The Race Is On for the Transit Ticket of Tomorrow

The next-generation fare card will definitely be much more than a fare card. But what, exactly?

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Reuters

BOSTON—Arrive at the MBTA commuter rail station in Hanson, Massachusetts, and you might not believe the train can get you to Boston in just 43 minutes. The stop is a small concrete platform in a rural town, and it feels a world away from the city. It's nestled between cranberry bogs, acres of woods, and a row of semi-abandoned buildings that once housed Ocean Spray. There’s a deer check station just up the street.

To pay for your trip, you could buy a commuter rail ticket at the Tedeschi's convenience store a mile and a half away. Or you could pay your fare on board if you've got enough cash in your purse or wallet.

But with the mTicket app on your smartphone, you've got another choice. With a swipe of the screen, just select your destination from a list of stations, authorize a charge to your credit card, and show the conductor the time-stamped virtual ticket glowing on your phone. It doesn't cost extra to buy a single trip or pass with mTicket, and setting up the app for the first time takes only seconds.

Amid the pine trees and winding country roads, the station in Hanson offers a glimpse of how we'll pay to ride public transit in the future. From New England to Oregon, tickets are giving way to smartphones, and fare cards are starting to work more like gift cards. Eventually, bus schedules will adjust in real time to how many riders are waiting, and the train you take to work might even buy you a coffee.

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Back in 2012, the MBTA's commuter rail became the first system in the country to let riders buy tickets on their smartphones. Josh Robin worked at the T back then and helped launch the program. Now he works for Masabi, the company that handles the MBTA's smartphone app. He says the two ways riders could pay a fare before mobile ticketing — cash on board, or a paper ticket from a convenience store or a major station — just weren't cutting it.

Courtesy MBTA

"You often end up paying cash on board if you're not a monthly commuter," says Robin. "And if you're a regular commuter, you do an awful lot of waiting in line on Mondays and the first day of the month."

According to Robin, it would've cost the T upwards of $70 million to install and maintain ticket vending machines on every platform — especially at stations as remote as Hanson. "Because it was so expensive, it landed on my plate," he says. So he looked into how other transit systems do ticketing and came across Masabi, a company that had launched a smartphone app for mobile fare payment in the United Kingdom, including several railways that run through London. The T didn't have $70 million, but the majority of its riders did have smartphones. Six months later, the T got mobile ticketing.

Since then, transit systems across the country have followed suit. Austin, Dallas, Long Island, and Portland have all introduced apps that let riders pay with their phones.

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For years, transit agencies relied on a simple payment model: pay us what we want how we want it, or walk. Heck, the namesake for Boston's CharlieCard is a song about a guy who got stuck on the Green Line when he couldn’t figure out how to pay his fare. (Curiously, his wife brings him lunch, but not the nickel he'd need to exit the station.)

If a coffee shop only took exact change or tokens, customers would go elsewhere. But riders usually don't have another way of getting where they're going, and transit systems are slow to innovate. Major systems like New York, Boston, and Washington, D.C., have introduced reloadable fare cards, but aside from magnetic strips and microchips, the basic premise hasn’t changed in a century.

Partially, that's by design. Transit systems need to move people through fare gates and onto buses, trains, and subways as quickly as possible. "In the transit business you've got thousands of people every day that need to rely on the experience," says Robin. "There's a good reason that it sometimes takes time for innovation to come forward."

Replacing old systems can also cost a ton of money. Chicago just did it, and the bill was $454 million. Right now, the mTicket app costs the MBTA almost nothing, because conductors manually check phones for tickets. Masabi gets paid a percentage of each fare, and there's no infrastructure to maintain — riders carry it in their pockets. But if Boston were to upgrade every one of its buses and subway turnstiles to recognize and scan smartphone tickets instead of chip-based cards, it would be at an enormous expense.

"You have quite an infrastructure in this country and in other countries built on chip-based communication," says Martin Schroeder, chief technology officer with the American Public Transportation Association. "To have them go in and replace that would be monumental in cost."

