Recent media reports of the effect of John Tory’s requested 2.6% cut in TTC funding have cited numbers that might confuse readers by giving an incomplete view of TTC revenues and spending. In the interest of better-informed context for the debate, here is the full story.
The TTC Operating Budget contains two separate sections, one for the so-called conventional system and one for Wheel-Trans. That term, “conventional”, is the one used by the TTC to describe its base system, the one used by most riders. Each budget has three major components: fares and other revenues, operating expenses and subsidy. The numbers in the budget are never the same as the year-end actuals, but the TTC is usually within 1%. Here are the numbers as of the July 2016 CEO’s Report [pp 46 & 50].
Conventional Wheel-Trans Total
Projected Budget Projected Budget Projected Budget
Revenue
Fares $1,150.3 $1,175.3 $ 7.1 7.0 $1,157.4 $1,182.3
Other 66.1 66.8 66.1 66.9
Total 1,216.4 1,242.1 7.1 7.0 1,223.5 1,249.1
Expenses 1,726.0 1,736.7 128.4 123.7 1,854.4 1,860.4
Subsidy Required 509.6 494.6 121.3 116.7 630.9 611.3
City Subsidy 493.6 493.6 116.7 116.7 610.3 610.3
Draw From Reserve 1.0 1.0 1.0 1.0
(Shortfall) ( 15.0) ( 4.6) ( 19.6)
1. All figures in millions of dollars.
2. Other revenue includes contract services, advertising, rent, parking and interest.
3. The reserve contains funds from previous years' "surpluses".
When the City looks for a cut, this is based on the “net” budget, in other words the subsidy that the City pays, not on the gross operating budget including fare revenue. Any shortfall would be covered by a combination of expense reductions and fare increases. In the “other revenue” category, the only item subject to extraordinary year-over-year increases is parking because the remainder are dictated by longer-term contracts. Commuter parking will bring in about $9.2 million in 2016, and even doubling these fees (assuming no loss of demand) would bring in only a tiny amount relative to the entire budget.
The starting point set by the Mayor and approved by Council is a 2.6% across the board cut to all departments and agencies. For the TTC, this translates to 2.6% of $611.3 million (the 2016 budget figure) or $15.89m.
However, the TTC faces many cost pressures including:
- Inflationary increases in utilities and materials
- Wage rate increases in the negotiated contract
- Costs for Presto implementation including the co-existence of old and new fare collection methods and staffing during 2017
- Increased vehicle maintenance cost (aging bus, streetcar and subway fleets, continued operation of old streetcars due to Bombardier delivery delays)
- Startup costs for the Spadina Subway Extension including maintenance of completed structures, and pre-opening activities such as training
- Substantial increase in demand for Wheel-Trans in part due to provincially mandated changes in eligibility, partly due to demographics
Moreover, if ridership for 2017 stays at the 2016 level, then the projected revenue (leaving aside any fare increase) will be lower than the 2016 budgeted level.
According to The Star, the TTC projects that the funding gap in 2017 will be $184m for the conventional system and $31m for Wheel-Trans. That is the difference between projected revenues, subsidies with the 2.6% cut taken into account, and projected expenses just to operate the system at 2016 service levels. One can work backwards from these numbers to see what the 2017 budget looks like before any further adjustments are made.
Conventional Wheel-Trans Total 2016 Subsidy $ 493.6 $ 116.7 $ 610.3 2.6% Cut 12.8 3.0 15.9 2017 Subsidy 480.8 113.7 594.4 Added 2017 Costs 184.0 31.0 215.0 Total Shortfall 196.8 34.0 230.9 2016 Budget 1,736.7 123.7 1,860.4 % Cut vs 2016 11.3% 27.5% 12.4% 1. All figures in millions of dollars. 2. Some numbers do not add due to rounding.
An obvious question here is whether Council will attempt to avoid the unpalatable effect of a large cut in the Wheel-Trans budget (one which would likely violate provincial service level requirements) by shifting the lion’s share of the cut to the conventional system. Offsetting this would require an even larger fare increase and/or service cut. The last thing Toronto needs is a fare and service battle between the Wheel-Trans user community and the rest of the system’s ridership.
The average fare currently sits at $2.11 (total probable fare revenue divided by probable ridership of 544m), while the adult token rate sits at $2.90. A ten cent fare increase would raise this to $3.00, or 3.4%. This would translate to $39m in added revenue before allowing for ridership loss (a dubious proposition in an era of limits on service expansion). [This paragraph has been updated to correct the value of the token fare and subsequent calculations.]
Various possible changes to fares and expenses include (according to the Star’s article):
- Eliminate cash fare discounts (reduced fares would only be available through tickets, tokens, passes and Presto)
- Total additional fare revenue including fare increase: $40m
- Controls on Presto, diesel fuel and employee benefits: $7.5m
- Draw the remaining balance in the Transit Stabilization Reserve: $15.4m
- Unspecified reductions in the conventional system: $17m
- Unspecified reductions in Wheel-Trans: $1.8m
- Total: $81.7m
It is unclear how some of these reductions would actually be achieved, and it is not unusual to see the TTC start off the year facing a challenge of trimming expenses as it goes along to fit the available subsidy.
