The MTA is moving ahead this year with plans to phase out the MetroCard system. While London, as I wrote late last week, will have its bank card-based system in place by 2012, the MTA’s own process will likely be slower. The authority will soon issue an RFP and will eventually make way for a new system. The MetroCard is on the way out, but it’s going to be a slow death.

When the MetroCard goes, the MTA will begin to save on fare collection costs. By eliminating the proprietary infrastructure behind the MetroCard, the MTA can cut down significantly on the amount of money it spends to collect fares, and thus its revenue from fares will increase. That’s, at least, the intended consequence. One of the other consequence — call it a semi-unintended consequence — concerns MetroCard scams.

Nearly since the beginning, scams have plagued the MetroCard system. In January of 1998, the Daily News marked the end of the first scam when cops and MTA officials busted a ring of scammers who were mutilating MetroCards to game the system.

Over the next few years, MetroCard scams became a low-level annoyance for the MTA. The authority took some heat from politicians in 1999 when it didn’t know how much money it lost due to MetroCard scams. In 2000, a station agent was arrested for MetroCard fraud, and throughout the decade, cops and transit officials continued to vow to crackdown on scammers selling swipes.

Recently, scammers have gotten confrontational. Those selling swipes will harass costumers at stations missing their agents, and they’ll jam machines. In November, the MTA and NYPD started targeting stations from which they’ve received a high number of complaints. Sutphin Boulevard, which was highlighted by the Daily News, saw one scammer make $200 off of a 30-day unlimited card.

Yesterday, The Post again went inside MetroCard scammers. Here’s how the paper reported it:

Swipers, as the hustlers are called, commonly jam the bill slot in MetroCard machines to force riders to buy a “swipe” to get past the turnstile. They charge anywhere from $1 to $2. The fare is $2.50. They exploit flaws in discarded cards that allow someone to get through after repeatedly swiping it, or they charge people to go through a service gate, transit workers said.

At the Fordham Road D station in The Bronx yesterday, The Post found several busted MetroCard machines unable to accept bills — and swipers more than willing to help out. “I’ll let you in. Give me $2. Come on,” one man muttered.

Transit workers were quite hyperbolic about the gangs — allegedly organized — that hang around stations. “It’s like the Thunderdome in some stations,” one said. “I fear for the riding public. It’s dangerous,” another said.

Cops say they’ve been more vigilant about enforcement. After nabbing 74 scammers in December, police arrested 148 people in January. Yet that doesn’t begin to scratch the surface. Reportedly, vandals broke machines at the Utica Ave. station 198 times in December and at the Nostrand Ave. station 228 times. Lower-income areas of the city appear particularly susceptible to scammers.

For now, the MTA and the NYPD will continue to work together to combat these scammers, but it’s going to require more than just a token effort to nip this problem in the bud. When the MetroCard is retired though, scammers won’t be able to jam fare machines and harass costumers. For those subjected to these scams on a daily basis, that is welcome news indeed.

A swipeless, credit card-based fare payment system is in our subway-riding future.

Now that the MTA is well on its way toward building out an in-house real-time bus tracking system, the authority’s fare payment technology will be the next to see an upgrade. On and off for four years, the authority has run various contact-less fare payment pilot programs, and after the most recent one, Chair and CEO Jay Walder vowed to move forward with a replacement for the MetroCard.

“The history of some of the technology pieces is that we did a pilot to get to the next pilot and then we did the next pilot to get to the pilot after that,” he said to me in November. “The point of the pilot ending is that we are concentrating on moving out into the production phase of getting this done, and I think you will see contracts early-to-mid next year that will be moving this forward for the subway and bus system.”

That future is nigh. As Digital Transactions reported this week, the MTA will soon begin issuing the requisite documents to solicit proposals for the next-generation fare payment technology. The industry site has more:

MTA officials tell Digital Transactions News that they plan to publish a so-called Concept of Operations, a document outlining the agency’s broad plans that would help vendors develop formal proposals. That document is expected to be available for review soon, though the agency hasn’t given an exact date.

