Presto: A Botched Opportunity to Market Transit in Toronto?

The TTC is well into its rollout of the provincially-mandated fare card, Presto, across the transit system. Like any new piece of technology there are teething problems, but both the TTC and Metrolinx seem bent on making the implementation as difficult and unfriendly as possible.

As the implementation now stands:

  • All streetcars have Presto readers at all entrances, although their reliability leaves much to be desired.
  • About half of the bus fleet has readers, and this work is expected to complete by year end.
  • Many subway stations have at least a few turnstiles with Presto readers. This too will complete by year end, but installation of new fare gates will continue well into 2017.
  • Some stations have machines to allow riders to reload their Presto cards, but these are scattered around town, and their placement (inside or outside of the fare control area) is inconsistent.
  • Riders can pay the equivalent of token or ticket fares with Presto at adult and senior rates, but the ability use Presto for all trips is hampered by whether readers are available throughout a journey.
  • Metropass users cannot use Presto because the monthly pass function has not yet been implemented, and in any event would be worthless unless all of one’s travel were confined to Presto-enabled vehicles and stations.

The implementation of a new fare collection system, bringing the TTC into at least the latter part of the 20th century, presents a chance to “get it right”, to promote a more attractive fare structure and transit in general. This opportunity has been lost through a combination of factors at the TTC, city and provincial levels. What should be a “good news” story is one of uncertainty and complaints, with more to come.

The Technology

Without question, any transit system that has converted its fare collection from a manual system to an automated one did not achieve this overnight, and perfection in a rollout is a lot to ask. That said, Presto is supposed to be mature enough that we should not be worrying about the basics. Card readers should work well enough that encountering one that’s out of service should be rare, not a common occurrence. Fare calculations should be accurate, theoretically an easy task in such a simple system of Toronto that is bereft of zones and transfer charges. Support systems such as reloading fare value onto the card should have a close to 100% up time, not be down for entire weekends for back-end software upgrades.

Retrofitting the technology to vehicles requires wiring for power and control systems, as well as providing an interface to the on-board GPS units. That is comparatively simple beside the work needed in a subway station where running wiring for power and control circuits to fare gates requires new conduits in concrete floors and, in some cases, upgraded power distribution within the station. The TTC has chosen to use this opportunity to install new fare gates, and this makes the work more complex than simply fitting a Presto reader onto existing turnstiles. More about those gates later.

The central point here is that this is basically a construction project that may take time, but once done should allow the new technology’s installation and operation. That last step, actually “turning on” the new machines, depends on technology working “out of the box”. This has not been the case either with Presto readers or with the new gates. Responsibility for maintaining this equipment is supposed to lie with both Presto (part of Metrolinx) and with the gate vendor, but the TTC is doing this work for the time being. It is unclear how many workmen will have to appear on site when a Presto-enable gate becomes cantankerous and vendors point at each other in the classic “not my problem” standoff.

This is a huge scale-up for the Presto organization both in terms of the number of devices it must support, and the volume of transactions it will have to process. Because Presto has limited attractiveness to TTC riders, it accounts for a very small proportion of fares collected. In May 2016, of the 41.3 million trips taken on the TTC, Presto was used for 1.72 million, or 4.2%. Whether Presto is capable of scaling up to the demand represented by even half of all TTC trips remains to be seen.

Opportunities for a New Fare Structure

When a new fare card was first proposed for the TTC, a big selling point was supposed to be that new and improved fare options could be provided. These include:

  • Shifting to timed fares where an initial “tap” buys two hours of travel with no restrictions on stopovers and transfers.
  • Use of time-of-day based fares with lower charges (or longer travel per tap) at off peak hours.
  • Implementation of equivalent to Day Pass pricing with the total charges in one 24 hour period capped at the value of a pass no matter how many trips were taken, with similar options on a weekly and monthly basis. Riders would not have to decide in advance whether buying a pass was worthwhile.
  • Interagency fares so that the boundaries between the TTC and neighbouring GTA systems could be simplified or eliminated.

