Fare Game

By Jake Blumgart

When it comes to transit fare payment systems, Philadelphia is stuck in the 19th century. When the hordes of delegates and journalists descended on the city for the Democratic National Convention this past summer, they were confronted with a system that ran much as its predecessors in the days of private mass transit did.

Philly's system doesn't even rely on paper tickets (of the kind that the Washington, D.C., Metro phased out this year). Instead, the Southeastern Pennsylvania Transportation Authority still relies on tokens. It is the last major transit agency in the nation, perhaps the world, that still uses coins to pay for subway, trolley, and bus rides.

It wasn't supposed to be this way. For the past 10 years the agency has been attempting to develop and implement a contactless smart payment system that would allow riders to whisk their cards over the turnstile rather than dig around in their pockets or purses for a token.

The cards, in theory, could be recharged online and could be used — in the hazy future — to hop to one the region's other mass transit systems, the PATCO high-speed line that lances into southern New Jersey. The SEPTA Key, as it is called, is set up as an open system so it could even eventually connect with NJ Transit, a system that overlaps with its purview in the region.

By adopting such a system, SEPTA would leapfrog from the most out-of-date fare technology to a state-of-the-art system that would place it among first class cities like London, Paris, and Hong Kong.

"Similar to EZ Pass [for highway tolls], passengers can set up autoload or go online at home to load a pass or stored value on their electronic travel wallet," says Kristin Geiger, SEPTA's public information manager. "Open payment means that any NFC-compliant bank card, ID card, or device can be used to access the transit system." NFC stands for Near Field Communications, the wireless technology that allows the exchange of data between devices within centimeters of one another.

"Future SEPTA Key prepaid features allow someone to ride transit to work as well as pick up a coffee or groceries all on the same Key card. When fully implemented, customers will be able to use one card for everything," she says.

But the process has been haunted by delay after delay. At a 2008 press conference, it was announced that the contract for the implementation of the system would be awarded in 2009. That was delayed until 2011, then completion was slated for 2013. Then 2014. Th en 2015. This summer an initial pilot of 10,000 cards finally launched, but only for weekly and monthly passes. By the time this magazine goes to press, the cards should finally be available to all and for general use. But Philadelphians can be forgiven for any skepticism they might have. After all, they've heard it all before.

AP photo/Matt Rourke.

Not alone

The antiquity of Philadelphia's fare system, and its delay-plagued attempt to escape it, is only the most extreme example of American cities playing catch-up when it comes to adopting the latest in mass transit fare payment technology.

"I think New York is in a similar position to SEPTA, even though New York switched to a fare card system in 1997," says Yonah Freemark, creator of the blog the Transport Politic and a doctoral student at MIT.

He notes that the Metropolitan Transit Authority has been talking about adopting contactless fare payment systems for even longer than SEPTA. "Transit agencies suffer from a sort of status quo paralysis. I think that's particularly true of older agencies. It's not a reflection of bad management, its reflective about concerns about change because the existing system works."

In other corners of the world, contactless smart card systems began to be adopted in the mid-1990s. The pioneers were Hong Kong, with its Octopus card, which can be used for everything from shopping to riding the ferry, and London's ubiquitous Oyster card.

The ride hasn't always been smooth. As of 2008 there wasn't much evidence that these systems increased ridership and, while their technology was quite reliable, during the early implementation phases they were prone to buggy behavior that has mammoth consequences in the context of a big city. On March 10, 2005, the Oyster card technology broke down for a few hours (the turnstiles didn't recognize cards) and the system lost $3.8 million in a single morning.

But in this decade the adoption of these systems seems inevitable. Last year the largest region in France, Île-de-France (Paris is located there) adopted a universal and unlimited fare card, which gives holders access to all forms of transit in the huge metropolitan region. Such systems elsewhere include the OV-chipkaart in the Netherlands and the Combo Card in Mumbai, which can serve as a debit card as well — a common feature in many European and Asian cities.

Tech talk

The possibilities of NFC, or contactless, technology are vast. These type of technologies allow riders to wave the card, or even just their wallet containing one, over a turnstile without stopping to search for a fare card or token. That may not sound like much, but the act of simplifying and slightly speeding up the boarding process can actually pay great dividends in a variety of ways.

TIME SAVINGS. While swiping a plastic or paper fare card — or fumbling for a token — may only add up to a few seconds for each individual rider, compounded over dozens of people that process can result in significant delays.

