Updated March 11, 2016 at 11:00 am: A section has been added commenting on the TTC’s claim that a two-hour transfer would result in a revenue loss of $20m/year.
Recent discussions about a proposed Toronto transit plan have included, almost as a minor sideshow, the Metrolinx study of regional fare integration. A basic tenet of this study is that “rapid transit” would be a separate fare zone or structure from everything else, but the exact mechanism by which this would be done is as yet unclear. GO Transit fares might be lowered and subway fares increased for certain trips, but there is no worked example to show how various trip types inside and outside the City of Toronto will be affected.
Although City and TTC staff are working with Metrolinx on this study, neither the TTC Board nor Council has been presented with a definitive proposal, and there is limited direction from either of them on guiding factors staff should use.
The only context in which Council has decided anything was for SmartTrack, and their wishes included lots of stations, frequent service and the ability to ride SmartTrack for a TTC fare. We know now that many stations and a good deal of service are no longer part of the package. As for fares, there has been some equivocating about this by staff as to just what a “TTC fare” might be by the time SmartTrack (or more accurately GO Regional Express Rail) begins operating.
As for the TTC Board, there has been a series of reports and decisions evolving over the last year. None of these sets a definitive policy, although the motions passed could be misread to imply this has happened.
April 29, 2015
At this meeting, the TTC Board considered a request from Commissioner Vince Crisanti that staff report back to the Board on a $1 off-peak fare for seniors. Discussion of this item brought in other requests and the following compendium motion was passed:
i) That the Chief Executive Officer report back to the TTC Board by June 22, 2015 in a briefing note on the feasibility of a six-month pilot program to reduce fare costs during off-peak hours to $1.00 for seniors.
ii) Request staff report back, as planned, and in consultation with city fare equity staff, in October for a fulsome discussion on fare policy when PRESTO is in place and for when we remove legacy fare media (tokens etc.) and what the future for cash payments are including consideration of various fare options including:
(i) fare by time of day
(ii) 2 hour transfer
(iii) Seniors fares by time of day, including $1.00 seniors fare during off-peak hours
(iv) Fare by distance
(v) Concession policy over all as informed by Fare Equity Strategy
(vi) Monthly pass versus daily / weekly / monthly capping
(vii) Free regular transit fares for Wheel-Trans qualified passengers in addition to the visually impaired.
iii) Request that staff continue discussions on a 2-hour transfer, with PRESTO and Metrolinx, to understand how that could be funded via savings in the PRESTO programme and in support of more regional fare integration.
Note that all of the above is a report request, not a policy direction prescribing that certain types of fares be included or excluded from the TTC tariff.
The “briefing note” regarding $1 fares for seniors, off-peak, never showed up in the public agenda because that term indicates a private memo, not a formal public report.
As for the remaining items, most came back in a report to the September 2015 Board Meeting.
September 28, 2015
At this meeting, the Board received a report and presentation on Fare Policy Principles, although they opted not to actually hear the presentation. The report recommended that the Board:
- approve the proposed fare policy principles;
- approve the analysis assumptions; and
- approve the list of areas for analysis.
The lists of items approved were embedded in the presentation.
- Improve the customer experience
- Meet the needs of our different customer groups
- Increase ridership
- Optimize TTC fare revenue
- Optimize TTC operations
- Embrace new technology to modernize our fare offering
- Support fare integration initiatives across the Greater Toronto and Hamilton Area
- Policy changes implemented from 2018
- Technical requirements to support fare policy changes are in place
- Price difference between cash and PRESTO fares will widen
Areas for Analysis
- Cash fares and single ride options
- Loyalty programs
- Peak and off-peak fares
- 2hr time-based transfers
- Fare by distance/zone
- All-door boarding on buses
- Proof-of-Payment (POP) system wide including buses and subway
- “Tap on” to all buses and streetcars
- “Tap on and off” at all subway stations
Analysis With Other Agencies
- Low income discount – Transit Fare Equity
- Co-fares – Fare integration across the Greater Toronto and Hamilton Area
Note that the requirement for “tap off” in the subway received no discussion although it is essential to establishing any revised subway fare zone including fare-by-distance. Moreover, on the strength of what was only “analysis” at this point, the TTC 2016 Capital Budget included over $20 million for additional fare gates making this option possible throughout the subway system. This suggests that TTC staff had already made up their mind on the issue and proceeded accordingly.
Also, at this point, several possible fare schemes were still on the table.
The staff recommendations were amended by the addition of two more clauses:
4. Confirm the principle that the TTC shall remain whole and/or not experience any additional financial burden as a result of any regional fare integration proposals.
5. That the Province provides the same level of operating subsidy for riders crossing the City of Toronto boundary on local transit systems that they provide for GO riders crossing that boundary.
December 16, 2015
The whole package came back to the TTC Board in December with a report entitled Fare Policy. In fact, the recommendations in the report are written in such a way that some elements appear to be less a question of policy decision, but of general intent that could be changed in the future.
The minutes of the meeting record the outcome:
The Board received the presentation for information and adopted the recommendations in the staff report, as follows:
It is recommended that the Board:
1. Approve changes to TTC Fare Policy with specific emphasis on:
a. single cash fare in 2017
b. proof-of-payment system wide in 2017
c. ‘tap on’ to buses & streetcars, ‘tap on and off’ at subway stations in 2017
d. daily e-Purse loyalty on PRESTO in 2016
e. weekly and monthly Metropasses on PRESTO in 2016
f. moving the Metropass Discount Plan (MDP) to PRESTO online in 2017
g. migrating Volume Incentive Program customers onto the MDP program in 2017
h. peak and off-peak pricing as part of the 2018 budget process
2. Approve further analysis of:
a. single ride limited use PRESTO card for bus cash customers
b. no cash fares for bus cash customers
c. loyalty program options for MDP
3. Approve that no further analysis is required at this time for:
a. 2 hour time-based transfers
b. all-door boarding on buses
c. fare by distance/zone
d. cash fare proof-of-payment receipt for bus customers.
