In my first article reviewing the TTC’s budget updates of September 15, 2015, I looked at the Capital Budget for 2016 and the ten-year plan out to 2025. This installment looks at the Operating Budget including proposals for fare increases and service improvements.
The reports discussed here are:
- An update on the 2016 Operating Budget
- Preliminary Fare Scenarios for 2016
- Proposed Service Improvements for 2016
Updated September 21, 2015 at 10:05 pm:
The TTC has responded to questions I posed to clarify some issues raised by this article regarding: ridership, revenues and costs for Pan Am Games operation; treatment of capital-from-current related to bus purchases in 2015 and 2016; contract service changes for York Region; and diesel fuel hedging savings. See the end of the article for details.
The update begins with a preliminary version of the 2016 budget.
The table above does not include provision for any fare increase, nor for other service initiatives. These are discussed later in this article.
Ridership for 2016 is expected to be 10-million higher than the 2015 budget figure, although the gain against actual 2015 results is projected to be 15m. The discrepancy is explained by three factors:
- the very cold winter early in 2015 plus more than anticipated subway shutdowns and poor bus fleet availability hurt this year’s results;
- the 2015 fare increase had a larger than expected effect on riding; and
- economic growth did not produce as much new demand as expected.
Ridership gains for 2016 are expected to come mainly from economic growth and service improvements (mainly the effect of changes made in fall 2015 having a full year effect in 2016).
Original text:
Notable in these charts is the absence of any reference to the 2015 Pan Am Games as a one-time boost in service, ridership, fares and subsidy revenue or operating expenses.
The 2015 operating budget included a special Pan Am subsidy from Ontario of $3.5m which appears as part of the $474m total City subsidy in the summary chart. A further $0.9m from a “Stabilization Reserve” (an account held by the City with funding from underspending in past years) brought the estimated Pan Am cost up to $4.4m. The 2015 budget contained no estimate of the ridership gain specific to the Games.
This slightly skews year-over-year comparisons because the one-time event’s effects are not factored out.
Updated: Pan Am ridership, revenue and costs have been factored out of the Budget information and will be reported separately so that year-over-year comparisons do not include this extraordinary event. See the questions of clarification to the TTC at the end of the article.
Of the non-subsidy TTC revenues, the majority come from fares (95%) with the remainder from advertising (2%) and other minor income such as commuter parking. The latter is expected to fall in 2016 from about $10m to $9m. Revenue from charters and contract services (York Region) is also expected to fall due to cutbacks in services provided by the TTC for YRT, but this should be offset by a reduction in operating costs. However, no such reduction appears in the table of expense effects of various factors for 2016.
Much of the increase for 2016 lies in the full-year cost of improvements made in 2015, many of which did not kick in until the latter part of the year. A few items of note:
- “Leasing requirements” refers to the cost of temporary storage for the bus fleet which will be larger in 2016 than the available space in existing garages.
- “CBA” refers to the Collective Bargaining Agreement and is the one-year increase in costs due to higher wages.
- “Other Employee Costs” refers to benefits such as pensions, sick leave and the TTC’s contribution to government programs.
- “Diesel Hedging” shows a reduction in costs relative to 2015, but some of this may well be due to the lower market prices for fuel generally. These two effects should be disentangled, if possible, so that the contribution of each (and its reproducibility in future years) can be understood.
- Not included in the list above is a reduction in capital-from-current spending for new buses. The special subsidy added to the TTC’s budget in 2015 included money for bus purchases. $14m was budgeted for 2015 with a further $5m in 2016, but the $9m reduction is not reflected in the list above.
Updated: The capital-from-current reduction is bundled with “Other” changes according to the TTC, and the saving for 2016 under “hedging” is due to contracts already in place. See the clarification section at the end of the article.
Once again, the TTC raises the question of subsidy levels from other governments, and compares itself to many other cities. A common point of reference is the “fair share formula” of the 1970s when Ontario picked up half of the TTC’s operating subsidy. In 2015, the City will fund its TTC subsidy, in part, with just over $90m in provincial gas tax revenue. However, half of the operating subsidy would amount to $237m. Moreover, Queen’s Park contributes nothing to the operation of Wheel-Trans which is entirely funded by the City at a cost of over $100m.
