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Is free transit the answer to all that ails the TTC?
07/03/20
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Mar.4, 2020
"The fine for evasion is high by comparison to the slap on the wrist motorists receive for a variety of ills ranging from parking tickets to running red lights. On this one, the TTC appears to be at war with its riders.''
With the TTC seemingly at war with its riders, it may be an idea whose time has come but at what cost?
The February 25 meeting of the TTC board was a hotbed of debate on the 10-cent fare increase that went into effect March 1 – and the increasingly aggressive enforcement of fare evasion by the transit authority.
Several people gave deputations advocating free transit and the elimination of the personnel and machinery needed to collect fares as the solution to a number of the public authority’s problems, including transit’s high cost.
Is free transit an idea whose time has come? Should transit be regarded as a municipal service available to all at no charge, or should riders be expected to contribute to the cost of the service they use? And if there are to be fares, should they be equal for all trips and riders?
Fare game
Both the TTC and Metrolinx, the province’s transit agency, are studying future fare policies, including the difficult problem of what to charge riders who now pay separate fares to ride more than one system.
One part of that policy debate will be the structure of discounts and the eligibility of various riders for cheaper fares.
Should all seniors and students get discounts or only those with low incomes? Should the same price be charged for every trip, or should distance or zones be part of the formula? Co-fare arrangements already exist between many transit agencies, although Queen’s Park will not fund the TTC and GO Transit’s discount fare beyond March 31, 2020.
Technology makes complex fare structures possible, but it can also bring issues of system reliability, administration and confusion for riders.
If fares disappear, these issues vanish.
But the TTC takes up a large chunk of Toronto’s operating budget – some 18.5 per cent. That’s second only to social programs in spending.
In 2020, transit (including Wheel-Trans) will cost $2.144 billion. Some $1.255 billion of that, nearly 60 per cent, will come from fares. Most of the rest of the costs of running the TTC will come from the city (33 per cent), with advertising (4.2 per cent) and the province’s subsidy (4.3 per cent) covering the remainder.
Toronto would face a new annual expense of $1.255 billion (less the $100 million it costs the TTC in Presto fees, security and legal staff associated with fare enforcement).
Free transit would also bring higher demand and make the need for more service even more pressing than it is today.
A one-per-cent bump in city property tax generates $30 million in new revenue, so replacing fares with taxes would require close to a 40 per cent hike.
But that load would not fall evenly across the city because new taxes are not applied equally to each type of property, especially to apartments whose tax rates are frozen by provincial edict. The tax increase on others, notably homeowners, would have to be much higher to compensate.
New revenue could come from a higher gas tax, a parking levy, sales taxes or even a share of income tax. But Toronto has many other unfunded transit needs.
Capital costs for transit expansion promised by the province would add to the backlog, and there is no guarantee that other governments would boost their subsidies. They could argue that Toronto should not have special treatment compared to other cities just because we decide to give away transit services.
What should be free?
Something we already give away is the free parking at GO stations for all but a handful of riders willing to pay for a reserved spot.
This is so fundamental to GO’s business model that they have roughly two parking spaces for every three commuters. These spaces fill up quickly, leaving latecomers to forage for whatever space they can find.
A recent proposal to charge for more parking spots provoked howls of outrage and was quickly withdrawn.
Parking is an essential part of GO’s expansion plans because personal cars will continue to be the “last mile” ride for many GO users. GO also expects to shift 145,000 trips from road to rail and this will require an immense amount of parking.
Is the solution to this demand to build more, or to find a better way to get people to the stations? Should the replacement “last mile” service be free like the parking, or should there be a fare?
Tangled consequences
Making something free can have tangled consequences. There are other city services besides transit that are arguably more important to offer free, or at much-reduced charges.
Toronto Community Housing, for example, will receive $385 million in rent plus $251 million in city subsidy in 2020. Everyone in TCH could live rent-free if only we could find $385 million to subsidize them.
The TCH capital backlog is large (although not by TTC standards), and they have a 10-year, $3.4 billion renewal plan. At the end of that period, there will still be a repair backlog of about $1.3 billion. For the cost of free transit for a year, we could wipe that off of the books.
Child care is another service that’s much in need.
Child care provided by the city will get $91.6 million in city subsidy and $543.8 million in revenue from fees. We could give free child care, within the capacity of the existing system, to everyone for less than half the cost of free transit.
In every case, “free” services will trigger a demand for more capacity and that has implications for capital (more housing, more child care space, more transit vehicles) and operations (more service to be provided to more people). The cost will be well above that of simply replacing fares, fees or rents with higher subsidies.
A fare deal
Better deals on fares would be a more profitable way to boost ridership and provide affordable service without having to go the route of free transit.
The TTC has two classes of fares – the full adult fare and a discounted rate for youth, post-secondary students, seniors and Fair Pass holders.
The Fair Pass discount applies to adults receiving social assistance or child care subsidies in households where the income is below the Statistics Canada Low Income Measure (plus 15 per cent). About 150,000 people are eligible (according to 2018 numbers), but far fewer actually use the pass. In 2021, Toronto plans to make this available to any low-income household, raising the eligibility to 480,000 people.
Originally the discount fare was one third on single tickets and one fifth on passes. Only frequent users of the TTC take enough trips to make a discount pass worthwhile, especially with the benefit of the two-hour transfer.
The March 1 fare increase adds 10 cents to all fares across the board except for cash fares. This means that riders with discounts see a larger jump proportionately to full-fare adult riders.
