Presto report on which I commented. In that report, TTC admitted that CSIF and gas tax money was conditional on Presto implementation – basically what Wynne said.

    Steve commented “can you say eHealth?” but since the Ont Liberals can’t afford another eHealth, we might expect them to play every possible card to avoid the abandonment of Presto, especially if GTA agencies signed on on the condition that TTC would be coming too.

    Steve: I have updated the main article with a correction. Thanks to Mark for flagging this.

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  10. While the link from the original post is broken and therefore I did not have a chance to re-read it when I posted earlier today, here is the TTC’s November 2009 report on the Presto business case.

    The Presto contract with Accenture is noted to run to 2016, not 2011, with provisions to be extended to 2025. This supposed that the contract has not changed since the TTC’s report.

    While CSIF/gas tax caused a commitment to Presto, as I noted at the time, the report also states “The TTC’s only current commitment with the Province is to allow PRESTO interface readers to be installed on turnstiles at up to 12 TTC subway stations.” So while Wynne was correct to say the gas tax created a commitment “to Presto”, it seems to be a very limited one at the time of the report and one which is on the way to being fulfilled.

    While the Province may have stated that “adoption of the PRESTO farecard system will be a requirement for new transit projects (i.e. Transit City; subway extensions)”, we must surely presume that TC negotiations since November 2009 omitted to put Presto obligations in contractual form, since the “Key Principles for Developing Agreements Between TTC and PRESTO” included “open payments” as a criteria for adoption.

    Steve: I have corrected the link in the November 2009 article. The TTC changed the URL. The 2011 expiry date for the Accenture contract appears in another report and that’s what I used. This implies that the original contract has already been extended. Maybe Queen’s Park will even tell us the terms, one of these days, so that we can find out how much we are paying for Presto, and what we get in return.

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  11. With regard to the Board of Trade weighing in on Presto, I found it interesting that none of the associated news reports saw fit to mention that Accenture’s managing director sits on the board of directors of the BOT. That smells like a conflict of interest to me.

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  12. There are two reasons why I’d rather stay with the old reliables – cash, tickets, tokens – rather then go with PRESTO or similar system:

    1) How do I know – 100% positively – that my payment has been made. What if something did not register and then I get caught without having made a valid payment even if I tapped my card. At least an ATM or debit purchase, I get a printed receipt showing payment. Also what if the system goes down?

    2) How do the interlined fares work? For example, if I take the GO train I can change to a Mississauga Transit or Oakville Transit bus for a mere 6o cents. Does the PRESTO card (or similar system) recognise this? And what about the reverse trip (local bus to GO train)?

    I am not saying these systems are not positive, but that I am not just 100% convinced because of how new they are – at least to the GTA.

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  13. Steve said …

    “Therefore, when I originally reported that the link between Presto and programs other than Transit City had never been brought to the Commission, I erred”.

    Steve Munro erred on a transit issue and openly admitted it? The world is coming to an end … 😉

    You keep missing the basic point here. The idea behind PRESTO was the concept of a simple and uniform method of payment across all GTA transit agencies that would lead to fare integration down the road. Unless all the other GTA transit agencies go with open payment systems, or until PRESTO is accepted where VISA/MASTERCARD and debit cards are, the TTC is compromising that vision.

    Steve: To err is human. This puts you, assuming your forgiveness, on a somewhat higher plane.

    As for the possibilities of fare integration, and the cost of achieving this with Presto, I will leave those topics for another day. I have already written about how this is a technology war when the real question should be the capabilities of each system, and the policies behind any future fare integration.

    What I do stand behind is my question of how Ontario has managed to spend $250-million for a rather small-scale implementation of Presto with under 10,000 users to date, while people rail against the TTC for costing their system-wide rollout at a tad under half a billion. Queen’s Park owes us an explanation, particularly considering that they are always kvetching about the TTC overstating implementation costs.

    Is this yet another case where Ontario decided it had to have a roll-your-own system rather than buying existing technology and adopting international standards?

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  14. One thing I don’t understand is if we’re talking about paying per trip with this system how do we prove we paid a fare?

    I’ve spent time in Stockholm, which uses a presto system for pass holders and printed swipe tickets for short term rides. I’ve also spent some time in Zurich which uses a proof of payment system with printed tickets (they don’t scan as you don’t have to show proof of payment to board or even to enter the stations) – pretty much the same as VIVA. In neither case do you pay per ride, rather you pay for a time period.

