Updated July 8, 2011 at 10:20 am:
Updates on the disposition of various items previewed in the original version of this item have been added through the post under each topic.
Many items are on the agenda for July’s meeting, the last one scheduled before the summer recess. Previous articles covered the Ashbridge Carhouse routing issue and the Presto implementation scheme in detail.
This report covers the period up to April 30, 2011. Riding for the first third of the year was 5.5% over 2010. This is better than the budgeted projection by 0.8%. Coupled with a slightly than higher average fare than projected (the mix of fares actually paid), farebox revenue is running $2.2-million ahead of the budget. It is projected to be $7.35m above budget for the year as a whole.
This added revenue will be completely offset by higher diesel fuel prices. Additional unbudgeted costs arise from higher than expected bus maintenance expense and the need to operate more service to compensate for various construction projects around the city.
Although ridership may reach 493-million in 2011, the service to be operated will be at the budgeted level of 483-million. Those extra riders will just have to be a bit friendlier.
Meanwhile, the TTC will turn its attention to customer satisfaction and reliability. In a telling statement, the report observes:
“If a customer’s journey takes 30 minutes 90% of the time but 45 minutes 10% of the time, the customer must allow 45 minutes all of the time.”
A fundamental problem with past reviews of service quality is an acceptance of that 10% as a normal condition, an inevitable effect in real-world transit operations. From a customer’s perspective, 90% isn’t good enough because a 10% failure rate guarantees a bad experience at least once a week for someone who only takes the 10 regular commuting trips. Those who ride more frequently will encounter problems every few days, and this does not endear transit to would-be users as a choice for travel.
Although the TTC has attempted to construct measures of its performance, the focus of this process will now turn to satisfaction, to service as seen from the customer’s point of view. How this will be achieved with the coming budget constraints of 2012 remains to be seen. Some changes cost nothing, but running enough service to actually handle the projected demand won’t come free of charge.
Advertising on the TTC (Updated)
The advertising contract at the TTC, currently held by CBS Outdoor Canada, will expire at the end of 2011. Pattison Outdoor Advertising is the successful bidder for a new 12-year contract with a minimum guaranteed return of $324-million ($27m/year on average). This represents roughly a 25% increase in advertising revenue relative to the 2011 budget.
While $5m in new revenue is not to be sneezed at, this is 0.3% of the total operating budget, and the value shows the limitation of this revenue stream in the overall scheme of TTC financing. Some new approaches and technologies may lift the revenue higher than the base guarantee in the contract, but these will not be without controversy. They include:
- new forms of advertising display
- video screens in subway cars
- subway line and station naming rights
- station improvements funded by advertising
Advertising is already pervasive on the TTC, but in the current climate, we can expect to see even more as a cash-strapped Toronto sells every available space and surface. Naming rights will be challenging, especially if this takes us to a level beyond what we already see with “station domination” advertising campaigns. There has been no debate on what, exactly, would be involved in buying a line or a station. Would “Steve Munro’s Broadview Station” appear on all TTC literature, in all announcements of service delays, in schedules and trip planning? Will we have competing Coke and Pepsi subway lines? Will Sheppard become the Ford line?
Station renovations and upgrades can cost upwards of $20-million. How much of this will an advertiser be expected to contribute to get their name on the station? At what point does the public funding of the TTC take a back seat? Will the escalators and elevators run reliably in sponsored stations? Will the walls be cleaned more often? Will repairs be completed on time?
Far too many questions about this scheme remain unanswered, and the report gives no indication of contractual obligations the TTC may have to grant naming rights to whatever sponsors Pattison may dig up. No estimate of the value of these rights either to a potential advertiser nor to the TTC appears in the report. We don’t know what, exactly, we are selling or whether we will receive a worthwhile benefit.
A side-note: OneStop Media Group now holds the contract for advertising on a variety of screens on TTC property (e.g. station platforms and vehicle arrival displays). OneStop was recently acquired by Pattison, and the two contracts may be rolled together.