Changing the fare structure will almost certainly have a cost because anything that makes travel cheaper for some riders is unlikely to be made up for with increased revenue through greater use. Bumping other riders’ fares to pay for this would be unpopular, and there would inevitably be cries about favouritism and hardship unless the overall change could be seen to be beneficial to most riders.

The TTC has considered a move to timed fares, a function Presto already supports in other parts of the GTA and which has always been available to the TTC, but the penny-pinching politicians who would have to fund this change are more worried about precious tax dollars than improving transit’s attractiveness and usability. The estimated cost for this option is about $20m/year, although there is good reason to suspect that this number has been padded. TTC Chair Josh Colle, and by implication Mayor Tory, did not want to spend this amount as part of the 2016 budget package, and in the constrained environment of the 2017 budget, this is even less likely.

Timed fares have two important benefits. First, they completely eliminate the complex rules about transfers and the need for the Presto software to figure out what is a “legal” transfer. This process is fraught with potential errors and overcharging through a combination of GPS errors (did you actually transfer where Presto thinks you did), and from ad hoc routings for short turns and diversions. One cannot have a transit system where the rule is “always tap on” followed by a list of exceptions most riders cannot be expected to know. The TTC will provide a refund for riders who are overcharged (assuming that they even notice and go to the exercise of retrieving their trip logs online), but even a 1% error rate translates to a huge number of complaints.

The second benefit is linked to the convenience of using the TTC as a service without worry about marginal cost for short hops, something passholders already know about. A common complaint among poverty advocates is that “trip chaining” is very expensive for riders who must do several errands in one set of trips that by TTC rules cost a separate fare for each leg of the journey. Too¬† much of the underlying philosophy of fares on the TTC (and on GO) is based on the “commuter” trip, not on the frequent user who travels the TTC the same way motorists or cyclists might journey from one stop to another.

Fare capping is already used on GO Transit where beyond a certain number of trips per month, travel is free. The ability to do this for the TTC and to implement it for Day Passes already exists in Presto, and the Day Pass conversion was originally expected to occur midway through 2016. It might be held up because of the limited availability of Presto on bus routes, but the reason might also be that any extension of a “pass” is opposed by some on the TTC Board and in management who regard any pass as “lost revenue” rather than as an inducement for greater system use. The idea that transit systems exist to encourage more riding is utterly lost on those who look only at the “bottom line”, not at the wider benefits transit confers.

If automatic capping is implemented for monthly passes, the number of riders gaining a reduced fare may actually go up because there will no longer be an up-front decision about whether a pass will pay its way. This would increase the proportion of equivalent-to-pass riders to an even higher level (now well over 50% of all trips) than it is today. This phenomenon and the effect of other fare options has not even been discussed in any public TTC report.

Interagency fares are, at least for Queen’s Park and Metrolinx, the holy grail of a new fare system. Riders (and voters) in the 905 will get a simpler and maybe even a cheaper ride into Toronto. However, nobody wants to pay for this, least of all the provincial government where the focus is more on how to get municipalities to pay more for transit. Among the outstanding issues are:

  • Will Presto confer a unified, cheaper fare for travel on multiple agencies, including GO Transit, or will it simply be a way to automate the collection of existing fares on all systems?
  • If some type of “co-fare” is extended to 905-416 trips on local carriers (e.g. York Region Transit/VIVA to TTC), who pays the extra subsidy?
  • Will a “co-fare” be provided between GO and the TTC as it is for GO and the 905-based carriers?
  • How will “Smart Track” and a “TTC” level fare within the 416 be implemented on GO Transit’s rail corridors? By extension, exactly what is meant by a “TTC fare”?

The Dark Side of “Opportunities”

A new fare structure may bring not just “better” fares for riders, but could also include lurking fare increases that have not been discussed as publicly as they should be.