A major problem can (and did) arise with formula-based subsidies. If Queen’s Park or the City are not feeling like giving the TTC much more money, they will set their subsidy level at a dollar amount. To protect their political credibility, this amount becomes a basis for setting the total budget so that the formula works out properly. For example, if Ontario only wants to spend $250m on the TTC, and its contribution is supposed to be 1/6 of the total (assuming 1/6 from Toronto and 2/3 from farebox and other revenue), then the total budget must be no more than $1.5b. Similarly, if Toronto wants to spend more on, say, better service, it could be locked into spending no more than a matching amount to the province so that everyone saves face.
TTC budgets routinely go up by more than the rate of inflation because of the compounding effects of:
- population and demand growth
- inflation in costs
- new or enhanced services
If the provincial government were to take the same attitude to TTC subsidies as it has to other portfolios, the TTC would be lucky to see a flat-lined amount.
Moreover, if the only effect of a higher provincial subsidy is to reduce the City’s contribution, then the TTC (and its riders) are no better off.
The TTC loves to talk about its low cost base relative to other cities, and repeatedly cites a 2012 study of major rapid transit systems:
“When compared with other metros in the world, Toronto’s Subway offers excellent value for money.”
This should be taken with several grains of salt. First off, there are major accounting differences (capital vs operating) between various systems in the study. Second, as we now well-know, TTC’s ongoing system maintenance has not exactly been first-rate, and we are now paying for that short-sighted approach through reliability problems and a backlog of capital repairs. According to the same study, the TTC subway covers its operating costs. This is not surprising given the high level of off-peak service and ridership, but it masks the level of spending in the capital budget. Toronto’s costs per car kilometre are low, but this may be in part due to the operation of frequent service with long trains throughout the entire day, 7 days/week. Many costs have nothing to do with the amount of service operated, but very frequent service can dilute these costs when expressed per car/km. [See pp 11-14 of the presentation]
The TTC also trots out a number of budgetary savings.
The problem with this list is that it mixes in one-time and ongoing savings, as well as values from previous years. “Efficiency” in spending is nice to have, but it is important that the benefits be recognized for what they are and whether they have any effect on current budgets. For example, the change in accident claims policy (a legislative change by Queen’s Park) made for a one-time saving. Even fuel contract hedging cannot be claimed as a “saving” because this has become the standard practice, and the “saving” is only against a notional market cost the TTC would never pay.
This information would be much more informative as a table showing the years in which savings occurred and whether any of them contribute to current and future year budgets. Similarly, any future savings such as reduced costs due to the use of larger vehicles would be ongoing, but only up to the point where the fleet size stabilized again. Moving to one-person subway crews would produce some saving, but only on a one-time basis.
There are many future costs that also should be presented with clarity as to whether they are one time changes, or have ongoing implications.
Budget projections for 2017 and 2018 include a few items of interest:
- The cost of opening the Spadina extension will be $11m in 2017 and a further $20m in 2018 for a running total of $31m on an annual basis. There is no estimate of the additional fare revenue this line would have to generate either to break even or to come in at a 70% cost recovery. However, given that the average fare is about $2, a break-even result would require roughly 45m new rides on the TTC to pay for the extension’s operation. That is a very substantial jump, about 8% on the system as a whole.
- Annual ridership growth is projected to be only 7m for the system, and this implies a much lower level of net new riding on the Spadina extension than needed to be financially self-sustaining. An offsetting consideration is that riders diversion to this line, to the extent it happens, will provide some relief on the Yonge line.
- The 2017 projection includes a reduction in capital contributions of $5m. This is the residual amount remaining in the 2016 budget discussed above.
Additional Service Increases
Beyond the service changes that will occur simply to handle ridership growth and to continue the implementation of 2015 policy changes (such as more generous loading standards and network coverage), the TTC has a number of proposals for further improvements in 2016.
The pie chart below shows that the majority of the additional service in 2016 will result from the full-year operation of changes from 2015. A much smaller amount will be due to growth-related service improvements. The grey section, “New Service Initiatives”, represents proposals for more service, but these are not yet included in the Operating Budget described above.
The total cost of the 2015 “initiatives” for 2016 will be $95.3m.
A further set of improvements is proposed for 2016 at a cost of $12m rising to an annual value of $33m in 2017. This ratio implies a fall 2016 implementation much as the 2015 improvements mainly kicked in for fall 2015.
After factoring in ridership and fare revenues these would bring, the net costs would be $8.5m for 2016 and $21.8m for years following.