Further possible cuts include:
- Elimination of Metropass discounts: $80m
- Cutting service: $60m
- Deferral of the Spadina extension opening to 2018: $6m
These are not recommended by TTC management.
The relatively small saving through elimination of Metropass discounts gives a view into how riders actually use the system. Passholders account for over half of all adult “trips”, but one cannot simply assume that they would continue to make all of these journeys if they had to pay for each of them separately. The idea that all pass trips represent a huge subsidy (because the lower average fare one can achieve with very frequent use is “lost revenue”) simply does not hold up. Unfortunately, TTC management has encouraged this view ever since passes were introduced.
The total number of trips taken using any form of pass in 2015 was 292.983 million, or 55% of all ridership. With a projected saving of $80m, the average per pass trip is about 27 cents. However, eliminating pass-level pricing would represent a large fare increase and would affect ridership numbers, a counterproductive move when getting people onto transit is supposed to be one of the City’s priorities. Pass usage as a percentage of total ridership has grown from 25% in 1987 to 50% in 2008, and to 55% in 2015. This is now the primary way in which riders pay for travel, and the bean-counting politicians who agonize over TTC fares should stop thinking in terms of tokens, tickets and cash. Riders prefer to purchase their service in bulk at a fixed price, and this should be encouraged to simplify the fare system for as many riders as possible.
Mayor Tory’s financial schemes have been “running on the fumes” for two years, and the 2017 budget marks the point that his fantasies simply will not be tenable. Does Council have the will to tackle this problem, or will transit riders (not to mention users of many other City services) be forced to suffer through the effects of the tax cutters’ naïve belief that they can control costs through searches for “efficiency”? Will voters, especially those represented by Tory’s henchmen on Council, tell their representatives that cuts are unacceptable, or will those who languish awaiting suburban buses put their faith in myths about “waste” that prevents their having frequent, comfortable service?
Remember all of this the next time someone promises you billions in spending on transit, roads and other civic baubles.
Steve Munro 
Could early subway shutdown be part of the cost cutting equation? My understanding was that this used to be done on the University line when it was introduced. Would it make financial sense (not necessarily political) to replace subway service with bus service for certain parts of the system when usage becomes much lower? I am thinking this would be the northern part of the University line and the Sheppard line.
On a related question (I tried looking for the answer on your site), what are the major costs that make the Sheppard Line require a $10 per user subsidy? Is it the staff required on the subway trains? The staff at the entrances? Or is it more of an amortization of the capital cost of the line (which I feel should not then be included)?
Steve: I have never seen an actual worked out costing although the $10 number is often cited. However, there is a very high fixed cost in simply owning a subway whether it is carrying riders or not. Stations, tunnels and trains have to be maintained regardless of how many hours of service they provide. The staff actually driving the trains and collecting fares in stations represent a small cost, one that would easily be offset by the cost of bus drivers for a replacement service. Some station staff would still be required to handle access to the paid area at a major station like Don Mills. At best, you would save the collectors at Bessarion, Leslie and Bayview, plus crews for four trains, a total of 11 staff plus one or two supervisory level folks. University would be a different case as there are more stations and trains, especially when the line opens to Vaughan, but there are also more riders. Depending on what’s happening downtown, the line can be quite busy in the evening.
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So in essence, a 10% fare increase, the elimination of “subsidy” for the pass holders, and substantial service cuts would be require to fill the proposed gap. Do you really want to drive anymore people onto the roads? If you add 5% to traffic volumes where you have moderate congestion, you will have chaos. Toronto needs to take about 5% away from current peak auto loads, not add to them. It needs to drive every new commuter to transit, and then a little bit, not encourage any to leave transit.
The thing is that those that must drive, need to be the biggest supporters of transit, because if you remove 1 bus per hour from your route that would otherwise be full, well, that in may instances will be just enough to go from nasty congestion, to gridlock. The number of cars on the road achieves chaos quite suddenly, and well we are very close. Generally, in order for the city to function, we need more not less transit. Are you prepared to cost yourself additional hours on your commute in order to avoid a couple of dollars a month in the way of a tax increase.
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On the elimination of Metropass discounts, is this proposing the total elimination of the Metropass, or just the removal of the Metropass Discount Program? I had thought it was the latter, but the text of this post leans towards the former.
Steve: I am going by what’s in the Star as I do not have a copy of Byford’s presentation, but the article states:
This could be read as either passes generally for just for the MDP program. The TTC stats on fares do not break down passes between subscription and individual sales. However, since the MDP discount amounts to one month’s worth of a pass, an $80m saving implies about $960m in annual MDP sales, and this is not credible given total system revenues are only $1.1b. Until the TTC releases their report (or I get a leaked copy from somewhere), we won’t know exactly what they think they are going to do or achieve.
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No money to run the existing transit system, but that doesn’t keep Tory from holding a photo-op for a pie-in-the-sky, megabucks park over the train tracks that will never ever happen!
