Updated February 15, 2020 at 10:00 am:

Additional information from the TTC has been added to clarify some issues raised here including:

How the number of child card taps relates to the number of rides.

Which “average fare” is the one used in loss calculations for fare evasion.

The discrepancy between full year child card losses and associated citations as compared to the fare evasion study conducted late in 2019.

The difference between evasion rates calculated from tap data on Presto machines as opposed to from in-person observations, and the time periods covered by each.

Changes are flagged in the body of this article for readers who have been here before.

Introduction

The TTC’s Audit and Risk Management Committee met on February 11 to discuss three reports of which two dealt in detail with the problems of fare evasion and revenue loss.

Documents related to this are:

Among many areas covered by these reports was the problem of misuse of Presto cards set up for free travel by children by riders who were anything but.

Although this was flagged as a problem when the reports were published in advance of the meeting, the scale and potential revenue loss only came out in the staff presentation to the committee. To complicate the debate, there were two separate and different estimates of the scale of this problem.

The range of fare evasion losses with Child Presto cards ranges widely depending on how one does the calculation. The root of the problem is that there were only 10 million Child Presto taps in 2019.

In one version, a the TTC concludes that 89 per cent of child card taps are not by children. However, the small total number of taps limits the size of the potential revenue loss to about $12 million, well below the total projected losses of $70 million.

In the other version, the TTC claims that one third of all fare evasion is due to Child Presto abuse, but there were not enough child taps in 2019 to account for this level. It is possible that the level of abuse has been growing strongly and was much larger in late 2019 (when the study yielding the “one third” figure took place) than for the year overall.

Updated February 15, 2020:

The TTC confirmed that there are two separate calculations for Child Presto losses that cover two time periods and methodologies.

The estimate of $12.4 million loss was based on estimating the number of rides that do not fit with a typical usage pattern one would expect for children, and it is calculated from all-year card usage and the system average fare of $2.25.

Statistics for provincial offenses in court showed that about 13% of cases related to Child Presto abuse. This was based on the full year 2019.

The 33.7% overall evasion rate for Child Presto use is based on a study in the final months of 2019. This implies a strong growth in the fraudulent use of Child Presto cards.

Revenue Protection Strategy

As a starting point, here is a table showing the breakdown of adult and concession fare taps in 2019.

Note that taps are not the same thing as trips (or “ridership” in the conventional way the TTC talks about its passengers). One trip can involve more than one vehicle, and there may, or may not be a tap on the second and subsequent vehicles or routes depending on how the transfer connection works.

Also, during 2019, the usage of Presto was building up as riders migrated to this fare medium. The tap count above does not represent a steady-state value for one year’s Presto usage because “legacy” media and cash were still in use through the year, albeit on a declining basis.

The total number of taps above is 487 million of which various concession fares accounted for 119 million, or about one quarter. This is roughly the same as the proportion of adult and concession trips reported in a long-running table published by the TTC and reviewed in The Evolution of TTC Ridership and Fares 2005-2018 in March 2019 on this site.

In the table above, there were only 10 million child taps in 2019. The most the TTC could lose if all of these were fraudulent would be $3.25 per trip, not per tap, and the ratio is at least 2:1 overall. This means that only 5 million trips at $3.25 each or $16.25 million, tops, is on the table from this source. The TTC estimates that 11 per cent of child trips are legitimate, and this reduces the maximum loss to $14.46 million. Even that is high because some fraudulent use will be by students and other concession groups where the lost revenue is only $2.15. (These calculations assume that the lost revenue equals a Presto fare, not the TTC average fare which is diluted by trips paid for with passes.) The TTC places the loss at $12.4 million (see later slide) using different assumptions about the tap:ride ratio and the average loss per fraudulent trip.

The number of child Presto cards is growing at a stronger rate than the concession population overall. If the high growth rate of child cards in circulation is due to fraudulent intent, then the annualized rate of Child Presto use at the beginning of 2020 is well above the average use for 2019.

Two of the stations where a lot of abuse has been seen are Dundas and York University both of which have a large number of student riders.

The TTC estimates that only eleven per cent of child card taps are for legitimate rides based on usage patterns. Moreover, the number of taps per card is considerably higher for cards with usage that is considered to be abnormal (38.9) versus those that are “normal” (13.8). That said, 14 taps does not cover many days’ worth of round trips even assuming that children use only one vehicle between their homes and schools, and even allowing for strikes and PA days within the survey period. It is possible that some children have Presto cards but use them only occasionally rather than for daily school trips. Also, of course, any transfer connections within paid areas of subway stations do not show up in the tap counts.

Updated February 15, 2020:

The TTC has confirmed that the tap count used for calculating losses from Child Presto cards, 6.2 million, were for “first taps”, i.e. those that began a trip as opposed to the 10m count shown in the table above. To put it another way, the tap counts in the table include boardings where no additional fare is charged, whereas a lower number would apply to the number of fares evaded.

