The TTC lost up to $73.5 million to fare evasion last year, according to a new report that calls for no less than a “reset of social norms” to “disrupt negative customer behaviour” that it says poses a risk to the agency’s financial well-being.

The report by the TTC’s audit department concluded that roughly 5.7 per cent of all riders system-wide don’t pay.

That’s roughly in line with the rate cited in a City of Toronto auditor general report released last February, which estimated fare dodging likely cost the agency more than $64 million in 2018.

The new internal TTC report used a slightly different methodology than the earlier study and arrived at a higher dollar figure for evasion loses. But like the auditor general review, it concluded that recent changes in fare policies such as introducing all-door boarding on streetcars, allowing children 12 and younger to ride free, and the adoption of the Presto system have increased the risk of riders not paying.

It also warned that some passengers are using social media to alert would-be scofflaws to the locations of fare inspectors, which “allows certain customers to circumvent the existing enforcement model.”

The report, signed by TTC head of audit, risk and compliance Tara Bal, says the success of the agency’s revenue protection strategy is “dependent on building a fare compliant culture.”

It recommends the agency consider a suite of measures, including commissioning a study of the root causes of “fare evasion behaviour,” continuing communication campaigns stressing the consequences of not paying, reintroducing child fares, and improving Presto reliability.

In an interview, TTC CEO Rick Leary said he’s “very concerned about fare evasion and the loss of revenue,” and the agency is taking steps to address it.

Following the city’s ombudsman’s damning findings last year about the TTC’s investigation into allegations of racial profiling against three of its fare inspectors, the agency paused the hiring of additional officers while it improved its recruitment and training practices.

That pause has since been lifted, and by the third quarter of this year the TTC plans to have a full complement of 111 inspectors and 72 special constables patrolling the system, according to a separate new report about the agency’s revenue protection strategy.

“It’s going to be very hard to on a weekly basis not be bumping into constables and fare inspectors,” Leary said, adding the increased use of plain-clothes officers will help combat riders’ use of social media to avoid inspection.

“You’re never going to know who’s on board that could potentially ask you for your fare,” he said.

Shelagh Pizey-Allen, director of non-profit transit advocacy group TTCriders, said the report shows the TTC is “out of touch with the reality of Toronto transit riders” and needs to change its approach.

She said the agency is blaming individuals for skipping out on fares, but the deeper issue is the rising costs of transit.

In March, the TTC is set to introduce its ninth fare increase in 11 years, raising the adult cost of a single trip using Presto to $3.20. The set fine for not paying can run up to $425.

Pizey-Allen said malfunctioning Presto machines have made it more difficult for all riders to pay, and warned that deploying more transit officers is wrong-headed when the public still has concerns about racial profiling.

“This is an issue of affordability, and hiring more fare inspectors is not going to solve that fundamental problem. I think we need to be lowering fares so that everyone can afford to ride the TTC,” she said.

Leary said inspectors don’t target poorer riders and officers have the discretion to issue warnings instead of tickets. He noted the city has a discount fare pass program for low-income residents.

But he claimed the new numbers on fare evasion, which were determined by TTC audit staff reviewing security camera footage and observing plain-clothes officers over six weeks in November and December, showed riders who skip out on fares aren’t predominantly poor residents.

“People who aren’t paying are those who can afford to pay ... This isn’t about the person who is down on their luck,” Leary said. Adults riding for free by fraudulently using child Presto cards, which aren’t easily distinguishable from regular versions, is a common form of evasion, he noted.

The TTC is targeting an increased fare revenue recovery of at least $10 million this year. It will cost $3 million to hire an additional 50 revenue protection officers, for a net revenue increase of $7 million.

The evasion report, which will be debated at the agency’s audit committee next Tuesday, determined evasion rates are the highest on streetcars, at 15.9 per cent. Audit staff attributed that in part to the all-door boarding policy on streetcars and the design of the new Bombardier vehicles, which physically separates drivers from passengers.

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The overall rate at subway stations was 2.4 per cent, but at unmanned secondary entrances it was higher, at 4.9 per cent.

The rate on buses was 6.3 per cent, but because more people ride buses than any other mode that accounted for the highest value of lost revenue, at $34.4 million.

The TTC relies more heavily than other major transit agencies on fare revenue, with passengers expected to generate roughly $1.2 billion this year, or almost two-thirds of its operating costs.

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