    Obviously the plan isn’t to issue transfers for single-pay users as that would slow the boarding process significantly with the New York model. Is it peer pressure based?

    I’m curious about the operating costs of pay per trip vs pay for time. Certainly the Zurich system allows for much lower staffing. Also, because the trains and trams are continuous it’s very easy for a single fine officer to walk the whole train and hand out tickets. There are similar checks on the Stockholm trains, especially approaching the airport.

    I checked out the New York site, but didn’t see anything about failure to pay.

    Steve: The question of verifying a fare depends on the fare scheme. If a “trip” is defined by its distance, then the only concern is that you have “tapped in” somewhere reasonable (and recently) for the start of you trip. You will have to “tap out” when you leave the system to avoid being charged a huge default fare, and so you have no incentive to avoid this. If a “trip” is defined by the TTC’s transfer rules, then the “tap in” function must also retain some history of where you entered the system so that a fare inspector can determine if your “tap” is still valid. This is a messy way to do things, and one of the big reasons why even the TTC itself is looking at moving to time-based fares. They are much, much easier to validate and avoid a lot of wrangling about whether a connection was a valid transfer.

    You make an important point that it is possible to have multiple fare media so that casual users are not burdened with the complexities of getting a fare card.

    On the NYC page describing the trial of contactless media, there is a FAQ in which the operation is described as providing a two-hour free transfer window.

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  15. “You make an important point that it is possible to have multiple fare media so that casual users are not burdened with the complexities of getting a fare card.” I have to say that I have seen Irish people talk about getting an Oyster card for short trips or occasional visits to London UK. EasyJet sells Oyster on board (22 GBP of which only 2 GBP is card cost) which is something AC or WestJet could also do on flights to Toronto and Ottawa.

    It will be interesting to see, given Wynne’s heavy handed treatment of Toronto, whether support for K-W’s LRT will also be conditional on joining the Presto empire.

    Steve: One obvious point about Oyster is that it is actively marketing itself through outlets other than one office in the basement open from 10 to 11 am on alternate Thursdays. (I will resist the urge to make reference to Douglas Adams’ warning “Beware of the Leopard”.)

    I read on Presto’s site about how payments into one’s account won’t show up on some parts of the system for 24 hours because of delays in downloading the information to on-board readers that don’t have a real-time link back to “central”. This would be utterly useless for a tourist who wants to buy a card and use it immediately, and smells too much of Presto being designed for the regular commuter user.

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  16. The new streetcars are going to need a new fare handling process to be available before they arrive. It appears as though Presto delivery is short a couple of years. Maybe an open source system is capable of meeting the date, maybe not. Since there will be no capability of using the current fare-box process, what alternatives are available if a smart card process is not ready?

    Monthly, weekly and daily passes, including paper transfers from other routes would not be a problem since they can be verified by a transit officer. A fare box that will receive cash, tokens and tickets and vend a printed transfer may be required until a comprehensive smart card is available.
    The current implementation of Presto card is not ready to completely replace the existing GO fares since it can only handle adult fares. For other than GO, the process would need to deal with a much wider variety of fare policies throughout the GTA.

    >Senior, child, student and babies.
    > Daily, weekly and monthly passes (or equivalent riding pattern detection), including those offering multiple passengers riding under the same pass and passes that are transferrable between persons.
    > Transfers (either continuous trip or time transfers).
    > Inter regional transfers including TTC->GO->TTC trips, transfers between regional systems (Free or new fare), and special zone conditions (YRT).

    If these are not already in place and ready for rollout, I cannot see them being ready for rollout when required.

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  17. I read on Presto’s site about how payments into one’s account won’t show up on some parts of the system for 24 hours because of delays in downloading the information to on-board readers that don’t have a real-time link back to “central”. This would be utterly useless for a tourist who wants to buy a card and use it immediately, and smells too much of Presto being designed for the regular commuter user.

    I believe that is only if the method of payment was online or a one-off payment reload via one’s bank or credit card (Presto FAQ). Tourists would more than likely be getting their Presto cards from a designated vendor where they could be activated immediately.

