Why Toronto Needs A Fare Increase

Back on August 19, The Star’s Tess Kalinowski ran an article about TTC fares including remarks from me advocating an increase.

Let’s get this straight: Pro-car Mayor Rob Ford has told the TTC it can’t hike fares to solve its budget problems. Meantime the city’s leading transit advocate is calling a fare freeze “madness” given the system’s operating challenges.

Streetcar crusader and transit blogger Steve Munro believes predictable, moderate fare increases are preferable to service cuts, given that the TTC is facing an $85 million operating shortfall next year.

“If they have a fare freeze this year on top of other cuts they’re contemplating, it will be disastrous … just at the time the system is doing so well,” he said, referring to the 15 million more riders the TTC is anticipating next year.

Politicians of all stripes are spooked by fare hikes, says Munro. By holding down transit prices, Ford is just repeating the actions of his predecessor, David Miller, who also pledged a fare freeze in 2009.

The article set off a storm of comments divided between those who feel that going to riders for more money is the wrong approach; those who take a hard line attitude that the problem lies entirely with inefficiency, poor management and union contracts; and those who agree, one way or another, with my position.

Heather Mallick picked up the topic in her column on August 22 arguing that fare increases hurt the poor who are more likely to pay using the most expensive fare medium, the single cash fare.

My position on fares has been quite consistent for years.  Service is the most important “product” the TTC has to sell, and if we compromise the ability to give good service to riders, we might as well shut down the system.  Fares are one component of the revenue tools available to the TTC, and by contrast with many other cities, Toronto’s fares are the main funding for day-to-day operations.

While we might play around with fare structures and subsidies, transit costs overall will rise through a combination of inflation, wage increases and system expansion.  Unless there is an endless supply of new money, or a decision to cap the scale and scope of transit service, fares cannot be frozen forever.

Politically we lurch from regime to regime with policy changes on funding for and the role of transit.  Many decisions take place in the context of improvements or cutbacks in previous administrations.  Reports going back decades recommend modest annual fare increases at roughly the level of inflation, but we never see this implemented.  Multi-year freezes alternate with big jumps in fares, and these are especially hard to sell when subsidy cutbacks force more of the load onto the farebox.

Results for 2011 to April 30

The Chief General Manager’s Report presented at the TTC’s July meeting includes an overview of system performance.  For the first third of the year, riding was running 5.5% over 2010 and was expected to be 3% ahead for the year overall.  This may be a low estimate.  Demand for the months of May and June was reported to continue at a strong level at that TTC meeting, but the numbers have not yet been published.

Some info can be found in Ian Robertson’s article in The Sun.

Fare revenue is also strong both because of the extra riding and because, on average, riders are paying slightly more than expected for each trip.  This number is a blended value across all fare media, and if more people use the comparatively expensive cash or token fares, as opposed to passes, the average revenue per trip goes up.  About $1-million of the $2.2m extra revenue comes from the higher average fare with the remainder coming from extra riders.

Although the TTC projects total revenues $7.3m higher than budgeted for 2011, this will be largely offset by rising expenses, notably for diesel fuel ($4.2m).  Additional maintenance costs for Orion VII buses add to the problem ($1.8m), and greater-than-expected costs associated with additional service for construction projects accounts for the remainder ($0.8m).  A small amount remains as a “surplus” ($0.5m), although this really means a reduction in the subsidy required from the City of Toronto.

The TTC’s total Operating Budget stands at $1.4359-billion, but final results will be higher at $1.4427b thanks to extra costs listed here.  Fares and other revenues will total $1.0141b or 70.6% of total expenses.

Looking ahead to 2012

The City of Toronto is wrestling with an operating deficit that, depending on whose numbers one believes, ranges from $400+m to $774m for 2012.  To some extent, this problem is an “own goal” triggered by a refusal to raise property taxes and TTC fares (among other potential income streams), and by the abolition of the Vehicle Registration Tax.  All City departments and agencies have been asked to cut their anticipated City funding in 2012 budgets by 10%.  For the TTC, this translates to a cut of $46m in the “conventional” system budget and $9m for Wheel Trans.

Leaving aside the dynamics of the Ford Administration’s desire to reduce the scope of City spending and programs, the fundamental point here is that unless there is some new, long-lasting source of revenue for the TTC, or Council politics shift sufficiently to restore the proposed cut, then the TTC will lose that $46m for 2012.

Moreover, costs simply to run the existing system are projected to rise by $39m leaving a gap of $85m.  This does not include any provision for labour cost increases that will arise from a new contract, whenever it is settled or awarded by arbitration, retroactive to April 1, 2011.

Although Wheel Trans has a separate budget, it is a much more heavily subsidized operation than the regular TTC service, and this makes it even more vulnerable because it has almost no fare revenue.  The 10% subsidy cut translates to $9m on top of a further $7m needed to address cost increases in 2011.  There’s a good possibility that pressure to keep Wheel Trans funding whole may lead to an offsetting cut in the regular TTC budget, and this would have the difficult effect of pitting Wheel Trans riders against a range of users on route that would lose service.  To put this in context, the $16m needed for Wheel Trans is roughly triple the saving achieved by route cutbacks in May 2011.

Various options will come to the TTC board at a special meeting on September 9 (delayed to the 16th), and some of these have already shown up as proposals in the City’s “Core Services Review” conducted by consultants KPMG.  That report was a lazy approach to a TTC review.  It took the simple route of using the Ridership Growth Strategy (a holdover from the now-hated Miller era) as its base and targeted RGS-related improvements for cutbacks.

TTC management estimated that if all of the RGS service improvements were rolled back (some of these were already cut in May 2011), there would be a saving of about $30m, and a further $50-60m could be obtained from a 25¢ fare increase.  That figure is conservative and includes an allowance for some riding loss due to the combination of higher fares and service cuts.  (25¢ would be a 10% bump in the token fare, and other fares would likely shift proportionately.  A 10% jump in fare revenue would yield about $100m, but service cuts, especially those affecting peak period crowding, would offset the gain.

I mentioned the possible cut in peak loading standards in a previous article, and here they are again for refence.

Vehicle Type    RGS Peak     Pre-RGS Peak   Offpeak Std

  Low Floor     47 to 50       52 to 55       35 to 38
  High Floor       51             57          36 to 39

  CLRV             74             74             46
  ALRV            108            108             61

In short, rush hour buses would not be considered to be”full” for planning purposes until they had about 10% more people than today.  This may seem small, but vehicle loads are uneven thanks to bunching, short turns, and variations in the demand at different times and locations.  The crush vehicle capacity is higher, but the closer one comes to this loading, the more likely buses will spend extended times at stops trying to squeeze on “just one more”.  Changes in bus design for low floors, and the increased prevalence of bulky items such as strollers and shopping carts further limit the achievable capacity of vehicles and the “standard” can be difficult to achieve.  A 10% cut in service on the street would definitely mean more than a 10% cut in the quality of service as any regular system rider can attest.

On the streetcar system, there was no RGS change in the loading standard because there were no spare cars with which to address the need for more service.  Moreover, the elderly streetcar fleet needs many more spares, proportionately, than the newer bus fleet.  The longer we await a replacement fleet, the worse this problem becomes, although major rehab work on half of the CLRV fleet should provide some benefits.

Off-peak service standards are based on seated loads, and it’s no secret that there are off-peak standees especially on the busy routes.  This has always been a standard that is observed, now and then, but not as rigourously as one would hope.  Fleet availability is not an issue here, but the budget headroom to operate service is.

As I already reported, many routes are due for improvements according to the TTC’s own planning report, but won’t see any change because the TTC cannot afford to operate the service.  Almost all of the affected routes and periods of service are outside of the peak when there is no problem with vehicle availability.

Whether the TTC will propose to cut off-peak standards and roll back, officially, to allowing service designs that will presume off-peak standees remains to be seen.

TTC peak bus service for September 2011 requires 1,487 buses in the AM peak.  Although some routes would not be cut under a rollback (either because they run policy headways unaffected by demand, or because a cut to a lower loading standard would involve only a fractional vehicle), a reasonable estimate of the peak vehicle savings would be 120 (about 8%).  Adding 15% for spares would mean a fleet reduction of about 140.

