With official ridership stats flat or falling over the past few years, and the annual pressure to raise fares to balance the budget, the issue of fare evasion comes up regularly as an untapped revenue source. This became a particular concern with the move to all-door loading on, primarily, the streetcar network where the absence of a fare check at vehicle entry gives more scope for evasion than on buses or in subway stations.

Toronto’s Auditor General (AG) has issued a report and a video on this topic. They will be discussed at the TTC’s Audit & Risk Management Committee meeting on Tuesday, February 26, and at the full Board’s meeting on Wednesday, February 27.

The political context of fare management comes in on a few counts, and should be remembered when reading about dubious decisions and practices as flagged in this report.

• As the TTC shifted to larger vehicles, primarily on the streetcar system, an important goal was to increase the ratio of riders to operators. However, as all-door boarding and Proof-of-Payment (PoP) became more common, the need to validate fare payments went up. The politicians who control TTC funding at the Board and Council levels have a fetish for “head count” where limiting the growth in staff, or better still reducing their numbers, takes precedence. The result was that the number of Fare Inspectors did not keep pace with the growth in PoP.
• Presto was forced on the TTC by Queen’s Park under threat of losing subsidies for other programs. There is a strong imperative to report only “good news” about Presto both at Metrolinx and at the TTC for fear of embarrassing those responsible at both the political and staff levels for this system. Getting the system implemented took precedence over having a fare system that worked.
• Historically the TTC has claimed that fare evasion on its system amounts to about 2% of trips. With fare revenue for 2019 budgeted at $1.2 billion, this would represent a loss of about $24 million in revenue. If the actual evasion rate is higher, assumptions built into the PoP and Presto rollouts especially about the scale of enforcement required, are no longer valid.

Through all of this, there are many examples of poor co-ordination between Metrolinx/Presto and the TTC, of poorly thought-out implementations of procedure and of operational practices that simply do not achieve the best possible results. There is plenty of “blame” to go around, but a fundamental problem is that the system “must work” for managerial and political credibility.

The AG conducted a six-week review of actual conditions on the subway, streetcar and bus networks in November-December 2018 and found that the actual evasion rate was substantially higher, especially on the streetcar system.

The dollar values shown here are built up from mode-specific evasion rates and the level of ridership on each mode.

Problems with Presto contributed about 5% to the $64.1 million total in lost revenue, but this does not include issues with fare gates or TTC practices regarding “crash gates” in stations which allow fast entry for riders with media that can be checked visually. The proportion of such riders has dropped substantially with the end of Metropasses, and will fall again when tokens and tickets are discontinued later in 2019.

The report contains 27 recommendations all of which have been accepted by TTC management. The challenge will be to see how they are implemented.

Summary

The Auditor General’s findings fall into broad groups:

• The challenges of self-service fares where entrances are not always checked
• Presto equipment reliability and performance
• The ratio of fare inspection staff to the number of passengers
• Deployment issues for fare inspectors

A related issue is that the way the TTC estimates ridership might not accurately reflect conditions in the field. The reported drop in “ridership” in the past few years could lie as much in the methodology of counting multi-trip (pass) usage and shifts from old-style passes to Presto as in a real loss of riders and system demand. Moreover, a weakening in the rate of growth is clear going back longer than Presto has been available on the TTC, or Proof-of-Payment was in widespread use.

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