UNIFIED NETWORKS. Many metropolitan regions contain multiple transit systems, requiring residents to carry two or three different forms of transit passes. Contactless technology could ease or eliminate this problem.

CONVENIENCE. It could also reduce the hassle of adding money to a depleted card, by making the account available online (again saving time for riders scrambling to board an arriving train).

MOBILE BANKING. Even more radical is the possibility of using these more robust fare payment mechanisms as a banking or identification card.

These advances aren't totally alien to American cities. But they are substantially less impressive in their reach than their counterparts abroad. Chicago's Ventra card is probably the most ambitious effort yet, but it was plagued with scandals and missteps from the beginning. Most egregious was an effort uncovered by the Chicago Tribune to hide numerous fees, crafted by the private contractor in charge of the rollout, that would hit those who used Ventra as a banking card. Ventra even ran into challenges at its most basic level, failing to register fare payments or grossly overcharging customers.

New York's Fulton Street station in Lower Manhattan when it opened in 2014. New York City still uses swipe cards. Richard Levine/Alamy stock photo.

SEPTA has cited Chicago's experience as a reason it has taken so long for their smart card to come out. Washington, D.C., Metro's SmarTrip card debuted in 1999. But not only does the SmarTrip card lack any banking options, it cannot connect riders with adjoining transit systems like the MARC trains that provide commuter rail service to Baltimore.

There are successes, too. In California the Transit Access Pass can be used on bike share in addition to buses, trains, and subways across the agencies that traverse Los Angeles County. But why, then, have so many American cities fallen so far behind? It isn't just Philadelphia that has struggled to adopt new systems.

The largest transit authority in the nation, the MTA in New York City, is also still using swipe cards despite a long-delayed mission to move to contactless payment technology. Other newer systems, like TriMet in Portland, are also moving toward such a system and thus far have not suffered the same kinds of delays. The newer American transit systems, however, are typically substantially smaller than their counterparts in the Northeast and have much newer infrastructure, which saves them the need for extensive repair and retrofit costs.

The problem, at its core, is a familiar one in the U. S. Hyperlocal payment and governance structures are undermining the ability of transit agencies to keep their technology and infrastructure up to date. (Public education, water infrastructure — you name it — suffer from the same problem.) It is too easy for city residents with money to pull up stakes and move further out, depriving older cities and suburbs of their much-needed tax dollars. That leaves many cities with a disproportionate share of the deeply impoverished and recently arrived immigrants, and scant resources to fund essential city services — like public transit.

This tendency is exacerbated by race relations. In many other developed nations, these types of social dynamics, while by no means utopian, have generally not hardened into the rigid segregation that mars most American cities. As a result, funding mechanisms for public services are often broader, and the costs more equitably spread across the region, province, or nation.

"Comparing lessons from foreign cities is an apples and oranges thing," says Randy Vanderhoof, executive director of the Smart Card Alliance in an email to Planning. "[T]hat has everything to do with how nationally run systems in Europe and Asia differ from city and regional metropolitan systems supported by states and city funded agencies."

The situation was made worse by the Great Recession. Many U.S. transit systems were crippled by austerity just when people needed them most. An agency like SEPTA is funded by the city and the state, the first of which doesn't have enough money to adequately support it and the second of which hasn't historically had the political inclination to.

Before a 2013 transportation funding bill was signed into law, SEPTA struggled along on a capital budget of $308 million, a fourth of the size of neighboring NJ Transit. Even with current funding levels a couple hundred million dollars higher, the Philly agency's capital budget is still smaller than that of most of its counterparts.

"It is very costly and complex to change out the hardware and back-end systems to [implement] a fresh new fare system," writes Vanderhoof. "Transit agencies have huge infrastructure challenges and funding problems so investing in regional transit initiatives often take a backseat to keeping the core agency running."

As a result of this focus on the core mission, few transit agencies are capable of handling the complexities of implementing a contactless fare technology with the staff they have available to them. Although transit bureaucracies are often well staffed with mechanical engineers and urban planners, they rarely have the kind of people who can, say, build an accessible and easy-to-use website.

"Part of the problem we have is that the authorities who are acquiring the system do not have the in-house skill to identify what their own needs are," says Tony Jarvis, executive director of advisory services for Sequoia AFC Consultants Limited in Ireland, who has been involved in contactless fare card roll outs across Europe, Asia, and Australia. " They don't understand the pitfalls in the system they are buying relative to their needs."