    Oh wait, I think I see what you mean in the next FAQ item. Okay, that would be ridiculous if it’s the case. One would hope that cards you purchase from designated vendors would be pre-loaded into non-connected readers to avoid this.

    I have trouble believing that a) the Presto cards will cost SIX dollars and b) that we’ll have to pay this every 3 or 4 years. That seems like a total cash grab to me, especially as they become more widely used and one assumes economies of scale come into play (i.e. if adopted by the TTC ridership).

    What they need to do is just purchase the Oyster system. First off, their cards were 2 pounds if I remember correctly which (especially now) is not even CLOSE to $6. Second off, things “just worked.” I bought my card, loaded what I wanted on it by paying with my credit card, and *poof* everything happened as expected.

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  18. There are two reasons why I’d rather stay with the old reliables – cash, tickets, tokens – rather then go with PRESTO or similar system:

    1) How do I know – 100% positively – that my payment has been made. What if something did not register and then I get caught without having made a valid payment even if I tapped my card. At least an ATM or debit purchase, I get a printed receipt showing payment. Also what if the system goes down?

    2) How do the interlined fares work? For example, if I take the GO train I can change to a Mississauga Transit or Oakville Transit bus for a mere 6o cents. Does the PRESTO card (or similar system) recognise this? And what about the reverse trip (local bus to GO train)?

    I am not saying these systems are not positive, but that I am not just 100% convinced because of how new they are – at least to the GTA.

    Except… by that logic, new systems would NEVER be implemented. I don’t think “how do I know…?” is a valid reason to stay with antiquated systems (for instance, the whole purported “token hoarding” foofah that the TTC went ape-s**t over once they announced the latest fare increase is a great reason to find a better alternative to tokens). The important issue is implementing a new system that is reliable and that people can trust. Presto sounds, at the moment, rather dodgy in many respects.

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  19. There’s an article in today’s Star that quotes Paul Korczak (the lead consultant) stating a roll-out period of 30 months (2.5 years). If the replacement LRVs are the ginneau pigs for Open Payment (for which there’re arguments for and against), maybe they could see Open Payment in time for their revenue-service debut.

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  20. Could someone who has knowledge of this outline how Paul Korczak became involved with TTC? The first I saw of his name was in today’s Star.

    Steve: Paul Korczak worked for many years in New York and was responsible for the open payment system now rolling out there. He is now a freelance consultant. The report recommending a contract with his firm was approved by the TTC on June 10, and by Council at its July meeting.

    Note that the Commission added motions beyond the original report recommendations including:

    (i) The RFP for an open payment system be structured to ensure maximum flexibility for future changes to TTC fare structures.

    (ii) The Chief General Manager report back to the Commission at the earliest opportunity on options to change the fare structure and transfer policies of the TTC in conjunction with the implementation of automatic fare collection and open payment options.

    The TTC does not just want to avoid being locked into a closed technology, but also wants to ensure that it has the maximum flexibility to adopt a new fare structure rather than being limited by a model already in place.

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  21. 2) How do the interlined fares work? For example, if I take the GO train I can change to a Mississauga Transit or Oakville Transit bus for a mere 6o cents. Does the PRESTO card (or similar system) recognise this? And what about the reverse trip (local bus to GO train)?

    The PRESTO system does recognize “fare integration” situations. “Tapping on” a OT or MT bus right after “tapping off” a GO train results in a 65-cent charge (the 60-cent fare was raised many moons ago). Presumably the reverse works as well.

    Steve: I will describe the Presto fare model in an upcoming article. Any fare integration across boundaries between different operators is subject to local arrangements between these operators, and is implemented by Presto in its system.

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  22. I believe it was Howard Moscoe, back when he was a TTC commissioner, who stated that the TTC had a very proven and reliable fare collection system.

    To paraphrase, he said that you take your token, drop it in the fare collection box, and gravity does the rest. No down time, and no electronic systems to rely upon. I believe he had also stated that he was in no rush to see the TTC implement a Presto-type system, because as with all other technologies, it could fast become outdated. Looks like he may have been right.

    The province is pushing hard for the TTC to adopt a decades-old system that most other major transit authorities are starting to discard in favour of open payments. From a customer perspective, an open payment system is certainly easier, because it uses your existing cards and takes advantage of the knowledge and familiarity cardholders have regarding POS purchases.

