The TTC’s ability to enforce proper fare payment is “poor,” according to an internal report drafted by the transit agency, and the organization now says a policy designed to address the problem is on hold.

A TTC position paper that was among a set of previously unpublished documents obtained by the Star warns “TTC revenue control has been increasingly constrained as a result of broad, successive changes to policy over the last three years.”

“These changes were approved over time to provide easier travel for passengers yet were cumulative which resulted in poor revenue control,” says the paper, which is marked “confidential draft” and dated Feb. 9, 2018.

The documents outline numerous policies and logistical problems that they say have hampered the TTC’s ability to ensure customers don’t cheat the system. Fare evasion costs the agency tens of millions of dollars a year.

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The challenges include the introduction in 2015 of new rules that allow children 12 and under to ride free. The program was backed by Mayor John Tory and has proved popular, but the paper states it has “introduced a significant risk for the TTC.”

The implementation of all-door boarding on the streetcar network later that year “further compounded the lack of revenue control,” the paper says.

The position paper also reveals that the hand-held devices fare inspectors use to check whether riders have paid using Presto fare cards are not functioning as they should. The devices are supposed to allow inspectors to perform 40 inspections per minute, but are maxing out at roughly half that number. The paper warns that as more customers switch to Presto, the processing delays could increase “and it may be difficult to get customers to comply with inspections.”

According to TTC spokesperson Brad Ross, senior agency staff “reject the characterization of our revenue control as stated” in the internal report.

“We acknowledge there are areas in the system that are at risk of fare evasion,” he said, “but we stand by the public statements we have made” about policies such as all-door streetcar boarding. The agency has said it has no evidence the new rules have contributed to increased fare evasion. Ross added the agency is working with Metrolinx, the provincial transit agency, to improve the Presto inspection devices.

The TTC is in the midst of transitioning to the Presto system, and plans to stop selling older fare media such as tokens and tickets some time this year. Earlier this year, the agency said it would stop accepting the older forms of payment by the end of 2018, but the date has now been pushed to 2019.

The introduction of Presto was expected to provide the TTC with an opportunity to address some of the gaps in its fare system, including the potential abuse of fare discounts for children and students, which the position paper says is contributing to “significant losses.”

In 2016, the TTC board approved a policy that would require all riders aged 10 to 19 to carry an agency-issued photo ID with their Presto cards. That would ensure older teens don’t take advantage of the kids-ride-free program, while also providing a reliable way to prove eligibility for the discount offered to customers aged 13 to 19. Riders in that age range get 20 per cent off monthly passes and 32 per cent off single rides.

“The most important element of transitioning to Presto is the implementation of the board-approved photo ID policy,” the position paper states.

But although the photo ID policy was supposed to be in place by 2017, it has yet to be implemented. Ross said the agency will seek approval from its board this spring to “pause” its introduction until after Presto is fully implemented and the TTC can conduct a fare evasion audit of the new fare card system.

“We do not have enough data today to support a photo ID program for youth and certain children only,” said Ross.

Ross didn’t respond directly to a question about whether the agency is concerned that suspending the ID policy could expose the TTC to revenue loss. But he noted that under Presto, anyone purchasing a discounted fare has to show proof of their eligibility at the point of sale.

Under the older system, customers can buy discounted student and post-secondary passes without proving eligibility, and merely have to carry ID while on the transit system.

Requiring eligibility at the point of sale is expected to help reduce abuse, but the position paper notes “there is little way to prevent the invalid use of a (discounted) Presto card beyond fare enforcement,” and the TTC’s 68 fare inspectors only patrol streetcar routes. The document recommends “expanded inspections for surface routes, subway entrances, and major transfer points.”

Ross said the agency has no current plans to deploy fare inspectors on additional parts of the system, but could recommend changes once it conducts the audit.

Agency staff have repeatedly told the public that the TTC’s fare evasion rate is about 2 per cent, which would represent forgone revenue of about $20 million annually.

However, as the Star reported in December, a study completed in 2016 but never made public determined the rate was 4.4 per cent, which works out to $49 million in lost revenue each year.

The TTC has dismissed that study, which cost the agency nearly $100,000. Ross said staff “are not comfortable with the methodology” of the analysis, which was conducted by third-party consultants rather than TTC fare inspectors.

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Instead, the agency has stood by the lower evasion rate of 2.2 per cent, which was derived from a 2011 internal TTC audit that didn’t include bus routes, which make up half of all boardings. The 2016 study did include buses.

The documents obtained by the Star indicate the consultant’s results were presented as fact to TTC leaders.

“Most recent study in 2016 confirmed current system-wide fare evasion rate is 4.4 per cent,” reads a presentation to top agency officials dated Nov. 20, 2017. The position paper notes that “as a result of the study” a working group was formed to address “key areas of exposure.”

Some experts caution that concerns about fare evasion should not be overblown. They argue it would be impossible to completely eliminate the problem, and riders who avoid paying often do so because they can’t afford the fare.

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