Fares & Fare Collection

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TTC Ridership, Budgets and Those Pesky Metropass Users

This week, the TTC announced that it has record ridership for the past twelve months of 470.8-million.  This continues an upward trend from last year, and indicates that TTC demand may be insulated from the effects of the economic downturn.  Possibly a shift from auto to transit riding is offsetting any reduction in employment or recreational traffic.

The Chief General Manager’s Report for the first quarter of 2009 notes that although ridership continues to grow, revenue is below budget.  Why?  More Metropasses were sold than expected in January-March, and this trend is continuing into the second quarter.  The TTC had budgeted on a higher average fare-per-ride, and the more who travel with passes, the lower this average falls.

Rumours of budget related service cuts started to surface a few weeks ago, and one change effective June 21 is explicitly listed as being due to budget.  (I will report on that in a separate post on June service changes.)  This is an odd state of affairs considering that there is a buffer for service growth on the TTC”s budget, and there has been no report to the Commission of pending service cuts (or of deferred service improvements).

Moreover, in a separate report, the TTC plans to launch an ad campaign seeking organizations to be part of a Metropass Affinity Program where pass holders would receive discounts to products or events.  The intention is, wait for it, to sell more Metropasses by making them even more attractive.

The TTC has a long-standing love-hate relationship with the Metropass going right back to its origins 29 years ago.  Each pass is seen, by some, as a loss of revenue, a loss of individual fares that might otherwise be collected.  Of course, a pass is also an incentive for users to ride the system and get all those “free” extra trips, exactly the sort of mindset an auto driver operates in every day.

Those 260,000 monthly pass holders are now responsible for over half of the adult trips on the TTC.  Budgets and fare policies must recognize that there is a demand for flat rate purchase of transit services, and that this market will grow both through pricing incentives and improved service.  Cutbacks because too many people buy passes are a laughable, but unfortunately predictable response to what should be a transit success story.

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Fare By Distance: How Much Would We Pay?

In the thread about new streetcars, part of the discussion turned on the question of fare collection.  I’ve been thinking about this for a while and planned to write about this topic, but when I actually started, realized that there’s more here than will fit in one article.

One major topic in all discussions is the question of flat fares versus fare-by-distance, and this inevitably gets pulled into questions about “equality” in the way that we price transit so that riders are not penalized by things like zone boundaries and operator service territories.  However, any fare system brings its own benefits and problems.  We may solve problems for one group of riders, and create a new set of problems for others.

This article considers fare-by-distance by analogy to the existing TTC system.  It is intended as a “back of the envelope” calculation to give readers a general sense of the numbers and is not intended to be a prescription for any particular implementation.  What is important is that anyone talking about fare structures cannot simply wish away problems of any system by saying “everything will be fixed with Presto!” or similar, simplistic bilge. Continue reading →

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My Ride on the King Car

A few days ago, my travels took me to Parkdale for a presentation near Jameson Avenue in the early afternoon.  The obvious route for someone like me living near Broadview Station was the King car.  That journey gave several examples of how service can be delayed that have nothing to do with traffic congestion, and illustrate the changes that will be possible when the TTC moves to low-floor cars and all-door loading.

Just south of Danforth, we picked up a load of students from Moncrest School on their way to Thomson Hall.  They filled up the back half of the car.  Just loading them all took a while, and I wondered to myself how the TTC will handle fare collection for this type of group when they move to self-service.  Now we were slightly late.

By the time we were westbound on King, the car was filling up.  A man had boarded with a shopping buggy, and he took a single seat just ahead of the rear vestibule on the left side of the car.  This started a plug in the aisle that worsened when a group of five boarded.  There were not enough seats for all of them, and they wound up partly seated and partly standing right across the aisle from the shopping buggy.  Needless to say they were not going to “move to the rear”.

At Sherbourne, we passed up the first group of would-be customers even though there was still room in the rear vestibule.  This continued at Jarvis, Church and Victoria.

At Yonge, the crowd turned over, but the car was now quite late and we still didn’t manage to fully use the capacity.  By University we were again leaving people at the stops.  The students piled off the car at Simcoe, and by Spadina the car had cleared out reasonably.  All the same, we left an unhappy customer running for the car at Bathurst because getting back on time was more important than waiting, and the next car was only a block behind us.