On the TTC, some or all of the discount metropass schemes could disappear under the rationale that the savings through subscription and automatic bank withdrawals would apply to all buyers of “passes” on Presto, and there is no longer a reason to give subscribers one month free out of twelve. Never mind that this is a great loyalty and marketing tool. There are more than a few at the TTC who see this as a chance to get more revenue from this group of customers. (Full disclosure: I have been a Monthly Discount Plan user since this was introduced.) Of course a “twelfth month free” could also be implemented as an automatic loyalty reward just like daily or monthly fare capping. All that is needed is the policy decision, plus the software change needed to implement it.

A major problem for TTC Presto riders today is that there are limited locations where riders entitled to discount fares (seniors, students) can have their Presto accounts set up to charge concession rates. This is supposed to expand with the full TTC rollout, but details are scarce. If you can’t get your card set up for a discount, you pay full fare needlessly, or you stay with “legacy” fares as long as they are available.

The stealthiest of the possible fare change proposals is a move to some form of distance-based fares. Metrolinx has been pushing the idea as part of its “Regional Fare Integration Strategy” for a few years, and shows little sign of relenting on this for the TTC. “Rapid transit” fares would be based on distance travelled, and a fare from, say, Scarborough Town Centre to downtown would cost considerably more than it does today with likely a decrease in short distance fares. Metrolinx is quite selective in its description of “rapid transit” and initially this was only the GO rail and TTC subway networks. However, the description has more recently appeared for future LRT lines, although there is no mention of whether BRT services such as VIVA would fall into this category.

The TTC has assisted with making fare by distance possible because its new fare gates can have readers on both sides so that a “tap out” is needed to leave a station. This has very severe implications for the operation of a system that is designed around a free transfer and full integration between surface and subway routes. The Metrolinx study is still underway thanks to a growing realization at the political level that fare by distance is a land mine just waiting to go off under an already unpopular provincial government.

Presto implementation is expected to add $30 million to the TTC’s costs for 2017 because the savings of the new system will not be fully realized while old and new co-exist. That’s roughly the equivalent of a 1% property tax increase if paid through subsidy, or about a dime on the basic adult fare. In the medium term, Presto fees to the TTC are limited by contract, but we know from other cities that a big jump faces the TTC down the road because Presto simply is not self-sustaining on its current revenue stream. Queen’s Park does not want to indirectly subsidize local transit through its mandatory fare technology, and will claw back gas tax transfers from any municipality that does not comply.

A Marketing Failure: Bad News is Bad for Business

In my role as a “transit advocate”, I get questions both on this site and in person about how Presto will work. People ask me what is happening to the fare structure, and thanks to indecisiveness at TTC, I have to answer “I don’t know”. For a system that is supposed to be widely available in a few months, the absence of details is very troubling.

Even worse is the sense that both the TTC and Metrolinx are setting up for an environment where the transit rider (existing and potential) is a distant secondary consideration to avoidance of new costs and gerrymandering the fare system for political benefit.

The absence of public debate about fare structures and related funding challenges shows that none of the players wants to see these issues brought out in the open.

“Good news” is not made by Ministerial and Mayoral pontification, self-congratulatory statements devoid of actual benefit to transit users. “Lower taxes” is a meaningless term if the cost of using a service those taxes should pay for goes up.

Presto could have been a chance for major improvements in how riders view transit. The convenience of passes could be extended to a wider range of customers. Transfer rules that deter use of transit for short hops could be eliminated. The transit network could be seen as one unit (“seamless” is the favourite term) where fares would not create artificial barriers. New technology could be an improvement over tokens and paper, not as a move to a less reliable and inconvenient payment system.

That’s what a city, a region, a province committed to really selling transit as “the better way” would do. Instead, we get unreliable technology, and a refusal to address the need for extra subsidy to pay for restructuring.

A chance to promote transit with some truly “good news” has been wasted because governments are too cheap to pay for it.