Aug
01

Through licensing deal, TfL contactless fare payment system could come to NYC

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Cubic may combine London's contactless approach with Chicago's Ventra card to bring a new fare payment system to NYC.

Cubic may combine London’s contactless approach with Chicago’s Ventra card to bring a new fare payment system to NYC.

As the MTA finally for real this time gears up to replace the Metrocard, the global politics behind contactless fare payment technologies took an interesting and intriguing turn a few weeks ago as Transport for London announced a licensing arrangement with Cubic. In an arrangement that will allow London to monetize its contactless fare payment system and permit Cubic to bring a ready-for-market system to its customers around the world, TfL will license its current contactless fare payment system to Cubic. The deal was announced the week the responses to the MTA’s new fare payment system RFP were due, and although we won’t know the results of that RFP for a few months, the Cubic/TfL deal certainly made it seem as though New York is heading for a system similar to London’s current contactless system.

“Contactless payments have completely transformed the way people pay for travel in London and this deal will allow other world cities to benefit from the hard work we put into making the system work for our customers,” TfL’s CTO Shashi Verma said.

This deal allows Cubic to bring London’s best-in-class contactless fare payment system to the rest of the world. London adopted the technology for buses in 2012 and Tube and rail services in 2014 (which gives you an indication just how far behind the MTA is in the fare payment game). In the intervening years, TfL and Cubic have recorded over 500 million journeys off of 12 million unique debit and credit cards from 90 different countries and mobile devices. Gone is the need for a costly proprietary fare payment system (such as, say, a Metrocard).

Cubic, which does provide the backbone for the Metrocard system, also provides smartcard-based fare payment in a variety of other cities, including Chicago and Vancouver, and the company feels this combination of London’s technology and its marketplace expertise can help as transit companies look for a more agile and versatile fare payment system. I spoke with Matthew Cole, the president of Cubic Transportation Systems, shortly after the deal was announced, and he discussed with me how the company has combined what they feel are the best elements of these systems for the MTA’s bid. (In other words, one of the big motivators behind this deal was to position Cubic as the lead contender for the Metrocard replacement effort.)

Cole couldn’t discuss the ins and outs of the company’s proposal to the MTA; it is, after all, still under the MTA’s confidentiality agreement. But he spoke about how NYC’s system could potentially use contactless bank cards as London does while supporting a system similar to Chicago’s Ventra card. Ideally, a new system would support a smart phone payment system. “It’s great,” Cole said, “for people who don’t want to segregate their money and have a separate transit card with separate balance on it.”

In terms of performance improvement, an open system obviates the need to maintain a proprietary fare payment system. While a transit agency can still issue its own fare cards for those who don’t have bank cards or don’t want to tie a credit or debit card into a transit agency payment system, the option exists, but at a much lower cost to the transit agency as an account-oriented system significantly reduces the per-transaction cost of maintaining a proprietary system.

Additionally, a contactless, open payment system is, as Cole put it, “more future-proof” than the Metrocard in that the system is designed to change with the times. On the other hand, the Metrocard doesn’t involve and essentially runs on the same system with the same technology today in 2016 as it did in 1994. And the Cubic/TfL/Ventra system can still support time-based purchases (e.g., a 30-day card) or bulk purchase discounts as the current Metrocard can.

As the world of fare payment technologies go, this licensing agreement gives London’s technology an edge globally, and New York City could be the first test case. If Cubic earns business, we’ll find out how this newish contactless system works in an agency adverse to technology change. It could be a real test and a potential game-changing in moving forward on a Metrocard replacement project that has been stuck in neutral for nearly a decade.



Categories : MetroCard

34 Responses to “Through licensing deal, TfL contactless fare payment system could come to NYC”

  1. Chet says:

    Sounds cool…
    Does London still use the Oyster card? I have one from a few years back.