    Assuming the TTC can set daily, weekly and monthly caps (so that after X number of paid fares, you’ve essentially purchased the equivalent pass that exists today and no further charges are applied for the corresponding period) then it really is hard to find fault with it. It would actually makes things easier for riders, and when is that last time that happened?

    Steve: It’s not quite that simple, and the issues between TTC and Presto have more at stake than whether gravity works best. I will deal with this in a coming article.

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  23. Very interesting slide show on project management issues for the PRESTO team.

    Steve: As one goes through this show, one sees that there was a crisis within the Presto office a few years ago that suggests the project was not particularly well managed at the outset. It is unclear where the costs of the Presto office, as opposed to the service contract with Accenture, are charged, or how much has been burned through since the project started.

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  24. Steve,

    Most transit systems in europe have a combination of fare systems.

    I go to Croatia via London, I have family in England so I continue the day after.

    I go to the subway station and go to the ticket guy/booth collector. I tell him that I am going to Charing Cross (to catch a regional train to Folkestone – think Via Rail). I get a ticket just like GO Transit, it says zones 1-6. I get that ticket and put it through a scanner at the turnstyle, it spits it out, I go through. I put it through another scanner when I exit.

    Paris, I pay with EUR.

    Vienna, I got a 3 day pass at a machine at the station. What I didn’t realize was that the station at the airport was outside the Vienna region (think of it as Pearson having a train station). I spent a weekend travelling up and down it’s beautiful transit system and exploring Vienna.

    Dubrovnik, there are two areas, inner city and the outer region. Think of it as TTC running GO Transit as well. They have tickets that look like mini-credit cards, stripe at the back, when you get in, you put it in the machine, spits it out. Done you are in.

    You get these tickets for 7 kunas (1.30 CAD). To go to the suburbs, the actual village that my family is from, 10 kunas ($1.85) which is 11 km south. Cavtat is 21 km south of Dubrovnik and is the next city 12 kunas ($2.22).

    Dubrovnik-Mlini = 20 or so minutes (outer bus)
    Dubrovnik-Catvat = 30 or so minutes (outer bus)

    Dubrovnik-Mlini is like Toronto to Whitby
    Dubrovnik-Cavtat is like Toronto to Oshawa

    Whitby & Oshawa people come to work in Toronto
    Mlini/Cavtat people come to work in Dubrovnik

    Dubrovnik residents have a monthly pass.

    I am sure Paris residents will have one too, London does last time I was there.

    We can’t settle for just ONE system.

    By the way the inner buses for Dubrovnik have tickets that you can buy in kiosks (think like Gateway newsstands but the kiosks there are everywhere, where you would get newspapers).

    Dubrovnik had this system in 1998. the war ended in Croatia in 1995.

    Zagreb had streetcars for decades before I was born — they are the basis of the Zagreb Transit system (like for us, our subways). Zagreb Transit is like GO, fully automatic, the driver is in his own cabin. The ticket cancellers are inside the trams/streetcars. The fines are painfully high if you don’t have a valid ticket. Let’s just put it sex with Jabba the Hut would be less painful. You get your tickets for ZET (Zagreb Electric Tram) at kiosks. Not sure if there is a monthly pass for residents.

    Presto will charge me every ride. I am taking about 4-5 trips A DAY, every day. So 31 days at 5 trips a day = 155. 155 x $3 = $465. I do get my money’s worth out of my metropass. What happens if I don’t have enough funds on my Presto? I am stuck and too bad so sad go walk all the way to Scarborough? I hope they keep the metropass.

    Steve: Presto can and does support “pass” type fares. For GO riders these are implemented by a cap on the total paid in one month to a value equivalent to the cost of a monthly pass (17.5% off of the single trip rate for 40 fares).

    Some people will have cash.

    I know in Dubrovnik you can pay for your parking by your mobile (cell) phone. I have something called ZOOM PASS on my blackberry (Rogers), that’s some payment system. Tim Hortons has a mastercard pass thing you tap on to the pad.

    We should have more options not less.

    For me to have a Presto card, I would have to go to lala land, give them $465 (using above math), then go back home and work.

    I travel a lot and I tend to get daily/weekly/monthly passes when I am in other countries. If I am there for one or two days and don’t have daily passes then I pay cash.

    We shouldn’t have Presto vs. open systems, we should talk about options.

