Preliminary Strategic Analysis of Next Generation Fare Payment Systems for Public Transportation (2015)

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71 1. These issues were commonly stated by transit agency executives at both the Smart Card Alliance Payments Summit, February 5–7, 2014 in Salt Lake City, Utah and at the APTA Revenue Management Summit, March 16–19, 2014 in New Orleans, Louisiana. 2. Chapter 2 of TCRP Report 10: Fare Policies, Structures, and Technologies offers an excellent framework for fare policy evaluation. 3. Fleishman, Schweiger, Lott and Pierlott. TCRP Report 32: Multipurpose Transit Payment Media. Washington, D.C: National Academies Press, 1998. 4. Statement of Craig Roberts, Manager, Technology Program Development, Utah Transit Authority, Smart Card Alliance Payment Summit, February 3, 2014. 5. Statement of Carol Kuester, Director, Electronic Payments, Metropolitan Transportation Commission (San Francisco, CA); Smart Card Alliance Payment Summit, February 3, 2014. 6. Fleishman, Shaw, Joshi, Freeze, & Oram, TCRP Report 10: Fare Policies, Structures, and Technologies. Washington, D.C.: Transportation Research Board, 1996. 7. TCRP Report 10, p. 2. 8. Multisystems, Inc., et al. TCRP Report 94: Fare Policies, Structures and Technologies: Update, Washington, D.C.: Transportation Research Board, 1996. 9. See http://www.apta.com/resources/standards/technical-specifications/Pages/default.aspx. Note that at the time of this report, there are no CFMS compliant systems in operation in the U.S. 10. eTicket Deutschland, Our technological heart: The VDV core application; accessed September 30, 2014, available from http://www.eticket-deutschland.de/vdv-kernapplikation.aspx. 11. Calypso Networks Association, What’s Calypso; accessed September 30, 2014, available from http://www. calypsonet-asso.org/index.php?rubrique=main_10. 12. EMVCo; accessed September 30, 2014, available from http://www.emvco.com/. 13. TCRP Report 94. 14. Anders, Joel David; Brakewood, Candace; Watkins, Kari, “A Case Study Analysis of New Fare Payment Systems in Public Transit,” Washington, D.C.: Transportation Research Board, 2014. 15. TCRP Report 10, Chapter 6. 16. TCRP Report 10, p. 93. 17. TCRP Report 10, p. 93. 18. Smart Card Alliance. Smart Card—FAQ; accessed March 7, 2014; available from http://www.smartcar dalliance.org/pages/smart-cards-faq. 19. While there are other types of smart card technologies, this report focuses exclusively on contactless smart cards due to their inherent advantages in transit applications. Other types of smart cards include “contact smart cards” (which must be inserted into a special reader to make direct physical connection between the card’s contact plate and the reader), “dual-interface cards” (which incorporate both contact and contactless systems connected to a single computer chip), and “hybrid cards” (where the contact and contactless sys- tems are connected to separate computer chips. Source: Smart Card Alliance, Smart Card Primer; accessed September 30, 2014; available from http://www.smartcardalliance.org/smart-cards-intro-primer/. 20. Using both full feature and limited use cards can allow a transit agency attain deeper market penetration of contactless smart cards in their customer base, engaging both habitual riders and more sporadic riders that may not feel the need to obtain a full feature card. A program that uses a combination of full feature smart cards and limited use cards is the Breeze Card program at the Metropolitan Atlanta Rapid Transit Author- ity (MARTA). Source: Metropolitan Atlanta Rapid Transit Authority, Breeze Card Programs (http://www. itsmarta.com/fares-passes.aspx). 21. Smart Card Alliance. Smart Card—FAQ. Endnotes

