Back in June 2016, Metrolinx received two reports from its consultant, Steere Davies Gleave, that give some insight into the work and philosophy to that point on fare by distance schemes that Metrolinx contemplated.

GTHA Fare Integration Concept Evaluation Backgrounder

GTHA Fare Integration: Income and Transit Use

This article reviews the Concept Evaluation report. I will turn to the Income and Transit Use report in a separate post.

At that point, three concepts were under review:

• A modified version of the existing flat fare system with adjustments to deal with the high premium for cross-border travel to and from Toronto.
• A zone-based system
• A hybrid system with flat fares region-wide for “local” buses (including local expresses and BRTs) and distance based fares for subways, SRT, LRTs and GO Transit (rail and bus).

The recently added fourth option, a full fare by distance tariff, was not in the mix.

The breakdown within the “hybrid” option was acknowledged to be incomplete with assumptions such as the placement of BRT and the need for additional classes of service still up for debate.

The starting point for all sample fares was the then existing $3.00 cash fare on the TTC. The exact value is less important than the ratio between that base value and other proposed fares.

For Concept 1, there are only two changes. First, transfers between service providers would include a 50% discount on the second fare. This would reduce the cross-boundary fare from 200% of the base value to 150%. On “regional” service (GO), trips up to 7km in length would charge the base fare, and beyond this a distance based tariff would kick in. This would reduce the high premium now charged by GO for very short trips including those within the City of Toronto.

For Concept 2, the zone structure is built on the 7km screen used in Metrolinx proposals for “local” trips. The chart above is misleading for local trips because the chart shows a base fare of $2.60 with an additional $0.78 per zone, but because the second tier of pricing is set at 15km, it adds two extra zones. The pricing for trips that did not involve GO transit and the ratios to the “flat” fare would be:

Distance	Fare	Change
0 to 7 km	$2.60	13.3% discount
7 to 14 km	$3.38	12.7% premium
14 to 21 km	$4.16	38.7% premium
21 to 28 km	$4.94	$64.7% premium

For Concept 3, “local” services (buses) would retain the base flat fare, but rail modes (plus GO buses) would see an incremental fare for trips beyond 7km. The example shown here is a $3.45 trip (a 15% premium) for a 15km “rapid transit” trip, but there is no specification of how this pricing would scale for longer or shorter journeys.

Longer “regional” trips on GO would change by up to 10% because the longest trip prices (now lower on a distance basis than short trips) would have to be rebalanced to offset the reduced short trip fares.

This all looks quite reasonable from the abstract viewpoint of a “pay for what you use” philosophy, but the effects on riders are not spelled out geographically. The 7km cutoff for zone size and for the onset of distance based fares implies a fare increase for many trips. To put this in context, here are the bounds of a 7km trip from various points within Toronto. Note that these are “crow fly” distances, not trips plotted on the transit/street network.

From	North	South	East	West
Queen & Yonge	.7km N of Eglinton Ave	N/A	.8km E of Woodbine Ave	Grenadier Pond
Scarborough Ctr Stn	.7km N of Steeles Ave	S of Kingston Rd	W of Meadowvale Rd	E of Don Mills Rd
North York Ctr Stn	.5km S of Highway 407	S of Eglinton Ave	W of Victoria Pk Ave	.7km W of Keele St
York University	N of Rutherford Rd	.5km N of Lawrence Ave	Yonge St	.2 km E of Kipling Ave
Finch & Kipling	.8km N of Langstaff Rd	.8km N of Eglinton Ave	.7km W of Keele St	.4km E of Airport Rd
Six Points	Highway 401	N/A	Dundas & Bloor Sts	.4km E of Cawthra Rd

The “old” City of Toronto is rather compact, and a great deal of it lies within 7km of the core. This is not unlike the old “Zone 1” of the TTC before zone fares were eliminated. The suburbs are quite another thing, and 7km does not get one very far. Scarborough is 15km east-west at Ellesmere, and 13km north-south at McCowan. Cheaper “local” fares might apply to short trips within Scarborough, but not to trips anywhere else in the region. The “crow fly” distance from STC to York University is almost 20km, and to the business district downtown 17km.

With the goal of reducing cross-boundary fares, a whole new set of “long” trips that will pay a substantial premium for travel simply within the “amalgamated” City of Toronto will be created. Indeed, those cross-boundary riders will not see much of a benefit unless they live fairly close to their work locations. Scarborough Town Centre is more than 7km away from most of the area north of Steeles Avenue. Anyone working living in Rexdale but commuting to Markham faces a trip that will not bring the “cheaper” fare for short hops across the boundary. Richmond Hill is more than 7km north of Steeles.

The big savings would actually come to GO customers who now pay a full TTC fare to switch to that system. Their “local” fare would be bundled with their “regional” one at a premium of at most 10% over current fares.

The focus on cross-boundary travel and the degree to which this skews the examination of fare options is quite clear in two charts.