As part of RGS, the TTC added 100 buses to its fleet simply to expand service, and this would more than roll back that addition.  Such a change would be implemented in the short term by retiring the oldest of the fleet, and in the medium term by deferring new bus purchases.  This would also eliminate the need for one planned new bus garage.

One important point I have not mentioned is the question of riding growth.  If, despite the City’s best efforts to throttle the TTC, riding continues to grow, this may further stress the loading standards and force some additional service.  Indeed, the TTC already has plans for many service improvements in September 2011, and a few for October, within the limitations of the 2011 budget.

Other potential cuts include further reductions in marginal services following on from the May 2011 changes.  A new de facto standard was introduced in that process whereby a service carrying less than 15 riders per vehicle hour would be eliminated.  The analysis was done based on major blocks of service such as “Sunday afternoon” or “Saturday evening from 9pm onward”.  This approach can yield problems with routes that might met the standard for part, but not all of the interval, especially at the start and end of the day.

Moreover, no walking distance standard was included.  The TTC’s own design guidelines stipulate that:

… new transit services will be provided only if they would serve people beyond 300 metres of a service which is already in place (200 metres where there is a higher-than-average proportion of seniors) …

However, several of the May 2011 cuts produced parts of the city 2km square where the walk to a transit service would be well over 300m for many residents.  This part of the existing standards was ignored, and I doubt we will see it revived for 2012 as this would trigger service additions in the very places that were just cut.

Finally, the expanded Blue Night Network was briefly a target for cutbacks, but this option has been rejected by TTC Chair Karen Stintz.  Many night services carry respectable loads, and even the “baby night” routes that shut down for a few hours (such as 504 King), don’t do badly on their late trips.  Some have proposed that these routes carry a premium fare, but this leaves all manner of questions about how the transition from regular to and from premium rates would be imposed, let alone enforced.

How Much Subsidy Does the TTC Get?

We hear a lot about a “fair share” for riders and governments pay to run the TTC, and this often ties back to the original William Davis subsidy formula of 2/3 farebox, 1/6 Toronto, 1/6 Ontario.  There’s nothing magic about those proportions, and as is often noted, that’s a comparatively stingy subsidy relative to other major cities and countries.  Rarely have we actually achieved those numbers, and the farebox share rose to over 80% as Queen’s Park walked away from its role as a transit funder.

In 2011, based on projected year-end numbers, the proportions will be 66.1% farebox, 4.2% other revenue, 23.5% Toronto, 6.2% Ontario.

A small amount of TTC revenue comes from other sources totalling about $60m in 2011.  Of this, about $20m comes from advertising.  This is expected to grow under a recently signed new contract, but the total dollar value will still remain under 2% of the TTC’s funding needs.  The new contract presumes a growing pervasiveness of advertising on the TTC, although there is a limit to how much can be sold and how many “eyeballs” are available to absorb the material.

Many have noted the degree to which space on TTC vehicles is filled now with public service and in house advertising.  Just because you have the space doesn’t mean you can get more money for it.

Ontario sends about $160m in gas tax to Toronto, of which $90m goes to the operating subsidy and the rest to capital.  By contrast, in 1990 the provincial subsidy was $100.9m, or roughly $150m in constant dollars.

Subsidies present two problems for planners and for governments.  Whenever any public expenditure (seen as a line item in a budget) goes up by more than the rate of inflation, this attracts attention and criticism for “out of control” spending.  However, transit systems face two pressures on their total budget:  inflation and size of operations.  Leaving aside the question of appropriateness of pay levels, there will always be cost increases in labour and materials.  On top of this, system growth adds to the number of riders who are carried at a net loss relative to their fares.  The result inevitably is that total costs go up by more than the rate of inflation.

When times are tough and governments don’t want to support this level of increase, they must constrain costs and/or limit the expansion of service in response to demand.  The latter may work in the short term if the system has “excess capacity” (however that might be defined), but there is a point at which this tactic is counterproductive in the face of rising demand.

Planners may be asked to give multi-year budget projections, but the last thing they want to show is an organization whose budget grows by, say, 6% annually when inflation runs at a much lower number.  Many government services face this problem with costs driven both by inflation and by growing demand, but simplistic answers are all taxpayers are willing to hear.

Governments also prefer to target their spending based on previous years, not on a measure of what is actually needed.  In a situation with a hard linkage between fares, subsidy and total expenses, this can produce an artificially constrained budget.  If Queen’s Park says they will contribute $1, and the City matches this with $1, and the formula dictates a 2/3 rider share, then we know that the total will be $6 no matter what.  The TTC may need more service and more revenue, but politics dictate that governments are seen to be holding up their bargain.  This is a catch-22 for riders who can get better service only by paying a higher proportion of the total cost.

Freezing Fares as Social Policy

Over the years, I have often heard that fares should be frozen because some riders cannot afford to absorb additional transit costs.  This was Heather Mallick’s argument, although she is far from alone in her position.

This issue comes up particularly forcefully after a period when fares are frozen for a few years, and a large catch-up increase is imminent.

The problem with a freeze is that it benefits everyone: those like me who can afford to pay for transit use (although I limit my costs with a Metropass subscription), and those who scrape together the money for a few fares each day.  Moreover, a freeze penalizes the transit system by reducing its revenue.  Yes, “efficiencies” may be found to limit expenses, but this cannot be done year after year.  Just to keep pace with inflation and riding growth, some extra costs must be incurred, and fares from new riders are unlikely to compensate.

On the rare occasions when major new routes such as a subway extension open, there are new costs, but certainly not the extra riders to generate compensating revenue.  Unless fares or subsidies rise, the cost of major new routes must come from other operations.  This makes lines like the Sheppard or Spadina extensions problematic because without new revenue, their net cost of operation must come from other, existing parts of the system.

A fare freeze begs the question of the “fair share” riders will pay and the corresponding subsidy from governments.  If user fees (fares) are frozen, but subsidies rise to cover new costs, the farebox share will gradually fall, and the subsidy increases will run above inflation levels.  This is a recipe for cutbacks when economic or political circumstances will no longer support low or zero fare hikes.

What is “Good Service”?

When people talk about how much slower transit is than just about any other mode of transport, the discussion always turns to service, but what, exactly, do we mean by this?

Definitely vehicles should show up when we want them, preferably with only a slight delay — arriving just after one gets to a stop, rather than leaving just before, would be ideal.  If we do miss one, the next one should be along soon, and in a predictable amount of time.  There should be room to get on and ride reasonably comfortably, maybe even get a seat.  Buses and streetcars should actually go where they claim, and outer ends of routes should not have to suffer from frequent short turns to maintain headways in the central sections.

All this is very nice, but my “frequent, convenient service” is someone else’s waste of taxpayer dollars.  There are at least two parts to this problem.

First is the question of reliable service.  The single biggest improvement the TTC could make to surface operations is to have vehicles arrive on something vaguely like a regular headway.  However, we hear lots about “traffic congestion” as the root of all evil, even though irregular service can be found at times and locations when “congestion” doesn’t exist.  I won’t belabour the question of service management covered in many other articles, but the TTC, despite the ability to track all of its vehicles, still frustrates riders with ratty headways and short turns.

This has spinoff effects including crowding, frustrated riders and operators, and a sense that the service is actually much worse (as experienced) than it is on paper (on the schedules).  The problem, of course, is that if vehicles are unevenly loaded, more riders are on the full ones, and the “typical” experience is much worse than the “average” reported in route reviews.  Cutting service because some cars and buses are half-empty does little to address the problem.

A very simple example:  If there are two buses and two riders, but they are both on the first bus, they have a completely different experience than the zero riders on the second bus who, of course, count for the average load (1 rider per bus), but not for the average experience (2 riders per bus).  The higher the load and the greater the disparity, the more likely that the now-full bus will contain many unhappy riders and a grumpy operator, while the nearly-empty bus will sail along with a few happy, seated passengers.  On average there will be a seated load, maybe a handful of standees, but that’s not the result you would get if you talked to the “average” rider who is on the packed-full bus.

Managing service so that vehicle capacity is actually provided on an even basis is the single greatest problem for transit systems, but the effort buys useable capacity at relatively low cost.

Next comes the question of policy headways and hours of service.  The TTC now runs almost all routes no less frequently than 30 minutes, and part of the Transit City Bus Plan would have established a core set of routes that route never have headways over 10 minutes.  Until May 2011, all routes operated from at least 6am to 1am, but that ended when the most lightly-used were cut back leaving some wide gaps in access to transit service while saving less than .5% of the total operating budget.