    Kiddies under 18 couldn’t get a Presto card (I am sure you have to sign a paper right?), legally someone under 18 can’t legally sign contracts. They won’t have credit cards. Mobile payment is good for them. Not everyone has a cell phone.

    TTC needs to keep cash payments and metropasses along with future options.

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  25. The Star has another Q&A type article up that gives some interesting quasi-answers (mostly because a complete answer is not available).

    Q. What kind of revenue would the TTC pay to an open payment fare system provider?

    A. TTC officials won’t talk about it.

    “This will be the product of the (TTC’s request for proposals from suppliers) and we can’t get into that or we prejudice the RFP,” said TTC chair Adam Giambrone.

    Presto officials have estimated those costs for the TTC would be about $320 million, including devices, upgrades to infrastructure, wiring, project management, devices and central system changes.

    A November 2009 TTC report suggested it would cost the TTC up to $490 million to create and operate its own electronic payment system. It said that signing onto Presto would be cheaper.

    It seems that the $490M figure that has been bandied about then is what it would cost the TTC if they developed a stand alone, closed system, and is not the cost of signing up to Presto.

    I don’t know that I have a preference yet, but I can see how Presto could be easier for Metrolinx to at least budget operational costs, be able to control prices for discounted fares and and be held accountable to the public. Also if you have a dispute with charges levied against your bank or charge card, I can foresee it being much harder to get a resolution.

    Steve: There are probably costs over and above the $489-million for a Presto implementation as that figure does not include provisioning the back end systems to handle the much higher volume of transactions the TTC would generate.

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  26. Since Presto was the first mover, it’s pretty unlikely that everybody else will just drop their investment and rush to implement whatever the TTC decides to use. So you need to choose: do you want something better than Presto, or do you want an integrated fare system across the GTA? You can’t have both.

    Steve: Actually you could. Presto is simply one form of payment mechanism. The issue is whether it will support additional payment media like credit and debit cards, as well as identification via devices such as cell phones.

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  27. * Diesel trains
    * Accenture contract(s)
    * Overpriced streetcars

    The only question now is:

    Who would be best qualified to lead the inquiry into e-Transit?

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  28. Steve wrote:

    I read on Presto’s site about how payments into one’s account won’t show up on some parts of the system for 24 hours because of delays in downloading the information to on-board readers that don’t have a real-time link back to “central”. This would be utterly useless for a tourist who wants to buy a card and use it immediately, and smells too much of Presto being designed for the regular commuter user.

    There is a BIG difference between loading value in person by card onto a card you have on you (which is instantaneous); and loading value over the internet (which has a delay). There’s no way you can have instant loading via the internet. If you are a tourist and you go to the Presto window at Union, you will get a card with value right there and then.

    Also, Steve, your comment comparing the current “10,000 users” with the 450,000 Metropass users isn’t really valid. The Presto card can currently be used by adults on one GO Transit line and two local systems. Once it’s rolled out across all GO lines and all non-TTC systems, with senior/child/student funtionality in place, I would expect more like 150,000 users. Adding TTC would still be a major step, but not the 45-fold increase you are implying.

    Charging six dollars for the actual card is nasty. Make the card free, or something nominal like $2.

    Steve: “No way you can have instant loading via the internet”?? I beg to differ. Once a transaction goes through it should be in the back end database, the “electronic purse” associated with my fare card. Where problems arise is that part of Presto is designed to operate without “calling home”. This is a double-edged sword. It simplifies implementation and avoids the overhead of real-time validation and transaction processing, but it also means that info available on your card and at Presto readers is out of date. The problem is one of system design, not an inherent issue with smart cards.

    As for the relative number of users, my point is that the back-end infrastructure for the system will scale with the number of users. I would be very surprised if all of that infrastructure has even been installed now because it would be a waste of hardware to have servers that won’t be needed for two years just sitting there online. Presto has a small user base now and is still going through implementation problems (which you can read about elsewhere). They need to scale up not just their hardware, but also their whole customer service machinery to deal with a much larger user base than they have today, and probably will have to rethink some of their business practices. Schemes that work for comparatively infrequent users (daily commuters with fairly regular trip patterns) don’t work for the more complex movements of riders in a big system like the TTC.