While this may have been a particularly bad example of how service can be screwed up by loading delays, it’s not uncommon.  The combined effect of many factors interferes with the travel time of TTC vehicles, and this has nothing to do with whether they are in a private right-of-way.

Loading delays caused by inadequate service can cause a downward spiral where line capacity drops even as ridership grows because cars spend longer at stops and onboard crowding slows or blocks movement of passengers.  We hear far too much about traffic congestion as the root of all evil.  Yes, it exists, but it’s not the only problem.

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Fare By Distance? Not When It Suits GO (Updated)

Today, GO Transit implements a 25-cent across the board increase in all fares.  Writing in the Star, Tess Kalinowski reports displeasure among commuters who have been slapped with higher relative increases for short trips than for long ones.

This isn’t the first time GO increased fares disproportionately, but the cumulative effect sets a pattern.

One commuter who travels from Old Cummer to Union complained that:

… the flat-fare hike means riders who live in Toronto are subsidizing passengers travelling from places such as Hamilton and Barrie.

“Over the last five years, I’ve seen my fares go up 27 per cent. Somebody from Barrie has seen their rates go up 9 per cent, Oshawa 14 per cent, Hamilton 10 per cent,” he said.

In response, GO replies that many costs have nothing to do with how far someone travels:

Transit officials defended the increase, saying many of the system’s costs, such as snow removal, station improvements and communications, are fixed and have nothing to do with distance. They also worry about discouraging riders from farther afield by pricing them out of the system.

Strange, that argument.  It’s precisely the one for which I, among others, have been villified when suggesting a flat (or at least flatter) GTA-wide fare policy.  Long distance riders are subsidised with free parking, new make-work garage building, and proportionately lower fares relative to the resources they consume.  Why?  Because we don’t want them driving to and from work.  The costs — both physical to provide and maintain infrastructure, and social to consume so much land with unproductive roadways and a low-density lifestyle — are greater than what it takes to subsidise their commute by GO.

As regulars here know, I have a big problem with parking construction as an alternative to improved local feeder bus services.  This issue will only grow as GO becomes less of a peak period carrier and more of an all day regional rapid transit system.  That’s one of the many areas Metrolinx, in its less than infinite wisdom, chose to ignore.  We won’t have “Mobility Hubs” complete with soaring interiors and palm trees as Metrolinx envisions if stations are surrounded by parking garages, and those who cannot afford to dedicate a car to all-day storage at a GO lot will still be isolated from regional transit services.

Finally, those who advocate for fare-by-distance as a “benefit” of the “Presto!” card (or whatever technology is eventually adopted) should compare notes with the folks at GO for whom high costs for long trips are a very bad idea indeed.  Queen’s Park and its agencies don’t seem to have a consistent view of how we should price transit.  There is no perfect system, and all of them will distribute benefits and rewards inequitably.

Metrolinx could do everyone a big favour by looking at the impact of various options for fare structures, including the wider issues of local service funding and the broad social value of mobility for everyone.  Will they will have the fortitude to take on this issue (and revenue tools in general) rather than studying only infrastructure we may never be able to afford to build and operate?

Update 1, March 14 at 3:50 pm:  Andrew Salmons of Milton has created an online petition requesting not only a reversal of today’s increase, but a lowering of GO’s cost recovery ratio so that fares could be reduced.

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Metrolinx Fare & Service Integration (Update 3)

Thanks to an oversight on the security on the Metrolinx website, it was possible to view a report that was pulled from the agenda for this Friday’s meeting.  (Thanks to one of my regular correspondents for spotting this.)

The report talks about integration of services between the TTC and other systems as well as a Metrolinx-GTAH pass.  Because the report has been withdrawn it cannot be considered to be an authoritative Metrolinx statement, but it’s indicative of Metrolinx’ ham-fisted attitude to local systems including the TTC.

Updated:  Comments on the report added.

Update 2:  Tess Kalinowski writes about this issue in The Star.

Update 3:  For the convenience of readers, the report which was pulled from the Metrolinx site is now available here.

John Barber’s scathing commentary on this report is online at the Globe and Mail.

