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.