Management & Operations

Smart Card Technology Just Got Smarter

Posted on August 1, 2001 by Amy Carter, editorial assistant

The first electronic fare collection modes were introduced in the United States in the 1970s on rail systems in Washington, D.C., and San Francisco. As electronic fare media developed for rail, so did the developments in bus technology, until eventually electronic fare collection began to set the standard in the industry. From magnetic stripe cards to contactless smart cards, electronic media offer a host of options for transit agencies to customize their systems to accommodate just about every rider. Using automated fare collection systems gives the agency the choice of which type of non-cash payment method to use, and the options are extensive. “We are looking at adaptive technology to our fare boxes,” says Todd Cull, general manager of Diamond Manufacturing in Kansas City, Mo. “There are technologies in the marketplace that can be used in conjunction with a mechanical box.” Depending on a number of variables, including the size of the transit area, the number of riders and the level of sophistication sought by the transit agency, several different electronic fare media options are available. A simple “read-only” magnetic stripe card can work for transit agencies that want to offer monthly or weekly pass programs to their riders. An extension of the magnetic swipe card is the “read-write” magnetic card that allows the agency to use stored value or stored ride cards in addition to monthly or weekly programs. Read-write magnetic stripe cards are inserted into the automatic fare collection equipment and the fare is deducted from the card. However, a rapidly growing number of transit agencies are looking for a system that does more than just collect money. Manufacturers are developing and enhancing systems to be compatible with the emerging smart card technology. “Smart card systems are the next phase in fare collection evolution,” says Kim Green, vice president at GFI Genfare. Smart card technology With the innovative use of smart cards for fare collection, transit agencies are becoming increasingly aware of the possibilities that come with smart card technology. Smart cards are not only much more convenient for passengers but can be used to collect ridership data. That leads to more targeted services by allowing transit agencies to keep track of ridership patterns and preferences. “We are maximizing the useful management information that is available from our passenger and revenue collection data systems,” Green says. Dallas Area Rapid Transit (DART), which is in the process of procuring a smart card system, heralds the data collection capabilities as one of the biggest advantages of smart card technology. “Theoretically, we can find out where along a bus route a person is boarding the bus, where they’re getting off the bus and if they’re transferring to another vehicle,” says Matt Raymond, assistant vice president of advertising and marketing at DART. “We collect so much customer data that we’d be able to analyze that and provide better service.” Manufacturers are now developing systems that make smart cards seamless between different types of transit and other applications, such as concessionary stores in stations. Because of the memory capacity and stored value capabilities of smart cards, their potential for use outside of fare collection knows no bounds. Smart cards “allow agencies to enter into new types of partnerships with employers, universities, social service agents, as well as the opportunity to partner with other transportation riders, parking and toll,” says Dan Fleishman, an associate at Multisystems Consulting. “Once the transit systems are fully equipped and experiencing that seamlessness, it’s a natural desire for them to look at other venues they have an interest in,” says John Satterfield, vice president of business development at Cubic Transportation Systems. Cubic is introducing programs that are used in conjunction with smart cards to help increase ridership and decrease costs. With such solutions as Tri-Reader and AutoLoad, Cubic is helping transit agencies facilitate fare collection and implement new systems that make purchasing the smart cards worthwhile for both the customer and the agency. Tri-Reader gives the agency the compatible smart card architecture to use virtually any smart card that meets the ISO 14443 standard. With Autoload, smart card users can link their smart card balances to a credit or debit card. When the smart card balance reaches a certain level, it is automatically transferred over to the credit or debit card. The Chicago Transit Authority (CTA), which is in the process of procuring and developing a smart card system, is exploring the options of AutoLoad, attempting to develop a system that will allow riders to choose between many AutoLoad options, including the Internet, credit cards or ATM machines. “The goal is to develop all three systems as an option because this will help us reach out to our bus and rail customers,” says Luis Cantu, general manager of revenue equipment, technology and maintenance at CTA. Other applications for the smart card are still being developed. The Washington (D.C.) Metropolitan Area Transit Authority (WMATA) is exploring the option of offering “fair fares” which guarantee the lowest possible fare for which a rider is eligible. The smart card technology is programmed to “know” when the rider becomes eligible for a lower fare than what is being charged. “The way it works now is if you want to take advantage of a low fare, you have to buy the pass,” says Fleishman. “‘Fair fares’ takes the decision out of the purchaser’s hands.” WMATA is now looking into the programming requirements of guaranteed lowest fare and the system requirements for the project. Some worry the program could be detrimental to the agency because customers who do not know of a discounted fare or those who are willing to pay the full price will automatically receive the discounted fare, which could cost the agency money. “Other people feel that won’t be that significant, that it’s outweighed by the attractiveness of offering people this guarantee that they won’t have to worry about what they’re buying,” Fleishman says. “Guaranteed last ride” is another option, where the card becomes something of a credit card. If a rider attempts to use transit without enough money for the fare, the traveler can still use the system. When the time comes to add value to the card, the amount owed from the last ride is automatically deducted from the added value. “You don’t have to worry about getting stuck somewhere with no machine to reload value. Essentially [the agency] will give you credit. And the next time you put value on, you pay for [the ride] then,” says Fleishman. Since most smart cards can cost the customer around $5, not including the value that must be added to the card, riders are far less likely to throw the cards away, ensuring the agency will be reimbursed for crediting a ride. The Los Angeles County Metropolitan Transit Authority (LACMTA) is also researching and exploring the possibilities smart cards offer. But LACMTA is also interested in reducing the costs of maintaining moving-parts fareboxes. “In looking at upgrading to current technology, we looked at not only what was the most versatile and had the ability to store the most memory, but what would give us the least amount of moving parts and maintenance,” says Jim Cudlip, deputy director of revenue at LACMTA. LACMTA began comparing the different modes of electronic fare collection years ago and recently decided to implement the smart card technology. “Although magnetic stripe is a fully developed robust technology, it is a contact technology that requires a lot of moving parts and a fairly consistent amount of maintenance,” says Cudlip. Becoming regional In one of the largest smart card projects in the U.S., GFI Genfare and Cubic will install new validating Odyssey bus fareboxes with Tri-Reader smart card readers on all the buses in the greater Washington, D.C., and Baltimore areas. WMATA and the Baltimore MTA are currently using the smart card capabilities to offer regional riders access to transit in Washington, D.C., Maryland and northern Virginia. The WMATA/MTA system allows different agencies to maintain their individual fare regulations. “The systems are adaptable and programmable so that everyone can maintain their own tariffs,” says Greg Garback, executive officer for the department of finance and program development at WMATA. WMATA/MTA employs a clearinghouse to issue, maintain and service the smart card operation. The WMATA/MTA system will eventually link the bus systems in all three areas using smart card technology via a contactless farecard. The project will provide the nation’s first interstate ticketing system, allowing riders access to the partnering transit systems without needing to use different fare cards between systems. TransLink®, the regional project in San Francisco, is implementing a similar system to connect service between as many as 22 different agencies. Users will buy a contactless farecard that is valid at all agencies participating in the TransLink program. TransLink currently consists of six groups, with every mode of transit (except cable cars) used in the Bay Area represented in the pilot program. In designing the pilot program, TransLink wanted a comprehensive group of its transit users. Says Russell Driver, TransLink project manager, “We want to look at its operation in a number of different environments and different consumer markets so we have a geographic dispersion.” Other agencies are still looking for an option that will increase ridership and decrease costs. For many, smart cards are the way to go, but finding a system that meets all their demands may be a difficult prospect. Although it is true that reducing cash handling reduces overall costs, completely eliminating cash handling is not feasible. “I don’t think you’ll ever get away from [cash handling] completely,” says Greg Krause, executive director at the Regional Transportation Commission in Reno, Nev. “We are not using the stored value card technology, yet. We are really trying to make our technology investments not for technology but to meet our objectives of better customer service or more efficient and lower cost operation.”

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