Faregate: More Information
Faregates have now been installed at King Edward Station on the Canada Line
my photo on flickr
CORRECTED 16 August – my math was at fault
In the Vancouver Sun story from yesterday’s media event more information is forthcoming about fare evasion – and most of the points I made in yesterday’s blog post are conceded.
TransLink’s $171-million program to install faregates at SkyTrain stations and the SeaBus in Metro Vancouver isn’t expected to reduce policing costs
So then all the expected savings have to come from collecting more fare revenue. One way you can tell when somebody’s lying is that they do not answer the question directly but point to some other true statement that makes them look better. So when you look at Translink’s performance recently on fare gates, you have to take into account how often the new smart card gets brought into the discussion. Smart cards could have been introduced at any time, once the new machine readable tickets were introduced. It is just matter of plug in modules for ticket vending machines (TVMs) on buses and stations, and they were designed that way. Similarly the payback calculations treat contributions from provincial and federal governments as cost reductions – which from a narrow, institutional perspective (commonly accepted standards of bookkeeping) might be acceptable but for public sector accounting is simply a fudge.
The province provided $40 million and the federal government contributed $30 million from the Building Canada Fund. TransLink will fund the additional $100 million.
So we ought to be looking at the payback on $170m not $100m. But we also need to discount the effect of the introduction of the long overdue new regulations that put fine collection revenue into Translink (not the province) but also give them powers to collect those fines. When it comes to people saying how much fare evasion has been reduced the period between now and the new gates going live will be the critical one to assess the effectiveness of these measures. Note that the possession of a driver’s licence is important to make these rules work. What happens when someone has no license is less clear. So far as I am aware, we are still in this country not required by law to carry an identification document with a valid mailing address. This seems to me to be a critical weakness of the collection of fine revenue.
Transit police Chief Neil Dubord said some 60,000 violation tickets were issued last year, and similar numbers are expected for 2012. In 2011, TransLink lost $14.5 million in revenue, which is a combination of people not paying or paying only a partial fare and travelling into extra zones.
Of that figure, $7.7 million in fare evasion occurred on rapid transit, with $6.2 million on buses. So far in 2012, TransLink has lost $6 million in revenue.
These figures are very different from those that Frank Luba was quoting yesterday from earlier Translink reports.
TransLink did audits in 2004 and 2008 that showed annual losses to fare evasion on the rapid transit system were between $5 million and $9 million. But another TransLink report from 2005 showed that yearly operations and installation costs for the system amortized over 20 years would be $30 million annually.
Now $14.5m is a lot more than $5m but then fares have gone up a lot since 2004. Fare revenues last year were $356.6m (Translink 2011 Annual Report) so the evasion rate is still around 4%. Actually, the evasion rate is probably higher than that, simply because this only counts those who were caught, and accepts what they said about their journey as truthful. There will be some people travelling on tickets they were not entitled to (concessions and passes) and others making longer journeys but only buying a single zone. If there was much better data on travel that did not depend on ticket purchase data then there might be a better understanding on the extent of evasion, but we have for many years preferred to cut the cost of data collection to the point where I begin to doubt the validity of a lot of what is said about travel here.
There is nothing said about the additional operating costs of moving to a gated rather than an open system. This extends far beyond policing costs, but also requires some insight into how the staffing needs to change to cope with the new system. I would not expect Translink to be forthcoming on these kinds of details (but see that 2005 data Luba quoted) and anyway the use of Compass already makes the situation confusing enough. Let us assume that they are lucky enough to cut evasion in half in the first year of operation and let us further credit all of that to the gates – forget the extra revenue from fines. So now Translink has $7m a year to pay down the $100m it is spending – and again we assume that policing and operating costs are a wash. Which is pretty much what Doug Kelsey was saying yesterday.
Kelsey said TransLink is optimistic the system will “pay for itself,” with savings of $7.1 million every year, starting in 2014.
CORRECTION But the faregates only impact SkyTrain. So if they cut fare evasion there in half, there is only $3.8m in “new” revenue, since evasion on SkyTrain is said to cost $7.7m a year now.
I do not see how this “pays for itself”. I also see no estimate of how much it is going to cost to rebuild Main Street and Metrotown stations to allow for the gates to be installed – all of which I think needs to be charged to the Faregates account since it would not be necessary (however desirable) if the project had not proceeded. I suspect too that the gaping hole on the revenue protection fence that will exist until these two stations are gate fitted, which will also significantly lower the expected savings.
The decision to install faregates was made by Kevin Falcon when he was Minister of Transport. It made no sense then and it makes no better sense now but we are stuck with it. It is also too late now to turn back the clock and unmake it, and the BC Liberals are now so low in the polls that one more scandal can add nothing to the balance. Next year they are gone, and then – hopefully – some more sensible transit (and related) policy making will be seen. Not that that was a feature of previous NDP governments, but we must have hope, mustn’t we?
