In October 2015, DART (Dallas Area Rapid Transit) confirmed a five-year contract, worth almost €28 million (~$US30m), with Vix Technology for its eO™ (easy and open) product: an account-based, open architecture and PCI-compliant fare collection platform.
We had been studying the evolution from cash to electronic payments for several years, explains David Leininger, EVP & CFO, DART. The transit sector is in the process of shifting from the older version of the smartcard – based on ‘stored value’ technology, whereby you write the data on the card, the ‘intelligence’ is held on the card – towards the ‘account-based’ smartcard that essentially just holds the rider’s account number, while all the rest of their information is stored in the software, at the back end.
David Leininger, EVP & CFO, DART
The regional agency reponsible for keeping over 220,000 passengers on the move every day, across a 1,813km² (700 sq. mile) service area, DART’s remit covers Dallas, Texas, 12 surrounding cities, and an extensive network of DART Light Rail, Trinity Railway Express commuter rail, bus routes, and paratransit services.
Given the considerable investment involved to bring its ticketing system up to speed, the Agency wasn’t going to take any chances. Its decision to go with Vix for this new solution was the result of an extensive evaluation process that began back in 2010.
Over the past five years we’ve been educating ourselves about the changes and about who was performing the technology, Mr Leininger tells Mobility. And since the latter was in flux, we decided not to rush into any decision.
MOBILE APP – WHAT DO RIDERS REALLY WANT?
Yet rather than put transit ticketing on the back burner, given that mobile was emerging, in September 2013 DART launched its intial GoPass℠ application with the help of Danish mobile service and payments firm Unwire.
And Mr Leininger is happy to report that the app has been very really well received – the early adopters, the millenials, loved it! And behind them came… grandparents!
Keen to ensure broad adoption, the Authority decided to offer all its tickets, without exception, via mobile. And the bet appears to have paid off! With around 450,000 downloads to date and a few million transactions, GoPass currently accounts for some 10% of DART’s total payment structure.
An interesting insight – according to DART’s surveys, utilisation of smartphones is highest among lower income riders. This is probably because they can do more with it for less money, e.g. they don’t have landlines at home, can benefit from special offers, and so forth, suggests Mr Leininger
Over the past two years, DART has used GoPass as a means of better understanding what its riders really want. And this proves to be services that can be easily and conveniently provided via mobile, such as trip planners and links to ridesharing services such as Uber, Lyft, or Zipcar.
STRINGENT SELECTION
Once DART was confident about where it believes fare payments are heading, i.e. towards account-based technology, it was time to take the plunge.
DART staff published an in-house reference document, called a concept of operations for a comprehensive fare payment system (CFPS), following the example of MTA [transit authority] in New York,
The next step was to encourage industry participants to provide unsolicited proposals that discussed how the vencor would propose to introduce an account-based solution. Five vendors came forward – Xerox, Accenture, Cubic, Vix, and Genfare, with each giving a half-day presentation of their proposed roadmap, etc.
Based upon the information obtained, we determined we would need to go through request processes for vendor qualification, and then proposal, says Mr Leininger.
The request for qualification and then quotation process was necessary because not every vendor had a system that represented a clearly unique, superior account-based solution that would justify a source contract. After receiving initial submissions, we went through the proces of separating those who had an account-based solution from those that didn’t.
DART then visited the four remaining vendors, allocating two days for each visit, and asked they demonstrate specific tasks with their systems within a given time block – to ascertain if they were aspirational or actual. Of course we carefully considered the costs too. And at the end of the day, while Xcentra and Xerox came quite close, the one vendor that clearly met all our requirements was Vix.
MEETING NEEDS
While admitting that the Vix system is not the cheapest, Mr Leininger points out that the company proved competitive and offered the best overall proposition, e.g. current verifiable functionalities, CRM software, and was closest to our needs in its architectural concept, i.e. deep mobile integration. This latter feature, Mobility understands, is particularly important to DART because of its strong interest in ride sharing services as companions to public transit. We are moving towards providing a combined public transit, private ridesharing journey as a single payment transaction, adds Mr Leininger, and are already close to doing so on the existing GoPass.
The contract with Vix will actually cover almost seven years, given that DART issued the notice to proceed this September 2015 and the installation period will last 18 months. Revenue service is planned to start in spring of 2017, with Vix providing for five years of managed services. And since it is a managed services contract, while there will be hardware at DART, the software for both Vix eO and the mobile ticketing system will be hosted remotely at the back end, points out Mr Leininger.
FAIRBOX, RETAIL & CHANGE – ALL CHANGE?
Right now, DART is in the process of shifting its riders from farebox payment (on board vehicles) to retail merchant locations such as CVS (City Vending Services), grocery stores, and the like.
