Toronto take note: discounted off-peak fares a real option

Toronto’s transit and civic leaders argue that transit expansion is the only way to reduce overcrowding. Singapore shows there is a better option.

Toronto’s transit and civic leaders have repeatedly said that building more transit is the best way to handle overcrowding on city’s trains and buses during periods of high demand. Singapore shows there is a better way that is both cheaper for riders and easier to implement.

Last week, officials in charge of Singapore’s transit agency announced they would offer riders a discounted monthly pass for all off-peak hours. While a typical monthly pass costs customers $120 (Singapore $) a month, the discounted pass reduces that price tag by one-third and costs $80.

The off-peak pass can be used at any time other than peak travel periods, which the agency defines as weekdays between 6:30 and 9:00 in the morning and between 5:00 and 7:30 in the evening. All weekends and public holidays are considered off-peak. The transit agency says that 60 percent of all trips taken on public transit occur in off-peak hours.

It’s not the first time Singapore has done something like this, as the city-state has a history of using discounted – even free – fares as a way to ease congestion and overcrowding on the public transit network during periods of high demand. The country’s transit agency already offers commuters travelling to a select number of downtown subway stations a free ride if they travel before 7:45 a.m. The program has been such a success that the agency has extended the trial – which initially ran through 2014 – for another year.

How successful? Around 7 percent of all peak transit customers have moved their commute to off-peak hours. Prior to the trial, the peak-to-off-peak ratio was nearly 3-to-1 – meaning there were three customers during the peak period compared to off-peak. That ratio has since declined to about 2-to-1.

The benefits of such a program are two-fold. First, riders get the immediate benefit of lower fares if they change their commute times. While some customers won’t be able to change their travel times and will continue to pay the full fare, they will enjoy a less crowded commute. Second, the transit agency can avoid a costly overbuild of the entire transit system in order to solve a few, targeted times of high ridership. Avoiding those costs will, in the long run, help keep fares as low as possible for all customers.

Toronto should consider similar policies as it looks for ways to ease over-crowding – particularly on the Yonge subway line – during the morning commute. Both the TTC and City Councillors have highlighted the Downtown Relief Line (DRL), a subway line that would run from the Bloor-Danforth line to Union Station, as the best possible solution to ease packed trains and subway platforms on the Yonge line and Bloor-Yonge station, respectively. More recently, newly elected Mayor John Tory has launched his transit plan, SmartTrack, which is also being touted as a way to ease overcrowding on the TTC.

Yet the cost of the DRL ranges from $3 billion to as much as $8 billion (SmartTrack’s price tag is also $8 billion). Worse still is that the DRL would run well under capacity, even during the busy morning commute – meaning the line would be a drain on the TTC’s overall finances. Covering those losses would require a mix of higher fares for all customers or a dramatic hiking of property taxes. Similar problems plague Mayor Tory’s Smart Track plan.

Consumer Policy Institute argued in a report last year that off-peak pricing – even offering free rides in the hours prior to the morning rush – would alleviate the need to build the DRL and save the city $1.5 billion over the next two decades. Toronto City Council is set to embark on another public debate over how to tackle congestion, both on the city’s clogged roads and on its busy trains and buses.

Using discounted, off-peak fares needs to be part of that discussion.

Brady Yauch is an economist and Executive Director of the Consumer Policy Institute (CPI). You can reach Brady by email at: bradyyauch (at) consumerpolicyinstitute.org or at (416) 964-9223 ext 236.