The Long Island Rail Road may be losing more than $33 million a year because of “haphazard” fare collection efforts on trains, according to a new report by the state comptroller's office.
The audit examined how fares were collected on 301 LIRR trips between December 2018 and May 2019. Auditors found that in 78 cases — about 26 percent of all trips — conductors did not collect "non-commutation" fares, which include one-way, round-trip and 10-trip tickets.
In 44 instances, conductors did not check fares at all. In 14 instances, auditors never saw a ticket collector — including one time when a collector "went into the conductor’s compartment before the train left the station and did not come out."
Even when conductors did collect fares, they often received the wrong amount, according to auditors, who also conducted "scenario-based" tests on 68 LIRR trips to look for improper fare collection. In fully a third of those cases, conductors "collected the incorrect fare from the auditor by missing fare extensions and step-up fares, allowing the misuse of special tickets or fares, and giving incorrect change."
Although the sample used in the overall audit "cannot be projected to the LIRR system as a whole," the percentage of missed and incorrect fares would represent an annual loss in fare revenue of $33.4 million, the comptroller's report noted.
The audit comes amid a push by the LIRR’s parent agency, the Metropolitan Transportation Authority, to address uncollected fares. Systemwide, lost fares cost the MTA about $300 million a year, agency officials have said.
An internal study by the LIRR has estimated it loses about $20 million annually in uncollected fares.
“This audit found LIRR is too haphazard in collecting fares and potentially losing tens of millions of dollars by failing to check tickets or collecting the wrong amount,” Comptroller Thomas DiNapoli said. “Riders are counting on the MTA to find the billions needed to upgrade and maintain service. It can start by making sure it’s doing everything it can to collect fares properly, not just in the subway, but on commuter rail lines too.”
In a written response to DiNapoli, LIRR president Phillip Eng said the railroad’s goal is to “validate all tickets onboard and ensure that all customers pay the correct fare.” But conditions on trains, including crowded trains, can prevent proper fare collection, Eng said, noting that the LIRR set a modern ridership record in 2018.
LIRR officials also took issue with DiNapoli’s methodology, noting that fully half of the observations occurred on the same two trains, including one known to be particularly crowded. Eighty percent of observations were focused on two LIRR branches, and 60 percent took place in January — a month affected by severe weather, according to the LIRR.
Auditors said in their report that they followed "generally accepted government auditing standards."
The railroad said a more accurate picture of its fare collection procedures can be found in the work its independent auditor, MTA Audit Services, which conducts about 200 randomly selected and unannounced observations per month throughout the LIRR system. Using the data compiled by those auditors, the LIRR estimated that through September of this year, it failed to collect about 5.4% of fares — down from 7.3% during the same period in 2018.
“The LIRR has made fare collection a priority and increased management oversight of this activity by expanding customer and train crew education regarding fare structure and fare collection procedures, and increasing strategic deployment of train crews,” LIRR spokesman Aaron Donovan said in statement. “The LIRR has taken a leading role in developing and implementing an ambitious fare collection strategy that has yielded measurable improvements, including a decline in the fare not collected rate of 1.5 % in the past year.”
DiNapoli's office disputed the LIRR's assessment of the comptroller's methodology and questioned the independence of MTA Audit Services.
The comptroller's report made several recommendations to the LIRR, including looking at whether the railroad has sufficient staffing levels on trains, and working to determine why some conductors did not follow proper fare collection procedures and "develop a corrective action plan."
LIRR union chief Anthony Simon defended the efforts of conductors, who he said have to deal with overcrowded trains, insufficient manpower, multiple ticket options, technology challenges, and policies "that force them to make common sense customer service decisions to secure revenue while being fair to riders."
The workers are not to blame, Simon said. The LIRR leadership is responsible for putting fare collection policies in place, he said.
Recently, the LIRR announced it was moving forward with a pilot program eliminating cash transactions on trains — a move Simon and other union leaders have said could result in further lost revenue if riders don’t have another way to pay for their tickets.
"All of the fare collection policies and technology-driven plans, including the newest brainstorm of removing onboard cash, are a result of decisions by managers with no railroad experience," said Simon, general chairman of the International Association of Sheet Metal, Air, Rail and Transportation Workers.
The LIRR's Lost Fares
The office of NY State Comptroller Thomas DiNapoli conducted an audit of the Long Island Rail Road's fare collection efforts between December of 2018 and May of 2019. Here are some of its findings:
78 out of 301: Rate of one-way, round-trip and ten-trip tickets not collected.
44 out of 301: Rate of conductors not checking fares at all.
23 of 68: Rate of conductors collecting improper fares from an auditor.
$33.4 million: DiNapoli's estimate of how much money the LIRR loses annually in uncollected fares.