Calls for cuts to the Blue Night Network have been rebuffed by some on Council, but I’m sure we will see another attempt.  I will be intrigued to see whether consistent standards are applied to services at 3am and at 11pm.

Running service that will never be full is a fact of life on some transit routes, and it costs money.  If you happen to use one of these routes, you will fight strongly against cuts, but to many others, your route may simply be something we can’t afford.  When we look beyond transit in the 416 and think of a surface network extending seamlessly into the 905, our idea of “acceptable” service may take a beating.

Service standards must be set and maintained at some level, although some will argue that the standards we have now are too generous.  Maybe so, but if we cut the standards for 2012, what will we do for the budgetary problems of 2013 and beyond?  Will transit at new standards become so intolerable that it will lose whatever political support it now has?  Will only fantasy transit networks of subways criss-crossing the city attract interest?

Changing the Fare Structure

When fare increases are proposed, many respond with debates about alternate fare structures.  Such a debate is long overdue, but it avoids the central point:  someone is going to pay more so that someone else can pay less.  A fare increase may be bundled with a restructured tariff,  but this could undermine the acceptability of the new scheme.

There is a good parallel in the change to time-of-use billing for electrical power.  This was implemented at the same time as the change in taxation on hydro bills, and moreover, once the new rates were in place, they were not revenue neutral.  A rate increase was buried in the new tariff.  A good idea — encourage off-peak use by charging less — was compromised by an implementation that served the purpose of raising revenue overall.

Creating a “fair” fare structure, given all the dimensions that might be considered in evaluating that term, is just about impossible.

First off, any social justice aims have nothing to do with how far or how long someone travels on the transit system.  If we decide that people of reduced means should pay less for transit, then we need some way to provide them with service at a reasonable price.  Some groups, such as seniors and students, are presumed to deserve a discount regardless of their actual financial situation.  That’s a policy decision.  Indeed, if they (or those who support them) have significant income, then they will pay taxes that in a roundabout way will come back to transit subsidies.

Many low-income groups cannot be identified by some characteristic such as “all people with blue eyes”, and this brings us to the wider problem of social subsidies.  If they are to receive lower transit fares, this must be administered outside of the transit system.  Transit passes can be administered along with other social programs, but they have a catch-22 depending on how recipient’s income stream works.  Someone who gets all of their income at the start of the month may be unwilling to shell out for a transit pass, even a cheap one, but prefer to take a chance that single fares will be cheaper.  Moreover, there is some debate over how much the transit system should be paid for such a pass by an agency that might resell it at a discount to a client.

This is not a simple problem, but whatever solution might be used, we must agree that such a subsidy is both required and worthwhile as social policy.  It is pointless going through the exercise of creating a new fare structure and then doing everything possible to limit expenses by thwarting would-be users.  (One might make similar comments about Wheel Trans.)

Other fare schemes include the re-imposition of zone fares or some type of fare-by-distance calculation, time-of-use fares so that peak trips cost more than off-peak, and time-based fares so that a token might buy two hours of riding.  Each of these has benefits and implications.  Moreover, the discussion is heavily weighted to the concept of a granular fare that is charged per trip, rather than a bulk fare (e.g. a pass, or a fare card with a capped total charge per week or month).

Zone fares were eliminated in Toronto forty years ago when the whole business of transit subsidies by the then Metropolitan Toronto Council were quite new.  The old “zone one” comprised a semicircle bounded on the south by Lake Ontario, and drawn from the Humber River in the west, through the City Limits at Yonge south of Hoggs Hollow (York Mills) and down to the Scarborough boundary at the east end of Queen Street.  All of Etobicoke and Scarborough, and much of the other suburban boroughs (as they then were) lay in “zone two”.

The result was that radial trips from a suburb into the city cost about 60% more than a trip entirely within one fare zone (although the service in zone two was such that “local” trips were much less likely especially if a transfer was involved).  The outer suburbs were not yet developed, and ten-digit telephone numbers, let alone the population they represented, were unheard of.  (There was a time when some calls within what is now “the 416” were long distance.)

Zones based on radial travel are impractical in a region where the biggest market for new transit riders is not oriented to a core area on which the zones can focus.  Various schemes have been discussed in comment threads here before involving smaller checkerboard zones and rules for how far one can travel across a zone boundary.  Such complexities vie with the simplicity of a distance-based fare, but the problem for either scheme remains how to charge for service and validate that the correct fare is paid.

Time-of-use fares may encourage off-peak riding, but this presents two problems.  For some riders, changing their commuting hours is not practical because of scheduling at their job or school.  This particularly affects those who make long journeys because they have to offset their entire trip by a much longer time than someone whose commute is short.  (If the discounted off-peak fare depends on the start time for a journey, then a long trip must start much earlier in the morning.  At the end of the day, there is the reverse problem of leaving work very early or arriving home very late just to get the discounted fare.)

For the transit system, there may be a decline in peak demand, but there will also be an increase in riding on the shoulders when service may already fall to mid-day or evening levels.  If service does not adjust to handle this demand, exhortations to time-shift one’s journey will fail.  Again, this problem particularly affects longer trips which may, in part, occur after the peak service has ended.

Time-based fares, in effect a short-term pass, are simple to understand, although they tend to benefit riders whose trips involve stop-offs, or who make many short trips within a brief time period.  This benefits certain riders, and has the attraction of being simple to understand, but its implementation requires a change in the way that “transfers” are issued unless there is a move to smart cards.

New fare schemes are also aimed at regional travel, the “cross-border” issue of paying a double fare to travel short distances.  This is no different than the old complaint about zone two in Toronto where riding past Humber Loop, across Bathurst & Lawrence, or across Eglinton & Don Mills would incur a zone fare.  Getting rid of that invisible line also involves changing the fare someone pays.

All of these have their benefits and their difficulties, and address perceived inequities for various groups of riders, but they do not address the fundamental question of how much riders, as a group, should pay for the provision of transit service.  Implementing a single fare medium such as Presto while maintaining the existing tariffs uses an expensive piece of technology to avoid the fundamental question about how much we should charge for travel.

Premium Fares for Premium Services

Another variation on fare schemes involves premium fares.  These have been suggested for night buses and for the subway, but nobody has quite explained how to make them work.  Many night routes have quite decent riding and meet or better the minimum standards applied to day service.  They are “premium” only in the minds of those who presume that they are expendible.

As for the subway, the Toronto network is designed on the assumption that the subway replaces surface routes rather than being a fast, but higher-priced alternative to them.  Yes, a system like Presto could charge different fares for different routes, but having the capability doesn’t mean we should actually implement it.

Those of us who live close to downtown have the option of travelling on surface routes or on the subway, but those who come longer distances do not.  Do we really want to impose a city-wide fare increase on those who have no choice?

GO Transit charges substantial fares, but they are not out of line with what TTC fares would be on a mileage basis.  The one missing factor is the ability to transfer to the TTC at a low marginal fare such as that provided on some 905 transit systems.

The TTC does not publish ridership or cost data for the “premium express” buses, and we have no way of comparing their performance as routes to others that could be on the chopping block.  These are peak only, peak direction routes carrying riders a considerable distance and using vehicles that are generally not able to provide other peak period services.  That’s the most expensive kind of bus operation one can have.  Whether these are cost effective even with their premium fares, compared with other “regular” routes, is a mystery.

Subways do cost a lot to run, and the newer lines have low riding and low station usage compared with older parts of the system.  The standard for subway service is a five-minute headway from 6:00am until almost 2:00am regardless of demand, and this is completely different from the standard applied to surface routes.  It’s no wonder that people want lots of subways built with this kind of service.  Should riders pay more because politicians have chosen to give them a premium service quality?  Why is a decision to run good subway service treated so much differently from bus and streetcar lines where a half-empty vehicle is scorned as inefficient and its riders as pampered while almost empty subway trains roll unseen beneath the streets?

The structure of the network, and the common fare charged for most routes, has evolved in Toronto for decades.  Charging more today for parts of a network that were, in good faith, approved and built in a unified network would be counterproductive and could trigger an unwanted migration of demand to a surface network that cannot handle the increase.

