Skip to content

Canadian Urbanism Uncovered

Headspace: Ernie Wallace, Presto

Read more articles by

This new, regular online series will feature interviews with fascinating and influential urban thinkers, with a focus on discussing how Toronto can become a more engaged, accessible, sustainable city.

Presto, the GTA-wide electronic fare card introduced by Metrolinx, is set to undergo a significant transformation. The TTC, despite the changes being proposed for Presto, remains skeptical of the system and announced earlier this year that it intends to pursue its own open fare payment system instead. Spacing sat down with Ernie Wallace, the executive director of Presto, to discuss “Presto: The Next Generation.”

Spacing: What is Presto “The Next Generation”?

Wallace: In the very near future, by 2012 at the earliest, transit operators utilizing the Presto system will be able to accept multiple forms of payment. For the casual traveller, this means if you want to use your credit or debit card for travel then you’ll be able to that. Presto is also considering expansion in the direction of commercial uses for the card, what we call “near transit.” Near transit has the same function as Public Transportation — mobility and travel. Although this is purely fiction now, maybe you could use your (Presto) e-wallet for some private transit options, e.g. taxis.

Spacing: Toronto has a new public bike system rolling out: BIXI. Is bike-sharing a possible use for Presto?

Wallace: It seems perfectly reasonable at some point somebody should be able to use their Presto Card to access it. We haven’t sat down with BIXI yet but that’s exactly the kind of thing we hope to move forward on in terms of different products and services for Presto. We have to move and change Presto to a more open architecture, and we’re in the process of doing that. Once we’re there, Presto will be able to plug and play with other products and players. We’re looking to it over a period of the next 3-5 years.

Spacing: Are you also considering a Presto  smartphone app?

Wallace: With technology advancing by next year it will be entirely possible to put all your cards, credit, transit, etc…on your mobile. One of the most obvious ways of doing this is for the user to install a Presto app onto their smart phone. The application then interfaces with the phone and transmits payment through the mobile operator. We’ve already demonstrated phones with Presto apps on them.

Further up, Research In Motion has proposed an idea of making the entire fare payment system virtual. The direction they’re moving is not to install apps but using the phone, instead, as “Digital ID.” The phone would function as a front-end device; you press your phone to the Presto reader and it knows who you are. Once the system identifies you, it will automatically link to a preferred payment method which you’ve specifically assigned to use for transit, i.e. a virtual online credit card, virtual transitcard, etc… For security purposes your “digital identity” would be held in trust through authentication.

Spacing: Using Smart Card Technology, transit operators have the option of offering users specialized fare structures. Can you explain how that system works?

Wallace: We expect by 2012 that the operator, whether it’s GO or the TTC, would be able to go online, define a particular product, and execute it within 24 hours. There would be no reason why, for example, you couldn’t designate a smog day, by route, assign a special reduced fare, have in place for 24 hours, and then revert back to normal fare structure. Aside from smog days, the capacity is there for the operator to provide such options as Remembrance Day discounts for veterans, or, as another example, structure fares for a Breast Cancer Awareness day. The operator will be able to design products targeting a specific group of people who have a particular travel need.  We’re also looking at other incentives that go beyond those aimed specifically at commuters.  Ultimately it’s up to the operator to decide, but rewards programs are another possibility. We’re talking about a program where the cost is zero after a certain number of trips.

Spacing: What spurred Metrolinx to consider these enhancements to Presto?

Wallace: We were always going to do it. The idea began to coalesce around 2006 and we began serious considerations a year ago. Whether it’s transit systems, or health systems, or anything else which grows increasingly dependent on technology, if you wait until after the system’s been implemented to consider changes then you risk becoming a very dormant technology. If your question relates to the press about other providers taking their own direction, I think that’s a bit of red herring. Presto Next Generation is the kind of system we proposed for the TTC from the beginning. The TTC has its own reasons for going in their own independent direction. Since the summer of 2009, we were well under way looking at different operational architectures for Presto, as well as building towards having a card library and the variety of features mentioned.

Photo by Presto



  1. These are all great ideas – now if only the obstinate TTC would stop shopping around and speed up implementation. People used tokens in the fifties.

  2. Given the TTC’s past delays and overruns with technology development it might be best for them to stick with a proven provider with a functional product than going it alone. The TTC has created a pretty user friendly trip planner, but NYC and Chicago had provided their data to Google years before and allowed people to simply use Google to plan their trips. It might have been a better idea for the TTC to work with Google and use Google’s platform and incorporate aspects unique to Toronto rather than creating a separate trip planner.