The three “reliability” initiatives relate to continued changes in service scheduling so that vehicles have a better chance of completing their trips. This addresses shortcomings in the design of schedules, but what remains to be seen is an improvement in service reliability as I have discussed in other articles. It is unclear whether this can be achieved with the current staffing level for line management.
On Line 1 (the YUS), there is a proposal that trains operate at least every 3 minutes until 10:00pm this would reduce crowding and give more resiliency to the service for surge loads and special events downtown.
The earlier subway service initiative would see subways open at 8:00 rather than 9:00 am on Sundays with corresponding changes in feeder surface routes where necessary.
The express bus initiative would add four new off peak and weekend routes (unspecified) beyond those already contemplated by the 2015 initiatives.
The new Cherry Street streetcar would operate from the new loop at Cherry and Mill Streets and run north, then west via King to an as-yet undecided western terminus. This would provide additional service on the central and western parts of the 504 King route. It is hard to see this described as an “initiative” considering that the line will open in 2016 to serve both the new developments in the “Canary” district (former Pan Am Games Village) and the eastern end of the Distillery District.
Fare Options
At its previous meeting, the Budget Committee asked staff to present a range of fare options based on various assumptions. None of these has been selected for implementation nor incorporated in the preliminary budget, but they give Commissioners (and everyone else) a sense of what each type of change implies and how much revenue it could be expected to generate.
Scenario 1 is the “do nothing” option representing the Preliminary Budget as it now stands. The next two scenarios look at bumping the ticket/token fares by a nickel or a dime respectively, along with a jump in the adult cash fare from $3.00 to $3.25.
The cash fare has not changed since 2010, and the premium for paying cash has dwindled relative to tokens/tickets over the years. This has always been a flash point in fare discussions because, as advocates claim, cash fares are more commonly used by the very poor who wind up spending more for their journeys. In this presentation, the TTC counters that their user survey shows that “low income” riders overwhelmingly use tokens, tickets and passes with only 15% using cash. The problem here is in the definition of “low income” at a cutoff of $45k/year which is considerably higher than the poorest riders enjoy. This issue is not going to disappear, and it is entangled with a parallel request for special subsidies for very low income TTC riders such as recipients of disability allowances.
After bumping the Metropass trip multiple (the ratio of a pass price to a token fare) by 1 in each of 2014 and 2015, TTC staff recommend leaving the multiples unchanged in 2016 in part because the growth of pass usage is slowing.
Another proposal that was examined, based on practice in other GTA municipalities, is the creation of a single cash fare, eliminating the student and senior cash fares and making all cash transactions a standard amount. The projected additional revenue (compare scenarios 4/5 with 2/3 above) is from zero to $5m depending on assumptions about lost ridership or shifts to other fare media. Whether this is worth the political fallout inevitable from the elimination of cash fare discounts is dubious.
Even at the dime increase (scenario 3), the added revenue is nowhere near enough to offset the $95m gap in subsidy funding, let alone an additional $8.5m for the 2016 Service Initiatives.
The components of fare revenue by medium show up in scenarios 6 and 7 where a nickel increase is applied selectively to only non-Metropass and to Metropass fares. This shows that pass users account for about 40% of the revenue stream.
What to do with the City Subsidy?
The 2015 subsidy is set at $474m from Toronto for the “conventional” system plus an additional $108.8 for Wheel-Trans. Without a fare increase, and with no added service initiatives, the subsidy shortfall in the preliminary budget is $95m for the conventional service and $9m for Wheel-Trans. These represent increases of 20% and 8.3% respectively. These increases require well beyond the “just stay with inflation” level of, say, 2%, let alone a flat-lined subsidy. Even with the scenario 3 fare increase, there would still be a need for about 13% more in City subsidy for the conventional system, and that’s without the proposed service initiatives.
Toronto Council has hard decisions to make about its continued support for TTC service including funding of the growth in service quality it launched in 2015.
Addendum
The Budget Committee passed the following motion:
- Request the Province of Ontario to return to the system of the province covering 50% of the operating shortfall of the TTC.
- Request the TTC to develop a strong campaign to this end.
- Request TTC staff to report back on commuter lot revenue enhancement opportunities.
- That staff provide comparable data for other transit systems on the non-passenger revenue sources identified on Page 4 of the Operating Budget presentation.
Clarifications September 21, 2015:
The following questions were posed by me to the TTC. Here are the responses from Vince Rodo, Chief Financial & Administration Officer. These have been edited to eliminate to-and-fro exchanges.
