MetroCard

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.

The future of the Metrocard is a bit fuzzy. (Art by Lisa Scruggs. Photo by Benjamin Kabak)

The future history of the Metrocard has been, for nearly a decade, maddeningly out of reach. Since 2006, the MTA has discussed, tested and discussed again plans for a contactless next-generation replacement for the Metrocard, and a certain combination of technological uncertainty and organizational inertia, the effort won’t be fully realized before 2019 when the costs to maintain the current Metrocard system start to climb. But taps, and not swipes, are on the way.

Now that the state has seemingly cleared the logjam that was the MTA’s 2015-2019 capital plan, the agency has started to take concrete steps to phase out the Metrocard. It began earlier this week with the release of a solicitation notice (pdf) in advance of an RFP that will be made available today. The MTA claims the RFP contains certain confidential information regarding the agency’s infrastructure, and it isn’t available to the public. But the agency has released enough detail either through the solicitation or in subsequent so that we have a general sense of what will go into the MTA’s tap-based contactless system. Adios, swipes.

First and foremost, despite what you might have read elsewhere, the Metrocard isn’t getting phased out next year or even next presidential election. We’ll have plenty of time for presidential candidates to mock their inability to swipe. Although the MTA hopes to begin phasing in the next generation fare payment system by around June of 2018, much as tokens weren’t retired until nearly nine years after the introduction of the Metrocard, the Metrocard won’t be retired immediately. When last we checked in on this project, the MTA expected to phase out Metrocards by the end of 2023, but an MTA spokesman told me on Tuesday that this is not a definite timeline at this point.

So what is this thing anyway? According to the MTA’s documents, we’ll be using some fare system “based on open bank card payment industry standards that will utilize contactless media, including contactless smart cards and mobile devices.” The MTA will likely use a proprietary card and offer a cash option for riders who don’t have bank accounts, smart cards or smart phones. “The key thing is broad support for all of our customers,” agency spokesman Kevin Ortiz told me. “We’re not leaving any customer behind in the transition.”

As part of the implementation, the MTA is going to maintain but rewire the current turnstiles. The RFP documents call for a supplier to install and maintain a TCP/IP ethernet-based communications network connecting fare collection equipment, including turnstiles, HEETs and payment vending machines. Still, the basis for the system is going to be contactless. The MTA will rely on bank cards, smart phones, or an MTA-issued card to process fares. This move will allow the MTA to lower the costs of fare collection and maintenance of a fare payment system. Only a small percentage of users will use the MTA’s own card, and the system — essentially next generation that doesn’t rely on a proprietary technology as, say, PATH’s SmartCard or London’s Oyster Card does — will be adaptable across MTA agencies.

One interesting part of the solicitation document concerns the fare future. The MTA wants its next generation fare payment technology to respond to “alternate fare structures…including fare capping and/or changes to the fare incentive structures.” In other words, the MTA wants something that could be used for fixed fares, a zone-based fare structure or even a time of day-based variable fare. The possibilities with a system that could allow for tap in and tap out are more expansive than today’s swipe in-only system. While the MTA has no plans to start exploring a variable fare structure, I have been told that the agency wants the ability to do so in the future.

So we get a few glimpses into the future and a bunch of uncertainty. The MTA’s initial contract for this new system will run for 69 months from the date of contract award, but the MTA doesn’t expect Metrocards to be phased out within six years from now. So there will be some period of overlap and some period of exploration as the MTA receives RFP responses.

Yet, the overarching questions are whether and when the MTA can pull this off. The agency’s last true systemwide technological upgrade effort was the introduction of the Metrocard two decades ago, and now they’re going to try again with something that is essentially a new technology built on industry standards and evolving technology. We’ll see how this goes, but one thing is for certain: The Metrocard — and that message urging us to please swipe again — is on borrowed time. How much borrowed time remains to be seen.

An update in the MTA Board materials shows how the MetroCard replacement has been delayed six months.

When the Mayor and the Governor magnanimously set aside their unnecessary differences to come to an agreement on the MTA’s capital funding gap, it seemed as though a victimless dance had ended. The MTA had its money; the governor had his political victory over the mayor; and most New Yorkers wouldn’t notice any difference. But everything comes with a cost.

For the MTA, the capital funding crisis could have been worse. Though we still don’t know exactly where the money will come from, by reaching an agreement in October, Andrew Cuomo and Bill de Blasio avoided a slowdown of work. Had the political bickering over the money stretched into December, the MTA’s authority to pay for ongoing capital work would have run dry, and the agency would have had to shutdown some projects. As it stands, the MTA had to curtail some impending work, and one of those victims was the MetroCard replacement effort.

