Last week, the TTC approved new fares to take effect January 3, 2010.  This scheme represents roughly an 11% increase for adult tokens with proportionate increases in other fares.

Oddly enough, the projected increase in revenue is well under 11% thanks to the estimated loss of riders due to such a big jump in fares.  The idea of a freeze last year may have seemed good at the time (going into a recession), but the consequences of having two years’ worth of increase at one time is the downside.

The Commission overrode staff’s recommended fare scheme and held the Metropass multiple at the same level as in 2009 so that it would rise to $121 rather than $126 (to $111 instead of $116 for subscribers).  In a major new policy, the Commission, reacting to a large and well co-ordinated campaign, removed the age limit for student passes and extended them to post-secondary students effective September 2010.  This will save them $22 off of a regular Metropass.

The Commission also agreed to pursue a target of 60% farebox recovery to bring Toronto’s system to a level closer to other Canadian systems.  What remains to be decided is how that 60% level would be achieved.

Fare policy should never be made in the heat of a budget debate, but nobody seems to want to discuss the issues at any other time.  This brings gains, if any, to the squeakiest wheels, not necessarily the most deserving.

I expect all sorts of ill-will to come my way for saying this, but we hear a lot about the effect of transit fares on “the poor”, whoever they may be today.  Are students “poor”?  In past fare debates, they have been painted by advocates for welfare recipients and the working poor as coddled members of a class who could look forward to substantial incomes.  Yes, some students come from backgrounds of limited means, but does this entitle them to fare discounts?

The poor, those for whom budgeting consists of day-to-day decisions about what they can spend, choose not to buy passes because this would represent a single large outlay and because they are unsure of actually needing a pass for the entire month.  The sad fact is that “the poor” tend to pay single fares, or at best token fares, because that’s what their cash flow permits.

Taking the farebox recovery to 60% is presumed by many to mean “freeze the fares”, but that’s both shortsighted and not necessarily the best policy.  The TTC budget for 2009 was roughly $1.3-billion, and a 10% reduction in fare recoveries represents $130-million of new “expense”.

• The reduction might be achieved by running more service, changing the standards so that buses and streetcars ran more frequently with more empty space (even seats!).
• It might be achieved by changing the fare structure.
  • The TTC has already priced the implementation of a time-limited fare (unlimited riding for one fare for two hours) at about $15-million annually.
  • Over a decade ago, the cost of senior/student fares relative to adults was bumped in a revenue grab to stave off a larger adult fare increase.  Should this be reversed?  All in one go, or over a few years?  How much would it cost?
• As a fare freeze, that might last two years, after which we would be back into a debate about a fare increase at least at the level of inflation.

Better service benefits everyone not just by making the system attractive and improving its political base (without which better subsidies are unlikely), but also by reducing the time wasted by riders trying to get from “A” to “B”.  The time spent waiting for a bus or streetcar to show up can be a significant part of someone’s trip, and unreliability further extends the period a rider must allow for the “routine” delays that may occur. 

Time-limited fares would simplify the entire transfer mechanism (establishing a clear yes/no test for transfer validity), but would also act as a limited-time pass giving people who must make a number of linked, short trips the ability to travel without paying many fares.  (Yes, there are day passes, but they’re not always available when and where you need them, and four fares may be more than you want to pay.)

Adjusting the ratio of senior/student fares to adults would improve the lot, financially, of a group that were treated in the past as cash cows, a captive market that would bear any increase.  There will always be fare increases eventually, but there is also a strong argument for restoring the ratio between adult and the concession fares to historic levels.

Smart cards are mentioned often, but the system should allow someone to qualify for bulk discounts (equivalent to passes) based on their usage history without having to pay for an entire week or month of transit use up front.

If the intention of that 60% target is simply to freeze fares, that’s nothing more than a call for greater subsidies without the riders putting any money into the pot, and it will do nothing to change the quality of transit (or the fare structure).  Two years from now, we will be back in exactly the same place.

If the intention is to have a full debate about how we might adjust fares and service, then that’s worthwhile.  We can talk about investing in transit, in making the system more equitable, in improving service and reliability.  Those are changes where new subsidies provide lasting results for riders, not bandaids to defer real discussion until the next budget crisis.

The TTC staff report recommending a fare increase is now available on the TTC’s website.  This will be formally considered at the Commission meeting on November 17, but of course this subject has already been discussed at length in the media and on blogs.