1. The service budget clearly identifies the reduced service hours associated with the lack of Pan Am Games in 2016. Why is there no comparable accounting of changes in expenditure, subsidy and ridership in the main ops budget presentation?
Answer: 2015 Budget included expenses and offsetting recovery of Pan Am and Parapan Am (i.e. it was in and out of the budget). Therefore, there was no reduction to show in the 2016 budget. Ridership for Pan Am etc was not budgeted.
The figures shown for the 2015 probable do not include the allowance for Pan Am rides. Adding in Pan Am rides would increase that figure. The analysis we showed to explain how we went from the 2015 budget of 545 million to the recommended budget for 2016 of 555 million rides was all done ignoring Pan Am, since it was a one-time very extraordinary item.
We are still finalizing the accounting for all of the items and will be billing Pan Am for both costs and revenues.
2. There is a reduction of about $9m in 16 in the capital from current amount because most of the bus purchase funded through this is booked in 2015. The 17 projection shows the last $5m of this disappearing but there is no comparable figure in the deltas for 2016.
Answer: An $8.7M reduction ($13.9M less $5.2M) was incorporated into the 2016 Budget but not shown separately. It was included in the “Other” variance (see page 7 of the Sept 15 presentation.
3. There is a revenue (and service budget) reduction related to contract services, but no corresponding drop in operating expenses.
Answer: The 2016 Service Budget already incorporates the reduction in service hours and kilometres related to the decrease in contract services to York Region. The variance is too small to show separately.
Within the $15 million revenue explanation, the revenue change associated with this was significant enough to warrant highlighting. Given the $100 million +/- expenditure change, this wasn’t a significant enough item to be shown individually.
4. What is the “saving” from hedging diesel measured against? There is $13m here, but what would this have been spent on otherwise? This shows in the presentation as a reduction vs 2015. Is this a net additional hedging saving or a reflection of lower market prices generally?
Answer: The $13M drop (year-over-year) in the Diesel budget reflects the lower budgeted price in 2016 resulting from the hedges made to date.
Steve Munro 
Calvin Henry-Cotnam left the following comment in another thread:
It is high time that the TTC seriously consider a single cash fare for everyone, and provide concession discounts only with multiple media (tokens, tickets, Presto, or pass).
It is also nice to see the report acknowledging a reality about who uses cash fares:
I have said before that low income people are more likely to purchase a minimum number of tokens (3) over using cash fare, and the cash fare user is more likely to be the owner of a luxury vehicle who needs to get somewhere while their vehicle is in the shop. Holding the cash fare low for so long with the excuse that it would be a hardship for its users is pure bull.
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What burns my buns is the city extending free transit to kids.
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Let’s just hope the TTC doesn’t decide to implement an across-the-board fare increase while prematurely withdrawing token sales “to prevent hoarding”, thereby forcing low-income passengers to pay the more expensive cash fare for each and every trip during a two-to-three week period until the new fares come into effect.
It would, of course, mean a nice little boost for the TTC coffers at the expense of riders least likely to afford – or otherwise pay – the cash fare. (I seem to recall this happening before, however . . .)
Deb (low-income passenger)
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I note that the forecast for population growth for the city is around 300k – with 500k new jobs.
I would really see a more focused effort at intensification within the city – what the avenues plan was meant to support. Toronto should be taking in a much high percentage of the overall population increase for the region, a third or better. GO needs to provide more inside 416, the TTC better coordination with it, and a single fare, and we need to get on with a DRL, or well, we are looking at a lot more sprawl – which I thought the province had decided was not to be allowed.
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That only cost $7 million dollars. Looking at the presentation, a 5¢ increase to tokens (with corresponding increase to passes, but nothing to cash) yields $24 million. So the child’s fare elimination equals a fare increase of 1½¢.
This is a rounding error. And greatly simplifies ticket distribution, etc. Not to mention speeding boarding times anytime there’s a class of kids entering the bus, and the elimination of schools having to collect small change and tickets for every child taking a trip.
Furthermore, it’s rare that most kids in this age group are travelling alone. And often aren’t even going very far.
I’m surprised it happened – at least for those in the 6 to 12 category who pay fares elsewhere. But it’s such a minor issue.