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Let’s not forget what a blow this would be to the quality of transit service in what is apparently a “world-class city.” Schemes like this only perpetuate the vicious cycle, driving more people off public transit in the long-run and further reducing revenues. The system’s reputation is important in attracting ridership: a system that is regarded as shutting down early in the evening (when many people would be taking return trips), would sacrifice the corresponding outbound trips during the day. People use transit more when they are confident it will be there for them, regardless of the time of day they are travelling. It is important to grasp that a transit system is an interdependent network: shutting down seemingly “underused” portions not only adversely impacts the well-used sections, but harms the ultimate goal of building a transit system that will be well-used at all times (due to ride-share growth).
Moreover, shutting down the subway earlier would have the greatest impact on shift workers and those already unlucky enough to be relying on the TTC late at night. I would encourage anyone who supports this to go down to St. Michael’s hospital in January at midnight and tell the overnight ER nurses, support staff and maintenance workers that they will no longer have access to the subway for their commutes from Wilson, Lawrence West and Downsview because the city council refuses to pay for it. They can wait for a bus.
All this is quite separate from the dubious cost claims, as Steve has outlined above.
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I always love to see Tory speaking at a remote location (remote being anyhere other than his office or City Hall), where to do so he has first had his minions transport his bulky custom podium so everyone will know who that is standing behind it. He could start by cutting off that brute (and the transporting bodies) from the budget. Sorry, Mr Mayor, but we all know who you are, no need to constantly remind us.
If he thinks the owners of the rail corridor are giving up those extremely valuable air rights for a few potted trees (the rootless kind that wouldn’t be a pesky problem for passing trains) and some astroturf, he must’ve found the drawer in Ford’s old office where the pot was stashed.
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Thanks for clearing the subway cost issue for me. I always wondered about that.
Off topic, in regards to the LRT vs Subway debate, an LRT not only has a substantially lower operating cost as maintenance is not required as frequently (judging by the only maintenance I see being track and overhead wire replacement for our streetcar network), but also would be able to be run 24 hours a day? Our streetcars mostly run 24 hours a day, so in addition to Scarborough losing out by approval for a much smaller network, they are also losing potential 24 hour a day rapid transit delivered via LRT.
Steve: The TTC could run the subway all night if they wanted to, although there would be some changes needed in the signal and power systems to allow single track operation through work zones. The essential point about subways (and LRT running underground for that matter) is that simply by having tunnels and stations, there is a lot more “stuff” to maintain than for a surface operation, and so the fixed cost of a line goes up. Those who talk about 100-year subways forget that in many cases, such as Scarborough, it is only the use of this technology that forces the tunnel on us in the first place.
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Steve, personally I think it’s time for the cash fare to be $3.25 period. If you want a discount, then you need to have a ticket, token, Presto Card, or pass. This is how it works on other transit agencies (such as Mississauga Transit.)
Of course, I also blame part of this on Mayor Tory’s decision to give children 12 and under free rides on the TTC. While the idea is great, it also means the TTC is losing much needed revenue and I would totally agree with it if City Hall would cover the loss in revenue. Otherwise, perhaps it’s time to start charging those children again, even if it’s only a token fare of twenty five cents per ride.
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If the TTC is having such a hard time balancing the budget, then let us shut down the Sheppard subway which runs empty even during rush hours and has unusually long hours of operation. If not, then let us STOP unnecessarily opposing the Scarborough subway which is expected to be very crowded with the Scarborough Centre station expected to be the busiest on all of the Bloor-Danforth line. John Tory has done a tremendous job. And yes, he is indeed a transit mayor as he has succeeded in improving ridership for the under-13 population by an astonishing 400 to 600 per cent in a very short time and transit is a good habit to develop for the next generation if we are to fight global warming and climate change. I am sorry to say this but gridlock and transit are NOT our biggest issues but it is global warming and climate change; the BIGGEST threats faced by mankind since an asteroid wiped out the dinosaurs. By offering free-rides to the under-13 population which has vastly reduced the number of cars on our roads, John Tory has done more to fight global warming and climate change than the federal and provincial governments combined.
I would also like to take this opportunity to wish all the best to all of the Scarborrow athletes at the Olympics. They built subways to take people to the Olympics and NOT streetcars / LRT as world class cities build subways NOT streetcars / LRT.
Steve: For the benefit of other readers, the spelling used in this comment has not been modified. If you feel insulted, complain to the writer, not to me.
As for the comment itself, I am touched by the tender concern for residents of North York who might feel miffed about having “their” subway shut down. Maybe we could alternate days: even days for Scarborough, odd days for North York.
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Steve, I wonder if you may be misinterpreting what they mean by “removing discounts for metropass subscribers”. I don’t think they’re talking about removing the metropass. I think they’re talking about removing the Senior, Student, and Post-Secondary Student discounts, leaving only the Adult metropass (which I guess would then be just *the* metropass).
Steve: As I said in a previous reply, the “saving” imputed for this is out of scale with the effect of changing the pricing. I’m not sure just what the TTC is talking about, and the absence of a public discussion of the options is not helping things one bit.
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We have more rich people in this City crying poor than ever. There no legitimate excuse aside from greed. Raise the fare & raise our property taxes for both Capital and Operational needs
Once Scarborough is connected to both the subway and LRT you’ll see much less support in this City for this narrative of starving our system. But when you don’t have a network worth taking nor suits the needs of the people. People are obviously not going to want to pay more & this type of politics will continue.
