Fares & Fare Collection

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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.

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GO Transit’s 15-Cent Solution

Sean Marshall wrote in with the following comment in another thread. I’m putting it in its own post so that replies can be kept in the appropriate area.

… at GO Transit, they’re planning to increase fares again by the flat $0.15 rate. Of course, this is a disproportionate fare increase for those who make shorter trips (say within the 416 or from, for example, Georgetown to Brampton) yet almost insignificant for someone coming in from Barrie. And GO also has to fix the problems with its fare structure, where, for example, a bus trip from Square One to York U is the same price as from Bramalea to York U, about half the distance.

Anyway, my sense is that GO will always take the easiest route (requiring the least thought) to fix a “problem”. Service crowded? Tack on more cars. Issues with parking? Build more spaces. Crowding at platforms? Remove the escalators. Raise fare revenue? Make it a flat fare increase so we don’t have to work out what the new fares should really be.

This is not the first time GO has done this, and I can’t help worrying just a bit in anticipation of a smart card system that can do everything but make passengers’ breakfast, lunch and dinner, but might wind up supporting a fare structure more appropriate for conductors and ticket agents. Will GO continue to penalize short-haul riders with disproportionate fare increases?

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A Visit to the City Archives

Now and then, I spend my time browsing through the photograph collections at the City Archives, and this activity can be rather addictive.  The main page includes a link to a search page where you can start your travels.  Note that the indexing is spotty, and if you find items in a series that you really like, it is often worthwhile drilling down into the linked pages for the specific collections and looking for a “browse” link that will bring up the entire content.  I can’t put links to such pages here as they are built on the fly.

After looking at photos of my old neighbourhood in North Toronto, I stumbled on paintings of the Yonge Subway by the artist, Sigmund Serafin, whose paintings of Bloor and University subway stations are posted at Transit Toronto.  I have recently learned more about Serafin’s history, and that post will be updated in the new year.

I will leave the joy of finding intriguing bits and pieces to you, but there are a number of items I thought worthwhile to whet your appetite. Continue reading →

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Before We All Say “Presto!”

Over at spacing.ca, there’s a post about the difference between Montreal and Toronto transfers, and comments arguing whether Toronto is hopelessly archaic, merely quaint, or actually a system that encourages friendly contact with the operators.

In the midst of this, I thought it would be worth looking back at older forms of transfers in Toronto, and this post links to two of them.

Toronto Railway Company September 1892

Souvenir Toronto Transit Commission 1953

The TRC transfers (shown slightly larger than actual size) are printed on very flimsy paper, and were intended to be given out by a conductor.  Note that the corner fold/cut indicates the direction of travel, and there is provision for the conductor to write in the time after which the holder had ten minutes to make their connection.  Obviously, these were intended to be issued as someone left the car.  This format didn’t last long.  (Note also the evolution of the printing of the date with the larger numerals for September 14.)

The souvenir transfers are from the display of the first two subway cars at the CNE in 1953.  I have shown both the back (left) and front (right) here.  The two that I have are printed on different coloured stock, but I don’t know if a wider selection was used.  At the top, you can see the area reserved for a station and time imprint from a machine.  Passengers picked up a blank transfer (yes, there were new ones printed for each date) and they manually validated it .

These transfers include one howler of an error:  one station is missing from the map!  This missing station almost had a different name from the one by which we know it today.  Rosedale is called “Crescent” on many early maps of the Yonge line.

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How Ottawa Just Raised Your Metropass by 50 Cents

While you are all out spending your hard-won cut in the GST, one little note:

The after-tax cost of the Metropass just went up from $84.50 to $85.00.  Why, you ask?

The tax credit for passes is tied to the tax rate on the lowest income tier, and this will go back to 15% from 15.5% according to today’s announcement.  This means that the rebate per $100 Metropass just went down by 50 cents, or $6 over the course of the year.