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About 3 days before the last increase, I was in a subway station and needed a new roll of (50) tokens. I figured they wouldn’t sell them to me, or would be charging me the new price (which would have been fine – $135 vs $140. I was pleasantly surprised that they hadn’t even stopped selling rolls of tokens last time. So a 10¢ hike isn’t enough to trigger hoarding. The last time I recall this being an issue was the 25¢ in 2010 (which was only necessary because of the preceding 3-year fare freeze).
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Bullsh*t
For the same price as a metro pass you can get a CAM in Montreal which also lets you on any commuter train within the city limits.
And no screwing around with your farecard charging you per trip, you can load a pass on it. I’m not so sure the TTC should be crowing about “value.” Cheapest fares I’ve encountered were in Boston on the bus (fare by mode) some ~5 years ago.
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Ah it seems I’ve misunderstood that quote I just railed on. Looks like we were talking about the precious investor dollars not our money as users of the system. What about the value for us?
Also the faulty comparison with buses…
I’m off my game tonight.
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The TTC has already started to build the overhead for the Cherry Street branch this month. Span wires are already up between King and Front. There are two inverted channels on the underside of the bridges over Sumach St for overhead wires although I am puzzled how they would be pantograph compatible in future.
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What’s also important for 2016 is the opening of the St. Clair West elevator.
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Re: John Richards
Don’t worry about St. CW … if Lawrence West (a direct unmitigated hole from subway to bus) took four hundred years, then a complex station (St. CW is presumed to need at least 3 if not 4 lifts) will take a millennium.
I really can’t believe that the Cherry Street service will go along King as opposed to Broadview/King/Queen … though I think that a service from Exhibition Loop along King to Cherry Loop would certainly provide a good ADDITIONAL/SUPPLEMENTARY service on King (as there aren’t as many logical places to “branch” on King [westbound past Yonge/Eastbound past University] as there are on Queen)
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There’s no doubt that transit in Montreal is far better integrated, and a better bargain for the consumer than Toronto.
But don’t hype that Opus card too much. If you never leave the Island, it’s passable. But it’s not a cash card, like Presto or Oyster. You have to pre-purchase tickets or passes. So if your trip requires to you start in Laval, and end up on the South Shore, using a bus to the metro on both ends, and you don’t have a pass, then you have to pre-purchase tickets on all THREE systems. And my understanding is that if you then need a 4th system – your are out of luck, because it can only handle so many different types of tickets at once.
I’ve used Miway, Oakville, YRT, GO, and TTC all in the same month on Presto, without having to buy anything, and letting Autoload do it’s thing. That’s not an option in Montreal.
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Can this comment and reply be confirmed? IIRC it cost _far_ more than $7M.
Steve: The TTC estimated that it would cost $5.4m in 2015 (partial year implementation) and $7.1m on an annual basis. This is in the report on Service Initiatives in the review of the 2015 program at page 16 of the pdf.
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I too found OPUS to be clunky. On my second last visit I bought two paper tickets when I got on in the morning and travelled to Laval. After my meeting I tried to use the other ticket to get back on the Metro and it did not work. On my last visit I did buy an OPUS Card, but I only put on Montreal fares and had to buy a paper ticket to get on at Montmorency.
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While true, it’s also misleading. Page 21 of the Fare report indicates that 11.5% of customers use cash (the most expensive individual fare) vs 15% (page 8) for low income users.
It would be more accurate to indicate that low income riders are more reliant on cash & tokens compared to the general population. Retirement of tokens could have a disproportionate negative impact on them, especially for those that a Presto card is not a good option.
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Steve: The TTC estimated that it would cost $5.4m in 2015 (partial year implementation) and $7.1m on an annual basis. This is in the report on Service Initiatives in the review of the 2015 program at page 16 of the pdf.
It should also be noted that $7.1m is revenue loss. They haven’t taken into the account the savings from not having to print, distribute, and collect the tickets.
If you look in the TTC 1985 to 2014 ridership data, they sold 7.1m child’s tickets (60¢) and 3.7m cash fares (75¢) – for a total revenue of $7.0m. So clearly the $7.1m on an annual basis is the lost revenue, and once you account for the ticket system, it’s going to be lower. How much lower? Who knows … perhaps the TTC even saves money.
Steve: The cost of printing and distributing children’s tickets is trivial out of the total budget. As a round number, fare collection (all modes) costs about 5% of the revenue stream which is about $1.1-billion. In other words roughly $55-million. There is no way that 7.1 million tickets out of the TTC’s total ridership, are going to account for 1/8 of the fare collection costs. It costs much, much more to handle all of those adult tokens as their associated cash transactions.