This report proposes that Metrolinx embark on a takeover of fare integration and service co-ordination for cross-boundary operations.  To that end, Queen’s Park would be asked to implement the necessary legislation to remove jurisdictional obstacles and to proclaim the section of the GTTA act empowering Metrolinx to implement a Farecard Division.  The target for full GTAH-wide fare integration would be 2012.

Notable in many discussions of fare and service integration is the absence of GO Transit, even though the GTTA Act includes GO as part of a future integrated system.  Nobody wants to mess with GO’s revenue stream, or to contribute “local” demand to what is seen as a regional service.  Strangely, the same approach is not taken with respect to the TTC (see the Richmond Hill subway debate).

The report notes that between 1996 and 2006, transit trips to downtown Toronto from the 905 have increased while auto trips decreased.  I venture that the vast majority of this effect is thanks to GO rail services, not to cross-boundary bus routes. Continue reading →

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Frozen Fares? Frozen Service? Frozen Riders?

Yesterday’s announcement that TTC fares will remain unchanged through 2009 warmed the hearts of many including a packed room at spacing magazine’s birthday party last night.  However popular a fare freeze may be, it’s only part of the story.

Through 2008, the TTC implemented many service improvements to catch up with a backlog of overcrowding and to restore hours of service and a half-hour maximum headway to the network.  There’s more to do including further catch-ups on crowding problems and proposals for even better service.  I will turn to that topic in a separate post.

Meanwhile, the cynics among us have been here before.  Freezing fares sounds great until you’re waiting for a bus that never shows up, or is packed to the roof when it arrives, because the TTC can’t afford to run more service.  Past years have shown what happens when the “you can just stretch the money you have” attitude prevails — service and maintenance deteriorate.

If City Council wants to freeze fares, they have every right to expect that the TTC will go through its books carefully to look for spending that can actually be deferred or eliminated, but this must not be a shield to hide a subsidy freeze.  More service costs more money, and we all know that the TTC does not make a profit on most of its riders.  Council cannot bask in the glory of a rejuvenated TTC and the Transit City mantra but refuse to pay the price of a better transit system.

I await details of the 2009 City operating budget and proposed subsidy arrangements with much interest.

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TTC Hosts Presentation on Montréal’s Smart Card Experience (Updated)

On the evening of Thursday, September 18, there was a presentation by Montréal’s AMT on the implementation of their Smart Card system.

See the announcement flyer for more details.

Updated:  The presentations gave a lot of information about the Montréal OPUS project, and I will outline the high points here.

Joël Gauthier, President and CEO of the Agence métropolitaine de transport was the main speaker.  He began by talking about the transit renaissance in Montréal.  Ridership has grown consistently since 1995, and the introduction of new fare systems supports the growth and attractiveness of public transit in general.  Capital programs are also underway to expand transit services including a new commuter rail line and an LRT line.  System ridership in 2008 is up 8% over 2007.

The Montréal region contains 83 municipalities (plus an additional 8 within the AMT’s service territory) and 14 transit operators serving a population of 3.6 million.  There are 2,550 buses, 5 commuter rail lines (52 stations) and 4 subway lines (68 stations).

An important thread in M. Gauthier’s talk was a focus on consumers.  The transit system needs a good relationship with its customers through service quality and through offerings such as OPUS that simplify the travel experience.  Smart Cards are part of an overall solution, not a cure-all.  Indeed, the OPUS project includes the construction of twelve customer centres around the Montréal area that will provide general support for the public in addition to OPUS itself.

The old fare structure in Montréal was fragmented among the 14 separate agencies each with its own fares, media and discount structures.  Riders would have to purchase single fares (tickets, tokens, passes) for each system they used, much as we see today in the GTA. 

Fare rationalization was introduced in 1996, five years before the OPUS project even started, to simplify fares for riders.  The metropolitan area is divided into 8 zones although most riders lie within a few of them.  A pass covering multiple zones is 15-25% cheaper than the combined cost of passes in the old, local systems.

Riders within the downtown zone are split about 50-50 between single ticket and monthly pass users, while those who cross zones are split 90-10 in favour of passes because of the discount.  The fares apply to all services including commuter rail.