When we have more in common things will be easier on the Political front.
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I like the idea of increasing property taxes. It’s fair. I think the idea of raising the fare has merit too. We could implement a progressive fare system where people can report their annual incomes to receive a discounted rate (raising the fare for higher earners to result in a net increase in revenue). PRESTO would allow this to work. The excuse of bureaucracy not allowing it is no longer valid.
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This is typical high level management garbage…cut everything by a random number irregardless of if there is new stuff coming online, or the things that will save money are ready…despite attending dozens of photo opps for the new subway, Tory probably thought it was going to save money rather than cost him more money. He probably was told they were investing in some new computer system and figures that the work will be done this year and all the money is going to be saved, irregardless of the fact that he was told it would take 6 years to implement.
We need to get someone in government that understands that operating expenses are more important than capital expenses. And twice as important as photo op expenses (the city should have that as a third official budget, total projects committed to by the mayor without any agreement from council).
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True Scarborrower is quite incorrect, Rio did build an LRT line (as well), Alsthom provided the cars. Frankly I suspect he wouldn’t know what true LRT is like if one happened to bop him while he was crossing the road. As for that stupid comment on free rides for children “which has vastly reduced the number of cars on our roads”, I say “Huh? Just for the record I live in Scarborough – we’re not all whackadoodles.
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Isn’t it possible that the evil Scarborrower is some downtown yuppie having at us? If not, he did make a couple of good points: Although the kiddies don’t usually drive, they now have cheaper transit options enroute to school, taking quite a few cars off the road, I would think; and the Sheppard Subway could use a little shaving around the edges.
Note to Scarborrower, I worked in North York when Mel forced Sheppard on Toronto. I didn’t meet a single soul who thought that it was, in any way, a sane idea. A few, who felt that it was intended to run west from Yonge, liked the concept of linking the two subway lines, but quickly recanted when they heard: “All aboard for Fairview!”
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Reinstate the child fare. It will help TTC make more revenue.
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The TTC should be sending York Region a bill for the costs of running the subway into Vaughan.
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We shouldn’t raise the fare. It wouldn’t be fair. Yes, as I also noticed on another thread, there is a lot of money splashing around this city. It isn’t, however, evenly distributed. A lot of people have been “left behind” by the economic growth of the city and often it’s exactly those people who have no choice but to rely on transit. $142 is a ridiculous amount of money to pay for a metropass … for a system consisting of two and a half subway lines and outside of the downtown core, buses.
Take a look at Montreal. They have the same single-ticket price as Toronto ($3.25) – but their monthly pass is $83! The discounted passes (students, seniors, etc.) are $49.75. When I was there a couple of weeks ago I was shocked (from a Torontonian perspective) to see their $5 evening pass, which allows you unlimited travel after 6 pm. Now that’s encouraging people to take transit outside of just the daily work commute.
An all-zone metro monthly pass in Paris costs €73 ($106.63) … all five zones. That’s Paris, with a metro station on like every street corner almost. Did I mention all the different modes (metro, RER, buses, trams) are fare-integrated? In Munich, the monthly pass that covers the city itself (i.e. like the TTC covers the City of Toronto but not the rest of the GTA) costs either €53.40 ($78) or €64.40 ($94.07) as far as I can decipher their website. Also, fare-integrated with the S-Bahn (commuter rail). Even in Zurich, a city with higher incomes, lower taxes, and transit workers with higher pay and benefits (I’ve heard of airline pilots swapping aicraft cockpits for streetcar cockpits there because it’s more money and less stress – they only do 4 hour shifts for example), the monthly pass is cheaper than in Toronto! Also, with total fare integration from boat (yes boat – sorry Steve, no Swan Boats though) to train.
With significantly more investment into transit capacity in Toronto, fares could actually go down with ridership going up and the amount of money being collected from transit fares increasing significantly. It doesn’t have to all be mega-expensive subways, most areas of the city would be wonderfully served by mostly grade-separated LRT lines.
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Steve/Star: Further possible cuts include:
1) Elimination of Metropass discounts
2) Cutting service
3) Deferral of the Spadina extension opening to 2018
I like the first two but I would be damned if York Region would be punished further due to TTC’s incompetence. Already, the mismanagement by the TTC has resulted in the project being delayed for several years and TTC’s incompetence resulted in extra costs that York Region happily shared. If the project is delayed any further because of TTC’s chronic incompetence, then that’s fine by me as long as York Region gets our refund WITH INTEREST.
I like your site Steve but I don’t like it when you suggest how York Region should have service cuts because TTC spent all it’s money on salaries and benefits. What the TTC needs to do is to fight waste and at any cost, prevent employee overtime. TTC can also use our VIVA privatised model to run it’s bus service more efficiently while leaving the subway and streetcars and the SRT in public hands.
If the TTC likes to delay the opening of Toronto stations, then that’s fine but all of the ones located north of Steeles must open no later than 2017 as York Region paid more than our fare share for the project. Also the TTC should look into closing unused stations: Chester, Castle Frank, Old Mill, Bessarion, and Glencairn.