Save money? Not a chance.
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Sorry, Steve, should have put a smiley face. So less than $7 million, once you eliminate printing costs and what you pay the 1,200 authorized ticket sellers there (very small) cut. Actual distribution would be very small, given that the system remains in place. I’m surprised that TTC hasn’t published the net number rather than the lost revenue.
Steve: I suspect that the delta would be very low, below the two significant digits of the gross number. Don’t forget that the distribution network would remain in place for all other fare media.
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There are zone (metropolitan) fares for this very reason, pretty sure you can put them on an OPUS. TRAM fares definitely usable in Laval (zone 3).
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Giancarlo – in theory that’s also an option. But can only preload TRAM fares at AMT outlet. Also, if you’ve loaded tickets for both local agency and TRAM ticket … how does it know which one to apply.
I’ve heard stories of people carrying two Opus cards to deal with some of these issues.
It’s a great system if you never leave the island. Or always have the same patterns and buy a pass. But for those that use multiple systems, and don’t do it frequently enough to purchase a pass, it’s got limitations. The technology behind it is much more limited than Presto.
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Something I never considered … Point taken. Last time I traveled to Laval was in the paper ticket era and buying tickets at an AMT location was never that difficult. Even if you didn’t have them on you when going to Laval, you could get them at Henri Bourassa (the old northernmost stop on the orange line) and then get on the STL buses down the street.
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A key criteria for a smartcard is that it be easy to use. Tap and go, and not have to worry about loading anything except $. GO Transit has implemented it well, and some other agencies have got weekly and monthly rate capping working well. I suppose getting a pass subscription for a system you use frequently isn’t terribly onerous if it will save you money. Hopefully TTC implements something sensible.
Quite frankly, the shear simplicity of Presto has encouraged me to use transit more, especially when travelling on business. Not having to worry about buying tickets in the station, or having the large quantities of the right change for a myriad of local buses meeting the GO Trains or subway has cut down on driving, and even expensing a taxi ride.
Though perhaps one day soon, this will all be solved for occasional users by simply tapping one’s credit or debit card. Perhaps not the best rate, but occasional users aren’t normally concerned about the cheapest fare. It would certainly help me when travelling in other cities – and I did see Visa/Debit symbols on the new readers on Vancouver B-Line buses earlier this year.
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The way Presto is being presented in this budget is disingenuous. The dominant reason for adopting Presto is that it is supposed to offer a cost saving in collection of revenue, but in the Operations budget only the outflow side is presented.
@Deb, generally, the TTC issues tickets during the transitional times so that hoarding is not an issue nor forcing people into cash fares.
Generally, Presto is a 1:1 replacement of tokens, so the only impact how the money is paid. In fact, Presto tends to go to the “single use until pass is better model” (for example GO rides are discounted after 35 rides and “free” after 40 per month), so low income riders would have the flexibility of not paying for a MetroPass upfront (if Toronto were to adopt that model). Also, there is no indication of the conversion rates from Cash to Presto.
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I fail to see how this benefits low income users. That flexibility is misleading because its heavily skewed towards heavy monthly use. It’s just paying for your Metropass in installments. Remember that you have to use 35 trips in a month to start getting a discount. Occasional users (<30 trips/month) will pay more. You used to be able to get a discount for 10 rides on GO. The Presto fare is cheaper than full fare so I’m not sure about the price comparison in the 30-35 trip range but it certainly is cheaper for the occasional user to get such ticket strips, especially since you don't have to use them all in a month. For the 27 trip per month user, yes it’s not as expensive as a pass, but it’s a disproportionate hike on what it used to be. I hope the TTC doesn't adopt this model or if it does, lowers the threshold for discounted fares significantly.
At best, If the rent-to-own metro pass is instated with payments equal to the price of the token, there’s no net benefit unless trip multiple of the metro pass is reduced, and the presto user reaches unlimited rides after spending less than $120
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Thanks to Mapleson for the reminder about buying tickets during a TTC transition period to higher fares.
Unfortunately, I prefer using tokens (bought at the TTC’s vending machines) for a number of reasons, including not having to wait in line at a busy station behind all the people who are paying cash (“I know I’ve got another dime here somewhere”), buying tickets, tokens, or passes, or occasionally presenting a transfer that’s being questioned by the TTC staffer in the booth. While I don’t make enough transit trips to make a Metropass financially viable, I do appreciate being able to move quickly through the turnstiles (and not delay any Metropass or Presto card holder who might be accompanying me.)