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  29. Steve said: “Presto is simply one form of payment mechanism. The issue is whether it will support additional payment media like credit and debit cards, as well as identification via devices such as cell phones.”

    I work in the POS industry, and will offer the following information. The company behind Presto could indeed work with a POS acquirer to develop, code and become certified for debit and credit card processing with EMV/Chip or RFID. Many software and technology companies do this every year for their clients. However, there is a significant cost to do this, and more importantly, Accenture would be on the hook for all future code updates, PCI security standards updates, etc. Compliancy is a big and expensive component of POS systems, and where possible, it is much more cost effective to use an off-the-shelf solution offered by a POS acquirer/bank. This is why Giambrone is (correctly) stating that using a standard, open-payments system would be much more cost effective than using a custom built solution such as Presto, especially if you want Presto to be able to handle credit and debit card transactions.

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  30. I really have no doubts about the concept of smart cards, as they have been in use for 13 years. In my visits to Hong Kong, it has proven to be reliable, stable technology. You can even use it to pay at fast food outlets. The only problem is actually getting it running.

    All of these squabbles comes down to money. In this case, all of the revenue coming from Presto goes to Metrolinx, and not the individual transit agencies (correct me if I’m wrong). Of course this is going to cause tension amongst Metrolinx and the local agencies, as farebox revenue pays for a lot of the operating costs. If that problem could be solved (e.g. changing it such that revenue dispensed is proportional to service provided), it may placate those agencies.

    P.S. All those complex methods of payment can be possible. For example, the Shanghai smart card has an interchange discount (from wikipedia). For example, Bus 1 and bus 2 costs 4 dollars each. But if you change from bus 1 to bus 2 within 90 minutes, bus 2 costs 3 dollars. If we apply to our system, we can set it such that bus 2 would cost 0 dollars (transfer).

    Steve: The more subtle form of pressure among transit agencies will come from demands by riders that they get a break on fares that cross provider boundaries. This means that the fare received by each agency for a cross-border trip will be less than it is today. In cases where the reduced fare stimulates riding, this could in theory be a wash, but only if the cost of any additional demand-induced service is offset by additional fare revenue.

    Queen’s Park doesn’t want to get into the whole issue of local operating subsidies and claims that systems get all they need today through routes such as the gas tax. This is a total fiction for the TTC where the gas tax goes to support the capital program (and offset other funding cuts), and the operating subsidy is totally paid for by the City.

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  31. Steve: “No way you can have instant loading via the internet”?? I beg to differ. Once a transaction goes through it should be in the back end database, the “electronic purse” associated with my fare card

    Except the purse is *not* on the backend database – it is on your pass. Presto readers on buses (like Oyster) are “off-line”. They do not communicate with the central computer with every transaction.

    I also was applying a rather harsh definition of “instant”. If you hand over your Presto card and some means of payment at Union, the card is returned with the extra value added. If you add value on the internet, your card cannot be updated until you interact with an “on-line” reader, hence it can’t be truly instant.

    Where Presto falls down is that it takes *far* too long before you can “pick up” value you’ve added on the internet (24 hours). I agree with you Steve that once you’ve added value online, then tapping on any reader at a GO station or subway station (or similar) one minute later should then update your balance. If that cannot be done, that is a major fault in the system. I’m wondering if the “24 hour” rule is to allow off-line readers to be updated, so you can pick up the added value at a bus. (Which is nice, but on-line readers should still be updated instantly).

    Steve: The distinction I was making is between a situation where the ePurse is stored on the card (a function that requires the card to be “writable” by a Presto reader) and one where it is maintained centrally (as would be done for any device such as a credit card that would not allow updating by a “foreign” system).

    I agree that the 24-hour rule is a major problem and stems from the fact that bus readers only get updated when they return to the garage. That may be tolerable in a situation where most riders are commuters using GO, but it is unacceptable for a system like TTC where a large number of users expect to have their cards work all of the time.

    This gets us into things like auto-reload features where an account is refreshed regularly without user intervention and an account could even go negative within some constraints of time and value to allow an auto-reload to complete.

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  32. I am a bit confused about the 24-hour delay for on-line payments.

    Given that the readers need to update the card every time it is used (in order for the GO station reader to correctly show the balance after a couple of bus trips), I assumed when I read the FAQ that it would be immediately usable throughout the system as soon as it was used at one of the on-line readers.