72 Preliminary Strategic Analysis of Next Generation Fare Payment Systems for Public Transportation 22. Frank N. Magid Associates, Inc. “Smartphones and Tablets: The Heartbeat of Connected Culture,” Minneapolis, MN, October 8, 2013. 23. Gallup News Service, “Economy and Personal Finance,” April 2014. 24. Smart Card Alliance. Smart Card Contactless Payment Backgrounder; accessed March 7, 2014; available from http://www.smartcardalliance.org/resources/pdf/Final_Contactless_Payment_Backgrounder.pdf 25. rfid-blog.com, January 3, 2014; accessed March 7, 2014. 26. See discussion on Capital Metro website http://www.capmetro.org/fares.aspx?id=1380. 27. Keith Wagstaff, “Want to Pay With Google Glass? Just Nod”, ABC News, February 26, 2014; accessed September 30, 2014; available from http://www.nbcnews.com/tech/mobile/want-pay-google-glass-just-nod-n39246. 28. Interview with Craig Roberts, Manager, Technology Program Development, Utah Transit Authority, Smart Card Alliance Payment Summit, February 3, 2014. 29. Smart Card Alliance—FAQ. 30. “Consumers and Mobile Financial Services 2014,” Washington, D.C.: Board of Governors of the Federal Reserve System, March, 2014, p. 4. 31. Smart Card Alliance. “Near Field Communication (NFC) and Transit: Applications, Technology and Implementation Considerations.” Princeton Junction, NJ: Smart Card Alliance Transportation Council, February 2012. 32. Capital Metropolitan Transportation Authority, Austin, Tex. Capital Metropolitan Transportation Authority—Fares and Passes; accessed March 10, 2014; available from http://www.capmetro.org/app/. 33. Dallas Area Rapid Transit. DART—Fare and Pass Information; accessed March 10, 2014; available from http://dart.org/fares/fares.asp. 34. Massachusetts Bay Transportation Authority, Boston, Mass. MBTA—mTicket for Commuter Rail and Ferry; accessed March 10, 2014; available from http://mbta.com/fares_and_passes/mTicketing/. 35. Nassau Inter-County Express, Garden City, New York. Passenger Information—Mobile Ticketing; accessed September 30, 2014; available from http://www.nicebus.com/Passenger-Information/Mobile- Ticketing.aspx. 36. New Jersey Transit, Newark, New Jersey. NJ Transit—Fares and Passes; accessed September 30, 2014; available from http://www.njtransit.com/var/var_servlet.srv?hdnPageAction=MobileTicketingTo. 37. New York Waterway, Weehawken, New Jersey. NY Waterway—Get Tickets; accessed September 30, 2014; available from http://www.nywaterway.com/GetTickets.aspx. 38. Tri-County Metropolitan Transportation District of Oregon. TriMet—Mobile Ticketing; accessed March 10, 2014; available from http://trimet.org/mobiletickets/. 39. Smart Card Alliance, “Near Field Communication (NFC) and Transit: Applications, Technology and Implementation Considerations.” 40. NFC Forum—About the technology; accessed March 28, 2014; available from http://nfc-forum.org/ what-is-nfc/about-the-technology/. 41. Smart Card Alliance, “Near Field Communication (NFC) and Transit: Applications, Technology and Implementation Considerations.” 42. Molly Wood, “Businesses Are Turning to Beacons, and It’s Going to be O.K.,” New York Times, October 15, 2014. 43. Department for Transport. “Be-In-Be-Out Payment Systems for Public Transport.” London: Queen’s Printer and Controller of HMSO, 2009; accessed September 30, 2014; available from http://webarchive. nationalarchives.gov.uk/20091203214536/http:/www.dft.gov.uk/pgr/scienceresearch/orresearch/ paymentsystems.pdf. 44. Craig Roberts, 2014 Payments Summit, February 5, 2014. 45. Statement of Nick Stoner, Director, Americas Professional Services, HID Global, Smart Card Alliance Payment Summit, February 7, 2014. 46. “Behavioral Economics: Understanding Choices in Road, Transit, and Parking Pricing Workshop.” Trans- portation Research Board 2014 Annual Meeting, January 12, 2014. 47. Benjamin Davis, Tony Dutzik, Phineas Baxandall. Transportation and the New Generation: Why Young People Are Driving Less and What It Means for Transportation Policy.” Washington, D.C.: Frontier Group/U.S. Public Interest Research Group, April 2012. 48. “Smartphone Ownership—2013 Update,” Washington, D.C.: Pew Research Center, June 2013. 49. Metro, Parking at Metrorail Stations; accessed September 30, 2014; available from http://www.wmata. com/rail/parking. 50. Metro Express Lanes; accessed September 30, 2014; available from https://www.metroexpresslanes.net/en/ home/index.shtml. 51. Metro ExpressLanes, Transit Rewards Program; accessed September 30, 2014; available from https://www. metroexpresslanes.net/en/about/transit.shtml.

