Metrolinx: Presto Fare Card

[EnviroTO]

But do Canadian credit cards carry that 'smart' chip that can be used for tap and go? I recall my old cards all did not feature that type of technology. Perhaps things have changed in the past few years.

By next year virtually all cards issued will have the tap-n-go feature. Currently if you get a new card issued by TD, RBC, or BMO the odds of getting a credit card without the technology is low. Also by next year most bank cards issued will have Interac Flash which is the bank card equivalent to VISA PayWave, MC PayPass, and AMEX ExpressPay. A large number of retailers already support the technology partly because the timing with the rollout of chip technology for PIN protected large payments is occurring at the same time.

If this is tested technology, then I really wonder why the TTC cannot implement open payment immediately rather than ask for more studies. But on the back end, accepting open payment means a lot of logistics needs to happen to charge and process payments among different card companies, which is something the smart card will avoid as that should be central clearing?

There are three parts (a) the RFID hardware which is an off the shelf product when using open-payments, (b) the payment processor or merchant account, and (c) the billing system which has the products and rules engine to determine when a charge should and should not apply. Both (a) and (b) are the easy part whereas (c) is the part which it would be useful to do a study on, evaluate the various existing systems, and see how existing systems can be tied into the system. There are a lot of off the shelf rules engines out there which of course need configuration to meet the needs of the TTC, there are the systems that other transit agencies have developed which perhaps the rights to use their source code could be bought, etc. They need to study what the system must handle and how in order to nail down the RFP requirements in a way that ensures delivery of full functionality without cost overruns. To simply go to RFP with a requirement like tap to pay would lead to the delivery of a system far too basic to handle all the types of actions that can be expected.

I see the problem being can the tap reader readily accept different issuers' cards, such as a Visa tap, Mastercard tap, and AMEX tap card? Is that what the bottleneck is all about?

No, the readers that are provided by the banks to retailers handle all the credit cards with the same device just like they do with magnetic stripe. The reason open-payments couldn't be considered earlier is that only now is it mainstream. It has been around for quite a number of years but more in pilot and gradual rollout.

 

[kEiThZ]

I just wonder if the TTC is pushing open fare systems so that they don't have to offer discounts. They might just start arguing that it's too difficult to implement the features that Presto is pushing such as daily or monthly limits or transfer windows. After all, to make this work, one would have to use the same card for all their travel. The moment you use a Visa for one trip and a Mastercard for another, you'd lose your multi-trip discounts.

 

[EnviroTO]

That isn't the case if you register your cards. I have registered multiple cards, from completely different banks with no special features on them, for airline points when using network restaurants and the points accumulate automatically to the correct frequent flier account regardless of which card I use and without needing to tell the restaurant anything. If this can happen with restaurants which are unrelated to each other and who use completely different merchant accounts and providers across borders, then it is obviously possible when all the data is internal to the transit system. There need not be a requirement to use one card for all your travel, although there would probably need to be a restriction on using two different registered cards on the same day to prevent the equivalent of "pass backs" when people have a monthly pass for example.

 

[rbt]

But do Canadian credit cards carry that 'smart' chip that can be used for tap and go? I recall my old cards all did not feature that type of technology. Perhaps things have changed in the past few years.

Most chipped credit cards have this in Canada. I tapped mine at a Subway in Quebec City about a week ago. The readers aren't as plentiful as they could be but that is changing as well.

Of course, tapping is only valid for low value transactions (under $20?)

 

[spider]

Originally Posted by spider
What would the cost be to throw out all these fare payment systems including cash and allow every one to ride free?

No fare boxs, ticket takers, turnstiles or hordes of people sorting and counting would have to be cost efficient.

How much do you think the municipal tax rate would increase as a percentage of what is now paid?
In 2008, the TTC operating budget was almost $1.2 billion dollars, while budgeted fare revenue was $872 million. So, the cost of allowing everyone to ride for free would have been $872 million more than the subsidy, all things constant.

BUT, we know that all things will not remain constant. Demand would skyrocket and supply would have to increase to keep pace. A doubling of service might not be out of the question, so that puts the annual cost in the multi-billion dollar range.

Thanks for the info but what does this do to the ordinary taxpayer? How much would my municipal tax bill increase if the TTC were fare free, 10% 20%?

 

[PinkLucy]

Of course, tapping is only valid for low value transactions (under $20?)

You can tap and go at Loblaws for up to $100; after that you have to sign. Not sure what the limit is at Tim's.

 

[kEiThZ]

That isn't the case if you register your cards. I have registered multiple cards, from completely different banks with no special features on them, for airline points when using network restaurants and the points accumulate automatically to the correct frequent flier account regardless of which card I use and without needing to tell the restaurant anything. If this can happen with restaurants which are unrelated to each other and who use completely different merchant accounts and providers across borders, then it is obviously possible when all the data is internal to the transit system. There need not be a requirement to use one card for all your travel, although there would probably need to be a restriction on using two different registered cards on the same day to prevent the equivalent of "pass backs" when people have a monthly pass for example.

Sure. There's a lot that can be done. But we are talking about the TTC here. You really think they are ambitious enough to set up a points scheme where you register multiple credit or debit cards to implement daily/weekly/monthly limits? And if that's the game plan, how is that simpler than Presto?

 

[RedRocket191]

Thanks for the info but what does this do to the ordinary taxpayer? How much would my municipal tax bill increase if the TTC were fare free, 10% 20%?

