Savings through service efficiency

Public transit is a big industry. Annual operating costs for the TTC are more than $1.5 billion per year, while GO’s costs are about $500 million. Together with operators in the surrounding regions, total turnover probably approaches $3 billion per year. About two-thirds of this amount is recovered from fares, with the balance (about $1 billion) paid by local and provincial governments. The TTC’s operating deficit is about $200 per year for every Toronto resident.

Capital spending has been erratic, less than $0.5 billion through decade to 2003, but rising sharply since then to almost $3.5 billion per year at present,[1] all of it provided by federal and provincial governments.

Clearly, if Metrolinx is to continue to spend money on such a scale, it needs to be able to demonstrate that it is getting the best value for it.

Operational efficiency

Many GO and TTC operating practices seem inefficient, at least in comparison with international best practices. Labour costs are high, comprising about two-thirds of operating costs. For example:

  • TTC subway trains operate with two drivers, whereas normal practice in Western Europe since the 1980s has been single-person operation. Paris is gradually converting certain of its heavily used Metro (subway) lines to driverless operation. Vancouver’s system is entirely driverless.
  • GO Transit operates all trains with a three-person crew, including an engineer (driver), conductor (guard) and ticket inspector. In Europe it is common to operate commuter trains with a single driver, and with occasional inspection of tickets on trains and at stations.
  • GO Transit achieves very low fleet utilization, with most trains making only a single trip morning and evening. GO has been slow to develop off-peak and contra-peak services that could increase fleet utilization.
  • GO has one of the largest and most intensive diesel-operated commuter rail networks in the world, while other operators have discovered that, at this intensity of service, electrification makes financial sense. Electrification is probably 10 years overdue.
  • While the TTC basic wage rate of about $30 per hour for a driver does not seem excessive for a stressful job requiring unsocial hours,[2] many operating staff earn considerably more from premiums for working evenings, weekends, and overtime. According to TTC records, more than 1,300 employees earned more than $100,000 per year,[3] including 196 operators (drivers) and 21 station collectors.[4] These figures include taxable benefits, but exclude the cost of pension benefits. Private sector transport operators, such as Megabus and Porter Airlines, pay staff a fixed hourly rate, with shift patterns set to match traffic requirements and without premiums for overtime, weekend or evening shifts.  
  • Although TTC subway cars can operate as 2-car units, TTC runs 4-car trains all day on the Sheppard Subway, far in excess of required capacity.

Operating trains and buses may look simple and straightforward, but efficient operators find many ways to reduce costs, improve efficiency and maximizing output.

Commercial opportunities

GO and TTC also do not fully exploit commercial opportunities. They are constantly under pressure to add services, while keeping fares down. Expanding peak capacity is seldom profitable and requires increased capital expenditure. However, there are opportunities to add services or make capital investments to serve off-peak traffic, in ways that can actually make money.

The recent increase in off-peak services on the Lakeshore is one example. Another is service along Highway 401, from Pearson Airport to Yorkdale. Currently this service operates as part of an hourly route from Brampton to Scarborough. Looking at other cities with similar airport traffic, one would expect a more frequent service at least between Pearson and Yorkdale Subway Station to be worthwhile. In Montreal, the 747 bus now operates every 10 minutes from Dorval to Atwater. The minimum fare is $7, which includes a day pass, so it maximizes revenue from airport travellers while being affordable for airport workers.


Notes
[1] According to the table on page 45 of the Metrolinx Investment Strategy.
[2] Salary and wage rates are from www.glassdoor.com and other sources on the web. See http://www.torontosun.com/2013/03/28/ttc-staff-making-100gs-hits-1395
[3] See http://www.citynews.ca/2011/03/31/over-1000-ttc-employees-made-more-than.... Under the Public Sector Salary Disclosure Act of 1996, TTC is required to disclose details of all employees with total taxable benefits exceeding $100,000 per year.
[4] In comparison, pilots on Porter, and Westjet are paid about $90,000 to $100,000, including overtime. Greyhound and Coach Canada bus drivers are paid much less, in the range of $40,000.