Steve: I don’t care which of your many aliases you post under, learn to distinguish between what I write as my own opinion and what I report as the statements/proposals of others. I did not suggest that York Region should have any service cuts. However, the current estimate is that it will cost Toronto taxpayer $30 million per year to subsidize the operation of the subway to Vaughan. York got a sweetheart deal from the TTC, partly thanks to pressure from Queen’s Park, but now we’re being asked to pay for it. It will come either from new taxes, or higher TTC fares, or service cuts so that Vaughan can get the service it wants, but won’t pay for. The developers are laughing all the way to the bank.
The cost per passenger for your wonderful bus service is much higher on YRT/VIVA than on the TTC. That’s not the sort of efficiency we want to emulate.
As for unused stations, Castle Frank handles just over 7,000 passengers per day, more than any single bus route in YRT/VIVA. Chester, Old Mill and Glencairn have 6,500 each. I look forward to your proposal to shut down all of the “unused” service north of Steeles Avenue.
I notice, by the way, that your IP address belongs to a Starbucks in North York.
Now piss off, please.
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According to this Metrolinx study the cost of traffic congestion to commuters in the GTHA in 2006 was $3.3 billion, and the cost in terms of resulting reduction to the GPD was $2.7 billion. The projection was that the cost to commuters in 2031 would be $7.8 billion and the cost to the GDP, $7.2 billion. Yes, the numbers are in billions. Since it’s now 2016, we probably running in excess of $4 billion in terms of the cost congestion, per year. The majority of those costs, or at least the largest part on a per-jurisdiction basis, accrue to the City of Toronto, no doubt. Even if the number of overblown, and the losses to the City of Toronto are just say $1 billion, here we have Mayor Tory squeezing the TTC for $16 million.
Just to put things in perspective.
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Steve, is fare revenue ever broken down simply into how much from each of the fare types (Metropass, token, ticket, cash, and now Presto)? Not “fare per ride” which is speculative? Because I’d like to see gross receipts and numbers sold of each of the types, without attributing numbers of rides.
Steve: The TTC has published a breakdown of fare sales by type for years. It is available on the City’s Open Data site. I used the numbers in this table to calculate the percentage of trips taken by pass/non-pass media which now sits at about 55%.
Except for passes, each fare type represents one “trip”. Passes are converted to trips based on a sample of passholders who keep trip diaries. I have asked the TTC for a breakdown of pass usage by number of trips taken and will publish this when I receive it.
I say this because the “Metropass is too cheap! Cut the discounts!” cries are, in my opinion, nonsense. Those who cry this, including Councillors and possibly TTC Commissioners — possibly at the prompting of TTC staff — are, I feel, quite misguided.
Steve: I have grown tired of TTC staff who misrepresent the “burden” of passes on the revenue stream, especially now that the majority of trips are taken using them. Quite bluntly, it is time for the TTC Board to demand a different outlook on fares, revenue and ridership, but they are unlikely to do so.
The “Metropass is too cheap!” meme is based on the assumption that every Metropass purchaser has calculated exactly how many rides they will take in the month, and calculated whether a pass or single-fare payment would be the best investment. And to be fair, I know of people who do this … or at least worry about this. But, as is becoming apparent, homo economicus who dispassionately and exactly calculates the best possible utility of the money they spend doesn’t really exist.
I buy Metropasses on MDP (Metropass Discount Plan); they cost me about $125/month. There is no way that I take enough rides to make the pass a winner over paying by tokens or even cash. However, I continue buying the pass because:
1. It’s more convenient to purchase one fare at the start of every month than keeping up with a token supply.
2. I do want to encourage myself to take transit instead of driving, and “I have a pass already” does this. It’s half an hour or so to drive to work; it’s at least 1.5 hours by TTC and the hassle of irregular service is always a problem in the evenings.
3. I get a nice tax break from the passes.
I don’t know how many people are in my “buy it for convenience and not needing to count out tokens” position. The TTC doesn’t know this either is what I suppose.
But see what will happen if those “Metropass freeloaders” are dealt with, either by removing the pass functionality in Presto, or by raising the pass price even further. I won’t buy a pass that’s even more overpriced. If/when I’m forced to Presto with pay-by-the-trip with capping, I probably won’t ever hit the cap. So I won’t have any “free rides” as I do now, having paid for the pass up front. So then I meter out my rides because I’m paying for them.
Instead of buying a Metropass, I’d go to single fare and take maybe 10-20 rides on the TTC per month, and 20 is being pretty generous. I’ll switch from “I ought to take the TTC, I have a pass already” to “Do I really need to take the TTC and pay a fare, or can I walk/drive/skip it?”
Steve: An essential feature of a pass is that it makes transit use somewhat more like the decision to drive a car. In both cases, it’s already there and “paid for”, and there is no disincentive to just setting of on another trip, no matter how short. Imagine if driving a car included a meter that when “ka-ching” (like an old style taxi meter) every time you turned the key in the ignition.
That’s why I’m interested in how the gross receipts per fare type have changed over the years. And my prediction is that when the Metropass if phased out, the TTC’s gross revenues may well plummet. The gross revenue from Metropass sales — don’t think of it as a number of rides, just gross revenue — will not all migrate to Presto or cash fares. Some of it will simply evaporate. How much will do so? Even if it’s only 10%, I’m guessing that that would represent a 5% loss in overall TTC revenue (assuming that Metropass sales are 50% of gross fare revenue at present). That’s a $50 million loss of revenue.
