Despite Jay Walder’s looming departure from the MTA in six weeks, the MTA is still moving ahead with a variety of technological innovations. Staten Island will soon have real-time tracking throughout its entire bus system, and the MetroCard replacement project will slog forward toward a mid-decade completion date. While that project has more uncertainty surrounding it in the face of Walder’s departure, the authority appears committed to finding a newer fare payment system than the MetroCard.

New York isn’t alone in that regard. Across the world, cities and transit agencies of all stripes are moving forward with various plans to unify fare payment sometimes. Some are looking at charge card-based technology as the MTA is and others are examining tried-and-true smart card-based solutions run by the usual private players in the fare media field. Not every effort is going smoothly.

Recently, San Francisco unveiled the Clipper card, a payment system designed to unify the Bay Area’s seven different transit agencies. As Scott James of The Bay Citizen detailed for The Times, the new system is suffering through some growing pains. As James details, San Francisco commuters have taken to Twitter and other social media outlets to voice their complaints over the new service, and while BART, Caltrain and SF MUNI downplay the problems, they are indeed out there.

James writes:

Clipper, named for the high-speed 19th-century ships that revolutionized sea travel, is hitting a few head winds, including system failures and overcharging customers. The service began in June 2010 — the first one-card-serves-all solution for the region’s fragmented transit system — simplifying access and payment to regional trains, buses, subway lines, streetcars and ferries, all with varying fare systems.

In some ways it has been remarkably successful…But it has proved difficult to eliminate all the glitches. And some expected improvements, like increasing Muni efficiency, have failed to materialize. Clipper was built and is operated by Cubic, a San Diego military contractor and transportation company. To date, the system has cost $140 million, with another $17.6 million expected in the 2011-12 fiscal year…

Although Cubic officials declined to be interviewed, e-mail sent by the company said there were 38,000 calls to its customer service hot line in August. “The fact that 99.7 percent of transactions did not require interaction with Cubic customer service representatives suggests a successful system,” Matt Newsome, a Cubic vice president, said in a statement.

But that math obscures the truth: transactions (500,000 daily, 14 million monthly) do not equal passengers. Each leg of a journey counts as a transaction. A weekday round-trip BART to Muni transfer, for example, counts as four transactions a day (two BART transactions, two Muni transactions), 84 a month. Officials said it was too difficult to determine how many passengers regularly used the card, but it is clear that far more than 0.3 percent of passengers are complaining.

Cubic, no stranger to unfavorable press, has always been a major player in the fare payment field, and theirs is is a name familiar to us on the East Coast. They have supplied the MTA with its MetroCard system, and the ever-increasing maintenance costs, I am told, is one of the drivers behind the push for an open fare payment system. That they are encountering problems or “growing pains” in San Francisco is not much of a surprise.

Now, the MTA is in a situation where they can get something right. They can see how other transit agencies adopt to this new technology, and they can see which companies provide good service and which do not. They could compile some best practices as they identify potential MetroCard replacements, and they can usher in a technology that is both forward-looking and flexible. It’s a tall order for an agency that has struggled to adopt an old system to new technologies, but the other outcome — more pain from closed systems — seems less desirable all the time. Just ask San Francisco.

As the MTA has struggled over the years to fit technology into their offerings, their online customer support has lagged far behind the technology we see in the system. Countdown clocks and FIND displays are incongruous with the way the MTA had, up until recently, treated its web presence. Take, for example, a MetroCard.

If a straphanger loses or damages his or her MetroCard, he or she must call a phone number or mail in their card or, if lost, a claim for a replacement. It is a clunky process filled with vague questionnaires that often ask for too much unnecessary information, and I know more than a few people who sacrificed the errant swipe rather than deal with the confusion.

Now, though, the MTA is working to address that problem. The agency has unveiled a new MetroCard eFix website. Now when a straphanger has a problem with a MetroCard, he or she can fill out an online form and set the dispute-resolution process in motion digitally. “The introduction of eFIX is yet another example of how the MTA is working to make things more convenient for our customers. From countdown clocks, to BusTime, to a website filled with real information that our customers can use, we are constantly working to be responsive to the needs of our customers.” NYC Transit President Thomas F. Prendergast said in a statement.

