Smart Cards Ready to Take Off

Smart cards are a hot topic in transit. The general interest press is paying attention. So is the public transit industry, where experts are discussing the new method of fare collection in such forums as the recent American Public Transportation Association (APTA) Rail Transit Conference in Boston and the CardTech/SecurTech Conference & Exhibition in Las Vegas, as well as smaller advisory groups made up of transit managers, vendors and consultants.

In the U.S. today, there are three, going on six, major transit systems either actively using or preparing to migrate to, contactless smart cards as a primary form of passenger fare payment. Where smart cards have been introduced in Washington, D.C., and Chicago, the reaction has been extremely positive. Where smart card implementation is pending (the San Francisco Bay Area, Boston and the regional system planned for Washington, D.C.-Baltimore), transit operators are banking on similar successes while looking to their new ticketing systems as a way to hold down operating costs and build ridership through additional convenience.

Today transportation authorities are seeking ways to make public transportation more attractive and convenient to commuters and further improve system efficiency and flexibility. The transportation industry has struggled with ticketing choices as one means of providing these system attributes. To be able to serve a broader rider base cost effectively, it is likely that magnetics and smart cards will cohabitate in the same systems for some years to come.

To support the industry?s goals, Cubic Transportation Systems of San Diego has integrated into the field the most effective, easy-to-use systems. In place in Washington, D.C., and Chicago, these systems allow for fare and transfer payment to and from several transit modes, including buses, trains and car parks.

The Washington Metropolitan Area Transit Authority (WMATA) was the first to roll out smart public transit fare cards. WMATA serves a 1,500-sq-mile area around Washington, D.C., and includes the District of Columbia and parts of Maryland and Virginia.

Launched in May 1999 under the marketing slogan, "SmarTrip: It?s Pure Genius," the new smart card and its operating environment were a success.

Today there are more than 175,000 SmarTrip riders in Washington, and converts from magnetic tickets to smart cards are being added at the rate of 1,500 per week?an accomplishment owing to little or no paid advertising, just strong initial media events and subsequent "word-of-mouth" resulting from customer satisfaction.

Contactless smart cards (CSC) offer unparalleled customer convenience, operator management versatility, and future application flexibility. Since contactless cards do not require the physical contact step of inserting or swiping a fare card into a ticket transport or reader to be processed, smart card users barely break stride when entering a transit system, whether entering gates or boarding buses. There is the added feature of reduced equipment maintenance and increased equipment "up time."

Since its start-up in Washington, D.C., SmarTrip delivers stored value for park-and-ride fees and rail fares, but it has the ability to marry all local or regional transit modes to the SmarTrip CSC. It is this regional aspect which is particularly appealing to transit operators.

Today, more than 58% of WMATA?s commuters use SmarTrip, and the card?s potential reach has been further expanded under a regional procurement between WMATA and the Maryland Mass Transit Administration (MTA). This joint undertaking sets the stage for adoption of SmarTrip throughout the tri-region transit corridor serving Virginia, Maryland and the District of Columbia. For thousands of commuters, particularly those who live in Maryland and Virginia, this single card fare payment system will dramatically simplify the effort it takes for people to get to and from work in Washington, D.C.

Initially, the procurement, which calls for new validating bus fare boxes that include interoperability with WMATA?s system, led to two separate contract awards to Cubic since January 2001. One is for the Washington Metro and the other is for the Maryland MTA. This means commuters will extend their "seamless" travel from WMATA?s existing rail and parking facilities to all bus operations serving the capital, Maryland and parts of Virginia.

In Chicago, the nation?s first intermodal, inter-agency fare collection system for the Chicago Transit Authority?s rail and bus systems and Pace, the regional suburban bus operator, was deployed. Because the CTA?s stored-value card system, built four years ago, was designed to be smart card ready, the recent addition of smart cards to the existing magnetic system was seamless for commuters and cost-effective for the transit authority. The program, which started as a demonstration in 1999 for 12,000 users at the CardTech/SecurTech conference, and later as a pilot for patrons with disabilities, is setting the stage for a full regional rollout in the coming months.