I wonder if anyone on the Commission or in TTC management has pondered what would happen if the TTC starts to see a fare revenue shortfall in the many tens of millions of dollars that comes from Metropass buyers saying “well, that’s enough!” and stopping their pass purchases altogether?
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That TTC open data still reduces to “rides” apparently, unless I’m misreading it entirely.
This calculation can lead to the assumption that fares are fungible: the 204 million “rides” using a Metropass will go to another fare type if the Metropass is eliminated. Or that these rides will more or less hang around if the Metropass price is increased.
I think this is the wrong mid-set, and can lead to disastrous miscalculations.
It has to be looked at as “we sell $xxx million in Metropasses per year”. Forget the rides, which are entirely a supposition. So much gross revenue is from sale of Metropasses.
Then you can ask yourself, “where will the revenue, that we’re currently getting from Metropass sales, go in the future?” Play that scenario against various new fare schemes.
A part of this revenue may vanish entirely! I am pretty sure that for every rider who takes more than the “Metropass break-even point” number of rides per month (those Metropass free-loaders), there are several riders who take somewhat less than the Metropass break-even point number of rides per month, but are okay with the convenience. This revenue will go away if a more onerous fare regime is instituted.
TL;DR the TTC receives $125 from me every month right now, for a Metropass. I consider this expense reasonable, given the convenience. If the fare structure is changed to take care of all those alleged Metropass freeloaders, the TTC may get only $50 or $60 from me per month. The inferred “ridership” will plummet, and TTC brass and commissioners will be at a loss to explain this inexplicable phenomenon.
Steve: The TTC often makes the mistake of looking at the average usage of a Metropass which is around 70+ trips, and saying, in effect, “we only charge for about 50 trips, so we’re losing 20 fares”. That is of course total BS, but it’s the way TTC finance people think. They have been trotting out that line for as long as I can remember.
There are two factors here.
First off, many of those “trips” count as separate fares only because the TTC transfer rules make short hops that simply would not be taken (or might be taken by artful transfer cheating) part of the total. They do not represent “real” fares because many of them would never have been paid in the first place in a system without passes.
Second, the people who are likely to stop using passes if the cost goes up (as opposed to passes being totally eliminated) are those at the low end of the usage scale where the convenience premium simply would not make sense. Someone who takes 80 trips a month won’t be affected by the price multiple going up to, say, 60 because they’re still ahead of the game, moreso when the tax credit is taken into account.
Coming back to average vs actual usage, the irony of a price increase is that the average trips/pass would probably go up because only the very frequent users would remain on this medium. At the same time, as you point out, those who revert to single fares would show up as a huge ridership drop that represents trips they never took in the first place.
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Since the first round of “savings from cuts in unnecessary expenditures” imposed by Ford how much savings have been requested from the TTC and other departments. It may work once but there still is this thing called inflation and his holiness (worship) seems to be ignoring it and other aspects of reality.
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Kevin’s comment:
Less the sound effects, that is what a Toronto congestion charge would do. For example.
The sums of money required to properly fund operating expenses of the TTC are fairly small for such a wealthy city. What I always find mildly humorous in an ironic way is that the business community understands that we don’t get good things without paying for them. The Ontario Chamber of Commerce had no problem endorsing some of the proposed revenue tools to pay for “The Big Move.” It is the politicians whose bovine effluent would be laughed out of any boardroom. And yet they manage to keep getting elected. Sigh…
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This is why friends don’t let friends elect Tories. (Or Torys, in this case.) They’re prone to mindless behavior. Across-the-board cuts never, *ever* make *any* sense whatsoever.
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There is a popular business expression “We need to do more with less”. However, Nathaniel, you are correct. What we do with less – is less.
There is another related expression used to compel this madness. “The train is leaving the station – are you on board or not”. This means “my (the speaker’s) mind is made up and I am not interested in any other information.” Unfortunately, all too often (usually) the “train” is headed for a disastrous and costly derailment where the costs of the disaster far outweigh the original intended savings.
Our Mayor’s vaunted “business experience” and evident pig headedness means that there will be no discussion on the road to the derailment. Thankfully, the Mayor has but one vote on council.
Steve: Not so thankfully, the Mayor has enough allies who will support this nonsense because they fervently believe in the low tax nonsense he is peddling. Tory has already set up the premise that the TTC won’t make the cuts that should easily be available, and therefore any “hit list” of service or fare effects is just the TTC trying to protect its empire.
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I would argue that this has nothing to do with business experience, and everything to do with political calculus. The voter does not have a solid understanding of what is happening with regards to taxes, and how services, and taxes are tied. Therefore, property taxes feel like an unrelated expense, and since the voter has no sense of how the money is spent, or what maintaining roads, sewers, parks, street lights, Policing, and transit costs to deliver, or why, it is very hard to sell a tax increase. The fact that from a voters perspective more of the tax was invisible it makes it especially hard to appreciate. I support the rebalance of taxation to be neutral, however the voter will continue to scream murder, because to them they seem to be paying more while they are getting less. The right thing in the city would be to find a way of educating the voter, however, well that usually means the Mayor and Councillors who try this, usually pay with their political lives, so this will not happen.
