Management & Operations

Transit moves to open fare payment

Posted on February 22, 2012 by Nicole Schlosser, Senior Editor - Also by this author

Page 2 of 3

The CTA will shift responsibility to Cubic Transportation Systems for all card processing fees and increases, cost increases for labor and other operating expenses, and security breaches.
The CTA will shift responsibility to Cubic Transportation Systems for all card processing fees and increases, cost increases for labor and other operating expenses, and security breaches.

Savings, convenience
In an effort to provide more customer convenience, improve operations and save the agency money, the CTA recently made plans to implement a new, open fare payment collection system.

In November, CTA awarded a 12-year design-build-operate-finance and maintenance contract to Cubic Transportation Systems for $454 million. Cubic will supply fare-collection equipment, maintenance and support.

The contract includes a two-year implementation phase and a 10-year maintenance agreement, Eric Reese, GM, business development, CTA, says. The technology is expected to be implemented in early 2014.
The agency will maintain full control of fare policy, according to agency officials.

CTA will pay for the system through a base fee and a per-tap transaction fee from revenue on a monthly basis.

Riders will be able to tap their contactless credit, debit and bank cards, smart phones or CTA-branded prepaid cards on a card reader to board trains and buses.

The new system will eliminate the magnetic-stripe cards and proprietary Chicago Card/Chicago Card Plus currently used for fare payments. Riders who don't have credit or debit cards will be able to buy prepaid contactless cards. Cash fares will still be accepted on buses.

The agency will also more than double the number of its retail locations for purchasing prepaid cards, from around 700 to 1,000 retail locations when the system launches and to more than 2,000 when the system is fully implemented. The contract contains a requirement that customers must be able to purchase a fare within one-third of a mile of almost every CTA bus stop, Reese says.

CTA also moved forward with the agreement so it could shift a significant amount of risk to Cubic, in terms of maintaining and operating the system. Reese says that the contractor is responsible for all card processing fees and increases, cost increases for labor and other operating expenses, and security breaches. He adds that CTA anticipates an annual savings of $5 million or more with the new system.

"By moving forward with a system that's based on the financial industry as well as information technology security standards, that allows us immensely more flexibility," Reese says.

As the new system is implemented, CTA will allow for a transition period in which all current fare media will be accepted.

Like SEPTA, the biggest challenge at this point in the process for the agency is gaining customer acceptance of the new system. "Customer confidence in moving forward will be a challenge, but we think that we'll be able to build that confidence before we go live, with a community outreach program that will take place on a very grassroots level," Reese says.

Reese adds that the outreach program will include meeting with local constituencies and providing plenty of advance notice of the transition to the public. CTA is also considering a fare media exchange: the agency will take riders' old cards and exchange them for new cards.

Additionally, the new system standards could serve as a basis for a universal fare system among CTA, Metra and Pace, Chicago's suburban transit properties, according to a press release. Illinois legislation passed in 2011 mandates a universal fare system by 2015.

"This system meets with Mayor [Rahm] Emmanuel's and [CTA] President Forrest Claypool's vision for moving the Chicago Transit Authority into becoming a world-class system that is leading with innovative projects," Reese says.

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