Transit also has to remain accessible to all riders, and that means agencies will have to recognize everything from quarters to iPhone screens. "There was discussion in the early days of just using bankcards. That's not necessarily what all people will want," says Schroeder. "You can't disenfranchise them just because they don't want to use a bankcard."

And then there's the issue of future-proofing. Transit agencies don't have the cash to make frequent upgrades, so they have to be smart about how they invest. Pick the wrong transit-fare technology, and riders will have to live with it for decades.

"It's not trying to predict what's going to come next," says Dominick Tribone, the MBTA's special assistant for strategic initiatives (the guy who makes sure a very old transit system can adjust to new payment methods). "It's trying to incorporate that into the fare-collecting medium you currently have."

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Ideally, riders would pay however it makes sense for them, just as they do anywhere else. Flexibility like that would require a shift from "closed loop" payment, in which an agency issues and controls how riders pay their fares, to "open loop," which lets riders pay with whatever's in their wallet or purse.


Courtesy TriMet

That shift is already happening in Portland. The city's public transit agency, TriMet, introduced smartphone ticketing in 2013. Now, it’s on track to implement an open-loop payment system by 2016.

Chris Tucker, TriMet’s director of revenue operations, says the trick is to link fare cards to user accounts. That way, riders can add money at a station, online, from a smartphone app, or in person at a third-party retailer. The money stays on an account — not on the card itself — which riders can populate using a credit card, debit card, or bank account. It's similar to a Starbucks card, but instead of a latte, it'll buy riders a trip to work or anywhere else.

Tucker explains with a hypothetical example. Say you're flying into Portland from out of town. You could download the TriMet open-loop payment app and fill your account before your plane ever takes off. You can start to ride transit as soon as you get to Portland, and if you lose your TriMet card, you don't lose the money in your account.

Better fare technology can mean a better transit experience, payment aside. TriMet is already using data from its mobile ticketing app to improve service by tracking ridership in real-time. "If there's a lot of riders in a certain area, we need to add buses,” says Mac Brown of GlobeSherpa, the company that developed TriMet’s mobile app. With more riders using account-based ticketing, TriMet will get even better data, and riders will get better service.

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Across Europe and Asia, transit fare cards often double as an access card for an office or apartment building, or a payment card for restaurants and shops, or even personal identification. Fare card rewards programs let riders collect points and redeem them for discounts, the same way they would with a credit card.

"They treat it as a service, and transport ticketing is part of that service," says Martin Gruber, general manager for automatic fare collection at MIFARE, the technology that underpins fare collection systems from Boston to Bangkok. "It's providing an integrated approach to how people move in a city."

That integration is slowly coming to the United States. For instance, GlobeSherpa is working on a ticket design that rewards TriMet riders for taking transit. "You buy your transit ticket, you go to the Blazers game, and get 20 percent off a hamburger,” says Mac Brown.

In the longer term, Brown is also excited about inexpensive, location-aware technology — like Apple's iBeacon — that will let bus stops recognize riders through their smartphones. Retailers already use such technology to send coupons to frequent shoppers' phones, so why can’t transit agencies do the same for frequent riders?

"We can program fare structure, merchant deals, advertising — whatever we want," says Brown. For instance, a coffee shop near a bus station may send you a coupon for a free cup, or a concert venue could offer discounted fare to encourage attendees to take public transit. A report from tech consulting firm ABI Research estimates it’ll be at least four more years before technology like iBeacon goes mainstream. But when it does, transit agencies will have a powerful new tool for recognizing riders.

Back at the Hanson commuter rail station, it's not hard to imagine a future where coupons for Tedeschi’s convenience store pop up on daily commuters' smartphones. When that day comes, they’ll be lining up for free coffee, not paper train tickets.

This article is part of 'The Future of Transportation,' a CityLab series made possible with support from The Rockefeller Foundation.

About the Author

  • Keith Barry leads home and car coverage at Reviewed.com, and is a regular contributor to Wired's Autopia blog. His work has been featured in several publications including Car and Driver, USA Today, and the Boston Globe. He frequently rides the 96 bus from his home in Medford, Massachusetts.