Management & Operations

Fare Collection Upgrades Good for Operators, Riders

Posted on February 26, 2008 by Nicole Schlosser, Assistant Editor - Also by this author

Whether offering customers the option to use smart cards or credit cards, upgrading fare collection systems to accept new forms of payment are a surefire way to provide customers and drivers alike with a newfound convenience of not having to use cash.

Two transit agencies are realizing the benefits of these upgrades, with Cleveland moving toward smart cards and proof-of-payment for its rail and bus system, and further south, Nashville rolls out a fare collection system that accepts credit cards. Both authorities are looking forward to more efficient boarding times and accurate ridership pattern tracking.

Cleveland: Moving to magnetics

Serving the Cuyahoga County area of Ohio, the Greater Cleveland Regional Transit Authority (GCRTA) offers customers light rail, heavy rail, paratransit and a downtown trolley-bus service. GCRTA’s previous fare box system, which printed and issued magnetic tickets, was installed in 1985. Like any technology, the system became outdated. “It was requiring more in maintenance costs, so it was time to replace it,” says Joel Freilich, GCRTA project manager.

Wanting to take advantage of new technology on the market, the transit authority installed a new product from GFI-Genfare, the Odyssey fare box, which includes Trim Unit software, in December 2007. This new equipment features a magnetic card swipe reader and a smart card reader, which GCRTA has invested in for future use. While the previous fare was a registering system, the new version includes a validation feature.

“We knew when we came up with validating it would be helpful because, one, it’s a true validation of cash. It will now reject counterfeit money. The old system could not always detect fake bills, which is a big advantage, and, two; it takes advantage of new microprocessing. There’s more memory, it can store more data about ridership patterns, and it can process electronic fare media, like magnetic or smart cards. Cleveland needed an integrated system to accept different media,” says GFI President Kim Green.

Timely completion

The installation of the fare box equipment was completed ahead of schedule; all work was done in less than two weeks. GFI talked with GCRTA about accelerating the contract and worked closely with them, completing the installation in November 2007. “We’ve been installing these systems for 27 years for large and small transit authorities. It took 10 months on New York MTA’s system, which was about 4,000 boxes,” says Green.

One benefit of expediting the installation work is it increases the likelihood that customers and employees will only deal with one fare collection system instead of possibly alternating between one system on the newly equipped buses and the old system on the yet-to-be equipped portion of the fleet. With the completion of the installation on the fleet, the agency is currently in the debugging period, working with GFI to smooth over some software issues.

Another reason for expediting the contract was that GCRTA wanted the new system completed in time for the opening of the Euclid Corridor Transportation Project, the agency’s bus rapid transit system (BRT) due to open at the end of 2008.

Two simultaneous contracts

At the time of the fare collection project, GCRTA was working with two separate contracts. One was with GFI for 800 Odyssey-validating fare boxes, as well as the accompanying GFI system and wireless data transmission. The system can potentially take magnetic cards, smart cards or cash. The other contract, still in the design phase, is with Affiliated Computer Services (ACS) for new ticket vending machines to use in the BRT system and in the agency’s rail system.

“In 2008, we will complete integration work to link GFI to other fare boxes and the ACS ticket vending machines,” Freilich says.

In addition, the authority is equipping its heavy rail line, as well as the new BRT service, with a proof-of-payment system, which issues receipts to riders.

GCRTA expects the new system to reduce maintenance costs and allow them to eventually introduce the use of smart cards. “We’re not using the smart card reader yet, but the technology is there. The cards are not being issued to customers yet,” Freilich says.

Once the agency introduces the smart card aspect of the system and customers learn to use them, boarding times will speed up, he adds.

After debugging, the card reader will lower the servicing and maintenance costs. In addition, GCRTA will be able to obtain more detailed information on ridership patterns for planning services.

Customer notification

As part of its outreach program to notify riders about the new fare collection system, the transit authority placed copies of brochures with their monthly publication, Rider’s Digest. The brochures detailed the fare collection system upgrades, equipment specifics, and how the new equipment will work and benefit riders.

To facilitate the project, GCRTA retained consulting firm, LTK Engineering. The firm provided the transit authority with ongoing guidance through defining the authority’s needs, writing a specification, reviewing proposals and the procurement process. Overall project costs, including all contracts, totaled $25 million.