As a leader in a national transition to a 21st century smart transit fare environment, Chicago will offer its riders more convenient commutes for rail to bus and bus to bus transfers.

Extended utilities for smart card usage are being eyed by the agencies that have adopted contactless smart card technology, including the potential for secure e-commerce purchasing options that are expected to extend beyond the traditional ticket to ride transit.

In Washington, D.C., for example, Metro customers can participate in a program called "Smart Benefits," an electronic distribution channel for federally supported monthly transit benefits. Utilizing the Internet and Cubic?s technology, benefits are downloaded directly to customers? SmarTrip cards, delivering in seconds what used to take days under the former paper-based system.

Another feature WMATA plans to add is "autoload," the automatic downloading of value to a patron?s card when a predetermined minimum limit is reached. With this benefit in operation, a patron would previously authorize the agency to charge his or her card with additional value when the card limit dips below a certain dollar amount?a value that would be "read" by the smart card system at any of the fare gates, for example.

Regional ticketing has been cited as an opportunity for operators. Both the Washington, D.C. and Chicago systems were designed to unify fare collection among multiple operators for an entire region. Smart cards make it possible for several authorities to operate with one card that supports shared ridership once the participants agree on ownership and inter-system policy.

When public transportation is made more convenient for the customer, the customer is likely to rely on it as a regular service. WMATA?s customer surveys show that of their current smart card users, 99% expect to continue using the cards, with convenience cited as the primary reason for their high satisfaction.

Smart card technology is not new, although the transition in U.S. transit has been relatively slow. This could be attributed to the fact that the transportation industry is risk averse, and therefore cautious with any new technology rollout. Mistakes are expensive.

There is a comfort level in working with what you know, and magnetic ticketing systems have been quite effective?New York?s MetroCard is an example of one very successful magnetic card system. The actual media are less expensive than smart cards, and the processing equipment has become quite reliable. Therefore, magnetic tickets still have their place in today?s transit systems, particularly for the occasional riders or tourists who are not going to find it cost-effective or convenient to pay a deposit for a card they will not use regularly.

Transit authorities that use stored value-based magnetic ticketing today will find the transition to smart cards much less trying than other applications. Most of the authorities already will have experienced card ordering, printing/graphics, back-end system fare policies, customer education planning, customer services and distribution. All of these requirements still apply to smart cards. However, an authority must be careful to realize that the base smart card technology is significantly more complex. The cost of purchasing/encoding issuance mistakes carries a price tag 20 to 50 times greater than that of magnetic cards.

As a transportation technology, smart cards have been slow to catch on among transit operators in the U.S.

Initially, there is the period after invention, in which key applications of the new technology are evaluated. With smart cards, transportation quickly emerged as one of the original driving applications that would achieve the critical mass necessary for the technology to succeed.

Following initial introduction, a one- to three-year period of ongoing introduction starts. Often this includes initial detailed technology exposure, which includes a degree of education for potential users. Once the technology has been exposed, a peak level of interest is reached. In addition, it is not uncommon for the developers and supply adopters to become involved in standardization efforts. In many cases, standardization is an effective method of gaining customer/implementer support.

This critical period after peak interest is reached often becomes the graveyard for these new technologies. There is a period of high interest in the beginning, and then it wanes as efforts to standardize take over. If the momentum can continue among potential users and early supporters and developers, the technology has a chance to survive. As the technology evolves to a higher level of capability and starts to reflect upon the requirements demand of the "killer" applications and early adopters, what I refer to as the "period of understanding" is reached. The next stage of standardization and adoption is where the technology starts to be used in mainstream systems and reaches an acceptable level of maturity, albeit with controlled customer exposure to allow for risk management.

Now that the success in Washington, D.C., has been documented, and now that standardization, including de facto standardization, efforts are maturing, increases in users and their applications should start to multiply, and the industry will enter what Bill Gates described as the "positive feedback cycle."

To summarize, interest and/or growth bring more interest and/or growth. Today the smart industry is in this stage of the technology curve. It has propelled contactless smart cards into the starting stage of the implementation period, which is achieved when applications are plentiful, sufficient users have implemented on a full system-wide scale, and the functionality/cost/risk targets of the technology have reached majority acceptance.