Also, I use several automatic entrances that will only take a pass or token, rather than having to walk some distance further, particularly in bad weather, to the entrance staffed by TTC personnel. (Not just lazy: I use a cane.)
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It’s two fold: first, in months where they would buy a pass, but didn’t use it enough to make it worth while, there is a cost savings; second, depending on your budget weekly installments are easier to manage than monthly lump sums.
I don’t understand. 27 Presto trips per month is equal to 27 token trips per month, so there is no hike to be disproportionate.
I was only using numbers for a fare neutral implementation. There are other options that are currently used on Presto, such as daily and weekly passes. To me the idea option is that you don’t need to work out ahead of time how much you might be using transit in order to get the cheapest trips.
I agree the trip multiples should be lowered to encourage usage, but that’s another kettle of fish.
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Sorry I should have made this clearer. I predicated that argument on the adoption of a GO style pricing where you don’t have a token fare and discounts only come after 35 rides. Then I bemoaned the loss of the 10-ride. Really it’s a complaint about GO.
Maybe I’m too hard on Presto, but so far it seems it’s only “benefitting” those who toe the line between pass and tokens each month. Not sure that that’s a problem unique to or endemic of low-income riders. But I’d be interested to know more.
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Really, the issue isn’t Presto but how the individual agencies enact it. For example:
GO Transit – Cash fares are always equal and Presto fares are discounted 10% for rides 1-35, 87.75% for rides 36-40 and 100% after 40. High School/University students have a separate fare discount as do Children/Seniors.
Hamilton – $2.75 cash; $2.15 Presto single (-21.8% cash); $23.65 weekly (Multiple of 11 single); $94.60 monthly (Multiple of 44 single, 4 weekly)
Brampton – $3.75 cash; $2.80 Presto single (-25.3% cash); $31.00 weekly pass (Multiple of 11.1 single); $118.00 monthly pass (Multiple of 42.1 single, 3.8 weekly)
Oakville – $3.50 cash; $2.80 Presto single (-20.0% cash); 100% discount after ride 37; $110 monthly pass (Multiple of 39.3 single)
Each of these four has a different implementation that affects who benefits. In Oakville, it’s cheaper to use the bulk discount than the monthly pass for all but Seniors. In Brampton, you buy your pass before using it. In Hamilton, your costs are capped at the weekly and monthly levels. On GO, there is an intermediate savings.
There is no reason that GO couldn’t bring back the 10-ride pass on Presto, except that it’s lost revenue if it’s cheaper per ride, useless if it’s more expensive, and somewhat regressive in that the money is tied up in GO-only tickets for those that will use multiple systems.
I wouldn’t say the problem is unique to low-income riders, but they are the ones that benefit the most from any cost savings and flexibility. Taking my own example, the MetroPass multiple is too high for me to consistently say I’d benefit from it, so I don’t buy it. However, this means every trip I take costs money and thus, I walk for almost all ‘short’ trips up to 6km one-way.
From the system perspective, using Presto is operationally cheaper than passes/tickets/tokens, so net revenue is increased even if the fares are cost-neutral from a rider perspective.
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Not entirely, as the Presto trips (assuming you have 30 trips or so in a month) are income tax deductible giving you a 15% credit. So that $2.80 TTC trip only really costs you $2.38 compared to the $2.80 for the token which isn’t tax deductible.
Steve: Careful: you have to have income for the deduction to be worthwhile, and you have to pay the full fare up front with the rebate coming months later.
I was thrilled when they got rid of the 10-ride trip. Trying to get the stupid thing to validate, after it had been in your wallet for a few weeks, and had possibly got caught in a rainstorm … and your train is approaching?
Besides, the Presto fare was the same as the 10-ride trip fare. And potentially tax deductible if you take enough rides in a month. (though I never hit that, with all my TTC travel by token or pass).
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nfitz, it is a tax deduction, not a tax credit, so you get 15% off the 10% or so tax that you pay, so it’s really ~1.5% off the price (4.2 cents). However, you only get the tax deduction for Presto if you make at least 32 trips within 31 days, or buy at least 20 days of 5-day or longer passes within 28 days. Don’t you love our straightforward tax code?