Looking to the future, GCRTA intends to make the move toward accepting smart cards and will roll them out in a phased approach in 2010. For now, they are concentrating on magnetic fare media. “Right now, for 2008, we just want to get everything [running smoothly],” says Freilich.

Nashville: Credit cards accepted

The Nashville Metro Transit Authority (MTA), offers bus service for Nashville-Davidson County in Tennessee, and moves 8.5 million riders annually, with a fleet of 137 buses and 62 transit vans.

Ed Oliphant, Nashville MTA’s CFO, refers to the agency’s new fare collection system as a standard system, with a little twist. Credit card fare payments are accepted on all buses, as well as its paratransit vans. “We’re getting good feedback from people on this, particularly on the handling of cash for the transaction, since it can potentially be more difficult for those with disabilities,” he says, adding, “It’s [been very] helpful for people.”

The MTA, which began project development in January 2007, started accepting credit cards in May. “We began the service during APTA’s Bus and Paratransit convention last May, which we hosted,” Oliphant says. “We wanted to be low-key about it, to determine if it would be viable.”

The credit card service is only offered for fares purchased when boarding the bus for a single-ride, an all-day or night owl pass.

Attracting new riders

Paul Ballard, our CEO, had this vision of going after the choice rider,” says Oliphant. To attract “newer” riders unfamiliar with using the system, the agency wanted to make the transition to using public transit as easy as possible.

Ballard urged MTA to try accepting credit cards, as long as the risk wasn’t too high. “[Credit card payment] is quite prevalent in Europe. Trains have used it. For buses, though, boarding times have been the issue,” Oliphant says. The old system had delayed boarding times, but the new system promises to be convenient and faster.

Partnership potential

Oliphant has been working with Visa and MasterCard. “We’re currently using the magnetic strip. Visa wants us to move forward to the tap system.” (A rider just taps their fare card to the fare box to pay). “We want to perfect it first.”

Last June, Oliphant paid a visit to the SmartCard Alliance in New York, talked to MasterCard officials and observed a test run of the system on a bus line, which accepted only MasterCard. He found out that the Utah Transit Authority in Salt Lake City was letting riders use credit cards on ski shuttle buses.

In conducting research for the system, Oliphant says that many people he spoke with couldn’t believe there was a transit agency willing to accept the risks involved with credit cards.

Guarding against fraud

For security purposes, the MTA will keep what they call an automated “bad list” in an attempt to minimize risk of taking stolen or insufficient credit cards. The probability of receiving these cards is quite low, according to Oliphant. There’s a 2 percent to 3 percent fail ratio (those being bad cards).

The key is the automation of the “hot list”, or “bad list”, figuring out what cards not to accept. MTA wants to catch stolen cards, but will not be able to filter out cards with insufficient funds and wants to minimize that risk. “At the end of February, we will be able to officially promote the new system and have that list in place,” says Oliphant.

Nashville MTA is not officially promoting the new system yet, but has put a Visa logo on some buses and sent out press releases. “We’ve had great success, but we haven’t been promoting heavily,” adds Oliphant. They anticipate seeing an even bigger impact once promoting begins.

The cost of the project was about $12,000 to $13,000, slightly less than it might have been, since Nashville already had GFI’s Odyssey fare box equipment in place for five years. However, some upgrades were required, such as purchasing “LinktoGov” software and upgrading their speed, which enables them to track how many people ride the bus each day.

Keeping up with progress

Oliphant believes the new fare collection system presents a convenience for everyone. “Accepting credit cards will increase ridership. Our goal is to keep current customers riding and to go after choice riders, make it less [intimidating] for them. If customers have comfort and control, it’s more palatable.” In addition, people carry cash less and less now. Plus, the higher cost of fuel helps get people on public transit, he says pointing out that the new system will also make the drivers’ jobs easier. It will speed up boarding time and eliminate the need for them to handle or reconcile cash, increasing efficiency.

Oliphant is convinced that other transit authorities will follow Nashville’s lead. “I won’t say they don’t have a choice, but when we held the APTA conference...it was like the Visa commercial, where everyone’s using their card and one person uses cash and it slows everything down. Everyone’s moving from cash to cards. It’s a convenience. Other agencies will do it, because riders will demand it.”

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