New Technologies in Fare Collection
04 September 2018, UK
Originally posted on BUSRide Magazine
Vix Americas General Manager Gary Googins recently spoke with Richard Tackett, Editor in Chief of American trade publication BUSRide, to discuss innovations in fare collection and the impact of new technologies on the transit agency and rider experience. Here are Gary’s responses, featured alongside other industry commenters:
What are the latest emergent technologies “disrupting” fare collection and transit revenue management?
Rideshare apps are adding convenience to door-to-door transportation. These companies have recently added features that allow you to put together a rideshare. This, in some cases, significantly reduces trip cost, and could mean that rideshare apps are an even more attractive option to someone that might be price sensitive or environmentally conscious. From Vix’s perspective, we are looking to partner with these providers and provide access to our account-based fare collection system that would enable riders to pay for an entire trip journey, which may include a multimodal approach to trips.
How does modern advanced fare technology benefit agencies in terms of passenger convenience, cost savings, etc?
Regular and transit-dependent riders will figure out any fare payment scheme an agency implements because they have to, and they are invested in it. Where I see the convenience of modern fare collection providing value is in choice riders who are attracted to systems that are simple and easy to understand. That’s where the opportunity sits.
Differentiated fares is big because with most modern account-based systems, we can provide some unique faring approaches, such as fare-capping. This is when you have a daily, weekly or monthly cap in place, which means customers don’t have to think as much about their travels; the maximum fares are built in.
The other benefit is for low-income individuals. They may not have the capital upfront to purchase a monthly pass, and tend to pay cash each time they ride; this means they end up paying the highest fares. With fare-capping, customers can obtain a monthly pass by paying for each trip up tot he cap, which levels the playing field between regular riders and lower-income riders who don’t qualify for fare programs. These systems also provide protection against loss by offering a replacement, usually for a small fee.
In general, a lot goes into collecting, sorting and moving cash, so there are cost savings there when using fare systems. The collection of data, as well, provides immense value.
What factors are driving innovation in the field of fare collection?
The level of innovation occurring with account-based ticketing in using cellular data capabilities on vehicles combined with the high penetration of consumer devices is one factor. Customers expect things to happen in near real time, which is what account-based ticketing offers. The validators on buses and platforms are actually becoming less sophisticated because the fare calculations are being done in the back office; this means that vehicle and platform validators are becoming less expensive, which is a big win for transit agencies’ capital budgets.
Is “coexisting” with other technologies a requirement for today’s fare technology? How should agencies manage proprietary restrictions in 2018 and beyond?
From Vix’s perspective, we operate as a systems integrator: when it comes to building websites, we hire professional web developers; for IVR systems we hire IVR installation providers; and with the retail network, we partner with retail providers. By doing these things, we are able to stick to what we’re good at, which is providing the back-office technology, the field equipment, and the API gateway and logic that brings it all together. Coexisting is important because we, through the use of Application Programming Interfaces (APIs) and our API gateway, are able to interact with all kinds of systems in the field. Any retail network can use our API web application. Any other transit provider or ticket-seller, or even a third-party TNC app could utilize the API to leverage account-based ticketing.
What kind of institutional shifts should agencies prepare for as their operations adapt to new fare technology?
What we see is that every procurement is completely unique and transit agencies, as opposed to looking at best practices and trying to take software off the shelf, try to make everything custom for their project. This means they tend to stray away from those best practices because the organization doesn’t want to change a certain practice or the software, or just have a change-adverse culture. In turn these customizations create a much more complex support environment for a supplier, which drives up capital and operational costs. To save in upfront costs, doing your due diligence with the development of an RFP and actually sticking to those standard offerings and best practices will allow for cost savings and less risk in project deployment, and will also have payback through lower ongoing operating fees.
Originally posted on BUSRide Magazine