The new price for adult tokens will be $2.50, up 25 cents, with all other fares increased roughly pro-rata.  The one exception is the Metropass for which the proposed fare multiple (the ratio between the pass price and the token price) would be bumped by the equivalent of two fares.  This places the burden of the fare increase disproportionately on the Metropass users.

The TTC projects essentially flat ridership and service for 2010 relative to 2009.  Projected riding is 473-million, up only 2-million over the likely 2009 level.  Other than the full-year effect of service changes added during 2009, no major service improvements are planned for 2010.

A particularly striking comment in the report is that TTC costs are expected to rise next year by 7% and to continue rising at that rate for the foreseeable future.  A number of factors are cited, but they don’t all make sense over an extended period.

• Labour costs.  The TTC is committed to wage increases at the currently contracted levels, but unless there is a major change in economic circumstances, the next round of bargaining will almost certainly result in a lower rate of increase.
• Energy costs.  It is unclear whether all of the TTC’s energy costs (diesel fuel, electric power) will rise at greater than the rate of inflation and if so, by how much.
• General inflation.  Since labour and energy are already out of the mix, this only affects costs such as materials.
• Annualized service increases.  This affects only 2009.
• Low floor bus adjustments.  By the end of 2009, high-floor buses are planned to be less than 10% of the bus fleet, and by 2013, last of them will be retired.  The capacity adjustment for changing to low-floor buses will be completely worked into the system substantially in 2010 when 58 of the remaining 100 “New Look”s are retired.
• Construction and congestion adjustments.  Some additional construction effects can be expected as programs such as watermain replacement ramp up, but this will hit a new plateau at some point.
• Increased vehicle and facility maintenance requirements.  I can understand better facility maintenance (although stations are covered in a separate bullet), but if anything the vehicle maintenance costs should start to drop with the implementation of large new fleets of vehicles in all modes.

If we are looking at a sustained 7% growth in the TTC’s operating budget, even without service improvements, the underlying reasons must be clearly understood.  This has very serious implications for transit funding, service and fares in the coming decade. Continue reading →

At its meeting on November 17, the TTC will consider a report on the implementation of the Presto smart card system.

I will comment further on this matter after the meeting and whatever material is presented there.

Updated 11:10 pm November 4:

The TTC has confirmed that existing Metropass subscribers will not pay at the new rate until their renewal comes around.  For example, if your annual renewal is in June, you will pay at the old rate up to and including the May pass.  If your renewal date is January, then you will get the increase as soon as it comes into effect.

New subscriptions are now being taken effective January 2010, and so they will be at the new rate, whatever it winds up being.

Original post:

TTC staff propose that fares rise effective January 3, 2010.

Table of 2010 Fare Increases

As expected, the Metropass takes the brunt of the increase.  Passholders will see their prices go up 16% on Monthly Discount Plan (MDP) subscription, slightly less otherwise.   The token rate will go up only 11.1%.

I am sure that we will hear that 11% figure a lot in the coming weeks even though the primary way adult fares are collected today is by passes.  Any politician who tries to duck that 16% figure deserves to be called out for misrepresentation.

This change represents a triumph of the bean counters, who have always hated passes and regard them as a drain on the system, over equitable increase in TTC fares.  Reducing the fare multiple (the number of token fares represented by a pass) was an integral part of the Ridership Growth Strategy, and the TTC is now moving backward.

Metropass users are loyal, and those who have subscriptions don’t have the option of changing quickly anyhow.  The “elasticity” of this market, as modellers like to say, is quite favourable to the TTC, at least in the short term.

How long into 2010 will it take for staff to tell us that they have still underestimated the use of Metropasses, that the average fare is below their projections, and that for 2011 we must again raise the multiple?  After all it started out at 52 for everyone (there was no MDP in 1980).  Why not just turn the clock back 30 years?

I have no doubt the Commission will endorse what the staff have proposed.  We have been softened up for this announcement for weeks, and the TTC would not issue a press release about it without fair cartainty that the proposal would go through.

There is no question that the TTC needs a fare increase to balance its books.  However, there has been no public discussion about changing the long-range policy of bringing the pass price down relative to tokens.  What other parts of the Ridership Growth Strategy will we abandon next?

We will get a perfunctory debate at the TTC’s November 17 meeting.  There will be much hand-wringing, but in the end I expect the very Commissioners, the “left wing”, are more likely to support their Chair and the staff proposal rather than talk about “fairness” in the fare structure.

Maybe Admiral Adam can explain on his new TV program starting tomorrow night (November 5, 8 pm on CP24) why the TTC will bump Metropass fares so disproportionately.  His constituency should be the people, the transit riders, of Toronto, not his management staff.