    Since all readers (on-line and off-line) will immediately recognize a card that has been ‘reloaded’ at a Customer Service Outlet without confirming with the backend system, this seems to be a reasonable assumption.

    However, this is not what the FAQ actually says. Do you know whether this scenario is correct, or whether the bus readers will still refuse the card for the rest of the day?

    Steve: As others have described, the account balance is stored on the card. If a user reloads their balance online, this information is immediately available to Presto readers at stations that have a link to the central system and which can update the card as part of the fare validation process, but not to the bus-based readers that depend on an overnight download.

    The timing issue depends on when you update your card balance, whether that update occurs early enough to be part of the overnight download, and whether your first “fare” of the next day is on a bus or at a station.

    This arrangement also begs the question of how the system will work with half a million Presto cards and buses needing to know about account balance updates pending for a considerable number of them at any time.

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  33. I think the Admiral should step back from the payment card issue – he is doubly hampered by both the unfortunate fact that many people will oppose anything he is for and more seriously the fact that he will not be a Commissioner past the end of October. Gary Webster should take over dealing with the TTC’s public position on the farecard until after the election.

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  34. Re: Leo

    It is certainly more cost effective to use a standard POS terminal for bank transactions, but the significant question for a transit service is whether it is more cost effective to have a non compliant custom device alongside the compliant one than to make the custom one compliant and have the single device. Any transit system is going to require, permanently, a system of payment not requiring a bank account or credit card, along with some mechanism for concession fares. This ultimately means a something like a smartcard, the American style stored value card or the existing passes, tickets and tokens. Yes, we could imagine a system of reloadable stored value banking compliant cards appearing, but not in the timelines we are discussing (and which Transit City and the new streetcars require) and certainly not merely because the TTC wants it.

    I have no difficulty with getting open payment alongside Presto if it can be shown to be cost effective, but seeing as some sort of prepaid system is needed in any case the sensible option seems to me to be adopting Presto as the standard fare system and adapting it to open payment rather than vice versa.

    Steve: Presto says that the next generation of readers (including those to be provisioned for Ottawa and eventually Toronto) will be able to talk to both types of card. It’s not an “either A or B” situation, but simply having the capability for both. That said, the logic of handling a credit card, for example, will be completely different from the logic now used for Presto cards.

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  35. Re: Miroslav (and apologies to Steve for double posting)

    It is simply not true that Presto cannot be given to minors. The system does not require agreement to a contract any more than the current Metropass does. Yes, they will be limited in the methods of loading cash value on the card, but presumably any rollout to the TTC would include the ability to load cards with cash at subway stations. Quite simply, the great advantage of Presto over open payment is that it is NOT a credit card, and does not require one, nor does it require a bank account. Yes, both those things can be linked for convenience in adding funds to the card, but ultimately the method use to load the card is separate from the amount stored on it. The card is therefore usable by anyone with the funds to load it (assuming they have access to a facility that CAN load it, which currently means Union Station only), unlike an open payment system that needs a credit or debit card (and by extension a bank account and decent credit rating) or some greatly expanded system of prepaid credit cards (realistically they would have to be reloadable as well).

    Steve: What is needed is the ability for a parent to acquire additional cards for their children on their main, adult Presto account. During a fare inspection (we are going to have fare inspectors, aren’t we?), the fact that someone used a child’s card for system access would be obvious. If we want to support multiple riders on one card, with a mix of fare types, that’s theoretically possible, but would require a special mechanism at the reader so that someone entering the system could declare how many and which type of concession fares they were paying.

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  36. Where Presto falls down is that it takes *far* too long before you can “pick up” value you’ve added on the internet (24 hours). I agree with you Steve that once you’ve added value online, then tapping on any reader at a GO station or subway station (or similar) one minute later should then update your balance.

    I’m pretty fimiliar with the Oyster system, and it works in exactly the same way. If you add value to your ‘pay as you go’ balance on the Oyster website, you have to nominate one tube station where you will pick up the added value. The top up is available starting the next day, and for about 7 days following.

    I generally reloaded the card in person (at a vending machine, or ticket booth) in which case the extra value was available right away. That aside, setting up ‘auto top-up’ or ‘Autoload’ as it’s called on the Presto system removes the need to ever manually add value.

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