The items in clause 1 are explicit changes to fare policy to take effect in 2016-2018. Items in clauses 2 and 3 remain open for discussion, and the operative words are “further analysis … at this time”. The Board did not expressly adopt or reject any of the items in these clauses, it only said “look at the first group in more detail” and “we don’t need more work on the rest”. This does not constitute a definitive decision on either time-based transfers or fare-by-distance. There has been no discussion at Council of these items.
The seven options listed in clauses 2 and 3 were scored in a table to indicate how well they supported the seven principles that had been approved in September.
Note that the 2-hour transfer ranks highest with six out of seven principles, but its cost, estimated at $20m per year, sandbagged its embrace as part of the TTC’s 2016 fare proposals. “Optimizing” TTC fare revenue trumped all other considerations.
The detailed evaluations of the options make interesting reading. Here are three of them.
The main report gives more information behind this analysis:
Many transit agencies offer peak and off-peak pricing to reduce congestion during peak hours and encourage off-peak ridership. There are two ways in which this policy is implemented; either the peak price is inflated to discourage travel during peak hours or the off-peak price is decreased to encourage new customers during off-peak hours. Very few transit agencies have success implementing off-peak discounts, as the increased ridership often does not counteract the revenue loss from discounted rides. Increasing peak fares can also be difficult as it involves a change in customer behavior and not all customers have the flexibility to change their schedules. With peak and off-peak pricing there is also the risk that peak congestion will simply shift, instead of leveling out.
Fare impact analysis scenarios were completed based on current TTC ridership, and included options for raising the peak fare by 5, 15 and 25 cents, and decreasing the off-peak fare by 5 cents. For example, factoring in ridership loss and switching rates, the revenue potential of a 15 cent increase in peak pricing alongside a 5 cent across the board off-peak discount could result in an overall $2M net revenue gain. The peak and off peak pricing option that will be presented as part of the 2018 operating budget will meet the approved fare policy principle of optimizing TTC fare revenue.
The report is silent on the fact that riders who use any form of pass would not be affected by the fare differential. The report also omits any information on the numbers of riders or on the types of trips and geographic distribution of those most likely to be affected. This additional analysis is badly needed.
Although there is the possibility for a rider to pay a second fare for a long trip that might, or might not, slip over the two-hour boundary depending on circumstances, there is also a great simplification of transfer rules. Already, the TTC has to deal with special instructions for riders about not tapping-on when they are shifted between vehicles due to short-turns. This will only get worse as use of Presto builds out through the system. Not only can Presto not handle this type of “transfer”, there are also the common diversions and service substitutions which Presto’s database, built on the “standard” route configuration, wouldn’t know about. Can we honestly believe that the TTC will implement a completely new set of transfer rules every time they divert service? Of course not, but the instructions to riders would become complex beyond understanding, and disputes regarding extra fare charges would be numerous.
However, the $20m annual cost of this option appears to have frightened off support (TTC Chair Josh Colle especially mentioned that he is worried about lost revenue on this account), and so the idea goes into the “no further analysis” pile.
Updated March 11, 2016 at 11:00 am:
The estimate of lost revenue is overstated by at least 100% based on the following calculation:
- 4% of customers take two trips within two hours.
- With 545 million annual trips, 4% is 21.8 million.
- Half of these would now be “free” or 10.9 million.
- At an average fare of about $2, the “lost” revenue would be about $20m.
- However, over half of all adult trips are paid for with passes which allow unlimited riding. Therefore at least half of the “lost” revenue is based on trips taken using passes today.
- The correct “cost” of a two-hour transfer should be cited as no more than $10 million.
This puts the two-hour transfer in the same ballpark as free rides for children.
TTC staff neatly sidestep analysis of this option by saying “we’re waiting for Metrolinx”. That evades a key responsibility to the Board and to riders. It is all very well to say that this option gives “more equitable distribution of pricing”, but the premise that longer trips should cost more was removed from Toronto’s system in the early 1970s precisely because of the effect of fare zones on suburban riders. This analysis also gives no hint of the concept of service class which is integral to the Metrolinx study, and hence no hint of a double-whammy through fare by distance and a higher category of fares for rapid transit.
Like the two-hour transfer, this idea went into the “no further analysis” pile, but two problems remain:
- the phrase “at this time” leaves open the possibility that these might resurface, and
- the TTC Board and Council have not explicitly rejected or adopted either scheme.
As things stand, we must trust that Toronto’s interests are being represented at the staff level in the Metrolinx study, but there is no definitive policy statement at the political level declaring the ideas as “must have” or “don’t even think about it”.
If Toronto and the TTC want a two-hour transfer, then they should say so, even if the concept is subject to future choices about priorities for increasing subsidies or fares.
If Toronto and the TTC do not want distance or zone-based fares, at least within the city, then they should explicitly reject such options without waiting for Metrolinx to complete their work. “Regional integration” should not be a mantra to fleece riders with a two-tier scheme imposed on an integrated subway-surface network.
These are decisions for politicians who set policy, not for staff whose job is to advise on and implement directions from their political masters.