TTC lost $3.4M in revenue due to malfunctioning PRESTO equipment

Revenue loss due to PRESTO issues 'understated' The Auditor General cited malfunctioning hardware as one of the causes for the lost revenue in 2018.

The Toronto Transit Commission (TTC) has lost at least $3.4 million in revenue last year due to malfunctioning PRESTO fare equipment.

A new report by the Auditor General identified 300 frozen PRESTO card readers on 168 TTC buses over a two-day period. It also found that about 56 per cent of the out-of-service incidents that occured on new streetcars in August are due to coin boxes being full.

The malfunctioning hardware caused the transit agency to lose what the audit committee is calling “a significant amount of dollars.”

“The question is, well, that's not really a shortcoming of the equipment because it's functioning normally it's just full,” Stephen Holyday, chair of the audit committee, said. “And the report suggests that both Metrolinx and the TTC and vendors involved in this have to go work out how to optimize the situation.”

The report suggests that the estimated $3.4 million the TTC lost in revenue in 2018 “may even be understated.”

“It is our view that the information and data gaps identified at this time make it difficult to provide these important numbers with the required level of audit assurance,” the report read.

The Auditor General submitted 34 recommendations in its report, including identifying the root causes of frozen PRESTO card readers, developing a method to detect issues with devices and ensuring coin collection occurs regularly.

The report also says that there needs to be a “strategic refocussing at the top by both TTC and Metrolinx to tackle what matters most and to work together better.”

Stuart Green, a spokesperson for the TTC, said the recommendations provide “excellent advice for moving forward.”

“The (Auditor General's) report confirms much of what the TTC has identified in terms of gaps in PRESTO’s reporting and revenue calculations,” he said in a statement. “Being heavily reliant on fares for our operations, the TTC is committed to continuous improvement and to making sure we protect that revenue source whether it be through enhanced fare evasion enforcement or by correcting technological issues that leave us short.”

Meanwhile, Metrolinx said that they “agree” with a number of the statements presented by the auditor general.

“We recognize that the TTC is unique given its size and the complexity of its operations and all of our efforts have been focussed on their successful PRESTO implementation — at every phase of their project,” Annalise Czerny, executive vice president of PRESTO at Metrolinx, said in a statement.

“We agree that there are opportunities to strengthen the terms and governance of our contract with the TTC, and there are also opportunities for us to deliver some enhancements the TTC may wish to pursue. We also agree there are gaps within the current PRESTO agreement with the TTC and that resolving these gaps is in the best interest of our customers.”

The report will be presented to the TTC board on Thursday.