DRAFT
Fare collection technology should be
considered in a broad context
All components fit together to meet Fare Policy Goals
Fare products
and pass programs
Transit operations
Fare collection
technology
Enforcement
of fare
payment
Key Goals: Improve customer experience, increase revenue, reduce cost of fare
collection, provide regional mobility/access
1
Draft for Discussion & Policy Purposes Only
DRAFT
To achieve the best fare collection system in the
long term we are answering these questions
A Fare media, hardware, validation, and enforcement: what fare
media should be available to the customer, what type of hardware
should we use, and how do we confirm travel is valid?
 Move toward open payment system with hardware that reads multiple fare media
(mobile, contactless credit card and Charliecard)
B Payment, value storage, and products: where and how is value
stored, and how are payments processed? Do we continue to
encourage pass usage and increase bulk pass sales?
 Account based system with value stored in accounts, not on fare
media; passes likely to remain key product for foreseeable future
C Revenue management: should we be in the business of managing
cash?
 Cash management is not central to the MBTA’s mission, explore
BIG QUESTION: which
business model should we
pursue? Does the MBTA
serve as the integrator or
do we hire an outside
firm?
partnering with third party provider, direct remaining resources to core
services
D System operation and maintenance: who should maintain hardware
and software assets, are these MBTA core competencies?
 Hardware and software maintenance is too complex, commonly
managed by a systems integrator through an SLA arrangement
Draft for Discussion & Policy Purposes Only
2
DRAFT
We own and operate our current system, but
much of it is tied to our primary vendor
Component:
A
Fare media,
hardware,
validation, and
enforcement
Current MBTA system
Current business model
▪
▪
Mag-stripe tickets, Charlie cards, CR mTicket
Gate systems, fare vending machines, cash
on board, and handheld devices
Charlie card tap, ticket swipe, and rail
conductor manual check
Limited enforcement after initial validation
▪
Purchase at fare vending machines, pay cash
on board, corporate pass program, CR
mTicket
Value stored on media (no accounts)
Variety of passes and products
▪
▪
▪
▪
Payment, value
storage, and
products
▪
C
Revenue
management
– cash and credit
▪
▪
Cash collected and counted by MBTA
Credit cards processed by Vantiv (third
party)
▪
D
System operation
and maintenance
▪
Hardware maintenance (e.g. gates) across
system done in house
Software maintenance and database admin
done in-house
Software updates done by vendor
▪
B
▪
▪
▪
▪
Draft for Discussion & Policy Purposes Only
▪
▪
▪
In-house: fare media;
hardware (relies heavily
on S&B)
Third party: CR mobile
app (pilot – upgrading to
contract would reduce $)
In-house: all payment
portals except mTicket
Third party: mTicket,
corporate tickets mailed
by Edenred
In-house: cash
processing
Third party: credit card
processing
In-house: hardware
/networks maintenance,
software maintenance
and admin.
Third party: software
updates
3
DRAFT
Cost of Collection: MBTA is forecast to spend $34M in FY16
on AFC maintenance and money room/cash collection
$40M
$3.9M
30
20
$1.7M
$33.6M
$10.9M
$17.1M
10
0
Total headcount
Retirement eligible
AFC Maintenance
Money Room & Vault
Agents
Fare Systems
AFC Revenue
Operations
Total Costs
69
83
5
8
165
8
29
0
0
37
Note: The MBTA counts cash for the cities of Boston, Cambridge and the Mass Turnpike and receives a total of $400K per annum for
this service, which is not reflected above. Net of this $400K, the total Money Room expense would be $8.2M. Money Room expense
above also includes cost of MBTA transit police detail / OT to support Money Room security
Draft for Discussion & Policy Purposes Only
4
DRAFT
Cost of collection: Operational overview
AFC maintenance ($17M):
69 employees, 8 retirement eligible
▪ Charged with maintaining and fixing AFC hardware
▪ Hardware includes retail vending machines, fare gates and boxes, and other related equipment
▪ Work across all MBTA stations and bus facilities
Money room & vault agents ($11M):
83 employees, 29 retirement eligible
▪ Collect currency and transport funds in armored cars from stations to central facility
▪ Count and process cash funds for deposit in banks
▪ Includes armored cars, armed revenue agents, and counting staff
▪ Provide counting and processing services for other select municipalities and the turnpike
▪ Vault agents (14 employees) work in bus ops and move cash from buses into safes
Fare systems ($4M):
5 employees, 0 retirement eligible
▪ Maintain and update AFC software in conjunction with S&B
▪ Ensure cards / tickets, gates, and fare boxes interact appropriately with system back end
AFC revenue operations ($2M):
8 employees, 0 retirement eligible
▪ Manage fulfillment of wholesale card and pass distribution with vendors
▪ Oversee credit card processing (third party) and refund activities
▪ Limited retail operations for special
pass programs
Draft for Discussion & Policy Purposes Only
5
Best in class transit systems typically outsource AFC
maintenance and cash collection and manage vendor
through “% Up-Time” service-level-agreements (SLAs)
DRAFT
Most modern transport authorities rely on third parties to provide AFC maintenance and cash
collection services and manage their vendors through an SLA standard (focused on up-time)
▪ The Chicago Transport Authority (CTA) has an exclusive partner while Transport of London (TFL)
uses multiple outside vendors and some internal staff to manage
▪ Scheidt & Bachmann (S&B), the MBTA’s current provider, provides these services to other transit
authorities and could serve as a potential partner
By partnering with a third party, the MBTA could improve gate and FVM availability and usage:
▪ At each station, gates and fare vending machines average between 2 and 5 failures per month
▪ For safety reasons, when gates fail, they fail open. In 2014, there were 1,742 work orders to
address open gates (total 660 gates)
MBTA
(Current Process)
AFC
Maintenance
Cash
Collection
Scheidt & Bachmann
(MBTA AFC vendor partners w/)
Chicago Transport Authority Transport for London
PAAC
(Pittsburg, PA)
S&B partners w/
sub contractors
Heavy rail – third party
Tube – staff & vendor
6
Draft for Discussion & Policy Purposes Only
DRAFT
Alternative models range across a spectrum
of business models
Turnkey partnership
Open architecture with diversified
suppliers
+
Examples:
Cubic provides all fare collection,
payment, and revenue
management
TFL designed and operates an open
system that uses hardware and
software from multiple vendors
▪
A
Fare media, hardware,
validation, and
enforcement
▪
B
Payment, value storage,
and products
▪
▪
Value resides in accounts
Open payments (tap credit card at
gate); ticket vending machine;
online top up; auto-reload; mobile
C
Revenue management
– cash and credit
▪
Cubic reimbursed for CC fees,
cash on bus retrieved by CTA
▪
▪
Heavy rail – third party
Tube – staff & vendor
▪
Cubic maintains system and AFC
operations
▪
Cubic and TFL both maintain
portions of the system
D System operation and
maintenance
Open fare media policy. Ventra
Card and tickets. Cash still
accepted on buses
Vendor manages system and
associated risks, but this may
come with a price premium
and reduced flexibility
▪
▪
▪
▪
Oyster card; gates at all stations
and farebox taps on buses
No cash on buses
Cubic provides hardware
Value resides in accounts
Open payments (tap credit card at
gate); ticket vending machine;
online top up; auto-reload
Likely lower-cost and modular,
resulting in faster delivery and
more flexibility; requires
strong internal project
management ability
Draft for Discussion & Policy Purposes Only
7