Endnotes 73 52. See MBTA, Real-Time Data: the User Experience Symposium Workshop, Boston, April, 10–11, 2014 (http:// www.itsa.org/events/past-events/real-time-data); ReRoute/SF (http://hattery.com/reroutesf/); and San Francisco “Summer of Smart” 2014 (http://www.summerofsmart.org/home/); accessed September 30, 2014. 53. Shared Use Mobility Center, Research; accessed September 30, 2014; available from http://shareduse mobilitycenter.org/category/research/. 54. “Travel Preferences of Millennials Seminar.” Transportation Research Board 2014 Annual Meeting, January 12, 2014. 55. “TriMet and Zipcar join together to increase transportation options.” Press Release January 22, 2014; accessed September 30, 2014; available from http://news.trimet.org/2014/01/trimet-and- zipcar-join-together-to-increase-transportation-options/. 56. “Zipcar and Metrolinx Partner to Bring Convenience of Car Sharing to Transit Stations.” Press Release April 30, 2014; accessed September 30, 2014; available from http://www.zipcar.com/press/releases/ zipcar-and-metrolinx. 57. NJ TRANSIT, Car Share Program; accessed September 30, 2014; available from http://www.njtransit.com/ rg/rg_servlet.srv?hdnPageAction=CarShareProgramTo. 58. Chicago Transit Authority, Multimodal Connections/Car Sharing; accessed September 30, 2014; avail- able from http://www.transitchicago.com/goinggreen/multimode.aspx#carsharing. 59. Greenbiz Blog; accessed September 30, 2014; available from http://www.greenbiz.com/blog/2011/09/29/ market-smart-city-technology-reach-16b-year-2020. 60. Massachusetts Department of Transportation, Developers Data; accessed September 30, 2014; available from http://www.massdot.state.ma.us/DevelopersData.aspx. 61. This case study borrows heavily from a 2008 case study on the Utah Transit Authority (UTA) system in the Smart Card Alliance White Paper entitled “Transit and Contactless Open Payments: An Emerging Approach for Fare Collection” as well as interviews with UTA managers in February 2014 and March 2014, and with representatives of VIX, Inc. in February, 2014. 62. Utah Transit Authority, Salt Lake City, Utah. Utah Transit Authority—About UTA; accessed March 12, 2014; available from http://www.rideuta.com/mc/?page=AboutUTA. 63. Smart Card Alliance Transportation Council. “Transit and Contactless Open Payments: An Emerging Approach for Fare Collection.” Princeton Junction, NJ: Smart Card Alliance, 2011; accessed March 12, 2014; available from http://www.smartcardalliance.org/resources/pdf/Open_Payments_WP_110811.pdf. 64. Ibid. 65. Ibid. 66. Ibid. 67. Interview with Craig Roberts, Clair Fete, Abraham Kolloli, and David Snyder of Utah Transit Authority, February 3, 2014. 68. “From Campus to Downtown Provo, Just 50 Cents per Mile!” UTA website; accessed December 2, 2014; available at http://www.rideuta.com/mc/?page=UTA-Home-BYUBeta. 69. Smart Card Alliance Transportation Council. “Transit and Contactless Open Payments: An Emerging Approach for Fare Collection.” 70. Ibid. 71. Ibid. 72. Ibid. 73. Ibid. 74. Interview with Craig Roberts, et al., February 3, 2014. 75. Interview with Craig Roberts, Manager, Technology Program Development, Utah Transit Authority, March 27, 2014. 76. Smart Card Alliance Transportation Council. “Transit and Contactless Open Payments: An Emerging Approach for Fare Collection.” 77. Interview with Craig Roberts, March 27, 2014. 78. Interview with Craig Roberts, et al., February 3, 2014. 79. Interview with Vix Technology representative, Smart Card Alliance Payments Summit, February 3, 2014. 80. Interview with Craig Roberts, et al., February 3, 2014. 81. Interview with Vix Technology representative, February 3, 2014. 82. Interview with Craig Roberts, et al., February 3, 2014. 83. Smart Card Alliance Transportation Council. “Transit and Contactless Open Payments: An Emerging Approach for Fare Collection.” 84. Interview with Craig Roberts, March 27, 2014. 85. Utah Transit Authority, Salt Lake City, Utah. UTA News and Events, “Isis Offers Mobile Payment Perk, October 30, 2012”; accessed March 13, 2014; available from http://www.rideuta.com/news/2012/10/ isis-mobile-payment-perk/.

