Quick Fix x 5 = TTC Fare Headaches

With news of the upcoming fare increase in January, it should not have come as a surprise to anyone that people would begin hoarding TTC tokens to insulate themselves from the increase. It’s not a new concept: token hoarding occurred with every previous fare hike (2007, 2006). The difference this time, however, is that the TTC does not have their usual back up of paper tickets, as they were discontinued last year due to counterfeiting. The result? A token shortage, with the initial restriction to 10 tokens on Nov. 6, followed by a restriction to 5 tokens just three days later on Nov. 9, and today, the unprecedented halt to bulk token sales altogether. And the “solution” (as described by Chair Adam Giambrone)? Reintroduce paper tickets, at least temporarily, until the new year.

In the context of the budgetary pressures facing the TTC this coming year, it is appropriate to limit any potential loss of revenue through token hoarding as much as possible. However, it would be nice if the Commission was up front and honest about it. The first news release on November 6 that limited token sales to 10 made no mention of revenue loss, only to “ensure enough tokens in the system” for customer use. One week later, a news release finally mentioned the issue of hoarding, but it wasn’t until today’s release that the potential loss (estimated at $5-million in 2010 — see issue with this below) of revenue was discussed. Without a doubt, the Commission was ill prepared to deal with a fare hike in a post-ticket environment, and the actions over the past few weeks clearly demonstrate this.

INTERESTING FACT CHECK:
From today’s press release:
“Without taking these steps today, the TTC could lose more than $5 million in 2010 revenues due to token hoarding.”

The TTC ordered 20 million tokens in 2008 to replace adult tickets, on top of the original order of 20 million tokens in 2006. Hoarding would have lost the TTC 25 cents per token. To make the TTC’s estimate to lose “more than” $5-million plausible, this means that every other token the TTC has would have to be hoarded. Of course, it is extremely unlikely every single token would be even in circulation, considering the number that are lost (I lost 4 in Montreal!) and the TTC likely has a large supply in reserve.
(Thanks to @anthonyschein for correcting my earlier tweet mistake!)

So now with another quick fix, it looks like we’ll have these paper tickets again. And that brings me to the main point of this post that marks my return to the blogging world.

How many quick fixes can the TTC’s fare system handle?

In a tweet earlier today, I summarized the list of changes made to TTC fare media in the past three years that have impacted the customer experience. These include:

The introduction of new bi-metal tokens in 2006 in response to the discovery of counterfeit of the old tokens;
The termination of adult tickets in fall 2008 in response to the high rates of counterfeit tickets and the purchase of more tokens;
The introduction of security holograms and a special “activation sticker” to the Metropass in response to reports of fraudulent passes this past summer;
The announcement a couple weeks ago of plans to install Metropass readers and token validators on all buses and streetcars; and finally,
Today’s announcement of temporary paper tickets.

All of these are essentially quick fixes to the fare system, all in the name of preventing fare fraud. And all these quick fixes have come with a cost:

The initial supply of 20 million bimetal tokens cost $1.7-million to produce
An additional supply of 20 million bimetal tokens to replace tickets cost $2.0-million (source)
Security holograms on all weekly passes and Metropasses costing an additional $250,000 annually
Metropass and token validators on all buses and streetcars in 2010 will cost approximately $1.5-million.

This is a total of a minimum of $7-million for quick fixes on a fare system that is now officially obsolete, as the TTC finally adopted the Presto smartcard system that is being rolled out across the GTA last week. Adam Giambrone tweeted earlier today about a five-year timeframe for TTC Presto implementation. Given that, the total cost of these changes could be over $10-million (given additional annual cost of the new fancy holographic Metropasses). Given an nine year period between 2006 and 2015 (five year Presto target), the TTC has spent over $1.1M per year on capital alone to fight fraud. I’m curious how this cost-benefit is working out.

The worst part is, these quick fixes basically gave the TTC an excuse over the past three years to resist the adoption of Presto, a fare system that has been under development for six years. I know it is not this simple, but if the TTC had signed onto, and budgeted this $10M to actively work to implement Presto back in 2006, we would be only a year from a smartcard system that contains all sorts of security features to prevent the fraud these quick fixes have strived (and clearly failed) to do.

And now, we’re back to paper tickets, at least for the next couple months.