Lets say that the TTC cost $2.4 billion to operate, given the increased demand. This represents a doubling over 2008 levels. According to the census, there are 1,040,597 private dwellings in the city of Toronto. Each one's share would be $2,306. in 2008, everyone chipped in about $315.

For the sake of argument, lets assume a flat tax (makes the calculation easier) with every home valued at $368,000 (the median in June, according to the Toronto Real Estate Board). Taxes on that home amount to about $3050, based on the City's tax rate. If the TTC were free, that would increase to $5041.

In conclusion, your taxes would increase by more than 65%.

And that is why free transit isn't viable in large cities.

 

[SlickFranky]

Thanks for the info but what does this do to the ordinary taxpayer? How much would my municipal tax bill increase if the TTC were fare free, 10% 20%?

That's a pretty difficult question to answer. There would be a fairly massive change in ridership numbers, and operating expenses. Assuming the costs of fare collection were exactly offset by the increased service required, so that there was no change in total operating cost...then yes, roughly 10% tax increase.

More realistically though, even with the gains in boarding efficiency and reassignment of fare collectors to more productive uses, the current network could not handle the huge gains ridership. Many, if not most, routes would effectively break-down and massive upgrades would be needed accross the city. A no-fare TTC would need to look very, very different from the current TTC, so it's hard to put an accurate number on that....20-30% sounds about right to me though.

 

[spider]

I am not so sure that a fare free TTC would attract twice the current ridership for many reasons.

First, most riders use the system in Peak hours and ride vehicles that are full or next to it, as they should be, leaving little room for a substantially larger load at anything resembling comfortable conditions. Comfort is a key word here, lack of it will not get drivers out of their cars.

Second, many drivers drive because the TTC does not provide timely service to their destination and it never will regardless of the fare structure.

Thirdly, Many drivers prefer to drive and are not sensitive to fares. Saving $5.00 a day to leave the car at home is simply not a carrot this animal is going to respond to.

There will be an increase in ridership due to a no fare system. They will be riding in off peak hours which is fine because the TTC vehicles are far from full and might as well be carrying folks around as not.

 

[RedRocket191]

I respectfully disagree. I have seen some very, very crazy things happen at all-you-can eat nights and other free giveaways.

Now, that's not transit, but consider this:

When the new commuter rail service in Albuquerque began operation ridership during the free period was between 6000 and 2100 passengers per day. After the free period ended, 1000 passengers per day rode, all things remaining constant. It's impossible to say what free TTC ridership could be, but a doubling of ridership isn't out of the question in my opinion.

I'm not denying what you said is true, but I think that the numbers will be much higher than we might anticipate.

 

[EnviroTO]

Sure. There's a lot that can be done. But we are talking about the TTC here. You really think they are ambitious enough to set up a points scheme where you register multiple credit or debit cards to implement daily/weekly/monthly limits? And if that's the game plan, how is that simpler than Presto?

It is simpler than Presto because it doesn't require specialized hardware, specialized cards, is accessible to the person who just decides one day to hop on the bus, and doesn't involve a process to put money onto the cards since the money is already there. I'm not suggesting a points scheme for the TTC... they should be focused on delivering their existing fare plans using cards they didn't need to procure themselves and sell. My point is that there doesn't need to be a restriction on using the same card you pay with as being the card you use when it comes to passes. It all comes down to linking a tap to a person and a payment mechanism... a customer account can easily have multiple RFIDs assigned to it, just like you can get two transponders for two cars you plan to drive on the 407 but have them in the same account.

 

[spider]

I respectfully disagree

RedRocket191,
I defer to your expertise on all things transit related and thank you for your effort to answer my questions. Our mutual respect for each others prognostications is a welcome model of decorum that is often sadly lacking in other threads.

 

[kEiThZ]

It is simpler than Presto because it doesn't require specialized hardware, specialized cards, is accessible to the person who just decides one day to hop on the bus, and doesn't involve a process to put money onto the cards since the money is already there. I'm not suggesting a points scheme for the TTC... they should be focused on delivering their existing fare plans using cards they didn't need to procure themselves and sell. My point is that there doesn't need to be a restriction on using the same card you pay with as being the card you use when it comes to passes. It all comes down to linking a tap to a person and a payment mechanism... a customer account can easily have multiple RFIDs assigned to it, just like you can get two transponders for two cars you plan to drive on the 407 but have them in the same account.

But to link a person to a tap you have to:

a) use the same card, or
b) have several cards registered.

And I am not talking about a single ride here. My concern is that this will give a backdoor to the TTC to turn down weekly and monthly discounts because they'll argue that they can't keep track of individual riders who might use different cards.

And if they do allow for weekly and monthly discounts, I fail to see how (from the rider's perspective) this is that much different from Presto. I have to either use the same credit/debit card for all my travel. Or I have to register all my credit/debit cards that I intend to use with the TTC. The first option is effectively the same as Presto. The latter is worse.

I understand that it might be easier for the TTC to deploy. But I don't think it's effectively better for the average rider. And I am concerned that this is setting up the TTC to shoot down pass discounts. Or maybe we'll see a TTC branded mastercard for passholders?

 

[EnviroTO]

But to link a person to a tap you have to:

a) use the same card, or
b) have several cards registered.

Why would it be complicated? Which ever one is tapped in during a 24 hour period is the one they can use. The next morning if they forgot their credit card they could use their bank card but still get attached to their monthly pass. The current Metropasses are transferable anyway.