Lower costs, ridership barriers, and passenger congestion are among the possible benefits.
Provided they have an iPhone 6 and can actually figure out how to set up Apple Pay, Transport for London riders can now cover their fares on trains and buses with a tap of their smartphone. That’s a nice step forward for merry old England, but the truth is it’s just the latest development in a bigger push toward contactless fare payment on transit systems around the world. Fare cards are on the outs. The future is literally touch-and-go.
It’s not just busy travelers who stand to gain from the convenience—transit agencies and even city mobility networks at large are expected to benefit, too. CityLab recently spoke about the big-picture upsides of new fare technology with Will Judge of MasterCard, who has the great title of Head of Transit Centre of Excellence and came to the card company after years working on touch fare payment at TfL. He pointed out three big benefits:
1. Reduced operating costs
Judge says it’s typical for transit agencies to spend 10-15 cents in collection costs for every dollar they see in fares. That’s a big share of total operating expenses. Some of that sum is unavoidable, but in the past a lot of it—Judge estimates 30 percent—has been directly connected with ticketing transactions. Things like staffing fare booths, processing tickets, maintaining and loading kiosks, and providing payment information to travelers all add up.
As more riders pay tap-and-go fares via Apple Pay, credit cards, or specialty transit cards, those collection costs go down. “You see real savings on those,” says Judge. That’s money that can be reinvested back into the system in the form of better service.
2. Reduced ridership barriers
For transit enthusiasts, one of the great things about visiting a new city is learning the local train or bus system. But plenty of tourists prefer to show up and get on their way as quickly as possible. Contactless payment methods—especially global ones like smartphones or credit cards—get cities closer to a universal fare system that eliminates one more barrier to ridership.
Judge gives the example of travelers who show up into London’s St. Pancras Station on the Eurostar. If they want to ride the Tube from there they need to go stand in line and acquire a fare card. With something like Apple Pay, that step gets removed. “If we all used the same cards in multiple cities, that would take a big step towards making the experience consistent, predictable, and less intimidating,” he says.
3. Reduced passenger congestion
An even broader benefit that’s doable with existing technology but becomes easier with touch-and-go fares is demand management across an entire transit system. Say a city wants to reduce passenger crowding by encouraging subway riders to take the train outside peak hours—something Singapore recently did, to great success. A fare technology that’s linked to an individual bank account, as is the case with Apple Pay or credit cards, can provide direct rebates or discounts. Ultimately cities could partner with retailers or big companies to incentivize transit travel via cash deals or commuter benefits programs.