Stephen Rees's blog 
Stephen, I agree with much of what you wrote today and yesterday, but as to: “I also see no estimate of how much it is going to cost to rebuild Main Street and Metrotown stations to allow for the gates to be installed – all of which I think needs to be charged to the Faregates account since it would not be necessary (however desirable) if the project had not proceed.” I do not agree.
I am guessing that the major redevelopment of Station Square will involve a major upgrade to the Metrotown Skytrain Station. I suspect that a new entrance plaza (with faregates and a pedestrian overpass) will be added at the west end of the station, (I would assume to be largely paid for by Anthem Properties, the developer), and once that new entrance is finished, the east entrance and overpass would be renovated (translink and metrotown both agree that the existing overpass is too narrow, and the stairs need to be eliminated.) I would also assume that Metrotown Shopping Centre would pay for a portion of that renovation, including the development of Metrotower 3. The other major developments to the south of the station, currently underway, likely also contributed funds.
I would also geuess that the same could be said for the Main Street Station. i.e.: the considerable and ongoing development around there contributed funding to the station renovation/expansion.
It does not make sense that these stations would be renovated now to add the faregate plazas, only to be renovated/added to a short while later.
Please be aware that Vancouver has a pretty progressive record, when it comes to transit oriented development, and there is a significant relationship between development and transit system improvement.
Adam Fitch
August 14, 2012 at 12:04 pm
Stephen, I interpret “faregate” in your post as one would interpret “Watergate” or “climategate”. Not that I don’t agree with your opinion!
MB
August 14, 2012 at 12:12 pm
@adam – You may not agree but the fact is that the reason that Translnk and its predecessors did not install gates earlier was the cost of rebuilding stations (to meet the requirements of the Fire Marshal for emergency egress) was prohibitive. Yes I accept that some stations need upgrades – but as matter of good practice in the assessment of capital projects it is necessary to look at all costs attributable to the work, and not look for ways to “spin” results to produce a desired outcome.
“Pretty progressive record when it comes to transit oriented development” seems to me to be blind to developments elsewhere. Your are right that there ought to be “a significant relationship between development and transit system improvement” but we have not seen that in the City of Vancouver along the Expo line except at Joyce Collingwood. The record in Burnaby, Richmond and New Westminster is better – but still does not equal what happens in places like Stockholm, for instance.
@MB I think it is better to allow others to draw that conclusion for themselves and not underline it
Stephen Rees
August 14, 2012 at 12:32 pm
You’re harping on the missed fares. What about the costs of labour involved in the current ‘policing’. This morning at Olympic station at 945am (post rush hour), there were 2 VPD, 2 transit police and one Transit staff member at the top of the stairs checking tickets.
That seems like a colossal waste of resources.
Go to New York. They have turnstiles. Seems to work great there.
BC Ferries should be next.
Patrick Smyth (@patrick_l_smyth)
August 14, 2012 at 12:43 pm
No I am not “harping on” about anything. And if you know anything about the New York subway system you ought to know that their policing costs are considerable – but are not much related to fare issues. The assertions about the supposed correlation between turnstiles and security are not backed by any quantitative research.
Stephen Rees
August 14, 2012 at 12:50 pm
The renovation of Broadway Staion, Main Street Station and Metrotown Station predate the decision to install fargates – the afregate installation is now being co-ordinated wikth the timelines for those renovations.
See this SkyScraperPage.com thread on station renovations. The blurbs indicate plans to renovate dating back to 2006, which is before Falcon’s November 2007 amnnoucement of faregate installation. Of course, the timeline for the station renovations has slipped significantly…
http://forum.skyscraperpage.com/showthread.php?t=139672
guest
August 14, 2012 at 1:04 pm
Policing costs in NY have nothing to do with turnstiles. You missed an event called 9/11.
If automation (turnstiles) didn’t save money, why does private enterprise love the technology? Just go to Canadian Tire and you will see that automatic checkouts have become the norm.
My guess is that the Canadian Office and Professional Employees Union is backing a negative campaign against this. For example, transit police officers are paid at 125 per cent of their salary whenever they work on a Sunday, something that doesn’t happen at other police forces where weekend work is part of the job. A recent review also found overtime premiums paid for call-out shifts, which are unscheduled overtime shifts, appear unjustified. Officers are paid double-time for the first nine hours, then 225 per cent of their hourly rate after nine hours and 300 per cent after 10 ½ hours.
So, looking only at the fare-jumper model for building a case is wrong. Quantitative research includes all parameters.