Labour and Management “Efficiency”

I have deliberately omitted much of this discussion because it’s really a separate debate.  We can argue about whether operators are overpaid, but even with some form of wage controls, their pay will settle at some new level.  Yes, it could be frozen or limited to rise slower than inflation, but that tactic would eventually leave the TTC unable to recruit staff.  There’s also the small matter that we have declared TTC workers “essential” and left their wage negotiation, at last resort, to arbitration.  Although the legislation suggests that an arbitrator should consider the “ability to pay” by the employer, this is not the same as the “willingness to pay”, a far more common problem for taxpayers and politicians.

The “sunshine list” of employees making over $100k contains exactly 100 TTC operators for 2010, and 14 station collectors, out of a pool of roughly 5,000.  That’s a function of overtime, not of the base pay which is $29.05 per hour, or an annual rate of about $60k.  This is a good wage, but not as stratospheric as some like to believe is common.  Many crews involve more than 40 hours’ work per week, and split workdays are common.  Nine-to-five jobs are unknown.

Automated fare systems will transform the work of collectors, but they won’t be eliminated, only replaced by roving security staff.  Indeed, the TTC has no intention of eliminating all fare media other than Presto, and it is unclear when the collectors will be truly obsolete.

Service management is an always-burning question on the TTC and, as I said earlier, the cheapest additional capacity would come from more reliable service.  Whether the TTC can or will attempt to manage its service better, especially in the face of cuts to funding and staffing, is another matter.  Any efficiencies will delay cost increases for a time and may provide better service if the “savings” are reinvested rather than scooped as a budget cut.


The City of Toronto isn’t going to give more money to the TTC, and will probably give less than in past years.  Queen’s Park is cutting back, and this will be even more severe if the Conservatives gain power as they have already proposed a redistribution of gas tax revenue and overall cuts in spending.  The Liberals focus on capital projects, and show no signs of addressing operating costs.  At most their benefit could be indirect by uploading of other costs now borne by the City’s budget that would make room for better local transit funding.  The NDP offers more subsidy, but at the cost of a fare freeze that would eat up much of their proposed funding while contributing little to better service.

Meanwhile the price of fuel continues to rise, transit riding grows, and everyone clamours for better transit service.  They just don’t want their taxes to go up.

Toronto really must have an intelligent public discussion about transit financing, service delivery and quality, and whatever formula this eventually yields, fares will be part of it.  So will subsidies, and governments should stop fooling taxpayers that there is a magical way out of this problem.

We can rail against TTC and say “no more”, but that’s exactly what we will get as — more crowded vehicles, routes that fall off the map when they don’t meet increasingly strict loading standards, and a transit system that forces more and more people to own, maintain and drive their own car, the exact opposite of the goal any self-respecting city should pursue.

[Apologies for the lengthy absence of new articles here.  This article has been in the works for over a week, but I have been distracted by other events.  I could wrangle this text more, but feel it’s time to push it out the door and let the remainder of the debate flow in the comments.]

39 thoughts on “Why Toronto Needs A Fare Increase

  1. Time-based fares: Though I agree that time-based fares are more likely to benefit people who make fairly short trips and can then use the ‘transfer’ to return home, it seems to me that one of the most common areas of conflict between passengers and operators is the use of old (expired) transfers or trying to use one, but not at a ‘transfer point” (i.e. one just misses a bus and walks to the next stop when a vehicle unexpectedly arrives.) If transfers had a clear expiry time I suggest that the number of operator-passenger conflicts would be greatly reduced and that is surely a big plus.

    Steve: An advantage to be sure, but we then get into the question of whether the transfer remains “valid” if you are on a bus when it expires and you then meet a fare inspector. Even worse, if the bus is short-turned, you could be dinged for another fare simply because you were forced to make a transfer that would otherwise not happen. Every scheme has its benefits, drawbacks and operational challenges, and none of them is perfect.


  2. Steve:

    What a fantastic post – well balanced and totally avoiding inflammatory rhetoric. It outlines all of the various alternatives and their consequences – favorable and unfavorable as well as intended and unintended. I disagreed however, with one important point. You state that taxpayers do not want their taxes to go up. This is undeniably true for a loud and single minded group of taxpayers. Whether they form a majority or not, I do not know, but they certainly dominate the debate. However, there are many of us – perhaps even a majority – who see the merit of tax increases as a necessity if we are to preserve the quality of life that we currently enjoy. Obviously no one wants to pay taxes per se, but in the context of preserving this great city and facilitating good transit, I am proud to pay my taxes and would gladly pay more.

    Steve: I was being mildly ironic there, and am one of those pinko commies who, in response to the KPMG survey, said “yes I want to pay more taxes”. As a part owner of some real estate, that directly affects me even though I live in an apartment where rent controls could mute the effect.


  3. I think it was one of the contributors on “Worthwhile Canadian Initiative” who pointed out that massaging the price of hydro, transit, gas and other things the government can influence the price of (often at massive costs to the public purse) is a “price solution to an income problem”.

    I concur with the position that while government should support transit by contributing a portion of costs (and thus understanding the consequences of mandates which increase costs like low-floor vehicles, low-sulphur diesel, reducing maximum driver hours etc.) while ensuring that people in vulnerable circumstances *get enough income* that they are not priced out of the transit market. I would particularly seek better higher order of government support for paratransit, given that while the “standard” system covers $3 of every $4 in operating costs the equivalent for WheelTrans is maybe $1 in $10.


  4. Fare inspectors only come into play if the honour system is in place, like with VIVA in York Region. The driver doesn’t check tickets or passes, and riders may board from any door on the bus. I honestly don’t know what VIVA’s fare inspectors do if they come across a ticket that expired mid-ride. On the TTC, however, assuming that operators remain the line of defence against fare evasion, then all they would need to check is whether or not the transfer is valid at the time of boarding. Once you’re on the system, you’re on it, for as long as you’re on it.

    Steve: Until you have to change vehicles. If this is an unscheduled event, or if one is delayed enroute, disputes could arise. Indeed, time-based fares would encourage subway use to travel further in “x” minutes if someone were trying to get the most out of one fare. I personally prefer time-based fares like this of all the individual fare options, although an all-you-can-eat pass is even better. However, no system is perfect and any debate about the options must deal with the implications, and the degree to which multiple options can co-exist..


  5. In terms of fair boundaries, while every solution does have some drawbacks, overall I’d say the benefits could be worth it.

    The drawback to a fare boundary between old Toronto and Metro, or even just using Eglinton as a defining boundary across the city, is that someone who is going a few kilometers across the boundary has to pay more than someone who goes around the boundary or goes from one end of the city to the other. It is also worth noting that those who live near Toronto’s city limits either have to pay a full extra fare for a short distance, or have exceedingly long walks to avoid paying the extra fare.

    The alternative is a checkerboard of fare zones across the city. And as you stated, while this would be more fair to riders, it could also cause confusion as to how much each trip costs. While a 9-5 commuter system like GO where trips are pretty much set in stone this works, in a system and city as complex as Toronto’s it could cause a headache.

    I believe the first option is still the best. Most trips are probably north-south to some degree, and crosstown trips are actually better serviced through GO. In York Region, we have a fare boundary in Oak Ridges (north Richmond Hill), 2 hour transfers, and passes priced at about 40 rides.

    Steve: Crosstown trips better serviced by GO? No, within the 416 GO has nothing beyond the Lake Shore corridor. An Eglinton fare boundary makes some huge assumptions about travel patterns.


  6. I like the idea of time based fares, and can only suggest that most problems would be alleviated if the time period was longer than the longest reasonable trip – maybe 2 to 3 hours. Sure, that would reduce the number of fares paid somewhat, but it’s too short for someone to use to get to work and back, which is the backbone of transit ridership. Revenue might even increase as more people elect to use the TTC for shopping trips, running errands or nights on the town.


  7. Thank for getting this piece out the door, Steve. I am quite convinced that regular fare increases are preferable to the other options you presented. But just as finding economies within the TTC is difficult, so too within the budgets of many households. Ten years ago, almost 20% of home owners and over 40% of renters spent more than 30% of their income on shelter costs. What are the numbers in 2011, I wonder. That type of squeeze, not to mention cost of daycare, increased cost of education, decreasing job security, or the increasing proportion of boomers subsisting on fixed retirement income, really decreases disposable income. The problem with Mallick’s assessment is that is focuses on the poor; it’s the people with one or two low-wage jobs or the pensioners who stand to lose the most from a fare increase.