Steve: No, it is a non-refundable tax credit. It has the same value for everyone, but you have to have taxable income to receive the benefit.
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My bad, thanks for the correction. Credit at least is a step-up from deduction. So using my previous example of $1560 a year, it’s a $234 non-refundable credit. Roughly speaking, you need to work over 33 hours per week, 52 weeks a year, to get the full effect. Really, this needs to be flipped into a refundable credit, like Trillium.
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I’m gradually being convinced by this argument. It’s partly my own personal money habits that are clouding my judgement, I guess. I like to pay for as much as I can when I can to make sure I have it. That’s probably why I’m down with OPUS. I realize the dollar amounts are the same now but still everyone’s cash flow is different and mine was irregular for a long time. I’m loath to do things like auto load. That’s a personal view — obviously government can’t cater to all our views.
Back to the ten ride. I’m the kind of person who tops up their presto 10 maybe 20 dollars at a time. So there’s no extra convenience for me vs going to the counter to buy a new 10 ride. There’s also a disadvantage:
Even if that’s actually the case, you can’t travel on Presto without $5.20 on your card. Which means that if you take the train to one zone then need to transfer to the bus to travel within the same zone, not unusual e.g. on Trafalgar in Oakville, and you have 4.99 on your card when you tap off the train you’re S.O.L. I’ve been stung with that more than once.
I’ve been there, brother, and I’ve missed many a train in my day. Never blamed it on the pass though. Also you can bring your busted 10-ride to a counter for a refund, you have to pay $6 for a Presto refund.
Again, all these problems are solved with autoload and registering your pass and going whole hog on the Presto, at the same dollar cost, but that’s not something I’m comfortable with and in my personal opinion wholly unnecessary for the ~$50 I spend on Presto a month. I repeat that it would be wrong to say that Presto has any great benefits for anyone other than those who really struggle with the pass/token decision each month.
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AutoLoad is a feature, not a requirement. The loading requirement that is arbitrary and poorly done is that it’s a $10 minimum and then $10 increments for loading. The benefit/drawback to not doing AutoLoad is that you run the risk of not having money to complete your trip. The system allows one ride going into the negative, but really it should be two so you could complete a roundtrip in an emergency.
How recently was this? The issue was that GO allowed for a $5.20 discount between GO vehicles. GO has changed it now so that if you have a default trip set, any positive balance will let you take the next trip. If you don’t have a default set, you need a fare equal to pay to the next station on the route to go negative.
Actually, it’s now a 4% service fee, which is mostly about cost recovery.
The greatest benefit to Presto is that it costs less to process than physical media. MetroPasses need to be printed each month; tickets/tokens need to be stored and distributed; and, cash needs to be handled and collected. I forget the exact numbers off-hand, but if the handling costs of Presto are 4% and physical media are 6%, then that’s saving you 2% per trip, whether that comes from not increasing fares as much or not increasing the subsidy paid for by your taxes as much.
Beyond that, it’s just the question of how many fare medias you want to carry for the $50 a month you spend.
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If we assume an average one way fare of $2.50, probably quite a bit on the low side, that is only 10 days riding per month. What regular commuter only rides 10 days per month? If you are an infrequent rider then perhaps type of fare media is basically irrelevant.
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@robertwightman,
The $50 figure came from Giancarlo, who by your definition isn’t a regular transit commuter. The point remains independent of the quantity attached to the sentiment.
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Sorry, I missed that in his comments. But as you said; “… how many fare medias you want to carry for the $50 a month you spend.” I cannot see the problem with using Presto. The card is often free if wait for an special promotion. I got one for my wife and myself; we are both retired. I find it convenient to carry around because I can always use it to get home from wherever I happen to be, Brampton, Mississauga, Toronto or York. I do not use the auto load feature because I am basically paranoid about letting Metrolinx have access to my banking or credit card information. I load it back to $50.00 whenever it gets below $10.00. I realize that I am probably letting Metrolinx have free use of my money but the convenience is worth it to me. For what I want and from observations of riders in Brampton and Mississauga many people seem to use it. Is it the best possible system? Probably not but it works o.k. for my needs. Did Ontario need to re-invent the wheel? NO.
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I completely agree with your sentiment (although I’m more trusting). I’ve often ended up being a lukewarm defender of Presto when comments are off-base.
My comment was that Presto allows you to have a pool of $50 rather than say $25 in TTC tokens and $25 in MiWay tickets.
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