Also, of course, this has always been a non-refundable credit, and so those who have no taxable income pay full value for a pass while people like me get the subsidy.

It’s no secret to regulars here that I don’t believe in tax-based incentives and prefer that funding go directly to agencies that deliver service.  If the tax rebates for all of the roughly 250,000 Metropasses sold each month came to the TTC as a subsidy, they would receive about $45-million annually from Ottawa.  This would contribute to better service for everyone, whether they used a pass or not.

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Say “Presto!” and All Your Cares Will Vanish

Lately, with one announcement after another out of Queen’s Park (or is it Liberal Headquarters), I’m having a hard time deciding just what Rob MacIsaac’s job at the GTTA really is.

The push is on to make announcements now, to have photo ops now, to show caring Liberals fixing transit, environmental and traffic problems now!

Alas, the real world is not that simple.

The latest event was the unveiling of the Presto Smart Card out in Mississauga.  I am not going to duplicate a lot of good comments made by several writers on the thread at spacing wire, but the core of this debate lies the following issues:

  • The cost to implement Presto on the TTC is very large and has grown from $150- to $250-million in the past few years.  A detailed report was prepared by consultants for the TTC covering many of the issues.  The projected cost for the TTC implementation was actually cheaper, relatively speaking, than similar projects on other large transit systems.
  • The alleged reason for Presto is to allow seamless movement between many transit systems.  However, there are much more basic impediments to such movement notably the service quality (or lack of it) at boundaries, and the existence of multiple separate fares in each system.  Any fare integration that reduces costs to riders will require higher fares overall or improved operating subsidies.

The implementation to date between Missisauga, GO and TTC at selected locations is miniscule and has a tiny fraction of the technical requirements of a GTA-wide scheme.  A great photo op, but not nirvana.

Absolutely essential to any farecard implementation will be a unified fare structure.  Should we charge by distance?  Should we charge by time of day?  Should we treat one fare as a limited time pass eliminating the concept of a transfer per se?  Presto can make any of these possible, but we need to know what we want to accomplish and the potential effect on future and present riders.

The TTC has no pressing need to replace its fare collection system and is moving increasingly, for frequent users, to flat-price passes rather than charging for each trip.  Should we invest a fortune in a system to track details of passenger movements and calculate fares if a pass system (electronic or otherwise) will handle the majority of the transactions?

Some cities have used Smart Cards to replicate and expand byzantine fare structures already in place.  If anything, the GTTA is all about simplification and flattening of our fare structure.  Presto can help with this, but the important policy choices must come first.

This project has been around for quite some time as a technology looking for a problem and using the sham argument that fare collection technology is the answer to interregional transit.  This is total nonsense.  Better service, better fare structures and better subsidies (all of which are inextricably linked) come first.  How you collect the fare is a distant second.

After all, we already have the GTA pass, and that didn’t require any technology at all.  What it’s missing is the network and the service levels to make it widely attractive.

Queen’s Park may have scored a hit with MoveOntario, but Presto will do little to improve transit in the GTTA for years to come.

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The Fiscal Realities of Ridership Growth

During the TTC board meeting on June 13, two of the fiscal conservatives on the Commission ran aground on the cost of running a successful transit system.

As I reported earlier, the TTC has an embarrassment of additional riding and will begin increasing service in September and through the fall to bring crowding within the Commission’s service standards.  More service, of course, costs more money and it is very unlikely that this will be made up from added revenues.  We are, after all, trying to give all current riders better service rather than forcing them to ride on the roof, and we are trying to attract new riders to the system within the constraints of the fleet size and available operating staff.

With Metropasses now a highly attractive fare medium, more people are buying them and more rides are taken on each pass.  This dilutes the revenue per ride as ticket, token and cash fare riders migrate to the cheaper, fixed-price pass.  Riding is going up, but revenue is not. 

