The TTC is considering a switch from its longstanding single-continuous-trip transfer system to the kind of time-based transfers used in most other transit jurisdictions.

The move would probably be welcomed by riders. But it would be costly — up to $20 million a year in lost fare revenue.

Under the TTC’s existing system, riders pick up a transfer when they pay their fare. That allows them to transfer to the next vehicle or transit mode on their trip — the subway to the streetcar or bus, for example. But if they want to get off the streetcar to do an errand and then continue along the same route, they are supposed to pay a second fare when they re-board.

Under a time-based transfer system, the TTC would lose that second fare because customers could re-board at any point on any route, as long as it was within the designated time period.

It’s something riders have been asking for and the TTC would like to offer, said transit spokesman Brad Ross.

“But like many things it comes down to cost. There is a revenue loss to a time-based transfer. Providing that revenue can be made up elsewhere, it’s something of course we would embark on,” he said.

Changing the transfer system makes sense as part of the broad roll-out of the Presto fare card on the TTC that’s supposed to start later this year, according to a report before the TTC board on Tuesday.

The longer the time-based transfer period, the more costly it would be, says the report. A two-hour transfer would cost $20 million a year. A 90-minute transfer is estimated to cost $12 million annually in lost revenue.

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It’s money the cash-crunched system simply doesn’t have. The TTC expects to receive a $428 million subsidy from the city this year toward its $1.5 billion operating budget.

The lost revenue from a time-based transfer would have to be made up by an additional subsidy from the province or city, said Ross.

But losses from time-based transfers will be offset by the Presto system, said Councillor Karen Stintz, who chairs the TTC. Riders won’t be able to shortchange the fare box because they’ll need to tap their card to receive a proof of payment receipt, and new electronic gates will deter turnstile jumpers on the subway.

“The cost of not going to a time-based transfer system and trying to get Presto within our current fare policy is too complicated to even consider,” said Stintz, who is resigning as chair next month to run for mayor.

The misuse of the current transfer system is the biggest source of fare evasion on the TTC, according to the staff report. It accounts for $14.8 million of the $20.5 million the TTC estimates it loses annually to fare evasion.

More than half of TTC riders are pass holders, who don’t need transfers. But about 10 per cent of TTC trips involve the use of the paper transfers that are supposed to be obtained at the point where the rider pays the fare.

Ninety-two per cent of TTC trips take one hour or less; 99 per cent take less than 90 minutes, and all of them take less than two hours.

To restrict the losses associated with a time-based system, the TTC could prohibit riders from transferring to the same bus or streetcar route on which the transfer was issued, or from re-entering the subway.

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Although the TTC isn’t considering going to a zoned system, which would require riders to pay more for travelling a greater distance, Stintz said that is also a logical consideration, with the launch of Presto and the Spadina subway extension into York Region, opening in 2016.

“Nobody’s going to pay $3.50 to get on the Highway 7 bus, to get off at the subway, to pay another $3.25 — or whatever the fare — to get downtown,” she said.

“There is some benefit to integration, especially around the periphery.”

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