Elimination of fare barriers will result in a revenue loss that is not completely recovered through the attraction of new rides to the system. Moreover, the number of riders affected by this “barrier” is less than 15% of the total regional ridership. Completely missing from this analysis is any consideration of the numbers of riders who would be affected by increased or decreased fares for their “local” or “rapid transit” service.

The detailed discussion of findings shows the consultant, and by implication Metrolinx, showing the brightest possible outcome with only one hint that all of this might not be worth the effort.

If one considers “seamless travel” to be a goal, then the idea of having more people use multiple systems a “good thing”. However, the analysis is silent on the effect on trips that only use one “mode” but would still be affected by a new fare structure. One “benefit” shown here is a slight decrease in Park & Ride travel implying a slight shift to local systems for access to GO or subway services. This decline is small, and would be quickly eaten up both by ridership growth and by latent demand. Indeed, GO faces the problem that it is a very large operator of parking lots and structures that both waste space just where development would be most “transit oriented”, and which cannot easily be expanded as GO stations are now hemmed in by urbanization.

One of the most difficult problems for “multi-modal” travel in the GTHA is the generally poor level of service at GO stations (except Union) linking the regional service with local origins and destinations. This is a major disincentive to making trips involving local travel, probably much greater than the fare barrier except for those who have no choice but to attempt a transit journey. The analysis is silent on this factor, and on the future cost of improving local services.

This is a clear case of overstating the “benefits” of a change. When the deltas are all under one percent, these are not “substantial” benefits. Economic indices such as Benefit-Cost ratio are shown as high, but these require a very long life cycle to achieve, and it is still unclear whether the added cost to riders who will now pay more for transit has even been factored into the analysis.

This chart shows that the consultants looked at many variations in possible fare structures, but only one was illustrated for each of the three options as a basis of comparison. I have asked Metrolinx for details of the additional scenarios, among other information to explore just what the consultants actually reviewed.

These charts should be required reading for those who think we can get something for nothing.

Financial costs are high over a 60 year window, without any conventional financial benefits.

Encouraging ridership requires fare discounts that decrease revenue. There is a hoped-for long term benefit, but the business case numbers described above depend on indirect costs such as reduced health care and environmental effects through declining auto travel, not on direct operating costs. Indeed, some of the “benefit” included above is generated by the very discounts that produce the revenue losses here.

The implication here is that over the long term, the greater elasticities (a fare reduction producing a higher ridership growth) there will be greater benefits. However, the underlying assumptions about how populations might rearrange their homes and jobs to take advantage of a new tariff are not clear, and these decisions are affected by many other factors, notably housing costs. Moreover, there is no discussion of the effect of or need for much better local transit service in the areas where the cross-boundary fare reductions might attract riders. Finally, there is no discussion of ridership loss (or higher fares paid) due to fare increases within Toronto.

Again, the emphasis is on analysis of cross-border trips with no discussion of the much larger volume of existing transit trips. The increase in rapid transit trips, particularly on the subway, is troubling at a time when the TTC is hard-pressed for capacity. By reducing the cross-border fare, are we enrouraging riders who should be on long-haul GO trains to shift to the local subway system?

The benefits cited here are skewed to make the best of a bad case, and even ignore the basic observation that changing the fare structure will cost money on a net basis even if more riders generate more revenue. The appeal to cheaper fares for short trips as a benefit to low income riders ignores the basic fact that those riders also take long trips, and much of their city is beyond the “short” 7km range the lower fare would access.

What is particularly troubling is the implicit change in the role of “rapid transit” from an integrated, barrier free part of local transit systems to a “regional” function with premium fares. This assumption has major implications for existing lines and for new rapid transit under construction. Moreover, the inclusion of BRT as a “local” service while LRT is considered “rapid transit” could skew the appetite for new LRT lines if riders know that they will bring higher fares. For example, the assumption for all of the “Transit City” routes in Toronto is that they will charge TTC fares and have transfer privileges as we know them today.

Riders and voters do not expect a complete restructuring of fares followed by a claim that the higher fares on new LRTs and subways are simply an extension of the by-then TTC tariff.

After all of this, comes the sort of conclusion Metrolinx probably does not want to hear: you can achieve much of what you want without spending a fortune and causing much upheaval for riders, transit operators and municipalities. But this conclusion does not fit the Metrolinx agenda.

Instead, the focus is on a move to fare by distance with no acknowledgement of the role of other fare options notably passes, fare capping, and time-based transfer privileges (the “two hour fare”) as ways to address both boundary issues and the high cost of very short trips.

Metrolinx presents the advantages of fare by distance with a focus on a minority of the GTHA transit market while excluding consideration of the over 80% of riders who lie outside of their target.

This verges on dishonesty by downplaying or ignoring the effects on the many for the benefit of a few. Is this a result of political interference, or of staff who cannot see beyond one fare model?

Metrolinx owes everyone – riders, voters, politicians – a much higher calibre of analysis before gerrymandering the fare system.