“Once we finish our industry-outreach activities, we will begin the process of turning that into technical requirements and move into high-level system design, and then detailed system design,” an MTA spokesperson tells Digital Transactions News by e-mail. “We expect to issue an RFP [request for proposals] this year to enable us to identify a systems integrator. One of their tasks will be to work with us to do the detailed design.”

The program will be centered on using general-purpose, contactless credit, debit, and prepaid cards and other media based on the ISO 1443 contactless technology standard. That would include contactless fobs that already come with some payment cards, and stickers that attach to cell phones.

Digitial Transactions notes that while the contours of the payment system is in place, the details remain unknown. The cost, for instance, should be steep, and as the MetroCard system cost $750 million to install in the mid-1990s, overhauling turnstiles and the like will require an outlay of capital.

Timing too is a concern. It took the MTA 12 years to move from a consulting project to actual implementation of the MetroCard when it first tried to replace tokens. The time-to-live for this project, though, should be considerably shorter as the MTA has already conducted the pilots for this project. Widespread implementation and scalability are the primary drivers here. The death clock for the MetroCard moves another second toward midnight.

Sometime in the eventual future, the MTA will do away with MetroCards and move toward a tap-and-go fare payment system. When the familiar pieces of plastic with their particularly sensitive magnetic stripes go the way of the dodo, the authority will have a chance to re-imagine how we pay for our subway rides. Do we need a pay-per-ride option? How should unlimited fare cards work in this brave new word of contactless payment?

A few months ago, SAS reader Corey emailed me a question and a proposal concerning the fare structure. He asked about eliminating the pay-per-ride fare entirely and all forms of transfer. He proposed a three-tiered fare structure: Riders could pay either $5 for one day of unlimited use, $25 for seven days of unlimited use or $100 for four weeks of unlimited use. “The rationale here,” he wrote to me, “is that if you use transit to get somewhere, you’re highly likely to use it to get back.”

As long as the tap-and-go system uses the standard block-and-reconcile billing method that many e-commerce sites use, he believes it can be easy to program a flexible system that charges per use. Under this scheme, on the fifth day of use in a seven-day period, the charge would become a weekly unlimited one good for seven days from the first use, and the same would apply after the fourth weekly charge. Effectively, the user would buy discounted cards retroactively.

Corey’s reasoning, from a billing perspective is one of simplicity. This system, he writes, “eliminates complicated transfer wrangling and helps bridge the gap between the old MetroCard system and the new tap-and-go.” In essence, it’s a transition approach to billing that allows users flexibility. They should also be able to opt-in for bulk purchases from the start, but if they don’t choose to do so, they won’t get overcharged on the back end.

Corey ends his email with a question: “Can you see any flaws in this plan?” And that’s where I’m picking up his thread. I’ll leave the question open to debate, but first some thoughts.

I’m uncomfortable with doing away with pay-per-ride options entirely because it tends to discourage transit use. While many people do intend to make the return trip, that’s not always the case. Sometimes, the return trip is via automobile. Sometimes, in the case of trips to travel hubs, the return ride isn’t until after a vacation or business trip.

With an automatic payment of $5 from the get-go, users are encouraged to use as much transit as possible, but sometimes, they just don’t have a choice. The $5 rate seems high enough as an initial starting point to discourage those who need to make a quick trip infrequently even as it encourages others to make as many trips as possible frequently.

Beyond that limiting factor, though, this plan is certainly one that could be put in place fairly easily, and it shouldn’t increase most people’s transportation costs. The daily card would raise the price of a back-and-forth trip to $2.50 per entry, but the weekly option is cheaper than the current $29 card available for sale. Charging $100 for four weeks is a slight increase over the current $104 30-day card, but when fares go up in 2013, we’ll likely reach that point anyway.

When the MTA introduces a tap-and-go system, they should be able to tout an equally impressive reduction of fare collection costs. Off-the-cuff calculations reveal that fare-collection savings off as little as three cents per fare dollar will save the MTA around $50 million a year. Considering the authority’s precarious financial state, they won’t — and shouldn’t — pass those savings onto customers, but a more streamlined fare system has its benefits.

