New Technologies in Fare Collection

BUSRide spoke with thought leaders in the industry about benefits, proprietary restrictions innovations and more in the fare collection field.

Darren Dickson

What are the latest emergent technologies “disrupting” fare collection and transit revenue management?

Darren Dickson: There are so many new technologies ranging from mobile implementations, which are gaining momentum, to SaaS-based solutions that more readily enabling vertical integration within fare collection. Media is no different. One of the most exciting and recent disruptors will be our new Nano Card technology. The Nano Card is essentially geared toward enhancing social service programs and introducing more passengers to smart cards at a fraction of the cost of traditional media.

The new Nano Card technology we’re leveraging on behalf of our agency partners was originally developed for entertainment venues like Dave & Buster’s and GameWorks as their arcade gaming cards—and has proven to be an innovative, cost-effective solution which allows agencies to transition from magnetics to a technology-forward option.

Gary Googins: Ride share apps are adding convenience to door-to-door transportation. These companies have recently added features that allow you to put together a rideshare. This, in some cases, significantly reduces trip cost, and could mean that rideshare apps are an even more attractive option to someone that might be price sensitive or environmentally conscious. From Vix’s perspective, we are looking to partner with these providers and provide access to our account-based fare collection system that would enable riders to pay for an entire trip journey, which may include a multimodal approach to trips.

Gary Googins
General Manager, Americas
Vix Technology

How does modern advanced fare technology benefit agencies in terms of passenger convenience, cost savings, etc.?

Googins: Regular and transit-dependent riders will figure out any fare payment scheme an agency implements because they have to, and they are invested in it. Where I see the convenience of modern fare collection providing value is in choice riders who are attracted to systems that are simple and easy to understand. That’s where the opportunity sits.

Differentiated fares is big because with most modern account-based systems, we can provide some unique faring approaches, such as fare-capping. This is when you have a daily, weekly or monthly cap in place, which means customers don’t have to think as much about their travels; the maximum fares are built in.

The other benefit is for low-income individuals. They may not have the capital upfront to purchase a monthly pass, and tend to pay cash each time they ride; this means they end up paying the highest fares. With fare-capping, customers can obtain a monthly pass by paying for each trip up to the cap, which levels the playing field between regular riders and lower-income riders who don’t qualify for fare programs. These systems also provide protection against loss by offering a replacement, usually for a small fee.

In general, a lot goes into collecting, sorting and moving cash, so there are cost savings there when using fare systems. The collection of data, as well, provides immense value.

Dickson: The Nano Card checks the box on several initiatives—passenger convenience and costs savings to name a few. On the passenger side, the Nano Card replaces old-fashioned punch cards and magnetic stripe fare cards and introduces a smart card-like technology. Nano Cards look and function just like a smart card, but they are significantly less expensive, because they are intended for short-term use only.

As for cost savings, the smart cards that are commonly used for transit fare media cost far more than the magnetic stripe cards generally used for social service programs, so smart cards are not a viable solution. The intent of this new fare media is simply for a short-term purpose—getting to and from an appointment or travelling a transit system for just one day.

What factors are driving innovation in the field of fare collection?

Dickson: There are several factors driving innovation in fare collection—ease of use, quickly evolving technology and cost are just a few of the biggest factors. Our Nano Card has each of those benefits. For example, the cost per card for the Nano Card is a fraction of the cost for a smart card, which makes it the perfect fit for social service programs—it significantly brings down the cost per ride for the agency. Additionally, the Nano Card also helps introduce new fare payment technology to their riders, all while maintaining security and reporting functionality. In Albany, NY, Capital District Transportation Authority (CDTA), each Nano Card is labeled and programmed with a unique serial number, so the agency can track each card’s use, including date and time of use and the route for which it is used. This data can be leveraged to the agencies’ advantage, providing valuable insight to change and adapt programs to better meet rider needs.

Googins: The level of innovation occurring with account-based ticketing in using cellular data capabilities on vehicles combined with the high penetration of consumer devices is one factor. Customers expect things to happen in near real time, which is what account-based ticketing offers. The validators on buses and platforms are actually becoming less sophisticated because the fare calculations are being done in the back office; this means that vehicle and platform validators are becoming less expensive, which is a big win for transit agencies’ capital budgets.

Is “coexisting” with other technologies a requirement for today’s fare technology? How should agencies manage proprietary restrictions in 2018 and beyond?

Googins: From Vix’s perspective, we operate as a systems integrator: when it comes to building websites, we hire professional web developers; for IVR systems we hire IVR installation providers; and with the retail network, we partner with retail providers. By doing these things, we are able to stick to what we’re good at it, which is providing the back-office technology, the field equipment, and the API gateway and logic that brings it all together. Coexisting is important because we, through the use of Application Programming Interfaces (APIs) and our API gateway, are able to interact with all kinds of systems in the field. Any retail network can use our API web application. Any other transit provider or ticket-seller, or even a third-party TNC app could utilize the API to leverage account-based ticketing.

Dickson: Given that so many agencies have the challenge of working with legacy software and hardware, integration can be a huge challenge. Ideally, one vertically-integrated fare collection solution ensures centralized reporting and less agency management associated with several technologies.

There is a significant value in being able to pull reports from one place. In addition, not having to update several platforms to make a fare structure change and not having to manage multiple vendors are added benefits of reducing the number of vendors an agency is working with at one time.

What kind of institutional shifts should agencies prepare for as their operations adapt to new fare technology?

Dickson: As technology evolves, making sure you have a team that understands what was implemented and, just as important, what it takes to maintain those solutions, becomes far more critical. Unlike other vendors, which have a shorter engagement with the agency, a fare collection system has a lifespan of ten years, at minimum.

Most people don’t stay in the same role for more than a decade, and that alone puts transit agencies in a difficult position. Due to budget constraints, agencies are not allowed to bring in new personnel until the person holding that position leaves. As employees retire and move to new agencies—it’s difficult to fully identify the knowledge and experience lost until after that person is gone. A general shift toward knowledge sharing and training as part of onboarding new personnel will greatly serve this community.

Googins: What we see is that every procurement is completely unique and transit agencies, as opposed to looking at best practices and trying to take software off the shelf, try to make everything custom for their project. This means they tend to stray away from those best practices because the organization doesn’t want to change a certain practice or the software, or just have a change-adverse culture. In turn these customizations create a much more complex support environment for a supplier, which drives up capital and operational costs. To save in upfront costs, doing your due diligence with the development of an RFP and actually sticking to those standard offerings and best practices will allow for cost savings and less risk in project deployment, and will also have payback through lower ongoing operating fees.