    • RichardB says:

      Oyster will continue to be supported. TfL has to maintain it as not everyone possesses a relevant debit or credit card. You can still buy paper tickets with a magnetic stripe with cash from ticket machines at stations as well as station booking halls. These also will continue to be supported. The only thing that has ceased is acceptance of cash for bus travel. All other modes are supported

    • Bgriff says:

      Note that the current London system, from 2012/2014, is one that allows the use of contactless debit/credit cards to pay fares directly. The Oyster card system, which was also contactless but required using a special card, has been around in London for much longer, since 2003, and continues to be an available option alongside contactless credit and debit cards.

      It will be interesting to see how the London system is adapted to New York. In some ways it will be easier, because London allows for daily fare capping on credit and debit cards, which adds some complexity relative to New York’s needs. But it is not obvious how you would transfer the MetroCard refill bonus to this system. It may be more complicated to come up with a system that allows for pre-tax transit incentives. The easiest solution would be if transit flex debit cards were made contactless, but I’ve had a few different transit flex providers at my current job and none of them have issued contactless cards thus far.

      • Duke says:

        How does Chicago handle pre-tax incentives?

        I suppose if it can’t work within the technology there’s always the fallback of pre-tax reimbursement. Hand your receipts to payroll and let them handle the rest.

        • Alistair says:

          Actually, the IRS eliminated the option of reimbursement for pre-tax transit payment this year. You must use a direct-spending method of some kind (usually a debit card issued by eTRAC or a similar provider).

        • Dave says:

          Basically use the prepaid credit card to refill the passes or cash fare. Its almost flawless.

        • Colin says:

          I know this post is over a month old – but if anyone still cares, when I used to live in Chicago, my pre-tax incentive provider had my Ventra account number on file, and on the 25th of each month would deposit a pre-elected (by me, on or before the 10th of the month) fare amount or monthly pass directly into my account. I didn’t even have a separate debit card to use if I wanted to purchase the pass/additional fare myself. It was incredibly easy.

  2. bigbellymon4 says:

    Two Words: About Time.

  3. Larry Littlefield says:

    “London adopted the technology for buses in 2012 and Tube and rail services in 2014 (which gives you an indication just how far behind the MTA is in the fare payment game).”

    Just two to four years? My experience is it takes a project longer than that just to make it into the capital plan, with as much time again for each of preliminary design, final design, bidding etc. So the MTA isn’t very far behind at all, and moving faster than it usually does.

    Add in the MTA’s interest in contracting the whole thing out to a bank and the fact that I got my first chip card very recently and you see that the MTA is moving at the right time to move.

    • Bgriff says:

      London’s Oyster card contactless system has been around since 2003 though. So the MTA is much farther behind London in offering any sort of contactless system.

    • ChrisInEngland says:

      those dates are for when the use of contactless cards came in to use not oyster cards in general

  4. tacony says:

    Hong Kong’s MTR has used the Octopus card since 1997. TfL was not the innovator there. Seoul’s Upass was apparently the first major contactless transit smart card in 1996, 2 years after the Metrocard’s introduction! (Hey, Philly is still using tokens…)

    What’s to make of this bizarre story that the MTA will first pilot subway e-tickets for people “transferring” from MNR/LIRR? http://www.amny.com/transit/mt.....1.12006907

    It doesn’t really make any sense, as there are no “transfers” given between the subway and MNR/LIRR. I assume they will not suddenly be giving people any kind of transfer discount. Seems like language designed to justify an arbitrary subset of users getting first dibs at paying with something new, but confusing all around.

    • SEAN says:

      In Chicago – in order to transfer between Metra & the CTA, you need to use the Ventra app. The card won’t work. It’s sounds similar what is being proposed here.

      One of the benefits of this deal is fare reciprossity I, e the ability to take a card issued for NYC & use it in any other city that has a Cubic payment system & most of them do.

      • tacony says:

        Why won’t the card work? When you get on the CTA why does it matter whether your previously took Metra or simply walked up to the station without taking Metra? I don’t understand. Do Metra riders get a discount on CTA rides? The MTA doesn’t offer this discount and I’d be shocked if they’re suddenly proposing it with little fanfare.

        When people use the word “transfer” they’re usually referring to some sort of fare arrangement. That’s why the official subway announcements are that you can transfer to other subway lines or make “connection” to Metro-North, LIRR, Amtrak, etc. They don’t use the word transfer ’cause that’s not really what it is. So it’s odd that they’re apparently now going to call it a “transfer” when using e-ticketing.