  3. The TTC has been shopping around, among other things, to see if a proponent for new technology would fund the initial rollout. Depending on whose cost estimate you use, the price is anywhere from $300 to $450 million, but there is money committed for only about $150m.

    Also, the Presto folks didn’t start to seriously talk about alternatives to their original technology until they were pressed into doing so by the TTC looking at other, more flexible, implementations.

    Finally, someone might want to ask why we pay the head of Presto so much money. $288k in 2009 according to the sunshine list, more by a wide margin than anyone else at GO/Metrolinx. Can you say “gravy train”?

  4. “We’re also looking at other incentives that go beyond those aimed specifically at commuters.” This little sentence makes me suspicious. It’s been pretty clear from the experience of pioneer Presto users that it works okay on a commuter-with-regular-route model, but things can get strange or inconvenient if you stray outside that model.

    It’s all nice to read about smartphone users, after all most GO riders probably have a smartphone. It’s a bit different story with at least part of the TTC’s demographic. The poor and elderly may not have smartphones, nor might they be interested in downloading a mysterious app. There will always have to be a dumb card equivalent, and the card can’t be some expensive thing that would cost big time if lost.

    Before you put tokens down, recall that everyone has pockets to hold tokens, and you can get a nice plastic holder for a buck. You don’t have to have a smartphone, worry about digital security, or unexpected withdrawls from your account. (I would trust Presto, with its lack of track record, less than I trust Enbridge, and I would *never* give Enbridge withdrawal rights to my bank account.) Plus if you lose a token, you’re only out $2.50.

  5. I’m skeptical of the costs Giambrone has spit out to implement presto.  He’s never released a study, but just blurted it out (5 years ago he said it would cost $200m).  Assuming an average of 2 readers/bus, 2 readers/streetcar, and 5 readers/station (some, like woodbine would require 1-2 and others like bloor or union would require ~10) a $400m total works out to about $80k/reader!  The backend costs are eaten by the province.  An of the shelf MiFare DESFire (what presto is) reader is less that $50, plus a computer to hook it up to which for embedded devices are about $500 (and can support more than one reader).

    Now there’s also desk reader, loader machines, training, etc but the costs are nonetheless inflated.  I doubt the half dozen or so readers they’ve already installed cost anywhere near that much.

    The TTC also said the stop announcement system would cost way too much, but they ended up doing it quickly and cost effectively when their backs were to the wall.

    But there’s also the benefit of presto in that in integrates with our neighbours and will even eventually work in Ottawa if you take a trip there.

  6. Some of the major costs wouldn’t be the readers or the other technology but stuff like getting electrical and possibly networking to those readers (at Fair Wage Rates), and hardening them to work 24/7/365. In some cases that may be able to be connected to turnstile power but some others maybe not.

    As for Ed’s comment – we can just stand pat because of a lowest common denominator issue. We already discriminate against the strata he mentions by making cash fares more expensive.

    The next step should be to make Presto cards able to duplicate the functionality of Metropasses and forbid cash fare payments on vehicles to reduce cash handling costs and fare disputes, with each TTC route map indicating stores where tokens and passes are sold.

  7. TTC must get out of the not created here rut. They can barely keep the subway running and are way behind by years on routine system maintenance including wiping the stations.

    They should NOT be developing anything. No design. No construction. Just focus on the system running at peak efficiency. Or, get out of that too.

    Hire the profitable manager from HK or China.

  8. Steve, I’m not sure what Ernie Wallace’s salary has to do with anything. But since you seem very concerned about wasteful spending, perhaps you can explain why the TTC spent $1.3 million in consulting fees to learn about “open payment” — which would pay Wallace’s annual salary about 5 times over.

  9. I’m surprised that Steve Munro would resort to such politicized banter. It almost appears that he’s been hanging out too much with the consultant that was given a $1.3 million sole source contract by the TTC when Giambrone was leading it. This contract, which seemed to take only a few months of work, was to develop a business case and a RFP for the TTC to build a parallel system to Presto. I don’t believe that this business case has been published and probably never will be. Here’s your ‘gravy train’.

  10. Here in Tokyo I can use in the automated machine:
    – a ticket (bought from a Japanese/English capable machine)
    – a monthly pass
    – a weekly pass
    – a six month pass
    – a cell phone, or smart phone, or iPhone…
    – one of three cards like the Pasmo
    – my credit card
    – or pay at the wicket
    The Pasmo-type cards are usable on one national, two subway, and a dozen private lines. And this has been possible for a decade! Some of it for longer.