Although revenue under the new scheme is lower, this is subsidized by funds from the provincial gas and vehicle license taxes.  Note that this is an organizational and governance issue, not a technology issue.  The desire to lower cross-zone fares is a noble goal, but it has a cost.  Smart Cards allow for flexibility of implementation of new fare schemes and for more accurate tracking of usage on each system, but they don’t magically create new revenue.  The expected savings from reduced fare fraud are seen as an offset to the system’s capital and operating costs, not as funding for fare rationalization which was already in place for a decade. Continue reading →

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No Pearl in the Oyster?

Today, Transport for London announced that they would be terminating their support contract for the Oyster fare card at the 10-year opt-out anniversary:

Transport for London to terminate £100m a year Oyster contract.

The Mayor and Transport for London (TfL) are convinced that any new contract will deliver enhanced services for less money, driving significant savings.

The Mayor is keen to improve the Oyster card to make it even more attractive for Londoners and TfL will work to make sure this happens both quickly and in a way that represents the best value.

Shashi Verma, TfL’s Director of Fares and Ticketing said: ‘Transport for London is committed to delivering value for money across all of its services.

‘As part of this we are looking at more cost effective ways to manage and develop the Oyster card system that we expect will save millions over the next few years.

‘The savings will be reinvested to deliver further improvements in London’s transport system.’

Full news release

BBC coverage

TfL took pains to emphasize that they think the Oyster card is a great thing, but that the cost of providing the service can be reduced from the £100-million annual cost to a consortium of private contractors.  Issues have already surfaced about ownership of the “Oyster” brand and other components of the system.

Meanwhile, Torontonians continue to hear about the wonders of Presto as the salvation of regional travel.  I must emphasize that I don’t object to technology per se, but in London’s case there was an overwhelming need to replace an antiquated and complex fare structure and fare collection system.  Toronto does not face the same level of complexity.

An odd thing seems to grip advocates for technologies in various guises:  all of that private sector, value for money, keep an eye on the taxpayer’s dollar stuff flies out the window the moment someone wants to sell a system.  Metrolinx and Queen’s Park seem to be big on “alternate financing”, a scheme by which we keep the cost of infrastructure off of the public books by having a private company own and operate it under a long-term service agreement. 

Will they turn the same eagle eye on Presto, or will we simply be dragged into the new system without understanding its true cost?  The last time I heard, the cost to implement just for the TTC was approaching $250-million, plus annual costs to operate the system of at least $10-million greater than the current elderly but simple token and pass scheme.

Will there be a option to get out of the Presto contract at, say, a 10-year anniversary as there is in London?  Will the contract be written to ensure that the infrastructure, the trademark and any valuable side-agreements such as the use of a fare card as an electronic wallet stay in the public realm?  Will we just give away the store like Highway 407 to the salesman with the best song-and-dance who offers a quick solution, don’t fret about the details?

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Caribana Cash Grab (Updated)

Update:  At the TTC meeting on June 18, the Caribana pass was approved at a cost of $18, the price of two Day passes.  Sanity prevails.

At this week’s TTC meeting, a report recommends that a special two-day Caribana pass be issued for August 2 and 3.  Great stuff!  Give the tourists a souvenir.  Simplify ticketing.

But wait.  The price will be $20, or $2 more than the cost of two Day Passes “to offset the cost of production”.   Are we really supposed to believe that it will cost $100,000 to produce the 50,000 passes the TTC expects to sell?

I have no objection to event-based transit passes for conventions and other gatherings, and the idea is certainly not new in Toronto.  Tourists are found money for the TTC, and the last thing we need is to put them in a situation where they pay more for their “special” pass.  

Collecting fares is part of the business of running the TTC.  Selling special passes simplifies TTC operations because visitors only need to buy one pass.  These can be sold through hotels, not just a handful of downtown subway stations.  Pass holders enter vehicles quickly rather than pulling together odd amounts of cash.  Service runs more smoothly, and all door loading is possible at major stops.  That quality of service is worth something, if only fewer delays and short turns.

Doesn’t this count for anything at the TTC?  Maybe the lesson they need is that of basic market forces — have a pile of unsold, overpriced passes on August 4.