When last we visited this topic, the MTA had issued plans to institute a new fare payment system by the beginning of 2020 and phase out the MetroCards by the end of 2022. Now, though, thanks to Cuomo’s and de Blasio’s delays, the MTA had to hold back the RFP for the new fare payment system. Thus, the MetroCard replacement now won’t be ready for customer use until mid-2020, and the MTA expects to complete deployment of whatever the next gen fare payment technology will be until the middle of 2023. Six months may not sound like a lot, but it could potentially be a costly half a year for the MTA and its riders.

It’s not clear how much this will cost the MTA, but there’s certainly a cost involved. When the MTA began the latest push to implement a new fare payment technology, they originally targeted late 2019 as the date for deployment date. After 2019, the cost to maintain the current MetroCard system will skyrocket, as the MTA’s original contracts expire. With what will be a 30-year-old technology still in use, the cost to keep everything up and running will be high, and a six-month delay adds to these expenses. One way or another, riders will be footing the bill, and all of that political bickering will have a real consequence long after Cuomo and de Blasio are no longer holding their respective offices. Don’t let anyone tell you these funding fights don’t matter.

For the MTA, the problem is still one of execution. Ideally, in eight (!) years, the new fare payment system will be ready, but the MTA is still struggling with what this system will be and how it will be implemented. The agency wants to implement a system that relies on a contactless bankcard, smartphone or MTA-issued card, and it must include a new back-end system supporting payment and other financial functions along with a web-based interface for users to refill cards. Certain board members — such as Fernando Ferrar — have begun to question why the MTA is reinventing the wheel when contactless fare payment systems have become the norm throughout the world, but the agency is intent on finding that gem.

If all goes according to the new plan, the MetroCard replacement contract will be awarded in January of 2017 with design, development, testing and installation set to last around 42 months. The MTA’s best laid plans gang aft agley, and they aren’t being helped by recalcitrant politicians using budgetary debates to further petty political disputes. But here we are, and another six months we must wait. That is a real, tangible consequence with real, tangible costs which all will fall on transit riders’ wallets come 2023.

The MTA’s latest projections for the rollout of the fare-payment system that will replace the MetroCard.

Now that the MTA Board committee materials officially recognize that the 7 line extension won’t open until at least the 2nd quarter of 2015 (something we knew last month), we can move onto another project that is oft- and again-delayed: the MetroCard replacement. According to the latest Capital Program Oversight Committee materials, the MTA’s next-gen fare payment system won’t be ready until 2020 if all goes according to plan. Systemwide rollout won’t wrap until 2022 under the current schedule.

I’ve often said that the MTA’s latest technological advances are always five years away. Through the right circumstances, we finally get to enjoy countdown clocks on the A Division trains and BusTime through the city, but it seems that the MTA keeps promising B Division countdown clocks in “3-5 years” and has been for longer than 3-5 years. The MetroCard replacement meanwhile has been five years away from nigh on five years now. And the clock is ticking.

With the current MetroCard technology, now well over 20 years, the MTA faces a sunset date. After or around 2019, the cost of maintain the current MetroCard infrastructure will spike as maintenance contracts expire and parts grow harder to find. Thus, there has been some urgency surrounding the 2019 deadline for the introduction of a new fare payment technology. Various stops and starts, driven, in part, by rapid turnover atop the MTA, have delayed the project, but as Michael DeVitto discussed at my Problem Solvers session last March, the MTA is on track to do, well, something within a few years. Now, however, the timeline is slipping.

According to the latest Board documents, the MTA is gearing up to pass a major milestone in its efforts to find a replacement for the MetroCard that can serve for the next few decades. The new solution has to be integrated and adaptable with a contact-less payment system and a new backend for payment processing. By the end of next month, the MTA expects to wrap the business requirements development contract and will issue an RFP in late winter. The MTA expects to award a contract in mid-2016, and a deployment timeline takes shape from there.

According to the MTA docs, system design will run for 13 months and back-end development for two years. Contactless readers will then be installed in buses and subways over the following 21 months before vending machines are outfitted throughout the system. Much like the MetroCard’s initial rollout, the MTA expects to bring the entire system online within three calendar years at a cost of $450 million. But we know how reliable those cost estimates have been in the past.

These are positive concrete steps, but the problem is that Transit has to keep the current MetroCard system up and running until system-wide rollout is complete. In essence, the agency has to run and maintain two systems — one three decades old and one brand new — at the same time, and since the new system is now scheduled to be online after 2019, the MTA’s costs are going to jump. In fact, an Indepdent Engineering Consultant notes that the budget “may not be adequate” when considering the costs of maintain the MetroCard system in a state of good repair beyond 2019 and through 2023.

So where exactly does this leave us? The MTA is still five years away from a replacement for the MetroCard, and it seems nearly definite that they’ll miss their own 2019 deadline by a considerable margin even if all goes according to plan. This is unfortunately a common theme with technological upgrades and a challenge the MTA faces in convincing politicians it deserves $32 billion to improve the system. They need to deliver something at some point, but five years away is a frustratingly shifting target that seems to remain perennially five years away.