    We do not need that complexity of options in Toronto, but by god don’t our governments and transit services have any idea how far behind they are?!

  11. The next step should be to make Presto cards able to duplicate the functionality of Metropasses and forbid cash fare payments on vehicles to reduce cash handling costs and fare disputes, with each TTC route map indicating stores where tokens and passes are sold.

  12. I don’t like money spent on the consultant either, but this article is about Ernie Wallace who has been the head of the Presto project for some time.

    Hanging out with the TTC’s consultant? Hardly. I met him when he was in Toronto to make a presentation on Open Payment systems, and that’s it.

    The TTC summary report on the subject from 2007 is at

    and the detailed report is at

    and it estimates the cost of implementation at $250-260m roughly. This number has since gone up as other costs have been identified, and with allowance for inflation. Presto thinks it can be done at lower cost than the TTC, but still at a considerably higher price than the original estimate of $140m.

    It’s worth noting that Peter Milczyn, who is now vice-chair of the TTC, was a supporter of the TTC’s move to look at something other than Presto. This is not just a Giambrone pet project.

  13. $1.3M for a business case and RFP development is literally about 10x as much as it should have cost. There are dozens of technology consulting firms that could have done this work. Subject matter expertise, which is supposedly what the sole-sourced firm brought to the table, is not worth a million-dollar premium.

    That said, Presto also seems wildly overpriced for what is, as Tuzanor has pointed out, basically a commodity technology at this point. Accenture has a history of developing clunky, proprietary, underperforming systems — just ask the Ministry of Social Services.

  14. Steve, precisely what point were you trying to make by bringing up Wallace’s salary? Is it that Presto is wasting money on the salary of its executive director, so they’re probably wasting money elsewhere? Then the absurdly inflated consulting fee for open payment is certainly relevant, especially since the TTC’s implementation cost is a key reason for looking at alternatives to Presto!

    On the other hand, if you mention Wallace’s salary as an ad-hominem, then that is not only irrelevant, but lame and tacky.

  15. “Wallace: In the very near future, by 2012 at the earliest, transit operators utilizing the Presto system will be able to accept multiple forms of payment.”

    When someone says that something will be in the very near future, I don’t think 2 years out. And I certainly don’t trust such an estimate when it’s followed by “at the earliest”.

    That sounds much more like it won’t be ready in time for the first of the Transit City LRT lines.

  16. The detailed report referenced by Steve Munro is certainly very thorough in saying what TTC will need (see p170 of the PDF)… but it then gives only total costs, rather than unit costs for the all the items mentioned.

    Unless we can see what unit costs have been assumed, we have no way of knowing whether or not they are reasonable.

  17. With respect to unit costs, I agree that breakdowns would be helpful for comparison. Having said that, even Presto agrees that their system will cost much more to implement than the original estimate. It’s not just a question of buying a few card readers for every subway station.

    As for Wallace’s salary, I mention it because he is the highest paid person in the Metrolinx salary disclosure list. Two things are out of whack here. First, he is carried on Metrolinx’ budget rather than being paid out of the Presto operation itself. Second, he is paid more than the person who is responsible for all of GO Transit, and roughly the same as the Chief General Manager of the TTC. There is a slight difference in responsibilities.

    It’s not an ad hominem argument. It’s a comment on the basic question of why someone in this position is paid so much, especially considering how long it has taken for Presto to reach a modest level of market penetration.

    The high fee paid to the TTC’s consultant is even more outrageous considering how little he and his firm appear to be doing. It would be worthwhile for the new TTC to ask staff how much has actually been paid on this account, and whether it can be terminated. Remember, however, the the now-Vice Chairman of the TTC voted for it.

  18. Steve, I’m now even more puzzled. The reports that you provided are from 2007 and were done by another consulting firm. If I read the report right, it advocates support for a smart card system and directs staff to sort out the requirements and financial details with Presto. Since 3 years has passed since then, I don’t see much evidence of the TTC pressuring anybody. Also, I don’t understand why the TTC felt it was necessary to hire another consultant, especially sole-sourced, to do another report. The $1.3 million now seems like an even more colossal waste of money.

  19. I don’t understand why Kathleen Wynne is going absolutely mental over any possible threat to Presto, but is rolling over and playing dead for the destruction of Transit City. Seems bizarre. I guess Accenture has better lobbyists than Bombardier.