That's all starting to change. Responding to riders’ demands, many of the biggest transit systems in the U.S. are modernizing the way they collect fares. The agencies are upgrading their ticket-taking operations with technology that can take away the need for a ticket altogether. Riders will pay with regional fare cards or their mobile phone instead.
For many cities, it’s a huge leap forward from legacy systems they’ve been using for years, or sometimes decades. Philadelphia, for example, is only now phasing out a payment technology that's been in place since the 19th century: subway tokens. Philadelphia’s mix of tokens, transfers and swipe passes will soon be entirely replaced with a single electronic card for subway, buses and commuter rail.
Meanwhile, passengers on the Metra commuter rail in the Chicago region, which only started accepting credit cards in 2009, can now buy tickets and passes on a mobile app called Ventra. The app, which has been downloaded more than 2 million times, can also be used on Chicago’s subway system and on the suburban bus network. Passengers have bought more than $250 million worth of tickets on it in the two years since it launched.
New York City recently announced plans to ditch its electronic fare cards and let riders board transit with a wave of a cellphone or a swipe of a credit card, starting next year. The city's MetroCard, a yellow plastic card with a magnetic stripe, was considered groundbreaking when it was introduced in the mid-1990s. Upgrading the technology won't be easy: Despite a $573 million effort to replace them, the floppy cards won’t be entirely phased out until 2023.
As welcome as these moves might be, they’re still fraught with risk. Upgrading technology can be enormously expensive, especially if it requires building out a high-speed communications network. Installing new fare readers on buses or in train stations can disrupt service. Successful roll-outs require new policies, education campaigns, employee training, occasional fare adjustments and testing, testing, testing of both the new equipment and how users interact with it.
“Go in with eyes wide open to understand the complexity of these transitions,” advises Michael Gwinn, who helped the Chicago Transit Authority (CTA) develop the Ventra interoperable fare card and app. “But also understand this transition is absolutely worth it.”
Transit agencies can benefit in many ways from the new fare collection technologies. The new systems can make operations more efficient, by reducing the manpower required to keep up antiquated hardware or to collect cash from ticket machines. They can help agencies learn more about the travel patterns of their customers. Open pay systems, like Apple Pay, make it easier for tourists to ride transit.
But perhaps the biggest benefit is happier customers. “People who use public transportation want to use the same device that they use for everything else in their lives,” says Pat Elizondo, a vice president of Conduent, a company that sells ticketing software and other services to transit agencies. “[Transit] agencies need to have a way to address that, to maintain the ridership they have and to increase ridership.”
Randy Vanderhoof, the executive director of the Secure Technology Alliance, which represents the smart card industry, says it is also significant that transit agencies are moving away from the proprietary systems they used in the past and adopting standards that are used “everywhere” outside of transit. “That is different. That is new. That’s not ever been seen in transportation before,” he says. “They’re heading in the right direction.”
Technology Advances
Unsurprisingly, mobile phones play a central role in the new systems, even the ones that will still rely on fare cards. That's because smartphones can act as both fare card vending machines or the fare cards themselves, depending on the transit agency. Users can use mobile apps to add money to their accounts, while at the same time planning a route or checking the arrival time of a bus. Some systems also let riders use their phones instead of a fare card altogether, either through a ticketing app or by taking advantage of the short-range transmitters built into newer phones that let phones act as credit or debit cards.Nat Parker, the CEO of moovel, a transit app company owned by Daimler, predicts that transit agencies will continue to rely more heavily on mobile phones for ticketing. “Mobile is here, and it’s become the preferred fare media for customers,” he says. His company serves 18 transit agencies and processes $250 million a year in fare revenue. “It’s cheaper, it’s more efficient, it’s more convenient for the user, and it offers a very rich amount of data to understand how and where passengers are traveling.”
Meanwhile, there are equally important changes happening behind the scenes at transit agencies that make the innovations possible. One these is how they track customers. For decades, agencies did this by following fare cards. But this was problematic for a number of reasons. While the cards track how much money passengers have on their account, the agency has no way of knowing who’s using the card. Plus, because it's the turnstiles and other fare boxes that actually calculate how much value is left on a card, it can be extremely difficult to change fare structures, requiring the reprogramming of hundreds or thousands of fare-taking devices.
Card-based systems can be a pain for riders, too. If passengers lose their card, they lose all the money credited to it (unless they've registered the card with the transit agency). And adding money to a card can be a nuisance if you're not using a vending machine: Customers who use the San Francisco Bay area’s Clipper card, for example, often have to wait days before the money they add online shows up on the card.
So, increasingly, transit systems are looking to move to “account-based” systems where transit agencies track individual customers. The Utah Transit Authority was the first to use the approach in 2009, and the Chicago region followed suit when it launched its Ventra card in 2013. In these account-based systems, the card (or phone) simply tells fare readers who the customer is. The agency’s back-end systems then figure out how much money to charge the passenger. They can take the money immediately or do it once a month so that riders never pay more in a month than the cost of a monthly pass.
An account-based system opens the door to other innovations. For example, it makes it possible for a customer to pay in a whole host of ways, whether it's actual fare cards, an app, Bluetooth or the near field communication (NFC) standard used by Apple Pay and Android Pay.
And because all of those could be linked to the same rider's account, it allows a new level of interoperability with other agencies. Within a region like Chicago, for example, the CTA can now track which of its users also ride commuter rail or suburban bus services. That paves the way for features like loyalty programs for people who regularly use the different transit services in the area. The city is even looking at creating tourist passes that would let visitors take unlimited trips on the El, buses and Chicago's Divvy bike share system for one fixed price.