74 Preliminary Strategic Analysis of Next Generation Fare Payment Systems for Public Transportation 86. Chris Welch, “Carrier-backed Isis mobile payment system rolls out nationwide,” The Verge (Vox Media, Inc.), (November 14, 2013). Accessed March 13, 2014; available from http://www.theverge. com/2013/11/14/5103592/isis-mobile-wallet-rolls-out-nationwide. 87. Interview with Craig Roberts, et al., February 3, 2014. 88. Interview with Craig Roberts, March 27, 2014. 89. Interview with Craig Roberts, March 27, 2014. 90. This case study is based on a detailed telephone interview held on August 22, 2014 with Jerry Kane, Man- ager, Capital Program Planning, Southeastern Pennsylvania Transportation Authority. Other key ref- erences include the SEPTA website (http://www.septa.org/) and the SEPTA New Fare Program website (http://www.septa.org/fares/npt/). 91. Southeastern Pennsylvania Transportation Authority. SEPTA 2014 Capital Budget and Capital Program. Accessed September 30, 2014; available from http://septa.org/strategic-plan/reports.html. 92. Southeastern Pennsylvania Transportation Authority. SEPTA Operating Facts, Fiscal Year 2013. Accessed September 30, 2014; available from http://septa.org/strategic-plan/reports.html. 93. SEPTA 2014 Capital Budget and Capital Program. 94. SEPTA Operating Facts, Fiscal Year 2013. 95. SEPTA New Payment Technology, Need for a New Payment System; accessed March 13, 2014; available from http://www.septa.org/fares/npt/need-for-new-payment-system.html. 96. Ibid. 97. August 22, 2014 telephone interview with Jerry Kane, Manager, Capital Program Planning, SEPTA. 98. Ibid. 99. Chase Paymentech website; accessed March 13, 2014; available from https://www.chasepaymentech.com/ faq_emv_chip_card_technology.html. 100. SEPTA New Payment Technology, Project Timeline; accessed March 13, 2014; available from http://www. septa.org/fares/npt/project-timeline.html. 101. This case study is based on interviews with Patricia Dunn, Director of Finance, and Josh Nylander, IT Manager, of the Whatcom Transportation Authority (WTA) on March 19, 2014 and March 24, 2014 (Mr. Nylander only) as well as information from the WTA website (www.ridewta.com). 102. Urbanized Area Formula Funding Program (49 U.S.C. 5307) makes Federal resources available to urban- ized areas and to Governors for transit capital and operating assistance. For more information on 5307 grants see the FTA SAFETEA-LU Urbanized Area Formula program website (http://www.fta.dot.gov/ grants/13093_3561.html). 103. Federal Transit Administration, MAP-21 Discretionary & Formula Grants; accessed September 30, 2014; available from http://www.fta.dot.gov/grants/15926.html. 104. Tri-County Metropolitan Transportation District of Oregon, “TriMet eFare”; accessed September 30, 2014; available from http://trimet.org/efare/. 105. Tampa Bay Area Regional Transportation Authority. A Connected Region for Our Future—TBARTA Master Plan Vision Update 2013. Adopted June 14, 2013; accessed September 30, 2014; available from http://www.tbarta.com/en/master-plan. 106. Niagara Frontier Transportation Authority Engineering Branch, “Metro—Fare Collection System Upgrade—Bus/Rail.” Retrieved September 30, 2014 from http://www.nftaengineering.com/Tools/ Bidgetter/frontend/itemlist.asp?reset=1&size=2. 107. Massachusetts Department of Transportation Highway Division, “A 2014 Synthesis; the Status of Intel- ligent Transportation Systems Deployment,” April 2014, p. 23. 108. Interview with Jane Matsumoto, Sales Director, Accenture Fare Management Services, North America, Smart Card Alliance Payment Summit, February 7, 2014. 109. McKinney, Dorothy “Impact of Commercial Off-The-Shelf (COTS) Software and Technology on Systems Engineering,” Presentation to INCOSE Chapters, August 2001. 110. Statement of Michael J. Wilson, Managing Director, Public Transportation North America, Accenture, Smart Card Alliance Payment Summit, February 7, 2014. 111. McKinney, op cit. 112. “Accelerating the Payback From Fare Collection Investment,” Accenture, 2014; accessed September 30, 2014; available from http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-Accelerating- Payback-from-Fare-Collection-Investment.pdf. 113. Ibid.