    I don’t mean to sound like a cheap imitation of Elizabeth Warren, but there seems to be a strong correlation between the disappearance of Toronto’s middle class and the apparently inability of the TTC to obtain adequate funding. But then again, isn’t insufficient funding true of almost all government services now?

    I return to a question I posed some months back: whether there was any proposal to institute a tax much like the Employer Health Tax on businesses in Toronto. The province and the federal government have seen fit to reduce the corporate tax rates. I am wondering whether the city has the authority impose an additional tax on corporations with large payrolls, many if not most of which derive enormous benefit from the TTC as a mover of employees. If we include Government employers in the taxable, we’d have an interesting avenue for increasing the Province’s subsidy of transit in Toronto.

    Of course, my ultimate preference would be the return of a strong middle class that could afford, without worry, to pay its way on the TTC.

    Steve: The City does not have the authority to levy any form of payroll tax. As for the “middle class”, a lot depends on what is expected of them. I say this from the point of view of a time in Toronto’s history when there were Red Tories and a certain sense of civic mindedness among people of a conservative bent. Now it’s me me me me (and my cars). I am less sure that the problem is demographic than a general outlook that the public good comes a distant second to the private good.


  8. A beautiful, logical and well thought out post.

    I do have one comment though regarding labour efficiency. Your comments show great depth and knowledge when talking about things like the sunshine list and that overtime composes a major part of it. However doesn’t the Sunshine List come down to a single issue which cannot be refuted? That being: You simply can’t have ticket collecters in a non-essential role making a 6 figure salary without having those costs passed on to the riders.

    Steve: The collectors make the same wage as operators, and that was the result of an arbitration decision the TTC isn’t going to get out of. Those who make over $100k work a lot of overtime to get that income, and yes, it’s a lot for the position. However, the TTC’s security staff who would replace ticket takers if there were serious efforts at fare enforcement, make even more than the collectors because their jobs are deemed to be more dangerous (and they had a generous salary rate when the position was first created).

    In all businesses, the biggest single expense is wages and when the technology exists for automation, isn’t there an obligation for the “greater good” (ie. the TTC riding/taking public) to explore those options?

    I’m certainly not anti-union and I hate it when things become politicized (especially in these recent years) but I don’t see the wages on the Sunshine List as a “left” or “right” issue. It is an economic issue and a business model issue where the system in place simply cannot sustain itself without having Mayors Lastman/Miller/Ford going cap in hand to the Feds/Provs looking for handouts .

    While nobody begrudges any TTC from worker from making a decent wage, a legitimate question remains How Much Is Enough? Doesn’t the chronic “system” funding shortage demand that we look for ways to improve our efficiencies and automate where possible?

    Steve: And automation costs money to operate. One concern the TTC has is that all the new technology won’t operate free of maintenance and support costs, and that the refresh rate would be high enough to be an ongoing capital expense. Also, nobody has yet proposed completely eliminating all fare media, only automating the most common which are already the cheapest to collect. The collectors, by the way, represent a small portion of the total labour force. Getting rid of them may save some money, but not a fortune.


  9. Timed transfers are only useful if there is a transit service to back it up. Brampton has had 2 hour transfers for many years and it is only recently I have been able to make use of it with the new Züm service (15 minute service). It makes no sense to drop into a store to pick up some milk then wait 25 minutes for the next bus. In contrast I have frequently used the St. Clair timed transfer because it is backed up with frequent service.


  10. Hi Steve:-

    Don’t think you want this at this post but I’ll leave it to you where you place it if you even want it, but according to a Star article quoting from a CBC radio broadcast, it appears that the Fords have found public transit nirvana on the waterfront.

    Could this be the beginning of the swan boat network, with frequent, rapid services across the harbour to all of those future posh hotels and malls. Monorails too eh; the newest and most ideologically successful modern form of rapid transit able to swoosh riders to all of those amenities on the Waterfront. Wow sounds so sexy and forward thinkin’ huh. And we thought that Transit City in its simplicity, coverage and economy was the bees knees in transit improvements in Ole TO. No wonder it got squelched by the Ford brain trust. It just ain’t modern. And Mickey doesn’t want them there damned old tramcars in his theme park, now does he Goofy?

    Monorails, why there’s only one rail, what an economy there eh. ’cause costs will be cut in half right? And they don’t cause any disruption to auto traffic either.



  11. Yes, there should be a fare increase. A big one. For riders north of Eglinton.

    As a downtowner, I’m sick and tired of subsidizing suburbanites. Raise their fare to $4, lower ours to $2. It’s unfair to see trains packed with people from York region when I cannot get on – sitting down doing the crossword while I’m pressed up against the door.

    It’s called a zone system, and it’s time we got it.

    Steve: A zone at Eglinton is far too simplistic, and a huge number of people packed onto your train did not originate in York Region.


  12. Hi Steve, In response to Michael’s thoughts about York Region’s VIVA system, inspectors( more like fare police) come on the viva buses usually at the terminals. Now,one thing to know is that the YRT transfer is good for two hours!! That gives you a lot of time. When they come on the bus, they will ask for validated tickets(done by the machines at each stop kiosk) or transfers to be presented. If you don’t have the proper ticket or transfer, you’re taken off to answer questions and possibly be charged. But remember, it is two hours, unlike the TTC’s one.


  13. Re: paying more taxes. Whenever I read that someone wants to pay more taxes I am reminded of a Jerry Agar line, “What is stopping you?” write a cheque to the city treasurer explaining that you want to pay extra tax. It seems an especially rich statement coming from you Steve given that I read a comment on Spacing a month or two ago from you complaining about the “taxes” you pay as a renter. I think someone commented here long ago that any discrepancy in the amount of tax a landlord pays is more than offset by innumerable deductions available for mortgage interest, depreciation, maintenance, business expense etc etc etc… while I appreciate the points you have made in the above post all of this debate can be boiled down to one simple question do we have the money? The left thinks that blood can be squeezed from a stone, that somehow the Feds and the province will wake up one day and just magically write cheques when they have spent the last few years tearing them up. The pinkos believe that ordinary people watching their retirement savings evaporate in volatile markets, fearing for there jobs and talking to relatives overseas about austerity packages and riots will accept double digit tax hikes to maintain the status quo. The right knows who are really spinning the fairy tales in this city.

    Steve: FYI I pay taxes both as a renter and as a land owner. The effective tax on my two-bedroom apartment is almost the same as the tax on the family house in North Toronto I recently inherited. It’s 7 rooms and sits on nearly 6,000 sq ft of land. Something is badly out of whack.


  14. Steve

    This is an excellent, detailed, well-informed and thoughtful post – and it was worth the wait.

    When I first started reading it, I did wonder why you did not mention the cost of labour as a factor -but you explained that well enough later on in the post.

    No, it’s more of a discussion paper than a post, isn’t it?

    So … discuss.

    Regards, Moaz


  15. This happens on the Warden 68 in rush hrs. every day.I have seen 3 buses pull up together at Finch, thus a very long wait for those going up or down (eve/morn).

    Finch at the evening rush — the last big passenger drop northbound and so is Steeles. Looking at who is left in these bunched buses, Finch should be a turn around point, not a short turn, for at least one bus.


  16. Steve wrote,

    “An advantage to be sure, but we then get into the question of whether the transfer remains “valid” if you are on a bus when it expires and you then meet a fare inspector.”

    I don’t see this as a question. What happens currently if you pay with cash or token and don’t need a transfer and then run into a fare inspector? Are there any fare inspectors that one would run into beyond the point of paying one’s fare, except on a POP route such as the Queen car?

    Steve: If there are fare inspectors everywhere, i.e. the whole system is POP, then the idea of paying without getting some form of receipt will be unknown.

    My point is, a time-based transfer need only be valid at the moments in time when one would be expected to drop a token or cash for an initial boarding. That is, in a farebox or at a turnstile. The exception to this is on a POP route, where one must be able to show proof of a valid fare. This works well on YRT/VIVA where the transfer must be valid when boarding a regular YRT route, but should be in effect for the duration of a trip on a VIVA route. Fare inspectors can, and have, checked fares of people who are stepping off a VIVA bus. At the same time, they have the discretion to give a little leeway if your proof has just expired when on board. The big reason for their existence is to catch those who are trying to ride totally for free, not squeeze an extra 15 minutes out of a fare.

