February 2009

Updating Fare Collection Systems Help Transit Operations Increase Efficiencies, Revenue

by Alex Roman, Managing Editor

Photo Courtesy DART

As funding opportunities and budgets subsequently shrink, many transit agencies are looking for ways to cut corners and operate more efficiently.

One often overlooked remedy that many agencies may not consider is jumping further into the technological revolution, where there are many solutions that

can help make operations run smoother. Take fare collection operations, for example, with outdated systems. Many agencies lose money every day on illegal transfers, fare evasion and the inability to tailor their services to meet demand in key demographics.

From large to small, in a relatively short amount of time, many agencies have seen the benefits of updating their fare collection systems, which have helped increase revenue and virtually eliminated fare evasion, as well as given them the tools to improve service and increase efficiencies.

Addressing inefficiencies

“Changing our fare collection system was a huge leap because it was mainly just a flash pass before,” says Diana Kotler, executive director of the Anaheim  (Calif.) Transit Network (ATN), a seven-year-old system that serves the greater Anaheim Resort Area, including Disneyland.

Receiving zero state or federal funding, about 70 percent of ATN’s revenue comes from farebox recovery, with the other 30 percent coming from assessment fees charged to local businesses. Therefore, it was imperative for the agency to update its system, which it did in 2007.

“We did find that with the validating farebox our cash revenue went up probably twentyfold,” says Kotler. “That’s no exaggeration. We went from $2,000 a month in farebox revenues to $20,000 this last December.”

Kotler adds that ATN followed the same system requirements that the larger Orange County (Calif.) Transportation Authority uses, which would make it compatible with the agency if later down the road a transfer agreement is reached or fare collection moves to a smart card system.  

Either way, the change will help ATN with the expansion of its services expected to take place in 2010 when Metrolink service is expected to increase to half-hour frequencies, enabling ATN to keep its fare structure in line with the commuter rail service. 

Dallas Area Rapid Transit (DART) also improved its fare collection on its buses in 2004 and will begin installing vending machines in September 2009, with the intent of having the machines on the platforms of every rail station in its system.

“The new machines will allow us to have much more flexibility,” says Dwight Mymbs, senior manager, revenue systems, for DART. “Right now, our customers cannot buy a monthly pass or seven-day pass at the rail station, but in the future they will have the capability to do both.”

One major inefficiency DART addressed by updating its fare collection system was the elimination of paper waste. Before moving to a magnetic card system, Mymbs explains that the agency would have to purchase day passes for every day of the year.

“You can imagine trying to come up with a calculation to make sure that you have enough day passes to cover your fleet for a whole year or two years,” he says. “It was a lot of paper, and at the end of the day you’d have day passes left over because you didn’t use them all.”

Now, Mymbs says the agency can simply order card stock based on usage, saving the agency plenty in much-needed dollars.

El Paso, Texas-based Sun Metro had approximately six different types of buses on the street, and almost as many types of fare collection systems, before equipping new buses ordered in 2007 with GFI Genfare’s Odyssey validating farebox.

“We actually already owned the software, but never upgraded the boxes so that we had only one fare collection system that would work with it,” explains Lynly Leeper, assistant director, development, for Sun Metro.

The problem caused by having multiple fare collection systems was compounded by the counterfeiting of its day passes, which Sun Metro eventually had to quit offering after several attempts to correct the problem.

“We changed the structure and imprinting on the pass at least three times in about twelve months,” Leeper explains. “We couldn’t keep up with how fast they could counterfeit.”

Now with an updated magnetic card system, Sun Metro plans on bringing back the day pass, as well a seven-day pass, in addition to its monthly pass, which was instituted to help increase monthly revenues and discourage transfers — another issue made worse by the use of flash passes.


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