Patrick Smyth (@patrick_l_smyth)
August 14, 2012 at 1:13 pm
Though I do personally believe that faregates are not necessary, reliable estimates by Jarvis can be seen here: http://www.translink.ca/~/media/Documents/about_translink/governance_and_board/Mayors%20Council%202/2011/February/Smartcard_and_Faregates_Business_Case_Summary.ashx
An excerpt from Page 4:
2. Business Case – 15 Year Net Present Value Analysis
Projected Costs (15 year NPV)
New Capital Costs $155 m
Avoided Capital Costs ($52) m
Net Period Operating Costs $102 m
Total $205 m
Projected Benefits (15 year NPV)
Reduced Fare Evasion $89 m
New Ridership Revenue $35 m
Improved Resource Utilization $26 m
Bus Operating Efficiencies (low estimate of $8.7/year) $77 m
Total $227 m
The faregates and Compass will net a benefit of AT LEAST 22 million over 15 years. But of course, we never needed faregates in the first place, Compass would work just as well without them.
These figures are from Translink. See the link.
Kyle
August 14, 2012 at 4:55 pm
@Kyle Conflating Compass and faregates is the problem. Putting in faregates to reduce fare evasion is not economically rational. But the faregate decision was imposed on Translink and since then they have been engaged in a program of “communication” designed to put the best possible spin on it. I think this goes beyond what a public sector agency should be required to do. They could just put up with it, and get on with their job as best they can. But then they get sucked into these bogus “announcements” and “events” which are just political posturing. The politicians have absolutely no shame at all.
Stephen Rees
August 14, 2012 at 5:06 pm
Single use tickets will still be available so going 3 zones on a 1-zone fare will still happen with as much (or more) regularity as now.
The lack of new development along the Vancouver portion of the Expo line isn’t a terrible thing. Transit there is serving the population rather than displacing it. Gradual, human scale redevelopment can be preferable to knocking down hundreds of homes.
I hope the NDP will be better, but it was they who decided to scrap existing plans and instead go with the truncated and oddly placed Millennium Line. I blame that Harcourt government decision for the long, expensive debate on Evergreen and Broadway. There’s no doubt in my mind that both UBC and Coquitlam Centre would already be served by rail transit had the original plan been followed.
Those ready to blame TransLink for our woes would do well to remember that almost every study and plan ever produced by local transit authorities has been shoved into the shredder by someone in Victoria.
David Walker
August 14, 2012 at 5:25 pm
From March 2011: “Last year fare evasion cost TfL almost £75m in lost revenue, including around £40m lost on London’s buses and more than £20m on the Tube network.
A recent survey, commissioned by TfL, showed that one quarter of passengers thought it was easy to fare dodge in London and one in ten passengers believed fare evading was worth the risk…”
from http://www.tfl.gov.uk/corporate/media/newscentre/archive/19481.aspx.
Note there are no statistics for 2011 yet..
The fear that fare gates will slow down people is unfounded, as shown in transit systems that have a huge number of passengers. Mind you in quite a few of them one doesn’t ‘tap” the validator, only hold the pass just above it…people don’t even slow down doing that and the gates don’t actually close between 2 users.. they keep starting to close/ open fully/starting to close/ open fully….
Just like the old turnstiles that, at rush hours, were spinning non stop
TransLink can’t wait to have users pay by the distance–as if fares zones weren’t already distance based..but this should only affect the infrequent users. Surely a small proportion of all users?
I haven’t looked for statistics but I bet that the majority of daily commuters in most transit systems have a monthly pass as it reduces their costs drastically. In Japan it is even cheaper if one subscribe to a 6 months pass. In Europe the cheaper option is a 12 months pass, with 1 or 2 months free–depending on the town.
French towns with a population–with suburbs–up to 2.5 millions only have a single fare zone. Paris transit system keeps reducing the number of its zones and it is quite possible that there will be one single zone soon for the whole greater Paris (12,161,542 as of Jan. 2009).
Right now the Paris transit system makes a profit, so do the Japanese transit systems, all private companies, that haven’t raised their fares for years..
Mind you this could be another smoke and mirrors accounting trick as in Paris, for example, they are spending quite a lot of money to spruce up stations and also install platform doors.
These are needed for 2 reasons:1-eliminate the number of people that jump on the tracks and tie up several lines for hours..and 2-automatize the trains. Line 14, the latest one built (1999) was automated from the start. Line 1 is nearly finished and they are working on line 13 (they do the busiest lines first).
The only automated systems without these safety platform doors are Vancouver and London’s Dockland LRT.
Red frog
August 15, 2012 at 11:03 am
Here’s a list of driverless metros –
http://mic-ro.com/metro/driverless.html
Click on each city reference and the statistics list shows whether or not the system has platform screen doors.