    Steve: And we all know about the TTC’s “friendly” way of dealing with the public. Any allowances for this type of situation needs to be codified, not left to “the discretion” of staff. That’s what happens today, and it’s a recipe for disputes.

    Steve also mentioned,

    “Even worse, if the bus is short-turned, you could be dinged for another fare simply because you were forced to make a transfer that would otherwise not happen.”

    This is a very good point, and given that YRT has a low rate of short turns (from my personal experience and observation, but I would be willing to bet the numbers confirm this), it has not been an issue the way it would on the TTC. The simple solution would be for the operator to ask anyone needing to continue if they need a ‘fresh’ transfer. Depending on how they will be issued, it may be possible to issue a ‘fresh’ transfer with only 30 more minutes on it.

    The bigger question arises with the use of Presto. I am not sure if fare inspectors on YRT can only see if one’s Presto card has time remaining on a current 2 hour fare, or if they can see its recent history to know if you have just run out. Extending time because of a short-turn will likely have to involve a paper transfer for Presto users.

    Steve: This is one of many questions about the capabilities of Presto and its ability to deal with complex trips and fare situations.


  17. I agree that freezing fares when general and specific costs are increasing is a bad idea.

    And it’s also clear to me that modifying the fare structure as a substitute (or a Trojan horse) for a fare increase is the wrong way to go. We should get the fares to the appropriate level in the current structure, and only when we understand what the appropriate level is, try to go to alternate fare structures that would be revenue-neutral.

    What is not clear in reading your post is your position on the correct ratio between fares and subsidy. Your conclusion starts with a paragraph that explains that, not only will the TTC’s subsidy not go up, it may well go down. Does that mean that you’re advocating for a fare increase sufficiently large for the TTC to provide “good service”, notwithstanding the drop in subsidy? That would result in major fare increases, and the farebox recovery once again heading for 80% or higher.

    Steve: The current year’s figures which I included in the article show that the farebox now covers 2/3 of the operating budget. In other words, it is at the target level everyone keeps saying we should have — the old Davis formula. Therefore regardless of what the city does, it’s time to bump the fares. I don’t think there is any magic level, and can argue equally for a high farebox level (to minimize the effect of a subsidy cut) or a low one (to keep fares down), but either way, they cannot be frozen. Avoiding a fare increase this year just gives more ammunition to those who claim that riders want to freeload on the public purse. I would rather see fares go up and at least some service preserved, and be in a strong position to advocate for better subsidies.

    The problem with not addressing the subsidy:farebox ratio, while at the same time accepting fare increases, is that the subsidy could be arbitrarily cut further, because “the fare increase will make up for it”. That seems to be a dangerous position to take in the current environment.

    Steve: I could argue this the other way around. If we have less subsidy and no fare increase, we will start cutting service, and it won’t be long before the political support for transit will start to drop. That’s not a good position to be in either.

    As you state, “The TTC’s total Operating Budget stands at $1.4359-billion, but final results will be higher at $1.4427b thanks to extra costs listed here. Fares and other revenues will total $1.0141b or 70.6% of total expenses.” Given that the gap between revenues and operational expenses is around $400-million, and we’re expecting something upwards of 450 million rides, then a fare increase of just under a dollar a ride would eliminate all need for subsidies, correct?

    Steve: Assuming no loss of ridership, then, yes, $1 per fare would eliminate the subsidy. However, we would still have debates about the fares going up faster than inflation whenever we add new services that cost more than the average to provide. The Sheppard subway would never open.


  18. Before anyone starts crying for more money, one needs to demonstrate some cost control first. How convincing will a request for more money when we have two men crew running the metro? The whole world is gradually moving to ATO with a one man crew. Will people accept a higher tax to pay for a token and transfer system like we have today? Smart cards have proved to be the cheaper and more effective solution. In politics, perception is everything.

    Steve: The TTC is installing a new signal system on the YUS, although this project is not fully funded, and Chair Stintz has talked about one-man crews. The Eglinton LRT subway will use ATO and is going to have one-man crews because it’s a “streetcar” not a “subway train”. This transition won’t happen overnight, and it’s not cheap to implement. Smart card implementation has already been approved by the TTC, although this too will be expensive. You are talking about changes that take a lot of time and require substantial investment.

    Nevertheless, the TTC does need more money. It has to be creative to get the money. One should read the story of Tama (the cat) who brought the Kishigawa Line in Wakayama from losses to profit. Even to this date, I still do not understand why there are no cellphone repeaters in the metro tunnels. This is an easy $2 to $3 million in extra money per year. Why don’t we have scrolling video ad walls in the metro tunnels? To make matters worst, there are not even vending machines in the stations. This is easy money here.

    Steve: The Telecom companies are already working on a joint infrastructure scheme for cellphone repeaters in stations. The status of tunnels is uncertain, and this is not just a TTC issue, but a question of how much the Telecoms want to invest.

    Should the higher level of governments support transit? Absolutely. But should a fare freeze be mandated? The answer is no. I personally prefer the idea of surcharges. For example, we can add a $1 surcharge every time someone uses the metro. The Presto card can easily keep track of this. This $1 can go towards the construction of new metro lines. This is a steady flow of income and no one will really object to it. Pearson International and Billy Bishop Airport both uses surcharge to fund their expansions.

    Steve: As I said in the article, the system was designed around the idea that subways replace surface lines, they are not a premium fare substitute. Your scheme would penalize many riders who have no alternative way to make their trips, or at least not in a reasonable amount of time.


  19. When vehicles are short-turned, the current practice is to issue extra transfers to everyone who asks for one. Presumably these are people who did not get a transfer in the first place because their route does not require one, and they did not expect to be short-turned.

    I do not see this practice changing.

    Steve: Except that once the system moves to self-service and the operators don’t issue transfers, it will be a challenge. Also, it’s possible to be delayed on your trip (say in the subway) and then have an expired fare when you reach a surface vehicle for another leg of your journey.


  20. Following up on my previous comment…

    My back-of-the-envelope calculation is that the City of Toronto and other governments subsidise car use to the tune of about $15,000 per car per year. This includes spending on roads for cars, fire, police and ambulance services, providing car parking, lost tax revenue and medical costs due to people being killed and injured by car pollution, etc, etc.

    If we include the $12,000 per year individual contribution by their owners to car use and assume about a million cars in Toronto, this gives a total of $27 billion per year.

    Using the tax system to redirect that $27 billion into the TTC would result in all the existing car owners being able to get around Toronto much, much faster.


  21. TTC’s problems are not that unique to large city transit agencies: costs, services, passenger needs, politics, inflation etc. If TTC can’t solve its problems, it is because it doesn’t want to, or that our Ontario leaders don’t. Just copy a city that has a transit system that works.

    ie; The time-based fares is a perfect example, used by a lot of cities. The expiration time applies to before you get on a bus, once you’re on you’re safe. The ticket checkers can tell if it was possible that you got on before it expired. Also if a bus should unfairly short turn, which is annoying under any circumstance to passengers and seems to be a common operating practice in Toronto, or the bus be severely delayed the bus driver will have to mark your transfers so you can get on the next bus. That is how I’ve seen it done in other cities.


  22. Kasha, as a downtowner, you can stop complaining and walk or buy a bike. That’s what I did to avoid YUS subway crowding south of Bloor, because I don’t feel that riding the subway from King to Union is my God-given right.

    Thank god you don’t use the King or Queen car or you’d be railing against having to share space with people from Etobicoke (the nerve of those simpletons!!!). And oh my, that 502 car might even have people from Scarborough!

    If all Ontarians had your self-righteous attitude, (a) we’d never have had the capital funds to build a subway in the first place, and (b) people from Sudbury would be berating you about subsidizing the subway you think you have the sole rights to use.

    Hey, we don’t we convert the Toronto subway system in to an express service from Union to Rosedale and Forest Hill? Then it’ll service all of the parts of the city that matter, right?


  23. “….If TTC can’t solve its problems, it is because it doesn’t want to, or that our Ontario leaders don’t. Just copy a city that has a transit system that works….. ie; The time-based fares is a perfect example, used by a lot of cities.”

    No amount of fiddling with how time-based fares are treated on short turns is going to solve the TTC’s operating and capital funding issues. I don’t know why so many posters are going on about time-based fares. They’re an interesting topic elsewhere, but irrelevant when we’re looking at major budget gaps.