That's why third-party contractors are brought in to design and implement these systems. In Philadelphia's case, this resulted in its share of delays as SEPTA courted different private-sector partners. In Chicago's case, this partnership resulted in what the Chicago Tribune described as a 14 percent increase in costs since the contract with Cubic Transportation Systems was first signed in 2011, largely as a result of the contractor's own mistakes.

These types of problems may be, in part, due to the lack of competition in the field of fare payment technology. "There are very few vendors of a size that would meet the requirements of a city such as Chicago. You can probably count those vendors on one hand," says Jarvis, in relation to the scandals and delays that plagued Chicago's Ventra card in its early days.

And then there's the expansiveness of the systems, which need to be brought up to date. In Philadelphia, 650 new turnstiles, 1,200 new off -station purchase locations, and 350 new vending machines were required, not to mention the huge web apparatus to support the new system. The entire process cost almost $150 million.

Similarly, Chicago's Ventra card ended up running hundreds of millions of dollars over the estimated budget (and was still rising as of 2015). New York's contactless payment system is estimated to cost at least $450 million.

Smart Cards Elsewhere

OCTOPUS

Hong Kong

Launched 1997. Used for transportation, parking, at retail outlets, self-service machines, leisure facilities, schools, and online. Used for access control at a growing number of residential and commercial buildings.

OYSTER

London

Launched 2003. Used for transportation on the London Underground, buses, Dockland Light Rail, and London Overground. Visitors can add the London Pass, a sightseeing city card.

VENTRA

Chicago

Launched 2013. Used for fares on Chicago Transit Authority buses and trains and Pace (a suburban bus system). The Ventra app, launched in 2015, also allows payment for Metra (regional rail) fares.

TriMet and SEPTA, contrasted

These costs will be lower for newer, smaller systems, like those that have recently arisen in western cities like Seattle, Denver, and Portland, Oregon. The TriMet system announced in 2013 that it planned on implementing a contactless fare payment system, to be called Hop FastPass, that will stretch beyond the agency to include the Portland Streetcar (which is operated by TriMet but owned by the city and managed by a separate agency), and across the Columbia River to the bus system in Vancouver, Washington.

"Getting the technology right and making sure it's easy to use and secure and consistent and works — that's a huge undertaking," says Andrew Longeteig, communications coordinator for TriMet Public Affairs. "We feel like we are one of the technology leaders in the transit world. We aren't pioneering electronic fares, but maybe we will pioneer a system that works for the region."

The Hop FastPass will have a mobile app that riders can use to pay fares and manage their accounts. The vehicles of the three systems have already been equipped with the HOP FastPass readers. Apple Pay and Google Wallet will also be accepted as forms of payment. The system hopes to eliminate cash payments early in the next decade. The number of physical outlets where the cards can be recharged will be expanded from the 100 current fare stations to 500 across the region.

TriMet is smaller than its Northeast counterparts. Its capital budget is $157.1 million and its system comprises five light-rail lines, 77 bus lines, one commuter rail line with five stops, and 809 vehicles overall. Even when one adds in the other regional systems Portland's fare payment technology will support, the transit effort is dwarfed by SEPTA. The Philadelphia agency's fiscal year 2017 capital budget is $548.63 million and it has more buses alone than all the vehicles owned by the three Portland area transit systems combined.

The differing size of the challenge can also be seen in the cost of the new fare payment system: a mere $30 million for TriMet. So far there have been no serious delays, and the new system is expected be rolled out next year. The Philly transit agency finally received a much-needed funding infusion in 2013 but suffered budget shortfalls for decades prior to that. TriMet, by contrast, hasn't suffered long-term systemic divestment and will soon enjoy an increase in the regional payroll taxes that specifically fund its operations.

The endless delays that have dogged the rollout of the SEPTA Key have irritated and infuriated Philadelphians. But the issue is not a problem of arcane technology or government bureaucracy. The simple fact is that these agencies struggle to maintain their basic services due to inadequate funding structures. In 2015, Plan- Philly, a news website devoted to local development, housing, and transportation news, reported on SEPTA's delays by putting them in the context of other transit agencies failures: No other American agency had met its deadlines when it came to adopting contactless fare technology.

Without a larger role for the federal government, the spread of contactless fare card systems will be dictated by these kinds of regional political whims, and transit agencies will continue without the bandwidth to take on these kind of high-tech projects. In that context, American transit authorities will continue to lag behind their counterparts abroad.

Jake Blumgart is a reporter with WHYY's PlanPhilly.