TTC lost at least $61 million from fare evasion in 2018: report

Feb 22 2019, 9:22 am

A new report by the City of Toronto’s auditor general has sounded the alarm on the extent of the Toronto Transit Commission’s (TTC) fare evasion problem.

According to the report released on Thursday, the TTC is estimated to have lost at least $61 million just from passenger fare evasion in 2018. That does not include at least a further $3.4 million in lost revenue from Metrolinx’s malfunctioning Presto fare gates and card readers.

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Altogether this pushes the TTC’s total 2018 fare revenue losses to an estimated “probably understated” $64 million, which is a relatively significant amount considering 95% of the transit system’s revenues are from passenger fares.

Fare evasion highest on new streetcars

Interestingly, the streetcar network saw the highest fare evasion rate level — an estimated 15.2% or equivalent to one in seven passengers riding the streetcar.

Fare evasion on the streetcars is highest on the new streetcars first introduced in 2014, which have four doors for embarkment and disembarkment. The old streetcars see a fare evasion rate of 7.57%, while the new streetcars experience a much higher rate of 18.61%.

The other modes saw smaller fare evasion rates, with the bus network at 5.1% and the subway at 3.7%.

Moreover, subway station entrances without any manned presence from a manned collector see a higher risk of fare evasion. Currently, the TTC has 56 “automatic entrances” at 42 subway stations.

Overall fare evasion on the entire transit system is estimated at 5.4%. The assessments were based on the audit team’s observations with TTC Fare Inspectors over 136 hours within a six-week span in late-2018 — on 315 streets along seven routes, 76 buses along 26 routes, and 15 subway stations. Additionally, 38 hours of TTC security camera footage was reviewed for illegal entries at four automatic subway entrances.

“The fare evasion rate on streetcars is high… This could be attributable to the Proof-of-Payment system on streetcars where there is no interaction between passengers and streetcar operators, as well as the multiple-door design of TTC’s new streetcars,” wrote auditor general Beverly Romeo-Beehler.

“The design and functionality of subway fare gates make illegal entry easier, particularly at automatic subway entrances without the presence of TTC staff.”

Adults caught using PRESTO’s free cards for kids

Another major fare evasion problem deals with the fraudulent use of the free unlimited travel option of the PRESTO concession cards for children age 12 and under. Romeo-Beehler’s report notes that the child and adult PRESTO cards are not visually different, and there is currently no display for bus and streetcar drivers to spot the inappropriate use of PRESTO child cards when a rider taps the card onto the fare reader.

In fact, the report stated auditors “did not come across ANY children aged 12 and under who were using Child PRESTO cards” over the entire month-and-a-half audit period, when fare inspectors caught 56 subway riders and 22 bus riders.

“Passengers need to be made aware of the impact of fare evasion on TTC. Just as shoplifting affects the ability of retail stores to keep their prices low, fare evasion affects transit agencies in a similar way,” the report continued. “Passengers should also receive more education on how the PRESTO card payment process works, the Proof-of-Payment system, and the consequences of a $235 ticket if found to be evading fare.”

“Although the majority of passengers do pay their fares diligently, all passengers are affected when some do not. As seen above, an unpaid $3 fare can quickly turn into several millions of dollars when many people are not paying.”

Metrolinx billed $7.5 million to date for faulty equipment

Other revenue loss problems deal with broken and unreliable PRESTO equipment. For example, during off-boarding inspections of four streetcars at four stations, 71 of the 170 passengers who could not provide proof of fare payment complained about broken vending machines.

“When the Fare Inspectors were not able to re-board the streetcar to validate whether the machines were working or not, the Fare Inspectors accepted the rider’s explanation and asked them to pay at the nearby collector booth. They were not able to check whether the passengers made their payment as they needed to carry on with the inspection,” the report added.

“Many of the Fare Inspectors raised concerns about the unreliability of the Metrolinx equipment and that it can also impact fare evasion and their fare inspection. They stated that many regular passengers are aware of the machines always having issues, and some use it to their advantage to evade fare payment.”

The high prevalence of broken fare gates was also highlighted; among 15 subway stations monitored by auditors, 14 stations had multiple instances of fare gates not operating over a two-hour observation period. In total, there were over 40 instances of malfunctioning fare gates during 22 hours of subway observations.

According to the report, the TTC has invoiced Metrolinx a total of $7.5 million to date for the amount of estimated revenue loss since Metrolinx’s fare payment equipment was implemented.

In 2019, the faulty equipment could total to nearly $6 million if the functionality problems persist.

Romeo-Beehler’s report provided 27 recommendations to the TTC to help reduce fare evasion and increase passenger revenue.

“I sincerely thank the Auditor General for her thorough report and welcome her recommendations. Fare evasion is a critical issue that has gone far too long without being accurately quantified under the legacy fare collection system,” said TTC Chair Jaye Robinson in a statement.

“As a regular transit user, I know how frustrating fare evasion is for the residents of Toronto who consistently pay to travel on the TTC. Fare evasion has a significant impact on the TTC’s operating revenue and transit service. The recommendations included in this report will guide our action plan moving forward as we approach full transition to the PRESTO farecard system.”

It is estimated a 1% reduction in fare evasion is equivalent to $11 million in additional passenger revenue. In 2018, the TTC’s passenger revenue for the year was $1.162 billion.

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