When I lived in Toronto, and downtown was a (solid 45-minute) subway trip away, my daily commute cost $5. The one-way price later increased to $2.60 and, since leaving, it’s gone up to $2.65. Notwithstanding my dislike of the wage-price spiral caused by uncontrolled public monopolies, the cost was easy to absorb. Getting from Toronto from Hamilton on a daily basis is a vastly more expensive proposition; a round trip costs $26.46. Notably, however, my cost of living has plummeted overall compared to living in Toronto (and I have a vastly bigger, owned home where the windows don’t leak). Further, my real daily cost of public transit is below $26.46, thanks in part to the new Presto fare system. (It’s a stored value card created by GO Transit that can be used on many public transit systems in Ontario.)
For my calculations, let’s use April 2013 as an example month. It’s got 30 days, and I’ll need to be at work for 20 of them.
To catch the Hamilton Street Railway (HSR) express bus that runs by my house, the fare is $2.55. I can tap my Presto card on the bus and it deducts the cost from my balance. (This balance auto-refills from a credit card, resulting in time savings and a small cash-back bonus.) I get to downtown Hamilton in time for an express GO Train and run upstairs to catch it, but not before tapping my Presto card again to indicate I’m taking my default GO Transit trip. (Note that a “default trip” is another time saver because the user doesn’t need to tap their card again at the default destination station.) The train ride takes another $9.53 from the balance but, as soon as I tap the card, $1.50 is credited to the account. Why? Because HSR has a “co-fare” agreement with GO Transit. The co-fare savings alone mean that the Presto Card — which carries a $6 issuance fee — pays for itself in two days. Next, at Union Station, it’s time to tap again before entering the TTC subway station to take a five minute ride up the University side of the Yonge-University-Spadina at a cost of $2.65. There’s no co-fare agreement between the TTC and GO Transit because both agencies know that their users are economic hostages to the service. The trip cost is $13.23.
On the way home, the trip cost is the same — $13.23 — resulting in my calculated daily cost of $26.45. But here’s how the Presto Card saves me some money besides the 1% cash-back (eventually I’ll have a card that earns 1.5%) and the $3 in daily co-fare savings:
1. Ridership volume discount. GO Transit has eliminated its monthly passes in favour of the Presto Card. After 35 trips in a given month, the cost of a GO Transit ticket drops from $9.53 to $1.25. In a 20-ride month, this saves $41.40. Life-changing? No. Decent for a passive, zero-effort method of saving money? Of course. This means that my marginal public transit cost drops massively after 17-and-a-half workdays.
2. Public Transit Pass Tax Credit. There are various requirements to qualify for the tax credit and they can change from year-to-year so be sure to review them for yourself. In 2013, so long as I commute round trip 16 times on each transit service in a given month, I will get a credit for the full amount of my public transit costs for that month. The credit is a federal non-refundable tax credit which reduces my taxes owing at the lowest marginal rate. Confused? Just use TurboTax and you’ll be fine. Annually (again, assuming that April is the average month) this credit stands to save me about $880. Instead of having to keep monthly pass receipts for all three transit systems to enjoy the credit, I only need to print off a single consolidated statement for my Presto Card each year.
These savings might grow if Ontario actually implements a provincial transit tax credit. If this credit were applied in the same way as the federal credit, I’d get back approximately $300 more per year. (The reason this amount is lower is because Ontario’s income tax structure is extremely progressive, rather than regressive. The lowest marginal rate in Ontario is only 5.05%. I’m not saying “regressive” and “progressive” to make a normative statement, it’s just the accurate terminology.)
My out-of-pocket cost to get to/from work is $26.46. But after considering the ridership discount for 2.5 days a month and deducting the Public Transit Pass Tax Credit, the actual daily cost drops to $20.73. That’s a lot of money, but I’ll gladly pay an extra $15 a day if it means I don’t have to live in Scarberia.
How could I save even more money on public transit?
1. By driving to Toronto every day. In this scenario, my public transit costs would drop to zero. Of course, the price of parking near work would eat up most of those savings. Add in the cost of gas and, worst of all, time wasted in QEW gridlock and it becomes clear that commuting by car is a losing proposition for me.
2. By telecommuting. I won’t get deep into this because it would make for a whole separate post. If I only telecommuted for, say, 2 days a week then the cost savings wouldn’t as massive as you’d expect. Why? Because I’d lose the ridership volume discount and the transit tax credit. But whether I telecommuted for 2 days or 3 days a week, the major benefit would be time savings.
Thanks Presto Card for saving me money and time. I hope GO Transit (Metrolinx) and the TTC get their acts together and start offering a co-fare ASAP.
It also looks like with GO Transit, you save even more money in the long months since it looks like you pay $0 per trip on trips 41+. For example, in May, you probably have 22 days that you will be in the office, which lowers your effective cost per day.
One of my employment perks is a free bus pass. It’s pretty sweet, though I hardly ever use it for work. If I didn’t get one for free from work, I would probably buy a card for $5 and then set up autoload to add $10 when it runs out of money since I use the bus pretty infrequently. Oh wow, the bus pass is a benefit of working that I didn’t even think about!
Time saved, if you can telecommute, is priceless. My drive is 5 minutes each way and I wouldn’t trade with you for anything. How long is your commute from stepping out the door of your house to stepping in the door at work?
Do you work while on the transit? If you were writing your blog or answering comment from people bragging about their 5 minute commutes then it might feel less like a waste of time.
lol. My commute is a long one; I need an ultrabook to work more effectively but, yes, it’ll totally be possible.
