TTC lost at least $70M in revenue due to fare evasion, audit report finds
A woman taps a PRESTO fare card on a reader in a TTC station in an undated image. (CP24)
TORONTO -- Toronto’s Transit Commission (TTC) has lost at least $70 million in revenue due to fare evasion last year, according to a report being presented to the transit agency’s audit committee next week.
The report stems from a six-week “fare evasion study” that began in November 2019. The study found that the fare evasion rate across the TTC system is about 5.7 per cent, which translates to an “uncollected revenue figure” of about $70.3 million.
The report says the TTC may have lost even more in uncollected revenue due to factors such as free transit for children under the age of 12, which would increase the loss to about $73.5 million.
“Fare evasion is a major concern to the TTC as revenue losses contribute to the need for fare increases and create inequities for paying customers,” the report said. “While a certain level of evasion is inevitable, the cumulative impact of significant changes implemented by the TTC since 2010 to improve operational efficiencies, modernize the customer experience and enhance access through fare policy changes have inadvertently increased fare evasion risk.”
Passenger fares represent about 97 per cent of the transit agency’s non-subsidized operating revenue, the report says, which means that fare evasion can make a significant impact on their funding.
In 2018, the city’s auditor general found that the TTC’s fare evasion rate was 5.4 per cent.
The report goes on to suggest that social media plays a part in fare evasion, as “knowledge of the TTC’s inspection practices” may have been shared and allowed people to find ways to avoid paying for transit.
“A culture shift towards fare compliance and a reset of social norms are needed to disrupt negative customer behaviour. As such, concentrated efforts to educate our customers and emphasize the importance of tapping and paying proper fares while maintaining equity and respecting the dignity of our diverse customers must continue.”
The TTC is also recommended to enhance the presence and interaction between TTC representatives and customers “to promote awareness of fare policy.”
More people not paying fares on streetcars
The report found that the fare evasion rate increased to about 15.9 per cent on streetcars and that most of the observed incidents were likely due to infrequent inspections.
“This suggests that the all-door-boarding policy and the structural design of newer Low Floor Light Rail Vehicles (LFLRVs) which places the operator in a separate compartment, diminishes customer interaction and increases the risk of fare evasion,” the report said.
The fare evasion rate decreases on TTC buses to 6.3 per cent, the report said, but categorizes fraudulent use of PRESTO child cards as one of the most prevalent types of fare evasion.
“While the TTC has stopped the distribution of promotional child cards, they are still available through third party vendors and online sales (i.e. Kijiji, Craigslist) that advertise PRESTO cards with “unlimited taps,” the report says. “Efforts to work with concession card distributors and implement controls over the issuance of multiple child and to ensure child cards being purchased are utilized solely for children age 12 years and under must continue.”
The report indicates that overall fare evasion rate for subway entrances is much lower—1.9 per cent at main entrances and 4.9 per cent at secondary entrances.
The report credits gate barriers for helping prevent passengers from accessing the subway without paying.
TTC has goal to improve revenue by $10.2M in 2020
In order to make up some of the revenue lost due to fare evasion, the TTC has developed a Revenue Protection Strategy. The strategy focuses on improving station fare lines, installing 360-degree view cameras at Yonge-Bloor Station, and a communications campaign to encourage customers to “tap every time.”
Additional funding was approved by the city for 123 new fare inspectors, transit special constables and administrative staff.
In addition to the Revenue Protection Strategy, it is recommended that the TTC commission a study to determine the root causes that contribute to fare evasion.
There were 17,993 fines laid on TTC customers in 2019.
Metrolinx out $15M due to fare evasion last year
Provincial transit agency Metrolinx increased the number of fare inspectors last year after learning that fare evasion resulted in about $15 million in lost revenue.
Metrolinx added 12 new full-time officers to its revenue protection team, bringing the total number to 32. There are also eight part-time revenue protection officers.
The TTC’s audit and risk management committee is scheduled to meet on Feb. 11. Following that, the report will be presented to the TTC Board for further action.