TransLink's fare evasion losses estimated at $40 million each year

Fare gates at SkyTrain Stadium-Chinatown Station. (Kenneth Chan/Daily Hive)

On Tuesday, TransLink officially announced that its fare enforcement blitz is now underway to catch fare dodgers — all part of an effort to recover some of its fare revenue losses.

With more Transit Security officers recently hired, fare checks on TransLink’s public transit services across Metro Vancouver have significantly increased.

In July 2024, when the blitz first quietly began, Transit Security officers alone — not including Transit Police — conducted an all-time record of over 100,000 fare checks, representing a 60% increase from the same month in 2023. The public transit authority has noted that the highly visible blitz will continue to ramp up over the coming months, and the enforcement locations at transit hubs and on bus routes will change regularly.

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This is all part of an effort to recover at least $5 million in lost fare revenue by deterring unwanted behaviour and encouraging passengers to pay their fair share. TransLink first indicated in June 2024 that it would increase its fare enforcement measures as part of a wider strategy to find $90 million in annual cost savings.

Upon further inquiry, TransLink spokesperson Dan Mountain told Daily Hive Urbanized that the $5 million objective is established based on their estimate of how much they believe is achievable to “boost fare payment compliance using the fare enforcement resources we have available.”

“We will continue to monitor progress and adjust our objectives over time accordingly,” he said.

He also noted that TransLink estimates that $40 million of fare revenues is lost from fare evasion each year.

When asked whether revenue losses due to fare evasion have increased in recent years compared to before the pandemic, he says that TransLink does not have accurate data for such a comparison and that fare evasion estimates have evolved over time.

However, the $40 million figure represents a very significant figure for TransLink’s bottom line. According to the public transit authority’s latest annual financial report, this is equivalent to 8% of TransLink’s recorded regular fare revenue of $493 million for all of 2023.

It is also equivalent to 33% of the $120 million in regular fare revenue recorded by TransLink in the first quarter of 2024 or an entire month’s worth, based on a recent quarterly financial report.

In addition to regular fare revenue, TransLink also sees a significant portion of fare revenue coming from the U-Pass BC and the provincial government’s subsidized BC Bus Pass programs. This program-based fare revenue accounted for about $136 million of revenues for all of 2023 and $36 million for the first quarter of 2024.

In 2023, fares were TransLink’s single largest operating revenue source (29%), followed by property tax (22%), gas tax (18%), parking tax (4%), and the remaining (26%) from other sources, including other levels of government, especially pandemic operating subsidies.

For further comparison, $40 million is greater than the monthly operating cost of SkyTrain and the West Coast Express in the first quarter of 2024.

But how do TransLink’s fare evasion problems compare to other systems?

The Urbanist recently reported that Seattle’s Sound Transit estimated that about 45% of its passengers did not pay their fare as of October 2023. Sound Transit operates major services such as Link Light Rail, which does not have fare gates and uses the honour system. Passengers are required to tap their smart cards on fare readers before and after a trip.

Sound Transit aims to reduce fare evasion to 25% by 2029 by introducing new fare compliance initiatives, including doubling up on staffing.

Fare evasion is also a major problem for Canada’s largest public transit system. The Toronto Transit Commission (TTC) estimates it lost $124 million in revenues due to fare evasion in 2023, with a fare evasion rate of 12%, according to the CBC. The streetcars had the highest fare evasion rate (30%), followed by buses (13%) and the subway (6%).

Not paying any fare is one segment of the problem, but the other segment of fare dodgers is those who pay the wrong fare to access services. The TTC estimates that an additional $17 million was lost in 2023 due to cash fares not being paid in full. The TTC also estimates that 94% of passengers who used the discounted child Presto cards did so fraudulently.

In response, the TTC is also ramping up its fare enforcement efforts by performing more fare checks.

The Metropolitan Transportation Authority (MTA), the operator of the subways, buses, and commuter rail trains in New York City, estimates its revenue losses due to fare evasion have grown from $200 million to $300 million annually before the pandemic to $690 million annually as of 2023.

According to a recent report by City & State NYC, in the last quarter of 2023, the MTA estimates 45% of bus riders did not pay their fare, which is an increase from 21% in the last quarter of 2019. As well, 13% of subway passengers bypassed the fare gates in the last quarter of 2023, up from 5% over the same period in 2019.

Public transit authorities across Canada and the United States are struggling financially due to the pandemic’s ongoing impact on travel demand, especially due to the continued widespread practice of semi-remote office work. TransLink is no exception, with Metro Vancouver’s public transit authority recently indicating that if its fiscal cliff beyond 2025 is unresolved, it could be forced to withdraw a very substantial portion of its bus, SkyTrain, and SeaBus services, and even cancel the West Coast Express.

TransLink is also currently in the process of considering a major technology overhaul of the Compass fare collection system at an estimated cost of over $200 million, including upgrades to its technology and new replacement equipment such as fare gates. Daily Hive Urbanized reported that prior to the pandemic, the Compass system had over 400 fare gates at the SeaBus terminals and SkyTrain stations across Metro Vancouver.

The existing Compass system is aging and outdated, and an upgrade would enable new fare product options and features to improve passenger convenience. The public transit authority previously approved the eventual transition to distance-travelled fares for SkyTrain and SeaBus services, abandoning the long-running three-zone fare system, but this requires a Compass technology upgrade.

In 2016, when the Compass fare collection system went fully online with the 100% closure of the fare gates to replace the previous honour system on SkyTrain and SeaBus, TransLink stated at the time that the fare gates were working as intended, with fare revenue increasing by about $30 million over the first nine months of the fare gate closures.

Over eight years since the full launch of Compass, only about 5% of TransLink’s fares are now paid using cash, which led the public transit authority to recently abandon its digital fare payment machines for coins onboard buses in favour of non-digital manual coin drop equipment. The remaining 95% of fares are paid using the Compass Card’s stored value and monthly passes and single-trip Compass tickets dispensed from the Compass fare machines.

In 2023, the Compass Card’s stored value — such as for single-trip fare payments — accounted for 44% of fare revenue, followed by 38% from monthly passes, 15% from cash fares for single-trip fares, and 3% from the daypass. Although ridership levels have now recovered to over 90% of pre-pandemic levels, fare revenues remain down as passengers are using cheaper fare products of single trips for the fewer trips they now take, as opposed to buying monthly passes.

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