…good on you, Joe – saving transit fare is a good thing. And, I hazard a guess, perhaps there are additional savings to be realized if you don’t have too far up the Yonge – University – Spadina line you have to go. You might be able to walk up, either using PATH or by going outside, in the better weather months, thereby eliminating the extra cost of TTC. Even if its just one way. Just a thought. :>)
That’s a great point. I’ve definitely walked from Bloor to Front just for fun. My work is somewhere in between, near College. Unfortunately, that’d be a half hour walk. Great exercise but too far for a daily walk in terms of time. (Though perhaps I should consider it for my daily exercise?)
We live in archaic times in Canada. In Hong Kong and Singapore, their public transit programs and state-of-the-art, tap-in-and-tap-out cards were incredibly easy to use.
I’d like them to move to the future and let us just carry cards that we can refill or buy “monthly” passes on. Then if we lose it, we can just get another card and transfer our balance over online, and pay online.
In fairness, with population densities as intense as Hong Kong or Singapore, I do thing the GTA would be in a less sorry state. But yeah, the fact that we’re building crappy little light rail services is just pathetic.
The Gardiner Express was called a “white elephant” and a project “doomed to fail” during the 1950s. People didn’t think it’d get used. Infrastructure can only be used after it’s built, and it takes a while for people to make life changes based on new infrastructure. It’s like fixed costs during economics; during the short term people can’t adjust. For example, Hamilton only got rush hour GO train service a couple years ago, and only now are people like me moving here. Same for when they introduce “all day” train service.
Clearly the best way to reduce the cost is to work 40 days one month and none the next! That discount system doesn’t seem to be as much of an incentive as it could be since most of the trips have the same cost whether you’re making an annual visit to your tax preparer or using the train regularly several times a week. You would think that regular use would be worth more than a 10-15% discount.
Oh trust me, they structure it that way because they know people are hostages. If you want to see a pathetic incentive system check out the TTC MetroPass. You need to ride it twice like EVERY calendar day before it breaks even. I wrote about how I just bought tokens at a grocery store (to enjoy 5% cash back) and stocked up heavily before the $0.05 / token price increase. Even WITH the tax credit, I would have lost money on the MetroPass. You *can* get an 8%-or-so discount if you buy the entire year up front and they mail each one to you; thankfully I wasn’t dumb enough to do that because people got screwed during the Canada Post strike and between vacation / leaving TO after only a year, I would have lost money big time. I know a lot of really smart Buyers and most of them refuse to buy the TTC pass, they used tokens like I did.
Au Contraire!!!! Those of us who save money by paying up front to purchase the MetroPass via mail AND use it twice or more per day were NOT ‘screwed’ during the Canada Post Strike. TTC actually provided us all with a means by which they honoured their end of the bargain, which meant that we were still able to get our Metropasses and continue travelling. If I remember correctly, we were issued with a letter to take to TTC kiosks to collect our passes. In any case, we were definitely NOT screwed. FYI>
Didn’t you have to go to like Sherbourne station to get it or something? My friend who uses a metropass said it was pretty disastrous.
Hi there
No I didn’t, actually. As far as I recall it was all pretty seamless and easy. Maybe it was disastrous for others? Possibly, but no problems for me.
I’m glad to hear that Ontario transit is slowly leaving the stone age.
Also, think of all the delicious data that is generated by such cards! Cities like London get a HUGE wealth of information thanks to Oyster cards.
Unfortunately the data is collected by a government agency. The most use they’ll ever get out of it is putting it all on a hard drive without encryption and then losing the hard drive lol.
In retrospect, public transit was a bargain when I lived in NYC. Living out in the boonies in central North Carolina means we all have to have a car to get to and from work. I have a 35 mile commute and there are zero public transportation options for me. I make up for that by driving a prius
My commute is about an extra 10 miles but wow that’s quite the drive. When you rack up such huge mileage, fuel efficiency becomes a legit concern. If I were going to commute by car (again, impossible just because the traffic is so horrific — the 401 for example is the widest and busiest highway in North America (although only in the TO area; it thins out beyond the GTA. I’d have to use the QEW which is also insanely busy but they don’t have the room to expand it.) I’d look into a more fuel efficient car than the 03 Malibu.
I envy my friends who live on the U.S. eastern seaboard around NYC for their rail system. You can live hundreds of k away in the burbs or country and still it’s an easy, stress free commute into the inner city areas to work. Going ‘into the city’ for an event is a nobrainer, just hop on the train. Cheap, and fast.
Well, I don’t envy them that much because I have a much sweeter setup than that
. But definitely, places like the US eastern seaboard and parts of europe have way better transit than we do.
I used to commute from Burlington to the financial district every day, and I found I couldn’t hack it. It was way too hard to put in the hours that were needed to excel in Public Accounting and commute. My work suffered immensely! And it was about $200~ a month for a Go pass from the station if I remember right.
After Deloitte I moved to Bermuda, I had a moped and got to take that to work every day, about a 15minute moped ride into the city. $5 worth of gas would last about 3 weeks or so, and it was an amazing fun commute in the tropics (except when it was raining, but you adjusted and bought wet weather pants and jackets). After I experienced that, I couldn’t go back to a commute.
When I moved back to Canada as a young single guy, I lived downtown and walked to work. I can’t handle that commute anymore! Right now, I literally live across the street from work and can be from bed to desk in 5 minutes if the elevators are in a good mood. While I never thought of the cost savings (my rent is higher than if I commuted so it nets out) I’ve been able to work late nights and weekends without stressing about missing the next train, which has made my income go up much faster than it would otherwise have done.
That said, a downtown Toronto condo probably isn’t the best place to raise a kid if I ever have one…
lol yeah exactly. Living in an 800 square foot unit was just too small for us; I can’t imagine raising a huge family in one. And having a gorgeous daughter is what makes a ridiculous commute worthwhile