    If we are talking only about fare increases only — or more specifically, increasing farebox revenue — then trying a different fare regime just complicates matters. We have a pretty good idea of what will happen if the price of a token or Metropass is raised X%. (Although the ridership projections can be off.)

    Do we have any idea if a two-hour timed fare, at the current token price, will be revenue-neutral, -positive, or -negative? I suspect not, it would have to be tried experimentally for a period of say six months. Good luck if it turns out to be a revenue-negative change.


  24. Among many other great things about Viva, they don’t short turn buses. Maybe the TTC should consider adopting a no-short-turns practice as well.


  25. Re timed tickets/transfers: Warsaw now has 20, 40 and 60 minute tickets. Buses and trams have multiple on-board electronic cancellation machines, the subway has entrance turnstiles with cancellation. If you run out of time, you can cancel another ticket, at least on a bus or tram. There are also one-time (transferless, 1 or 2 zones), and 1, 3, 30 and 90 day passes, which you cancel on your first use. Drivers check nothing, only inspectors (it’s POP, but with subway entry turnstiles). Tickets are bought from vending machines outside Metro stations or on bought the latest buses and trams, or at the many news kiosks (like Tabacs) on city streets. The 20 minute tickets actually can get you a long way (the trams have mainly their own ROWs).

    My opinion is that for slower rush-hour traffic, in such a system you are forced to buy longer time-limit tickets, which is equivalent to the rush-hour premium you pay on many other systems.

    Warsaw raised its fares by 30% two weeks ago, with more to follow in the next 3 years. It is building a second Metro line, and superb new buses and trams are rapidly coming into service. Of course there has been opposition to the fare hikes, but overall they are accepted. The fare ratio is now 40%, and the system’s costs are very opaque.

    The 20 minute ticket still is less than the equivalent of CDN $1, which is roughly equivalent to Toronto’s given an average Polish income 1/3 that of Canada’s.

    My conclusion from using systems such as Warsaw’s and Vienna’s is that we must be prepared to pay for a decent transit system in Toronto, and that freezing fares is insanity. But that’s part of a political conundrum to be addressed elsewhere….


  26. Hi Steve, Regarding Calvin Henry-Cotnam’s enquiry about how the VIVA fare inspectors would check up on a PRESTO card, I just recently purchased one from YRT at the Richmond Hill terminal for my son attending Seneca/Markham.They were great with information. If one is on a bus and the inspectors come by to check, they apparently will carry a device that upon scanning the PRESTO card, will show how much time is left on your card. Hope this helps, Steve and Calvin


  27. A surcharge is easily implemented as oppose to changing the fare structure. The TTC needs money now and changing the fare structure could invite some nasty surprises. What happens if revenues falls becauase people started using transit differently? With a time based system, there may not be as much incentive to purchase a Metropass.

    A surcharge in using the metro will penalize certain riders. However, if one uses the TTC to go to work, it is only $2 extra everyday. It is within affordability. If someone wants to go from let say Queen Station to College Station, then perhaps Bixi is better? At least the people in downtown has alternative. One can ride the Queen car and connect to a bus as oppose taking the Bloor Danforth Line.

    A metro is a premium service, this is why everyone in Toronto wants a metro line under their house. If not, then the people on Sheppard would not be fighting for their line as oppose to supporting the Downtown Relief Line. I will use one example to illustrate this. A ride on the Tokyo’s JR Yamanote Line from Shinjuku to Shinagawa costs 190 JPY. A bus ride that originates and ends at the sample places costs only 170 JPY. The 20 JPY difference is due to the train has a higher chance of being on time. Even with the premium, most people will take the JR as oppose to the bus. If people are willing to pay for a better service, why stop them?


  28. I find Benny Cheung’s example is not appropriate, as it is an apples to oranges comparison:

    1. The bus service in question is not a JR service – it’s run by Toei (or “Metropolitan,” i.e. government-operated) Bus. JR is privately operated (since 1987, prior to which it was run by the federal government).
    2. JR fares, like all rail-based fares in Tokyo, are charged by distance, but buses are flat fare in Tokyo.
    3. Normal Toei Bus routes are 200¥ flat fare, but select routes are designated as student (学) routes where all riders, student or not, pay a 170¥ flat fare.

    The two companies’ fare policies are set independently of one another, as the two are separate companies with no fare integration (you can pay with the same smart card, but you’ll still get dinged for two full fares by two different companies). Incidentally, if the bus route in the example wasn’t a student route, but a regular route, the bus would actually be 10¥ more expensive than the train.


  29. Thank you for Karl for pointing it out. It does not matter how many companies offer transportation service in Tokyo. At the end of the day, a person simply wants to go from point A to B. Whether it takes two companies to provide the service or even five does not matter. What matters is that the person gets to their destination quickly.

    I will use another route to better illustrate the point. Most tourists usuall visit Tsukiji Market in the morning and then visit the Palace grounds near Tokyo station. A train only route would require the person to first to take the metro from Tsukiji Shijo station to Daimon Station on the Tokyo Metro. That’s 170 JPY. At Daimon Station (Hamamatsucho), the person would switch to the JR Yamanote Line to Tokyo Station. That would be another 150 JPY. This trip would take 20 minutes to complete according to Yahoo including wait time at the platform. The grand total would be 320 JPY.

    Now, a person taking the Toei bus (Route 都04) would only pay 200 JPY for a one seat ride straight to Tokyo Station. The trip will take about 25 to 30 mintues depending on traffic. Yes, there is a price differential of 120 JPY. Some people may view the one seat ride more important especially after purchasing many things. Some people may prefer the time.

    The whole point of this comparison is not to say a pay by distance option is superior. It illustrate that even if we add a surchage to the metro or even the rocket bus route, it should not be looked as a penalty. It is nothing more than another choice for the customer. If I want speed, I will pay the $1 surchage to use the metro or the rocket route. If I have some time to spare, I can take a cheaper local route. The surcharge that is collected will simply be used for improvement projects.

    I am also proposing that the TTC should indexed their fares to the price of gas. This way, it will be less politically charge everytime the fares are adjusted. Torontonians fight hard to avoid a fare hike every time. I do not have the TTC numbers in front of me now. However, given that Air Canada spends about 35% of its revenue on fuel purchases, the TTC should be around the same.

    So out of a $3 cash fare, $1.05 is the cost of fuel, so the base fare is about $1.95. Since retail gasoline is about $1.30 per liter and let say we use this as a starting point. If the price of retail gasoline rises to $1.50 per liter (15.3% increase). We simply tack on an extra 15.3% to the fuel component. We will have the new fare at $3.16. This should be adjusted at a predetermine time and since the base fare remains the same, it will be much less politically charged. No one can argue against the spot market for gasoline. Yes, I know the TTC uses diesel in addition to gasoline, but both commodities trade in the same direction.

    Steve: It costs a lot of fuel to lift a jetliner into the air, and the proportion of cost due to fuel is much higher for airlines than for transit systems. From the 2011 operating budget, the projected cost of fuel is $86.3m and traction power (electricity used to propel vehicles) is $37.6m. This gets us to a total of $123.9m out of a total budget of $1.436b or 8.6%. A jump in diesel of 35% is expected in 2012, but only a small increase in electrical power. This begs the question of whether bus riders should pay a premium because their fuel costs so much more. That is said in jest, by the way, because there’s a point at which assigning specific costs to specific routes’ fares is a wasted exercise. The premium subway riders should pay for the quality of service they receive is quite substantial, and it’s unclear why subway riders should pay for benefits that accrue to the development community and the city through increased taxation.

    Looking just at the diesel fuel component, the budgeted cost for 2011 was just under 6% of the total budget. A 35% increase in a 6% item means a 2% increase in revenue. Don’t forget that fares only cover 2/3 of total costs, and so if we are going to make up all of the added fuel cost from fares, we need to factor up the increase to pay for 3/3 of the cost. This would translate to a 3% increase in fares, or just under a dime.

    The preliminary report on the 2012 budget was presented in June and is available to anyone who wants to look up current numbers rather than speculating. The comparative 2011 and 2012 budgets are on the last page.


