Those Pesky Metropasses

The TTC Board has approved fare hikes in most categories effective March 1, 2015. [Scroll down in the press release for the details.]

This round included certain changes that attracted debate:

  • Children (age 12 and under) will ride free.
  • Adult Metropasses will change from the equivalent of 49.5 tokens to 50.5 tokens.
  • Cash fares remain at their 2014 level.

Although the “average” increase is advertised as 3.7%, the Metropass holders (who are 40% of the TTC’s customers and account for 53% of all riding) will see an increase of 5.8%.

TTC management has never liked the Metropass and fought hard against its introduction in 1980. Over the years, to encourage use, the TTC reduced the fare multiple (the token equivalent of the pass price) from the original 52 and it eventually dropped to about 48.

Management pushes back, and treats pass holders as people who get too good a deal, also as a captive market who will put up with a larger-than-average fare increase leaving money to offset other fare policies such as free rides for kiddies. They argue that passholders don’t pay their way:

  • Since 2010, the price of a pass has gone up by 17%.
  • During the same period, based on surveys of pass users, the trips taken per pass have gone up from 70 to 75 per month, on average, or 6%.
  • Therefore the price per ride (on average) has stayed at roughly the same level as inflation in Toronto.
  • The effective after tax price of the pass is only 43 fares.

From 2010 to 2015, the cost of a token has gone up from $2.50 to $2.80, or 12%, roughly equal to the imputed increase for pass holders, but this assumes that every pass holder actually is making five more rides a month to offset the higher price. As for the tax rebate, this assumes that a buyer has taxable income against which to offset the transit credit, and passes actually cost the poor more than they do those with taxable income.

Management claims that it is “not economically sustainable to carry an ever-increasing number of trips without the associated revenue to cover the cost of providing those trips” [Budget Presentation, Feb. 2, 2015, page 25] What this statement completely misses is the fact that pass holders make many “trips” that they would not take on a pay-as-you-play basis, or they would creatively cheat on their transfers. Those 75 trips/month do not all represent “lost” revenue, nor do they necessarily push up operating costs through a need for increased capacity. Indeed, pass holders get no credit in this calculation for the much lower cost/trip of fare collection — one monthly transaction, an electronic one for the Monthly Discount Program, no handling of cash (other than one monthly payment for in-person transactions), no tokens to distribute and collect, and no transfers.

There has never been an accounting of the so-called cost of Metropass users to the TTC, and especially not one weighed against the benefits in simplified operations and the social benefit of a fixed, monthly fare.

Oddly enough, management has no worries about “sustainability” when it comes to the inevitable demand that free rides for children will bring, but instead spins this as a way to get future customers into a transit habit early in life.

This is a simple grab for $7-million in extra revenue in the guise of better equity.

In fact, Toronto should encourage more people to use passes as an incentive to ride transit. Being able to take “another trip free” is an important change in how a user views transit, and is similar to a motorist’s view of car use — it’s paid for, I might as well drive.

Unfortunately, the 2015 budget was assembled entirely out of view of the Commissioners who nominally should debate and approve these things. Mayor Tory and TTC Chair Colle simply assembled the media in a schoolyard one brisk morning and announced the new fares with no input from the board nominally in charge. The new fares were not even a campaign promise, quite the opposite.

One ray of sunshine in this procedural murk is that the Commission voted that management should bring back a report in May 2015 on a “vigourous” (later amended to “rigourous”) process for future budgets so that the policy issues affecting them can actually be debated. This is a welcome change, but it should not have been necessary in the first place if the Commission had been doing its job and actively developing policies in public view.

Next year, the TTC and Council will have to address key issues such as:

  • Whether to implement a “two-hour fare”, in effect a limited time pass in place of the current transfers.
  • Whether to implement discounted fares for recipients of social welfare programs.
  • What, exactly, “fare integration” with GO and the 905 transit systems would look like, and who will pay for it.
  • What will a “monthly pass” be in a regional context, and how should it be priced.
  • How will the additional, net, cost of opening the Spadina Extension to Vaughan be absorbed in the budget (an estimated $10m that will have its full effect in 2017).
  • The next round of “customer service improvements” beyond those planned for 2015 are off in remote 2019. Is this acceptable, or should Toronto continue to budget for even better service by, for example, fully restoring the crowding standards to the Miller era?
  • What does “reliable” service look like, and what steps are required from management and staff to make this a reality.

This is much more complex than the smiling, simplistic, good news, bright-yellow-flower world of the previous administration. Is the TTC, is Toronto up to this challenge, or will the major debates be on the choice of tiles for new subway stations?