Presto devices are failing at higher rates than previously reported, Metrolinx has made “unauthorized withdrawals” from a TTC bank account, and there are so many gaps in the management of the electronic fare-card system it’s impossible to say how much money Toronto’s transit agency is losing as a result of it.
Those are among the startling conclusions in a new report on the Presto system released Monday by Toronto’s auditor general.
The goal of the 110-page report from Auditor General Beverly Romeo-Beehler was to determine whether the TTC is collecting all the revenue it should through Presto, the fare system that is owned by provincial agency Metrolinx and is now the primary method for Toronto transit riders to pay their fares. The latest TTC figures show Presto accounts for more than 30 million trips a month.
Romeo-Beehler concluded the TTC isn’t collecting all the revenue it should through Presto, but “information gaps and control weaknesses” in how the system is administered make it impossible to put a firm number on the losses.
TTC chair Jaye Robinson said the report signals major problems with the fare-card system.
“It’s been a bumpy road and a lot of this is not acceptable … We’re losing revenue that we desperately need to run a cash-strapped system,” said Robinson (Ward 15, Don Valley West).
The TTC has previously estimated faulty Presto devices cost the agency $3.4 million last year, and Romeo-Beehler found that figure “does not appear to be overstated” and “may even be understated” given the problems with the system outlined in her report.
Those problems include significant limitations with how the reliability of Presto devices on TTC vehicles and in stations is calculated.
According to the report, bus and streetcar Presto readers that are “frozen” and unable to accept passenger’s payment are sometimes mistakenly captured as in service by Accenture, the company that monitors the devices’ performance. The company also only provides reliability data for the devices Monday to Friday between 6 a.m. and 10 p.m.
In addition, Romeo-Beehler found the reliability numbers for fare vending machines on the TTC’s new streetcars didn’t include some instances when the devices couldn’t be used by customers, such as when their coin box was full. Up to 56 per cent of service incidents affecting the machines were caused by the coin box issue, she determined.
“Neither TTC, Presto, nor its vendors are currently ensuring that the coin box is emptied on a regular basis,” Romeo-Beehler wrote.
On top of technical problems, the report identified “governance gaps” between Metrolinx and the TTC for Presto.
She noted that seven years after the two public agencies signed the master agreement to implement Presto, they still haven’t defined crucial service level agreements that are supposed to be used to measure how well the system is functioning.
The TTC also claims Metrolinx hasn’t delivered about 40 per cent of the features promised under the terms of the 2012 Presto contract, including “open payment,” which would allow riders to pay their fares by tapping a credit or debit card on a fare device.
Perhaps most sensationally, the report reveals Metrolinx made “unauthorized withdrawals” from a TTC bank account the Toronto agency set up to pay Metrolinx its contractual commission on each Presto transaction.
According to the report, Metrolinx drew on the account for other payments it claimed it was owed, contrary to the terms of the contract. The TTC instituted a stop payment order to prevent the withdrawals, and funds Metrolinx had taken in 2019 were eventually returned last month.
The report provided no specifics about the withdrawals, but Metrolinx executive vice-president for Presto Annalise Czerny told the Star the agency had taken $104,000 a month from the TTC for hosting a Presto subsystem. She asserted there was nothing wrong with the withdrawals.
Despite the problems laid out in the report, Czerny maintained the TTC and Metrolinx are “working incredibly well together.”
She said Metrolinx was still planning to institute open payment on Presto, but technological advances had rendered some other promised features irrelevant and a waste of public funds.
She described the auditor report as “hugely positive” and said it showed how both her agency and the TTC could make Presto better.
“So for me this is a great step in terms of improving the customer experience on the TTC,” she said.
The TTC has accepted all 34 of the auditor’s recommendations, which are aimed at improving Presto governance, data collection, and reliability. The report from the city auditor isn’t binding on Metrolinx, a provincial agency.
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Robinson said the issues in the report are “solvable” and “all parties involved must work together to deliver a better more reliable system for our passengers.” But she conceded the TTC has little leverage against an agency controlled by a higher level of government.
“It’s a bit of a David and Goliath (situation), and it’s not easy being in David’s shoes,” she said.
TTC spokesperson Stuart Green said in a statement the report “confirms much of what the TTC has identified in terms of gaps in Presto’s reporting and revenue calculations.”
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