Updated July 8: I presented a deputation on this matter along with others concerned about the lack of detail and consultation by the TTC. Councillor Davis, who is not on the TTC, asked for several changes to the proposal, but only a few of these were accepted, both having to do with the effect of advertising on accessibility.
The Commission tried to spin the discussion of naming rights, and there was even an attempt to claim that this was not before the meeting for debate, even though it is mentioned in the staff report. What is clearly missing is a policy framework within which new advertising and sponsorship proposals could be reviewed, and a public mechanism for community input on iconic changes to stations which are, after all, public property. The Commission cares more about a few million dollars in extra revenue than the imposition new forms of advertising will make on their customers.
Additional details of the advertising contract were provided to me by Councillor Davis, and I will write about this matter in a separate post.
The TTC has awarded a contract to Carillon Construction Inc. for the Vaughan Corporate Centre Station (the final name of this station has not yet been decided) at a price of $197.8-million. It should be noted that this is only the construction cost — design engineering and of fitting out the station are separate. To be fair, this contract includes the tail track structure north of VCC station.
Building subway stations is an expensive business.
The staff report recommending that the TTC proceed with rebuilding tracks on Queen’s Quay independently of any plans for the street’s reconfiguration is back on the July agenda. I understand that Waterfront Toronto has sorted out its budgeting problems and the full Queen’s Quay project should proceed this fall, but nothing official has come out yet to confirm this.
Updated July 8: There was no discussion of this item because an agreement has been reached between the TTC and Waterfront Toronto that will allow the Queen’s Quay project to go forward. I await details of the new arrangements from Waterfront Toronto.
Next Vehicle Arrival System (Updated)
With the rollout of vehicle arrival and tracking information for the bus network (now planned for September 2011), the cost of providing SMS service (text messaging to cell phones) will rise substantially. The TTC plans to recoup this cost by charging 15¢ for every message beyond a base of two free requests per day.
As anyone who uses this type of service knows, two requests can be a bare start in a day’s travel. What has been disappointing in the rollout of this service is that the TTC has not advertised the availability of web-based access to their system.
This is available both through various third-party applications and from the NextBus website. Web access is generally much cheaper than text messaging, and some of the communications industry’s battles turn on the distinction between data and voice traffic.
The TTC would do well to advertise the availability of the NextBus website as well as the third party sites (on a “no guarantee” basis) so that customers can take advantage of the superior services available on them.
Updated July 8: The Commission decided to continue with the rollout of the Next Vehicle Arrival System, but to hold off on charging for text messages until a further report comes forward in the fall. I and others urged that the TTC should tell people that there are alternative ways to obtain this information, and at less cost both to customers and to the TTC (web based versus text message based access). The TTC will look into making the existence of NextBus known as an alternative to the SMS scheme advertised on transit stops.
In other news, the NVAS information and data feeds will be expanded to include the bus network starting on Monday, July 11.
Heritage Streetcar Charter Rates (Added from the Supplementary Agenda)
The Commission confirmed that charter rates for PCC cars will be increased to obtain full cost recovery from their operation to eliminate an annual loss of about $16,500. Sunday operation of the cars by the TTC (the primary driver of PCC-related costs) will continue.
The charter rates will change as below:
- Old: $975 for a three-hour minimum, and $230 for each additional hour
- New: $1,892 for a three-hour minimum, and $446 for each additional hour
It is self-evident that if the Commission is going to continue operating the PCCs for tourist and special event purposes, they will also continue to incur the cost of maintaining the cars. Charters should be billed at the marginal rate, not full recovery.
The almost inevitable next step will be a decision that even the good will from running and maintaining the cars cannot be justified. Obviously, they need a sponsor, but one who is sensitive to the historical nature of the vehicles. The City of Toronto and the TTC should be that sponsor as, in effect, they have been all along, but that’s not the way we do things in our fiscally responsible city.