That said, considering transfers and the two-hour rule, the ratio of total taps to first taps appears low, especially if the majority of “child” taps are for adult/student riders who would be making longer, more complex trips. This is borne out by the higher average tap count for abnormal usage, nearly three time that of “normal” child travel.

Looking at the full year 2019, the TTC estimates a potential loss of $12.4 million.

The 10 million taps of child cards in 2019 were converted to 6.2 million rides. This implies that the tap:ride ratio the TTC is using is 1.6. This factor is not the same as the ratio of boardings (vehicles used) to trips because some transfer boardings occur in paid areas and do not generate a second tap. There is also the factor that with the two-hour fare, one trip can consist of more boadings today than in the era before this fare was introduced.

Updated February 15, 2020: As noted above, the 6.2 million “Child” rides were derived from the actual “first tap” count rather than using a conversion factor from taps to trips as discussed earlier in the article.

If 89% of the taps are fraudulent, and the radio of adults and seniors/students within that group is the same as for the system as a whole, then the lost revenue per trip is equal to the average fare.

In this chart, the TTC uses $2.25 for this value although elsewhere they argue that it should actually be $2.35.

Updated February 15, 2020: The $2.35 value for lost revenue will be considered as a future refinement in the methodology to take into account the average value of fares that would be collected from paying passengers, not from those who would be entitled to ride free.

Fare Evasion Study

The fare evasion study presentation includes breakdowns of the type of evasion and the differences between surface modes and the subway. Note that the survey period is in November-December 2019, by contrast with the figures in the Revenue Protection Strategy which are from January 2020. Also, the calculations of lost revenue for 2019 were based on the full year’s tapping data.

The City’s Auditor General reported that fare evasion losses in 2018 were on the order of $60 million, and this has grown in TTC’s estimates for 2019 to $73.5 million through the combination of one year’s fare increase and an adjustment in the average fare.

Rider Type Correct Fare Fare Charged Loss/Ride Adult Using Senior/Student Card $3.10 $2.15 $0.95 Adult Using Child Card $3.10 $0.00 $3.10 Senior/Student Using Child Card $2.15 $0.00 $2.15

The TTC uses its average fare as the basis for the loss, although the actual loss will vary depending on the type of rider.

The average fare is calculated as total revenue divided by total rides. This is cited as $2.25 by the City’s Auditor General, but the TTC argues that this should be $2.35 because free rides by children were included in riding count.

Updated February 15, 2020: As noted earlier, the TTC considers the $2.35 figure to be a proposal for future use based on changing the way that they calculate the average fare for riders who should be paying, not for all riders.

On a system-wide basis, the use of Child Presto cards was found to account for one third of all fare evasion. There is a big problem with this number based on the weighted average of evasion (5.4%) and the actual number of child card taps.

The total number of trips on the TTC in 2019 was 525.5 million, and 5.4% of this is 28.4 million. However, there were only 10 million child card taps in the year. It is impossible to reach the level of fraud implies by the chart below given the number of taps. The only explanation for this would be that there has been an explosion in the fraudulent use of child cards late in the year when the Fare Evasion Study was conducted.

Updated February 15, 2020: As noted earlier, the difference in the two sets of numbers arises because of the different time periods covered and the higher rate of Child Presto card abuse observed in the latter part of the year.

On streetcars, the overwhelming majority of evasion is by riders who simply do not have a valid fare, and the Child Presto cards do not come in the discussion. The reason for this is fairly obvious: nobody is checking fares on entry, and so there is no need to tap anything. If a rider were using a child card just to give the impression of having paid, they would still be subject to discovery on inspection.

The evasion rate is highest on the new cars because they have more doors. This implies that with the retirement of the legacy fleet, the streetcar evasion numbers will go up in 2020. The bus evasion rate is also higher than the system average because buses on the busy streetcar routes, notably on 505 Dundas, commonly use all door boarding because of the heavy loads they are carrying.

On the bus network, Child Presto cards account for just over one third of fraud, with a further 11.6% due to adults using concession fare cards. Because there is no difference in the physical card or in the reader’s display/sound when any concession card is tapped, a rider can tap on and the driver has no way of knowing that they are using a “free” child’s fare rather than a discounted student/senior fare. This problem is at the heart of the TTC’s desire to have a distinct card and reader display.

Almost half of the fare evasion on buses is due to having no valid fare. A substantial amount of this is likely to be students claiming to be under 12 years old, with additional problems caused by all-door loading on busy routes.

One TTC response to this problem is to suggest that a move to all-door loading on buses would not proceed. This will have an immediate effect on service and capacity because buses on busy routes already load by all doors simply to accommodate passengers. TTC management appears to be unaware that this occurs nor of the further strain a ban on the practice would place on overcrowded routes.

