The MT Position

In July 1990, I visited Washington, D.C. for the first time.  I took the bus from my parent’s townhouse in Alexandria to the Metro station.  Then I rode the Metro Yellow Line train into DC.  In order to ride the train, I purchased a magnetic strip card from a vending machine.  The machine printed the value of the card on it and the new value was printed each time I used it.  The system worked very well; I really liked it.  At the time, I was working as a bus driver collecting cash fares and issuing transfers cut for a specific time.  The idea of a machine that took the money and issued fare media was great!

According to the Smart Card Alliance (http://www.smartcardalliance.org/pages/smart-cards-applications-transportation#smart-cards-and-transit), transit agencies have used some form of magnetic automated payment system since the 1970s.  In the late 1990s use of contactless smart cards began.  Smart card payment systems are now installed, being installed, in transit systems all over the world – from Hong Kong to Seattle.  It may be that widespread use of smart cards in major transit operators will promote use of the same smart cards in retail and other industries (http://www.smartcardalliance.org/articles/2003/10/13/public-transit-smart-cards-may-be-catalyst-for-cross-industry-payment-opportunities-according-to-new-smart-card-alliance-white-paper).  There continues to be technological improvements.  Some transit agencies (http://www.rideuta.com/ridingUTA/amenities/contactlesscreditdebit.aspx ) take a number of different contactless cards for payment.

Is a smart card system good for both the agency and for customers?  My vote is yes – with a caveat.  Business practices matter.

I think that automatic fare collections systems, such as smart cards, are a very good idea.  How well they work, however, appears to depend largely on business practices – not just the technology.  Business practices determine what an agency gains from smart card use.  They also drive public acceptance of the technology.

The transit agency clearly benefits.  Smart cards reduce costs by reducing the amount of money and tickets an agency has to process.  Accounting becomes easier.  For example, if a transit agency offers subsidized rides, smart cards can make it easier to bill the human services agency (http://ntl.bts.gov/lib/jpodocs/REPTS_TE/14140_files/section_3.htm ).  The more people use smart cards instead of cash, the more the agency benefits.  However, I think, acceptance of smart cards by the riding public will only come when they see it as beneficial.  Unless the card is easily available and easily managed, some segments of the market will resist using it.

I recently had the opportunity to distribute literature regarding an upcoming service change to some of our customers.  I worked on this project in the middle of the day.  Most of the commuters who might easily adopt a smart card were already at work.  The people I spoke with were lower income working people, job seekers and mid-day shoppers.  They managed their travel money a few days at a time at most.  They preferred cash fares.  Some of these customers were frustrated because paper transfers were not being issued by one of our region’s agencies due to the new smart card.  They didn’t see the new smart card as a personal gain.  People adopt a new product when it meets their needs.

The Puget Sound region will soon have commuter trains, light rail, regular transit bus service and bus rapid transit (BRT) all using the same smart card (http://www.orcacard.com).   Multiple agencies work together to provide regional service.  This is good.  It is also frustrating to customers:  Where can I get a smart card?  How is the card better than my transfer?  When should I pay?  Pay when I enter, when I leave or at the gate?  How much money will be taken from my card on my trip?  What do I do if there is a mistake on my account?

As I reflect on my 1990 Washington, D.C. trip, the magnetic strip card comes to mind.  The card was easy to obtain.  It was easy to use.  It showed me exactly how much money I had left to spend on the train.  And it was tangible proof that I had paid for my trip.  Smart card offers some of these advantages.  However, unlike a transfer that has a time cut, or a magnetic strip card with the remaining value printed on it, the smart card is a device that needs to be read to tell its value.  This is an inconvenience for the passenger – not a benefit.

If I put myself into the shoes of the transit customer, I would want to calculate my trip cost easily.  I would want to be able to determine the amount of money remaining on my card at any kiosk offering cards for sale.  I would want to be able to add funds to my smart card at multiple locations in the service area.  As new payment modes become available (e.g. NFC phones), I would want to be able to pay for transit services using the new device.

From my perspective, the issues driving customer acceptance are: convenience, transparent financial transactions, adjusting technology to meet customers’ demands, and clear communication on how the system works.  Adjusting business practices to address these issues will determine an agency’s level of success.

This entry was posted on Tuesday, February 16th, 2010 at 8:56 am and is filed under On the Line. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.