To create a better system, we must build one that encourages mass transit without overcharging for it or overburdening those who can’t pay as much but rely on the system for vital transportation needs. Corey’s proposal is certainly easier to understand than today’s menu of discounts and fare options. But is it the best we can do?

As I’m in Philadelphia for a few days this week, I’m not going to be around to cover all of the breaking subway news and snow service watch. I did, however, want to make sure that some fresh content finds its way to the site, and I’ll be running a few of my archived pieces. As the fares go up tomorrow and unlimited cards remain, thankfully, unlimited, let’s look back at how the unlimited MetroCard changed transit for the better in New York City.

When Tuesday dawned another cold, windy and rainy day, I pondered how New Yorkers ride the subway in those ugly conditions. On rainy days, the trains are damp and more crowded than usual. People who would otherwise walk or bike to their myriad destinations head underground for a ride free from rain.

Meanwhile, throughout the city, people running errands opt to duck underground as well. Instead of walking from, say, 50th St. to 40th St., the one-stop ride along the Sixth Ave. IND often calls out, and while 15 years ago, that ride would have cost $1.25, today, the Unlimited MetroCard urges you to take that one- or two-stop ride. Straphangers, in fact, get better deals on their weekly or monthly cards if they ride more frequently, and the MTA earns less per ride. In a way, it is a perverse incentive.

Today, the Unlimited MetroCard is a way of life. In January, over 50 percent of all non-student trips came from one of the four unlimited ride offerings. Yet, 12 years ago, few were aware of the looming debut of these cards that have changed the way we ride.

Gov. George Pataki first announced unlimited ride cards in early December 1997. Original plans called for a $63 30-day card, a $17 seven-day card and a $4 one-day fun pass. In a twist of history, the MTA could afford to offer these discount cards because of a surplus of tax revenue in 1997. The agency was expected to lose over $230 million on the per-ride discounts, and as riders today pay an inflation-adjusted fare that is 36 cents lower than the average fare was in 1996, this loss is still haunting the MTA today.

While the 30-day cards then — and still do today — require someone to ride at least 47 times to be a better deal than the pay-per-ride discounts, the new passes were designed to encourage use. Original MTA estimates projected 100 million more riders per year, an increase of six percent. ”The goal here,” Pataki said said to The Times, ”was very simply to empower the rider. Empower the person who takes the subway and the person who takes the bus by giving them the broadest possible range of options as to how they want to choose to use the mass transit system.”

When the unlimited cards debuted on July 4, 1998, they were an immediate hit. Even though plans for the one-day card were delayed, lines at the token booths snaked through stations, and New Yorkers were eager to take advantage of the potential savings. ”Maybe it would stop me from taking so many cabs,” one rider said at the time. ”It has to do with commitment. Once I’ve made that $17 investment up front, I see it as a free situation, rather than a $5 cab ride minus the dollar-and-a-half public transportation.”

The only down side riders could find was the original 18-minute use restriction. The unlimited ride cards could be used once system-wide every 18 minutes, and many straphangers taking short trips found themselves waiting for time to expire. Eventually, Transit agreed to reduce the limitations to their current form. Today, riders can swipe in at the same station only once every 18 minutes but can enter the system at other points before the time limit is up.

Immediately, the savings were apparent. As The Daily News noted, messenger services and frequent train riders were going to realize savings of hundreds of dollars annually. First day sales were very brisk and have continued to be for the past 12 years.

Today, the unlimited ride cards are still a great deal. As a student and frequent subway rider, my pay-per-ride cost off of the $89 monthly card is only just around $1.10 per ride. I can hop on and hop off the trains and buses as I please, and I don’t have to think twice about taking a trip we used to view as unnecessary 15 or 20 years ago. The Unlimited MetroCards changed the way we ride and interact with the system, and that was true transit innovation for New York City.