  30. Re: GO

    Go Transit also runs buses along the 401, with stops in Toronto at Port Union Rd, Scarborough Town Centre, York Mills, Yorkdale, Keele St, Martin Grove/Dixon, and Pearson Airport. If my commutes were along the 401 corridor, I’d much rather use these buses than the local TTC services.

    Steve: And those buses have a tiny fraction of the capacity of the TTC’s east-west services on bus routes, never mind what the Eglinton LRT or a Sheppard subway would carry. The nature of GO’s service is that you have to meet it at specific locations, many of which are not exactly in the middle of residential communities.


  31. Leo said:

    “Among many other great things about Viva, they don’t short turn buses. Maybe the TTC should consider adopting a no-short-turns practice as well.”

    It is very rare for a VIVA bus to short turn. I have only seen it happen once.


  32. Ben Smith says:

    “Go Transit also runs buses along the 401, with stops in Toronto at Port Union Rd, Scarborough Town Centre, York Mills, Yorkdale, Keele St, Martin Grove/Dixon, and Pearson Airport. If my commutes were along the 401 corridor, I’d much rather use these buses than the local TTC services.”

    These buses stop at mobility hubs for the most part. If you do not live near one of these hubs then you have to transfer onto the TTC or drive home from where the GO bus drops you off. Instead of paying two fares (TTC + GO) most people would rather take the TTC for the entire route or drive. I prefer GO transit but they do not offer enough service in Scarborough and Etobicoke.

    If you take the GO bus or train into York Region you can transfer onto York Region Transit for 50 cents rather than pay a full YRT fare. GO and the TTC need to work out a similar arrangement for Toronto residents who want to transfer from GO to the TTC.


  33. Peter wrote,

    “Although practically this is only enforced on VIVA if you encounter fare inspectors, YRT bus drivers only seem to care if the fare is valid when you board.”

    That is because many YRT riders pay their fare and do not ask for a transfer. No transfer means no proof of payment, so there is no requirement to prove payment except at the time of boarding. If one boards a non-POP vehicle with six minutes remaining on my fare (paper transfer or Presto), one can simply claim they didn’t get a transfer because they didn’t need one. Now, if you make everything POP, then everyone becomes subject to inspection at anytime en route, or even as they step off a bus.

    City Boy at Heart said,

    “If one is on a bus and the inspectors come by to check, they apparently will carry a device that upon scanning the PRESTO card, will show how much time is left on your card.”

    That is basically what I said. What I was questioning was whether or not inspectors have the ability to see your recent history. I suspect, and this comment also suggests, that if your time just expired, the inspector will only see that you do not have a proof of payment. Allowing a grace period requires that the device be able to tell the inspector that the passenger had paid a fare that expired within the grace period.

    Richard said,

    “It is very rare for a VIVA bus to short turn. I have only seen it happen once.”

    Not only VIVA, but regular YRT routes rarely short turn.

    VIVA does have scheduled short runs. During rush hours, there are Purple runs between York University and Richmond Hill Centre and Blue runs between Finch Station and Bernard Terminal. Perhaps planning service this way prevents the need to have ad hoc short turns.


  34. While I will support a fare increase instead of service cuts, I have to say that I do not fully stand for a fare increase this time around.

    As far as I am concerned, transit has become way too expensive in Toronto, and further fare increases will just tip transit over into the point where taking transit is more expensive than driving.
    And the fact of the matter is that the majority of TTC riders have a choice to drive or take transit. And a large majority of this majority of riders already have a car, and choose to take transit for a particular trip.

    With the current TTC fares, it actually only saves me about $2.00 a month over driving(and that calculation is by the TTC’s own fare calculator thing).

    I was just at a transit summit here in Toronto, and one of the planners I feel made a great comment. He said Toronto’s high fare recovery is nothing to be proud of. It instead signals a system that is starved for funding and is not able to provide a service at a reasonable cost.

    We should be protesting for more funding. Not asking riders to pay even more than they do now.

    I will close with a comment I heard yesterday while on transit. A college student and his mother were behind me at the subway station. The student and his mother were talking about the transit route he has to take to school and the fare. The mother was complaining about how expensive transit in Toronto is, and how it is cheaper to drive. Their conservation ended with the son saying not to worry, because the minute he has his full license next year, he will start driving to school. The mother was all happy. By the sounds of it, they already had a car waiting for him at home.
    And I think this represents well the situation in Toronto, as residents have a choice. A car is not some expensive out of the world notion for most Toronto residents. And they will drive if it becomes too expensive to take transit.

    Steve: The car already sitting at home tells the story — the capital cost does not factor into their calculation. Car drivers notoriously underestimate the fully loaded cost of each trip that they take.


  35. Steve: The car already sitting at home tells the story — the capital cost does not factor into their calculation. Car drivers notoriously underestimate the fully loaded cost of each trip that they take

    But that’s just it. Most Torontonians, by necessity, have a car and always will. For example, I take the subway to work daily, and my wife rarely uses our car, but it’s there because we sometimes need to get to certain places that are simply not feasible by TTC or GO. While we did get rid of our second car several years ago, nothing would ever convince us to get rid of our one remaining car. And so, that capital cost doesn’t really factor in as far as I’m concerned. There are times we drive because it’s cheaper than paying a return fare for my wife and two kids, and this even though I would actually prefer to use the TTC (ie going from East York to the Beaches).


  36. Leo Gonzalez wrote about owning a car, “…that capital cost doesn’t really factor in as far as I’m concerned.”

    That is absolutely correct. Very few people own a car for the single purpose of commuting to and from work, and keep the car for other purposes when they choose to use transit for that commuting. Thus, the fixed costs (capital depreciation and insurance) are seen as another household expense. Only the usage costs (gasoline and parking) are seen as a cost of commuting.

    Back in the mid-80s, the TTC had an ad campaign to show how much one could save by leaving the car at home and taking transit using the Metropass. The trouble with the figures in the ad, as was spelled out in the footnote in the ad, was that the cost of the car used in the comparison included the depreciation and insurance. These costs do not magically disappear when one leaves the car at home.


  37. I notice that it frequently – and fairly – gets mentioned in these debates that it’s cheaper for a family of 4 to take a car than to take transit.

    Of course it is – and there isn’t a problem with that because the full capacity (or 80% depending on model) of the average car is being used for such trips. If every car on the road had 4 people whenever they are used, we’d only have 30% as many cars on the road as we do today. However, our region doesn’t work that way, and the average car load is 1.2 passengers, not 4, and hence, all hell has broken loose in our current state of affairs.

    The problem isn’t the cost-recovery ratio of transit in isolation. This gets a disproportionate amount of attention in the debate, a fact that makes such debate lopsided because the debate, in a balanced frame of reference, needs to be about the transportation system, not just the transit system. What I mean is (and as I’ve driven at before), whatever the cost-recovery ratio is for the road network, the same should be applied to transit.

    For transit, you have to worry about patching tunnel leaks, regularly testing emergency trips, carrying out scheduled track inspections and repairs, maintain ventilation systems, electrical distribution systems, passenger station facilities, and vehicle maintenance, among other more back-end things. These all have to be paid for to run a safe and competitive system.

    For roads, you have to worry about drainage, traffic signals, surface paving quality [potholes], street lighting, snow removal, enforcement of traffic laws to ensure safety for both drivers and crossing pedestrians, emergency response resources in the event of accidents, maintenance of interchanges in freeway-type corridors, strain on the health-care system from vehicle accidents (transit isn’t immune from this phenomenon per se, as recent media stories will make clear, but it is rare compared to automobile accidents on a per capita basis), the costs of providing parking where warranted or required (including lost real estate that doesn’t generate tax revenue), and the costs of capacity when congestion slows all traffic (as when congestion slows traffic to a crawl, road capacity per lane plummets dramatically). What is the cost-recovery of the road network when all these elements are combined? Figure it out and apply the same standard to figure out what governments should expect the cost-recovery of transit should be.

    I’ve got no problem at all with transit being expected to have a 100% cost-recovery, on one condition: That the road network be required to have a 100% cost-recovery ratio itself. If the road network is subsidized, subsidize transit by the same percentage.


  38. Steve: Gary Webster was on Metro Morning this morning and basically endorsed your stance on regular fare increases. Just thought you’d be interested.

    Steve: Yup, I heard him. The call for regular increases isn’t mine alone — proposals like this go back decades, but nobody ever implements them. Far easier to bribe voters with their own money.


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