The two-day pass should be sold at a discount relative to individual Day Passes.  Show our visitors that we welcome them on the TTC.

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Fun With Figures at the TTC

After a long hiatus, we finally have a Chief General Manager’s Report for the first quarter of 2008.  Over the past few years, the CGM’s report dwindled, and the online version of this one is a threadbare five pages long.  There are three appendices with the meat, no doubt, but you have to actually attend the meeting to read them.  Within those five pages, however, we still see the TTC’s inventive approach to reporting ridership.

Last summer, in the midst of the financial crisis, the TTC suddenly discovered that Metropass riders were taking too many rides.  Even though they were selling more passes, probably due to the tax incentive for pass use bringing a new demographic into the Metropass cohort, they were collecting less revenue.  This brought out the thundering forces of the TTC’s right wing who demanded that the price of Metropasses go up to compensate for the lost revenue.

However, after the City’s new taxes (and their revenue for 2008) were safely in place in the fall, we learned that the TTC had been counting those passholders as more “rides” than they actually represented, and retroactive to July, they dropped the calculated  total ridership by using the new, lower multiplier.  Nobody bothered to apologize about the erroneous claims of how Metropass users were ripping off the system.

This year, ridership for the first quarter is not doing as well as projected.  It’s 0.7% above budget, but ever so slightly below last year.  Never fear!  TTC New Math to the rescue!  If we use the lower Metropass multiple for all of last year, then the ridership for Q1 last year goes down by 3.3-million and — Presto! — we have a tidy jump in riding this year.  The TTC seems to have missed the point that adjusting their ridership for last year downward throws off all their claims about a banner year for transit and causes a slight increase in the overall average fare per ride, but we’re not supposed to notice that.

You can count the riding increase in 2007 or you can count it in 2008, but double-dipping ain’t allowed in my transit planning 101 class. 

The Metropass Multiple is supposedly calibrated every month by selected riders keeping trip diaries.  Even I did it years ago.  There will always be some month-to-month variation, but over time there should be a good trend (rather like the headway charts for the Queen car).  However, you can make the ridership numbers, and the imputed impact of passes on the revenue stream, jump all over the place simply by twiddling that multiple.  It’s a basic piece of data that should be published so that we can get some sense of how it shifts around over time and in response to external factors such as tax regimes, the price of gas, and seasonal changes in tripmaking.

It’s particularly odd to think that a value that is recalibrated as part of a monthly moving average can be changed retroactively over a year backward in time.  Have they only now gotten around to looking at those early 2007 trip diaries?  Of course not.  If the multiple was actually dropping in early 2007, the TTC would have known it by early Q2 at the outside, and certainly should have known it by the time of the fare and budget debates in the summer, Q3.  However, that was news best kept under wraps as long as goading the Commission into approving a jump in pass pricing was the real agenda.

This is a case where the TTC has that classic choice:  admit that you presented faulty data because you were asleep at the switch and didn’t know what was happening on your own system, or admit that you misled the public into thinking that a Metropass increase was essential.

Postscript:  Recently, we’ve seen media reports that the TTC faces a big jump in fuel costs later this year and is thinking of adding a fuel surcharge to the fares rather like the airlines.  Please don’t insult everyone’s intelligence.  If total costs go up, you raise fares or subsidies.  Period.  Don’t call it a surcharge when we are in an era of higher prices as part of the landscape.  Or does the TTC know something about the oil market they’re not telling anyone?  Do they have some magical access to cheap diesel fuel a year or two out?

That’s hardly the message for a transit system to send to motorists who, we hope, are in mortal fear of never affording to drive their SUV to the corner store again, much less to work.  Don’t worry, folks, it will all be over in a little while and you’ll be back to 70 cents a litre before you know it.

If the TTC wants more money, call it a fare increase and be done with it.  Or is someone not wanting to break a political promise to hold the line on fares?

The creative accounting at the TTC has got to stop.  It takes X dollars to run the place, and Y dollars are needed from the farebox.  Period.  Decide how you want to divvy up the revenue among available fare classes and get on with it.  If we ever do get back to 70 cent fuel, I will expect a reduction in the cost of my Metropass.