The eFix site allows users to select one of six categories: lost or stolen reduced fare cards; Select Bus Service errors; MetroCard not returned from the bus farebox; MetroCard Vending Machine problem; or a transfer problem.
Overcharged. The eFix system, designed in house, will verify claims as they are entered which results in increased speed and accuracy. The MTA is also planning future enhancements to the system as well.

I haven’t yet had the opportunity to test out the system, but just its mere introduction is a step in the right technological direction for the 1400 folks who submit claims on a daily basis. Making it easier for the customer to recapture lost money is a good move.

While the demise of the MetroCard is still a few years away, the MTA already knows what its next-generation fare payment technology will resemble. In fact, the authority has produced a 140-page “Concept of Operations” that includes, according to the authority, “a detailed definition of what the MTA wants the system to do.” It does not, however, offer a technical solution for the system, and to that end, the authority will present its new fare payment system to an extensive group of industry experts this week.

Due to the demands of law school, I’ve been sitting on this story for a week because I simply haven’t had time to parse through this extensive PDF file, and over the weekend, the Daily News spilled the beans. Right now, the MTA is seeking public comment through the end of May on its concept of operations. It will host a meeting on Tuesday with a group of over 70 companies. Those attending the meeting include everyone from Google and HP to AT&T and Verizon to Visa and Mastercard and everyone in between. It is the next step as the MTA continues to beat the death drum for the MetroCard.

So what exactly does the MTA want its future fare-payment system to do? The agency’s CFO Charlie Monheim said to the Daily News that the new fare payment system Card will be “an E-ZPass for Transit,” but that’s a rather vague summary. The extensive PDF provides a glimpse at the card. By and large, the authority hopes that straphangers will use their contactless debit and credit cards for subway travel. This move is as expected after multiple trials along the Lexington Ave. line.

“MTA wants to accept bank and third party issued credit, debit and prepaid cards directly at the turnstile and farebox unit for fare payment, as a merchant in payment industry terms,” the document reads. “Which card the customer uses will be his/her choice as long as it is contactless and has the appropriate spending authority. PIN-only debit cards will not be accepted at the readers. Fees for card transactions at the reader are expected to cost the MTA less than cash transactions today at the vending machines, station booths and farebox units.”

The MTA says it will continue to rely on open standards as well. To avoid making the same costly mistakes it made with the MetroCard, the authority will turn to open standards to “create a competitive market and more choice.”

For those who do not have the necessary access to a bankcard or do not want to use their debit or credit cards for subway fares, the MTA will also offer a new fare media currently entitled the MTA Card. This will be a contactless pre-paid fare card issued by the MTA that comes with a magnetic strip for reloading. The authority is hellbent on eliminating magnetic-strip technology, something that was obsolete by the time the MetroCard made its debut. Magnetic strips, the document says, are “not appropriate for the high volumes and rapid transaction times required for public transportation.”

These cards will operate on a “closed loop,” good only for travel on MTA rail roads. It will be available for purchase through one channel only — either a third-party or a white-label arrangement with a payment industry organization. It will be available, for a one-time retention fee, for purchase and then can be reloaded throughout the system. It sounds quite similar, in fact, to the DC Metro’s SmarTrip card.

Overall, the authority is asking the industry to develop something that is “future-proof.” Says the Concept of Operations: “MTA wishes to build a system based on technology where the choice to renew components or subsystems or adapt to an emerging technology during the system’s lifecycle is not an all-or-nothing choice. Basing a new fare payment system on open standards will ensure MTA can adapt to evolving technology in the payments arena and network environment. Components based on open standards have a shorter refresh cycle and can be replaced as the technology evolves without having to modify the entire system.”

As Jay Walder said to me in November, this new fare payment system is a prime example of spending money to save money. Per the Concept of Operations, the MTA’s fare collection costs translate to 15 cents per $1 revenue collected. This new system should cut those costs significantly while eliminating the need to spend millions on MetroCard maintenance and staving off vandalism as well. If executed properly, it’s a win-win for the MTA’s pockets and consumer flexibility.

Finally, as the Daily News article notes, Monheim believes that “the technology could also allow the MTA to charge different rates on a daily or hourly basis – like rush hour or weekends.” As the 140-page document details, the MTA expects a lot out of the looming presentations, but with the titans of the payment and fare card industries ready to listen to the nation’s largest public transit system, this project will move forward. For better or worse, the MetroCard’s demise is growing nearer and nearer.