The question is whether there will be enough councillors who feel it is better to take the gamble now or not. It used to be it fell mostly on business, so it was relatively safe to allow tax increases, however, now, any increase falls heavily on the same people who cast most of the votes. They were used to getting more, for less, because less of the bill came to them. The transition is painful, however, one hopes the Toronto voters will understand, and evaluate the need for services, and the fact that if they need them, they must be prepared to pay for them.
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How much money would it save by laying off all the collectors when they are no longer needed by the end of the year?
Steve: The collectors won’t be “no longer needed”. They are being converted to station agents to provide information and keep an eye on the stations. The Collectors group is about 380 in total, many of whom are/were operators who are on “modified duties” due to illness or injury. Despite claims about highly paid staff, very few of these people are on the “sunshine list” with pay over $100k. The few exceptional ones who work a lot of overtime are on the list, but they’re not representative.
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Let us hope their job description is carefully thought out and detailed enough that they will actually have more value than at present. In other words, multi talented. Now if there is a service problem and a customer asks what is going on, the answer is “I don’t know.” In other words “not my job”. Witness a subway shutdown and people still pouring in past said collector expecting a train. Nope, no trains running. Paid a fare and nothing received in return. Bus route screwed up, collector knows nothing, rider unable to try some other way to get where they want to get to. Make sure the new station agent is given the tools needed to be of some value to customers.
BTW What ever happened to those Station Managers? Another idea to improve things that seems to have stalled. A few were designated and seldom seen or heard from. Were they considered a success? Did any additional ones get added? Or, is this just another dream?
Steve: They do exist, but, yes, actually seeing one is a tad on the rare side.
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Construction of the McNicoll Garage is “allegedly” to start construction in 2017, that’s next year. To go operational by 2020.
Why is the city and the TTC building for an expansion of bus services? Building a new garage means an increase not a cut in TTC services.
In the 2011 census, it was said that Toronto had a population of 2,615,060. Does Tory and his clique think that the 2016 census will show that Toronto and a population decrease, hence the demand for a cut in services? Maybe we should ask Tory for the next winning lottery numbers?
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A lot of the problem is based on the current journalistic concept of balance. I feely admit that I am merely repeating arguments that have been circulating about coverage of Trump. These are not original thoughts, but I think the ideas expressed elsewhere apply to Tory’s actions.
Our press has this idea that they need to be balanced. If, for example, the debate was whether the world was round, our press would interview a representative of the 6 billion or so of us who know it is and then “balance” that by interviewing one of the 47 who thinks it is flat. Modern journalism thinks that the spokespersons think for themselves and rejects the important job of pointing out the known facts. In the previous example, our satellites have taken a picture of the whole orb and many boats have sailed around it.
Similarly with reviews of expenditures and waste that can be eliminated through “efficiencies”. Politicians speak their point of view and that is reported. No effort – or minimal effort – is made to show where those points of view are not based on facts. Instead, a politician who identifies waste that does not exist is given equal time to one that says it isn’t so.
The difficulty that we face is that John Tory has made a request for every department to cut by 2.6%. That doesn’t sound like much. However if the department has already been reduced below practical levels, it is a lot and a real reduction in service. If the issue was wading pools, previous reactions may have cut all the surplus and more. An additional 2.6% would represent a real reduction in hours open.
In the case of the TTC, a 2.6% reduction cannot happen until after the cutting of the costs associated with special increases in 2016. After that, the request is to cut even more essential service.
Our media should be more clear about what is at stake. It is OK (but I wouldn’t like it and would campaign to reverse it) if a well informed populace elected to cut the TTC by 2.6% (and more). However, that is not the case. Our media has not presented anything like the true picture of what it means. It could happen with an ignorant public – unaware of the consequences. In addition – those whose life goes on as before – could “agree” to the diminution of other lives elsewhere. These voters should know what they have on their conscience.
A true media, would expose the truly selfish to the costs they would face themselves. Less TTC means more cars on the road. The guy in the SUV would take longer to get to work and suffer – albeit in comfort – the same as the forgotten transit rider.
Tell the truth – and let’s vote.
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I think that the Metropass and senior and student and children discounts should ALL be abolished and let everyone pay using tokens, cash, or Presto. That will go a long way towards helping TTC revenues. I think that at least some of the collectors should be laid off if not all of them as with automated entry, I don’t think that you need 400 customer service agents for 60 stations.
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I have seen them at Warden only once since they were implemented. My understanding from talking to various operators and collectors is that they hardly do anything. They have a tendency to show up when needed such as during a Priority One but otherwise hide in the bowels of stations out of sight.
I have heard rumours of the Warden Station manager convincing TTC HR to to hire her son as some sort of supervisor without any application or experience.. hell his only qualification was that he was the station managers son. Long story short the rumour ends with the son misusing a company tablet and getting fired (as caught by TTC IT guys).
I cannot confirm this as I do not work at the TTC but I heard the same rumour from various employees so take it with a grain of salt.