        • Tower18 says:

          In Chicago, they offer a supplement to Metra tickets which allows free ridership on CTA, during certain weekday hours. For $55/month added onto your Metra monthly ticket, you get rides on CTA, Monday-Friday, between 6am-9:30am and 3:30-7pm.

          I think this used to come in the form of a sticker, but now Ventra just handles it. During those hours, you don’t pay, outside those hours, you pay.

        • JJJJ says:

          Not Chicago, but both new jersey and MBTA oeprate on a system where the monthly pass gives you free access to everything cheaper. So your NJTransit monthly from Princeton to NYC gives you access to all local buses and light rail.

          Same in Boston, you transfer for free to the subway because its cheaper than your commuter rail fare.

          NYC is really backwards in not doing this.

          • kevd says:

            I’m all for it if there is reciprocity.
            That is, you can ride the Commuter rail lines within the city for the same price as a subway fare.

    • AG says:

      It would seem to me fares will be the same but you will just be using the app(at Grand Central and Penn Station to start)… I don’t think there will be a change in costs per ride. There was no indication of that. Connection or transfer or whatever word people want to use.

    • Alon Levy says:

      In addition to the examples you give, Tokyo has been experimenting with contactless technology since 1989. New York’s ignored all of these because it thinks learning from other cities is beneath its dignity, except possibly if it’s London or maybe Paris. That’s why the recent best-practices reports the MTA publishes completely ignore what German-speaking cities are doing, what the Netherlands is doing, what Stockholm is doing, what Singapore is doing, and so on.

  5. AMH says:

    What is the difference between London and Chicago? They are both contactless systems, but my understanding is that the Ventra card is open (does that mean I’ll be able to use my Ventra card in NY?) What exactly did London sell to Cubic that it doesn’t already have?

    • SEAN says:

      My guess is the right to “open” the payment system for other cities & there farecards.

      • AMH says:

        Did TfL develop contactless payment though? I thought that was Cubic’s speciality, so I’m confused about what it would need from TfL.

        • SEAN says:

          TFL via Cubic is allowing there payment systems to be adapted to other transit systems like NYC.

        • AAA says:

          Yes. TfL developed the entire contactless system used in London in house. And the model is more powerful in terms of charging (waiting until the end of the day to give one charge).

    • Bgriff says:

      I believe a Ventra card is just a Mastercard and can be used anywhere Mastercard is accepted, though of course in New York Mastercards cannot be used at turnstiles yet — only in MetroCard Vending Machines, to buy a MetroCard which can then be used at the turnstile.

  6. Phantom says:

    I very much like the MetroCard’s ability to swipe in up to four persons at a time. It is a handy thing when you are traveling with a visiting relative or a co worker from NJ that doesn’t normally take the subway.

    Is there a way that this exceptionally useful feature can be retained when they go to any new system?

    • Tower18 says:

      No reason it couldn’t be. Ventra allows up to 7 simultaneous rides/touches.

      This isn’t allowed in London because their fare structure is different than US systems (other than DC) which are a flat fare for any trip.

  7. Marie S says:

    Been in Chicago for 13 years and before the Ventra App, I can count the number of times I rode the Metra. Now, I can look forward to riding. The convenience of the App makes it seamless to pay. A breath of fresh air. Keep it up!

  8. kevd says:

    The only thing about Metra that ISN’T from 1970 or earlier is the ticketing app.
    I was shocked at how, frankly, out of date the trains and stations were.
    For the US’s second biggest mass transit city it was quite a surprise.

    • g says:

      The only reason Metra caved on payment was because they were legally required to. As an organization they’ve always had to be dragged even an inch into the future kicking and screaming. The CTA progresses at warp speed by comparison.

      • SEAN says:

        Why is that – after all both are under the RTA banner. I guess it’s just like NYC Transit & the LIRR being under the MTA, but even more dysfunctional there.

  9. Richard says:

    Does anyone know if you can use your Ventra card as a contactless payment card to ride the Underground in London? Has anyone done so?

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