Another way to implement discounts exists on Presto, but the TTC does not use it. Price capping – setting a daily, weekly or monthly maximum charge – gives the equivalent of a pass without the up-front payment that some riders cannot afford or don't want to risk for rides they may never take. GO Transit monthly passes work that way already.
Presto change-o
Presto machines are a source of rider frustration. Many of them work most of the time, but when they don’t, it can leave riders open to harassment for non-payment of fares. The cost of managing the Presto system is one issue pointed to by advocates of free transit.
A big problem is the abuse of child fare cards that allow free travel. They are hard to monitor because fare gates and readers give the same indication for a child card as for any other discount card.
Metrolinx signed an exclusive contract with Shoppers Drug Mart for the sale and service of Presto cards at its outlets. They are supposed to function as an extension beyond the fare services available at GO Transit stations.
However, there are far fewer of them than the TTC ticket agencies they replaced. Just getting to one can be difficult in parts of the city and could cost riders a fare they might not otherwise have to pay. And with the move to self-service checkout, Shoppers has reduced the number of cashiers and their capacity to provide the personal service that Presto transactions require.
In the longer term, the TTC and Presto have to address how to provide child cards only to those who should have them, and make Presto readers behave in a clearly different way when they are tapped.
The TTC board sends inconsistent messages to staff and riders about enforcement. Sometimes they want staff to show compassion and understanding; at other times they have a hard-line attitude.
This Jekyll-and-Hyde policy predates Presto by years, but the choice used to be to get off the bus or hope that the driver treated you as deserving of free passage. Burly transit cops, court appearances and fines were rare.
Riders complain that fare inspectors do not allow re-taps to ensure that a fare was paid and assume that riders are trying to beat the system. The official line is that the history on a rider’s card will show whether someone pays regularly and should merely be cautioned, not charged with evasion.
The TTC board should clearly state what constitutes bad behaviour and stick by this definition.
The fine for evasion is high by comparison to the slap on the wrist motorists receive for a variety of ills ranging from parking tickets to running red lights. On this one, the TTC appears to be at war with its riders.
The TTC’s new plan for station management to curb fare evasion but the TTC board has conflicting ideas of what station staff will do. Will they roam around stations helping passengers, or will they camp out at entrances as greeters?
Clearly, the current model of customer service is not working. Not even free transit will change that.
The pros and cons of hitching a free ride
Who saves and who pays
The pros
• The first and obvious benefit of free transit is that every transit rider saves money. If this is enough to encourage a switch to transit from cars, then the additional avoided costs – including gas, maintenance, auto insurance and eventual replacement – means even greater savings for those families who would need fewer or no cars.
• Free transit represents improved mobility for those who cannot now afford a lot of transit travel or to own a vehicle. Mobility has an economic benefit because more people can reach jobs, schools and stores.
• If free fares are funded with Toronto-based revenue such as property taxes, what should we do with 905ers and tourists? A simple solution could be to extend free transit to both groups, one in return for provincial subsidy, and the other as an economic development strategy.
The cons
• Free transit would benefit everyone who rides both today and tomorrow, regardless of their economic need. This is contrary to the concept that spending should occur where it does the most good.
• Automobile savings only go to those who have cars, not to those who do not have a car for various reasons (health, public spirit, poverty).
Transit collection and enforcement
The pros
• The cost of fare collection and administration disappears, not only from the TTC’s budget, but from agencies who provide free travel for their clients and those responsible for the administration of discount programs such as Fair Pass.
• The problems with the Presto fare system, including card accounts, reloads, faulty machinery and fare inspections would not exist.
• Presto might survive through agencies that did not grant free travel to all, but it would lose its “cash cow,” the TTC, on which the Presto business model depends. This might force the adoption of better technology on Metrolinx.
The cons
• Unless fares are eliminated for all riders, some form of fare collection and enforcement must remain for those who are not entitled to free rides.
Greening travel and reducing congestion
The pros
• Transit riders who shift from autos represent a “greening” of the travel demand with fewer car trips and a lower carbon footprint. Costs associated with road maintenance and congestion and health costs might be reduced.
• People who cannot or choose not to bike or walk can travel freely without worrying about fares, especially in bad weather.
The cons
• Much more transit service is needed to address auto-oriented markets, and competition is tough in areas designed around car travel.
• Reduced congestion is unlikely without a very large increase in service to absorb demand. Where transit has a low market share, a big jump in transit demand produces a small drop in road trips. There is a very strong latent demand for road space. Without a big shift to transit, there will be little visible effect on congestion.
• Free short-hop transit would compete with biking and walking, although it does that already for riders with passes. Is better mobility, regardless of how it is provided, a bad thing?
Regional transit
The pros
• A free TTC would be a boon to those who commute into Toronto even if they must pay for part of the journey. This could encourage residents beyond Toronto to lobby for the same treatment on their local transit systems.
The cons
• Depending on how free TTC rides are funded, riders from outside Toronto could be seen as freeloaders on the city’s transit system.
• GO Transit began as a system for commuters and as a way to avoid highway expansion in the Lake Shore corridor. Today, GO is touted as a relief for short-distance demand inside Toronto using lower fares to attract riders. If the TTC is free and GO is not, this could undermine the shift of local riders to the GO network.
This column is part of a weekly review by Steve Munro of issues affecting Toronto’s transit system and its riders. It appears Mondays online and Thursdays in print.
[Top photo: SAMUEL ENGELKING]