With that said station managers need to be eliminated if they are to cut anything. They are pointless and honestly I would rather have a cab show up to an emergency as they are likely more knowledgeable in how to deal with things.
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Too true. They are not only a very lazy method but also they punish the best employees and are in the long run counterproductive.
If an inefficient manager has 5% ‘fat’ in his department, he can cut 2.6% with no real pain; whereas an efficient manager who is running a tight ship cannot cut without damaging the department, such as letting productive workers go while overloading those that remain.
Also, both managers will try to add some slack so that next time there is an ‘across-the-board’ cut they can both survive it. So you end up in a few years with even more ‘fat’. Unless of course, the better manager doesn’t find a job in another company where he will be appreciated, not punished, for running his department well.
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Yes, oddly enough across the board cuts at a certain point are very much like starvation diets. Fat consumes far less energy than muscle, and so when you cut, you lose muscle and fat, when you restore budgets, the fat come back.
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We’ll need station attendants more than ever if gates become automated, especially if they roll out fare by distance (which by the looks of St Clair station is coming inexorably) and you run out of funds before finishing your trip. Even with top up machines within the fare paid zone we need attendants on hand to handle unusual cases and confused people. FBD will confuse a lot of people used to the system as it is today. You can bet casual users will buy the wrong value ticket frequently, especially in the early stages.
Keep the station staff.
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There is also the simple issue of people not actually knowing the distance in question, and the simple problem of people who are not from Toronto or new to the city, not understanding whatever system you come up with. Unless the system dispenses the ticket allows you to exactly specify destination, nobody makes mistakes, and there is never a problem with equipment or payment systems, it would be likely that at most subway stations there will be work for that person, and it will be important in terms of relations for the TTC and the city, especially when it comes to tourists.
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Well … it’s about 380 agents for 69 stations. But what does that actually mean in practice? Here’s my back of the envelope…
The subway and RT are open for 19.5 hours a day (round it 20), so about 140 hours of staffing–that’s roughly 4 full-time positions just to put one person in one station. That accounts for 276 agents right there. Figure there’s got to be at least a half-dozen stations that warrant two (or more) agents and you’re up to 300 agents.
Add another 10% to cover meal breaks and vacation time (30 more, up to 330). Add another 10% to cover rush hour, emergencies, and day-to-day contingencies–like when those miraculous automated fare gates stop working or just don’t have the capacity to pass enough riders through, or when there’s a baseball game, or when there’s a something funny going on underground or on the surface: that’s 360.
Add in 1 manager/supervisor for every 18 employees and you’re up to the full complement of 380, without a lot of fat at all.
While I’m incredibly underwhelmed by some aspects of TTC operation and management (from the lack of pushback on the stupid, stupid Scarborough subway extension to the apparent inability to maintain sensible headways on any surface route) I really can’t fault them for maintaining what amounts to a pretty minimal customer service presence throughout their subway/RT network. It’s possible that aggressive micromanagement and a willingness to (further) inconvenience riders might shave a few positions off, but nowhere near enough to make a perceptible dent in the TTC budget.
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Yes, however, we also then need to consider the specifics of the governance the TTC is faced with. There is a point that reacts to the points where you are under pressure. Since the measurement system for headway, has allowed little pressure there, and there seems little pressure to improve it, well…. However, heavy criticism in areas like customer service staff etc. If the city would focus more on the notion of real deliverable, transit service, and look at the customer experience, and capacity, I suspect those others would improve.
There is a logic to the suggestion, that council, should have to ride the TTC to all city events The voter and media should be making a point of asking candidates and elected officials if they ride transit. I would go so far as to say most MPs should also be encouraged to ride transit. Suggesting that it needs to be improved, and more people should use it, is great, however understand where, and how it does and does not work, is important. You can support subway all over the place, if you never use the feeder system. Understanding that you are backing a subway, where the real issue is speed not capacity (ie the roadway only has capacity for say 2400 vehicles per hour, and the bus has only capacity for 2400, you do not require the capacity of a subway at 30,000, just faster more reliable service.
You cannot expect management to continually fight a political system, when the elected officials do not have interest in listening or learning, and voicing disagreement creates a serious hazard to your employment.
Steve: It is not enough to have all of the pols ride the system because that is a sure path to promises of subways for everybody (except for downtown relief, of course). Just because pols see and experience a problem, this does not mean that they understand it or will be well-advised on the ways to fix it. All they know is that “heads will roll”, and the new crew, probably friends/consultants of the administration, will have a few years to show “results”.
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Since the Subway and RT have about 70 stations that are open for about 20 hrs per day that would require 140 people per day working 10 hr shifts to be a “Customer Service Adviser” or Station attendant or what ever you wish to call them to handle customer problems and queries. Also since a standard work week is 40 hours you would need 245 persons to provide 1 person per station for 20 hours per day. Some stations would obviously require more attendants such as Queen Dundas, Bloor/Yonge etc. so I don’t think you can just “fire” them as redundant. I have ridden many systems that have station attendants instead of collectors and most did not have any unmanned stations. Cleveland had some and you paid into a fare box behind the operator, single door operation, so if you wanted off you had to be in the front car.
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