Commissioners Michael Thompson and Peter Milczyn wondered openly about changing the fare structure to recover some of the additional cost including schemes such as zone fares or charging for transfers.  They should talk to their constituents in Scarborough and Etobicoke respectively.

Suburban riders take longer trips to get to work, and a transfer between routes is almost inevitable for most of them.  Downtown riders might organize themselves to stay within one route, either the subway or a streetcar line.  Charging for transfers or imposing a zone system penalizes those for whom the transit system is already less attactive — the long distance traveller — and is likely to disproportionately affect those who can least afford it.

My rationale for that statement is that long, tedious trips including transfers are likely to have a larger proportion of “captive” riders who cannot afford to trade up to an automobile as an alternative even though it would be very attractive in comfort and travel time. 

Do these Commissioners/Councillors really understand the impact of their proposals?

During the same debate, Commissioner Thompson spoke of a “crisis” facing the TTC, and indeed he planned to launch a “strategic planning” process for the system.  Yes, we need a strategic plan, but the real “crisis” is that everyone hopes that somehow the problem of transit funding will solve itself for both the capital and operating budgets.

There is no magic here.  If you want better transit, then you must spend more money.  This may come from fares or taxes or transfers from other governments, but it must come from somewhere. 

Anyone who talks about charging for transfers or imposing a zone fare system, but  never breathes the words “fare increase” is not being honest with the TTC’s riders.  The irony here is that the amount of money needed to operate better service is between $6- and $7-million on an annual basis.  This is less than one percent of the total operating budget and could be funded by a miniscule fare increase.

Any change to bring in zones or charge for transfers would be complex to implement, and unless the base fare were lowered substantially, would bring in far more revenue than is needed for the service improvements.

In another context, Toronto Council seems willing to increase the subsidy to passengers by about $13-million to operate the York University subway extension.  Why do we happily go forward with such schemes but nickel-and-dime plans for better bus and streetcar service?  The real reason, no doubt, is that York U won’t see its first passenger until at least two further terms of Council while better bus and streetcar service is something for today, for this year’s budget.

Support future spending for a dubious subway project and you are a visionary investing in the future of our city.

Support better transit for riders today and you are a wasting precious taxpayer dollars on riders who should be paying more for their service.

I look forward to seeing Commissioners Thompson and Milczyn with coffee-pot fareboxes on buses in Scarborough and streetcars in Long Branch defending the public purse from marauding, oversubsidized riders.  It will be a great photo op for their re-election literature.

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A TTC Business Case for Smart Cards?

The TTC has published a lengthy report on the subject of Smart Cards.  I am not going to attempt to precis the material here, but the “bottom line” is that, yes, Smart Cards will work, but are we willing to pay the price for what they will give us?

The conclusion observes:

The business case demonstrates that a smartcard system will have definite benefits for customers (convenience), decision-makers (flexibility in policy and pricing), and employees (safety and security). The analysis estimates that the cost for a TTC owned and operated smartcard system is between $250M to $260M in capital, and $11M to $12M in additional operating expenses annually. The business case analysis further shows that while the current TTC fare system does have limitations, it is simple to understand and operate, and is relatively cost efficient and reliable. From a state-of-good repair perspective, the current fare system does not need to be replaced.

There is an interesting table in Appendix H showing the capital cost of various new Smart Card systems on large transit properties expressed per weekday boarding.  The cost cited for Toronto is cheap compared with Boston, Chicago or New York.  Whether this indicates we will do things better and at less cost, or that there is more headroom for overruns, only time will tell.  The time to implement a system on the TTC is projected at six years.

There are without question benefits that would come with Smart Cards.  However, we must decide whether they are worth the investment.  Recent comments at the TTC minimize costs with a shrug “it’s only about $40-million a year”.

As I have said so often, remember this the next time the TTC says that they cannot afford more bus service, or Council balks at the rising cost of transit subsidies.

Amazing, isn’t it, how we have money for the toys, but not for the things we really need.