Down the road, passengers could even use a single account in multiple cities. “As more of these open-standard, account-based systems come online, it’s just a technical question that would keep me from being able to tap my Ventra card in Boston on the T,” says the CTA's Gwinn. “I tap it in Boston, [Boston’s system] recognizes that my card’s a Ventra card. The Ventra back end debits the appropriate fare, and then CTA sends the money over to [Boston].”
Roll-Out Difficulties
As promising as all the technological advances are, they can be tough to put into place.Philadelphia’s transit agency, the Southeastern Pennsylvania Transportation Authority (SEPTA), has been working on upgrading its fare system -- one of the last in the country to still accept subway tokens -- since 2011. The project has been plagued by delays since its inception. State budget crises and local fare hikes pushed back the final roll out of its so-called Key card several times.
“SEPTA Key is the Philadelphia straphanger’s Godot: a tale of absurd waiting, punctuated by the occasional news that the long anticipated ‘won’t come this evening, but surely tomorrow,’” Jim Saksa of Plan Philly wrote. That was nearly two years ago.
Today, the system is finally rolling out, but users complain about a hard-to-navigate website and ticket machines that are difficult to use. Even a basic function such as adding value to Key cards online has been a big source of frustration. (SEPTA did not respond to interview requests. Conduent, the company hired by SEPTA to build the new system, declined to comment on the Philadelphia system.)
Matt Mitchell of the Delaware Valley Association of Rail Passengers, a group of Philadelphia area riders, says day-to-day operations are getting better, but SEPTA still hasn’t rolled out many of the features that it promised when it first described the system years ago. “We don’t have open payments. We don’t have a cap on monthly or weekly fares. A lot of these benefits that were being promised at the time SEPTA was looking for support are not coming to pass,” Mitchell says. “This is something we are pretty upset about.”
The riders group is also wary of SEPTA’s future plans for using the Key card system for its commuter rail lines, which uses zone-based fares and, unlike the subway system, is not completely closed off by turnstiles. The agency proposed installing turnstiles at its downtown stations and requiring passengers to “tag off” on key pads at outlying stations. Conductors on board will still check passengers’ fare cards, to make sure they paid the correct amount.
Mitchell says the arrangement is unnecessarily complicated, will inconvenience riders and will likely result in overcharges for customers who do not tap in or out. But it won’t solve the problem of unscrupulous customers cheating on their fares. When the commuter rail moves to the Key card, he says, “SEPTA is either going to incur ill-will from their customers or they’re going to lose more revenue.”
SEPTA’s transition has been especially rough, but nearly every transit agency that’s made such a big move has run into problems.
The Chicago-area Ventra card ran into several issues when it first debuted in August 2013. The CTA originally planned to replace its old fare cards within two months; instead, the process took a year. Riders had trouble activating their cards online or adding value to them. One November evening, 200 of CTA’s card readers failed during rush hour, which means CTA had to allow 15,000 passengers to ride for free. The CTA slowed its roll-out schedule, required its vendor to meet performance guidelines and eventually transitioned completely to Ventra the following August.
Leaders of Washington, D.C.’s Metro system spent $25 million on a pilot program to let riders use their mobile phones to pay for their fares, but the agency abandoned the idea last year. “The market isn’t there,” said Paul Wiedefeld, the agency’s general manager. Few of its customers used the Apple Pay or Android Pay features of their phones, and NFC-enabled credit cards are scarce in the United States. Plus, the Washington Metro system faces many other daunting problems, including track fires and frequent delays. “What I’ve heard very loud and clear from the stakeholders is, ‘Get the current system to perform,’" Wiedefeld said. Metro spent the savings from cancelling the $150 million contract on maintenance instead.
Moving Forward
Of course, the biggest U.S. test for the new generation of fare systems will come as New York City upgrades its 478 stations and 6,000 buses to accept mobile payments by 2020. The new system developed by Metropolitan Transportation Authority, which operates the city’s buses and subways, is also designed to work with the area’s commuter railroads.Cubic, the company building New York’s new system, is no stranger to such massive projects. It built the Chicago area’s Ventra card (although not its app, which was created by moovel). Cubic also runs the Oyster Card in London and the Opal Card in Sydney. Pradip Mistry, the company’s vice president of customer experience, says New York starts with the advantage of already having high-speed communications networks installed in its stations that can support the new, data-intensive systems.
But installing the new system is a lengthy process, because workers have to put the new equipment on buses and in subway stations without affecting service. Cubic also has to design a system that will work with a wide variety of users, including daily commuters, international tourists, tech-savvy young adults, senior citizens, and unbanked and low-income residents. So, in addition to mobile phone payments, MTA will issue a physical fare card that will be available at stores.
Despite the obstacles, Mistry says, transit agencies know the benefits of upgrading their systems, because it allows them to better integrate with other parts of the transportation network. People feel very comfortable, once they get used to it, with making payments with their mobile phones. They like being able to plan their trips and communicate with transit agencies directly through their apps. And they’re demanding features, like ones in development for Chicago and New York, that would let passengers pay for ride-sharing services like Uber and Lyft through their apps as well. “Agencies know,” Mistry says, “that this is the way the world is moving.”
This story has been corrected to indicate that the Utah Tranist Authority, not the Chicago region, was the first U.S. transit system to use an account-based system.