Vancouver and Docklands are certianly NOT the only automated system without platform screen doors.
guest
August 15, 2012 at 11:15 am
@ Stephen,
I also dislike how they’re spending money on unnecessary faregates. I believe that was Falcon’s decision without public consultation. There’s 2 ways to view this:
1) The government spends 3.2 billion on a highway, and spends only 0.17 billion on transit!
2) The government is spending 171 million on unnecessary faregates during a recession!
Maybe we should be thankful that the government is investing in transit in the first place, because as most historians and analyzers notice, no matter how much money is invested in transit, it always seems to turn into a good investment.
Kyle
August 16, 2012 at 9:37 am
@Kyle
Public consultation would not likely have changed the outcome. There is a general consensus that cheating on SkyTrain is a huge problem and that faregates are a good idea. The fact that the gates cannot pay for themselves in any realistic scenario does not seem to sway popular opinion very much.
Spending money on foolish projects does not produce the outcome that might have been gained from a more sensible one. The first priority for capital spending on transit in this region ought to be buying more buses. The bus system is either over capacity (routes that serve UBC and SFU) or under supplied (inadequate frequency in much of the region). But that also assumes that the measure of success is increasing transit mode share. That ought to be the thing we obsess about – instead we focus on ridership, or how much it costs.
Introducing new media (smart cards) has some benefits, but they could be achieved without the gates.
The project will not increase transit mode share. It is not a good use of public funds, as it is not likely to achieve the objectives claimed for it, let alone the more worthy objective of getting people out of their cars and onto transit.
Stephen Rees
August 16, 2012 at 9:54 am
@ Stephen, You are correct that the farecard could be achieved without the gates. To clarify, my argument is that all spending on transit, no matter how much or how little on any aspect of transit will be a good investment (though some are better investments).
Highways, of course, are >100% waste of public funds, as you’ll need to spend even more to recoup health and happiness benefits lost through sprawl and road maintenance.
The problem with more buses, (with the “more buses now” campaign) is that we must also find places to store them! NVTC is closing in 2015, VTC is at capacity, and when Corrigan won’t allow trolley wires to BTC, there is virtually no other place we can store trolleys. But if translink buys more buses (like the novas), there will always be some who attack saying we shouldn’t buy such expensive or “nice” buses, rather upgrade existing ones and spend money on other forms of transit.
Skytrain, when some say is a waste of money, may not be the Best Use of Money. There is the possibility that LRT would work better, but remember, all investment in transit is a good investment.
Though public opinion is vastly in favour of faregates, the public is also vastly in favour of spending more on transit (just look at Measure R in Los Angeles). So if the transit community can pressure the government to give the public a referendum on “do you want to raise the PST by 0.5% to pay for transit improvements” it will pass by a great majority.
Kyle
August 16, 2012 at 10:11 am
“You are correct that the fare card could be achieved without the gates” All the new tramways systems that were built from the the mid-1990s on in France have been using transit smart cards since the early 2000. Neither trams not buses have fare gates–obviously. These cards are also used on inter-cities commuter buses and trains ,bikes etc.
Even as small a town as La Rochelle (population 72 000) that pioneered bike sharing (mid-1970s) and electric cars sharing (mid-1990s) use a smart card for its buses, bikes, electric cars, electric ferries, even taxis …but then there are only 2 major transit providers in France (plus RATP that tries to get more contracts outside Paris) so small towns piggyback on big ones when it comes to the cards technology.
Red frog
August 17, 2012 at 11:31 am
Thank you for the research. Common sense that faregates should have been installed at construction. No one can name one thing that the Lieberals have ever done strictly for the benefit of citizens. At the heart of all their infrastructure projects is pay back to donors and cronies. Campbell was always the ‘developer’/’construction owner friendly’. And mini-campbell Falcon is the same. According to this article $170 M divided by $3.8M is 44.736 YEARS to break even. Our children’s children will be paying it.
And for transit police to be paid egregiously for working Sundays or overtime is criminal. It’s not like transit is a Mon – Fri 9-5 company. Very tired of seeing, as others do, a group of them standing around talking, laughing, unaware of what’s going on around them instead of working.
Ara Hepburn
August 26, 2012 at 1:16 pm
It was suggested that faregates work well in New York. Our loses to fair evasion are estimated in the neighborhood of 10 million of dollar per year. In New York, WITH fairgates, the figure is 100 million dollars per year. It is quite certain that these fairgates will never pay for themselves, although one can hope that they don’t make Vancouver much more like New York! (I turned down the opportunity to work in New Yoirk in order to live in Vancouver.)
Robert Morewood
October 18, 2012 at 12:43 pm