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A Smart Way to Pay

The use of smart cards in public transit has taken off.

Are some subway riders in Washington, D.C., smarter than others? It may seem so thanks to the advantage technology has given riders who use SmarTrip, the farecard with a microchip. Instead of fumbling for change or a magnetic farecard, thousands of subway commuters simply swipe the plastic card across a reader on the turnstile and are on their way.

So far, riders have snapped up more than 238,000 SmarTrip cards -- representing about 30 percent of all trips taken on Washington's subway. But those numbers may grow once the Washington Metropolitan Area Transit Authority, better known as Metro, expands the use of its smart card to include buses, Metro parking lots and the regional commuter rail system. By 2004, riders will be able to use the card on Baltimore's bus, light rail and subway systems, too. In all, more than 15 regional public transit systems across Maryland, Washington and Virginia will accept payment with the card.

"We're trying to put together a regional fare system so passengers can go anywhere with the SmarTrip card," said Craig Maxey, Metro's manager of technology implementation. The reason use of the card is expanding so rapidly since its introduction in 1999 is quite simple, say transit experts. Riders love the convenience of smart cards, which can be used for all forms of public transit, as well as parking, and may eventually be used to purchase a morning cup of coffee, a magazine or a cab ride.

Circulation Growth

Public transit riders have been using smart cards for nearly a dozen years, but most card systems have involved small pilot projects. Today, however, nearly all the major transit agencies in the United States, and around the globe, have announced plans or have projects under way involving smart cards. Besides Washington and Baltimore, the Port Authority of New York and New Jersey announced in December a $51 million plan to use smart cards on commuter trains. Boston's Massachusetts Bay Transportation Authority will replace its tokens and passes with smart cards by 2004 at a cost of $120 million.

In October 2001, Seattle's transit agency signed a $70 million contract with ERG Transit Systems to build a seamless smart card fare system covering seven transit agencies involving buses, commuter rail and the area's ferry service. Meanwhile, Atlanta has announced plans to spend $100 million on a new smart card system that will, for the first time, provide a regional fare system to the area's balkanized transit agencies. The Chicago Transit Authority is pilot testing the technology and expects to have 100,000 cards in circulation by December. In the latest announcement, the Los Angeles County Metropolitan Transportation Authority has approved an $84 million contract with Cubic Transportation Systems to build the largest smart card ticketing system in California.

Smart card fare systems have become so popular that an executive at Cubic predicted all future requests for proposals from transit agencies will require smart cards for ticketing systems. Steve Shewmaker, Cubic's senior vice president, said smart cards have become the preferred method for payment and collection at transit agencies around the world. "There's a couple of reasons why," he explained. "First, costs have come down dramatically. Smart cards used to cost more than $10 a piece. Today, the cost is less than $2 per card."

Second, smart cards are reusable whereas magnetic farecards are not. "Riders like the fact they can reload value onto the cards," he added. Also, if the user registers his card and then loses it, agencies will refund the value that was left on the card, something that can't happen with other types of fare cards.

Another reason transit agencies are embracing smart cards is their service value.

"Consumers expect higher quality of service, whether it's from their local retailer or their local transit agency," said Harriet Smith, a public transit consultant with ITS America.

That's why agencies are racing to install new fare systems.

"Transit agencies benefit too, because they can cut down on handling the cash from fares," Smith added.

Handling costs related to the cash collected from fares are an expensive, back-room operation with all sorts of security implications, according to Smith. Reduce the amount of cash that has to be handled, and you reduce a major expense in transit operations.

Less Contact, More Popular

Washington's SmarTrip card is known as a contactless card. It contains a microchip that keeps track of the rider's fares as the user passes the card over a target panel on top of the fare gate. According to Metro, riders can leave the card in their purse or wallet to activate the system. The smart card can hold up to $200, so riders don't have to replenish the card's value so often.

Contactless smart cards are popular, according to Shewmaker, because they are easy to use, fast (the entire process takes less than 100 milliseconds) and they don't involve any moving parts that may break down. Because the cards cost a couple of dollars to produce, most transit agencies, including Washington's Metro, charge users a small fee of $2 to $5 to use them.

Along with the cards, most fare collection systems have a fairly extensive infrastructure that includes terminals that can read a variety of smart card standards, a computer network and software for fare and financial payment management. But simply because the largest transit agencies have been the first to pilot test and install the technology doesn't mean it's only for the systems that transport tens of millions of passengers.

Ventura County, Calif., has installed a $1.7 million smart card system on 100 buses, involving a half-dozen public transit operators in the county. Smart cards make it easier for riders to use the bus-only system, according to Ginger Gherardi, executive director of the Ventura County Transportation Commission. The cards, which will also be used for identification and for free bus rides by students at California State University, Channel Islands when it opens this fall, will eventually also be available on the area's commuter rail system.

What's unique about Ventura's smart card project is the readers are mobile and can be moved from one bus to another. The readers also can store various types of data, including information about how many people got on or off at a certain stop.
"It's really good for transit planning," said Gherardi.

Uses Beyond Transit

Convenience remains the main attraction of the smart cards, say experts. For example, Hong Kong's experience with smart cards has been a huge success, in part, because of the card's versatility. MTR, the city's transit agency, issued 8.2 million cards by the end of 2001 that were used for 88 percent of all rides on Hong Kong's vast subway system. In addition, retail outlets, such as 7-Eleven and McDonalds, accept the smart cards as plastic cash. Hong Kong taxis also accept smart cards to pay for cab rides. And plans are under way to equip parking meters, vending machines and even racetracks with readers, so transit riders can use their cards to pay for parking, purchase a candy bar and place a bet on the daily trifecta.

Meanwhile, Cubic has announced a new virtual ticketing system using the Web. Nextfare Web Services will allow riders to order and register new smart cards online, reload their cards, verify purchases and get account history quickly.

If there's one issue with smart cards it's cost. The hardware, software and marketing involved in getting riders to use the cards can be expensive. Most transit experts agree that the business case with smart cards rests with rider convenience, not lower costs or increased revenue. But as ITS America's Smith points out, smart cards shouldn't be measured using a standard cost/benefit analysis.

With today's urban areas suffering from growing congestion and worsening air pollution, any creative way of getting people out of their car and onto public transit is worth the effort.

"One way to do that is by upgrading public transit with new services, such as smart cards," Smith said. "If you lure just 1 percent of the drivers out of their car, look at the benefit in terms of air quality and less traffic."
With more than 20 years of experience covering state and local government, Tod previously was the editor of Public CIO, e.Republic’s award-winning publication for information technology executives in the public sector. He is now a senior editor for Government Technology and a columnist at Governing magazine.