In the subway, the Child Presto cards are a big problem at main entrances, although evasion there is at a comparatively low rate of 1.9% overall. At the secondary entrances, the big problem is tailgating. The TTC plans to address this with better video monitors as well as placement of staff at those entrances when they are not otherwise occupied. This runs contrary to the “station transformation” scheme in which staff would be free to wander stations to provide assistance to all riders.

With the evasion rate at 5.4 per cent, there were 28.6 million trips in 2019 where a rider did not pay, or did not pay the full fare they owed. If one third of these are due to Child Presto abuse, that translates to 9.5 million trips, the equivalent of at least 15 million taps, and possibly more. However, there were only 10 million taps by child cards and some of those are considered to be legitimate.

As mentioned earlier, the discrepancy could be due to the difference in full year data (the 10 million taps) versus an increasing rate of Child Presto fraud by the time of the November-December Fare Evasion Study.

Fixing the Problem

There are several recommendations in the Fare Evasion Study [pp 7-8] about what might be done. Some of these are generic regarding changing the fare paying culture and understanding why people cheat in the first place. I would argue that cheating is opportunistic, and to the degree which it is simple to pull of with minimal penalty, the more likely it is to happen.

In that vein, the important thing is for the TTC to fix problems that are largely of their own making such as ensuring that there are no gaping physical holes in station access, and that there is a visible presence to deter fare evaders at entrances. This works contrary to the staffing model the TTC is pursuing to move away from resident staff at entrances, but I am not sure how this can be avoided.

The lack of a distinct look and reader behaviour with Child Presto cards is a combination for both the TTC and Metrolinx to work on as an urgent fix. If in fact one third of evasion is now tied to these cards, and the annual dollar value is over $20 million, this is not something to be fixed when they get around to it.

The report proposes:

Continue to work with Metrolinx to secure a modified fare product that aids in distinguishing between adult and child card usage.

This does not have the urgency this matter requires. Metrolinx is contractually required to provide a distinct visual identity for each class of fare card, but has begged off doing so on the grounds of “inventory problems”. Sorry, guys, it’s in the contract. What is missing is a requirement for the card readers to produce a distinct sound and coloured display when a child fare card is tapped so that anyone looking for riders who should be challenged will be able to pick them out easily, including both bus operators and roving fare inspectors.

Reduce customers’ intentional avoidance and the predictability of fare inspections through the increased use of plain clothes inspections.

This is a dangerous proposal if it is not backed up by uniformed staff because there is a real possibility that non-TTC riders will masquerade as fare inspectors and hassle riders.

Re-assess the existing fare structure to potentially: Offer one equitable flat-rate monthly pass for all customer groups;

Implement a more simplified zone fare policy required for passengers travelling north of Steeles Avenue to pay for York Region Transit fares. In the interim, management should review the ability to request York Region Transit to support fare inspection activities on routes serviced by TTC vehicles;

Simplify the proof-of-age eligibility requirement for the youth concession; and

Re-introduce the child fare. In the interim, institute an annual child card concession renewal requirement to help reduce fraudulent use of PRESTO child cards.

The concept of an “equitable” flat-fare pass is amusing considering that students and seniors now pay a premium in their fare multiple compared to adults with a pass worth about 57 trips compared to 48.5 for adults. There are far more adult riders than seniors, and the result would be a big jump in senior/student prices to pay for a small reduction in adult prices. This would still not eliminate the problem of evasion, only get rid of one class of pass. It would not eliminate pay-as-you-go fares for each class of riders.

The issue of cross-border fares has always been with us, and the underlying problem is that nobody wants to pay the increased subsidy needed to give a lower cost combined fare for regional travel. This is available to GO Transit riders as a co-fare (an option that will soon disappear for GO+TTC trips), but not for 905+TTC trips.

The problem with the youth concession, like the others, is that Presto behaves the same way regardless of which concession fare is on the card: youth, post-secondary student, senior or fair-pass user. The cards all look the same and the readers give the same yellow display with a two-tone “bleep bleep”. A fare inspector or bus driver could more easily know who should be a target for inspection if the cards and displays gave some hint of the type of concession fare.

Reintroduction of the child fare will trigger a widespread need for more children to have Presto cards for day-to-day travel as they would no longer be able to just walk onto vehicles. This does not, of itself, fix the problem of card abuse that depends on the fact that all concession cards look alike. There is also the small matter than free children’s rides are both a mayoral and GO Transit policy.

Basic Presto problems such as the card balance being out of sync with a users account, accidental lockouts from the pass-back protection feature, and the lack of a display that would warn riders that they are about to run dry on funds all need to be addressed so that aggrieved TTC users do not feel that the loss of revenue is all their fault. “Blame the rider” is no way to engender better future behaviour, and it weakens good will among riders who always try to pay their fares.