Beginning in 2017, DART will begin the process of shifting its riders from farebox payment (on board vehicles) to retail merchant locations such as grocery, conveniencen and drug stores, as well as other retail locations convenient and easily accessible to its customers.
Mr. Leininger observes that as DART customers have indicated, exact change payment at the fare box is not exactly convenient. He goes on to say: given that using cash is expensive, inefficient, and inconvenient for riders, a payment card is much more preferable. So we are switching to a card-based solution for the majority of our customers NOT using smartphones.
This move obviously benefits DART by taking the payment process out of its hands, while at the same time opening up opportunities to add value by integrating other services such as ride sharing, concert tickets, etc. By way of example, in 2014 DART sold 22,000 tickets through GoPass for the Texas State Fair. We have a light rail line that serves the venue (and beyond), so we introduced a ticket that combined the transit and a pass to the event, Mr Leininger told Mobility.
Offering the customer more, and making the fare payment process more fun, is important for retention and creation – to stimulate demand and ridership, he sums up.
Beyond this, such an integrated platform opens up potential revenue opportunities for DART. Yet to successfully handle the complexity of any future offers and achieve the final objectives, i.e. ridership retention and creation, Mr Leininger is aware that a robust and efficient back end is key. We really want to offer different modes and models of engagement with our customers. Hence the need for the type of back end provided by Vix, which is capable of both scaling up and expanding out to permit the addition of many other products and services.
Says Steve Gallagher, CEO, Vix Technology: We couldn’t be happier with the positive feedback and the growing, global customer base that is moving to implement our eO product. The system we are delivering in Dallas will allow DART to spend more resources in developing and improving their transportation network and less time on payment collection and processing. Account-based systems are the way forward and we are excited to be with DART on this project.
Note 1: ‘Vix Technology – knowing you, knowing me’. Technology-led innovations are creating opportunities for greater personalisation and engagement in the field of public transport ticketing. Together with Mr Gallagher, Mobility explores these new avenues…
MODAL MIX & SHARE
While only 3% of all travel within DART’s territory is by public transit (the car, it seems, is still king of the road), as the Authority introduces more rail services, ridership of this mode is growing. Indeed according to our customer surveys, the train, which is considered upmarket, is preferred over the bus by many riders, which is seen as downmarket, Mr Leininger explains. He puts this down to the fact that buses risk getting stuck in traffic jams, unless operating as BRT [Bus Rapid Transit] systems, which are viewed in a more positive light because of their dedicated lanes.
Note 2: one of DART’s tasks involves managing high occupancy vehicle (HOV) lanes. These are separated from the freeway and reserved for use by vehicles carrying two or more occupants, and buses.
DART sees its task as being to provide the most cost-effective and convenient mobility to customers, which, depending on the situation, may be rail, or buses, or shared passenger vehicles in suburban areas, or other modes. We must ensure that major population and employment areas are well served and that there are links feeding them, Mr Leininger tells Mobility. This is why we are OK with Uber [app-based alternative cab service] for example, because it provides these links and is ideal for serving shorter trips.
To drive his point home, DART’s EVP proceeds to describe how the 20 mile (30km) one-way trip between Dallas Forth Worth International (DFW) airport and downtown costs US$2.50 (€2.3) by train, or US$50 (€47) by cab. Given this huge difference in cost, plus the added inconvenience of congestion on the roads, no surprise then that the train is starting to grab customers to/from DFW.
On this particular route, we can carry people [by rail] one way the cheapest; the cab and Uber can’t,’ adds Mr Leininger. But then the latter is able to provide a reasonably priced connection to the final destination, if necessary, if it lies beyond the reach of our public transit services.
IMAGINING THE FUTURE
There is much speculation over how public transport ticketing will shape up in the coming years. On this score, while agreeing that tickets and travel cards will become increasingly electronic, Mr Leininger suggests the future might be different from what most people are imagining today – with riders no longer carrying anything on their person. And here I’m not talking about embedded chips, but technologies like Bluetooth and sensors.
The paper medium will go away eventually, I would say. It will disappear in large quantities relatively soon, but remain pertinent for specific cases – there will always be a need for tickets you can use once and toss. Paper will continue for at least another ten years in North America’s major urban public transit systems, he predicts.
Cash for single trips will possibly exist for longer than paper. But the smartcard makes sense for regular users of a system, which makes the case for open payment, i.e. contactless payment on buses.
While admitting that it could offer open payment for its rail services, i.e. DART Light Rail, Trinity Railway Express, and commuter services, the Authority is nevertheless reluctant to do so since it will require riders to present their credit cards for validation by inspectors – a less private transaction than swiping them before a machine. However, contactless payment opportunities utilising Apple Pay, Samsung Pay, and other NFC-based services has immediate applicability and will be offered.
I think payment in public transit in North America by contactless credit cards is still a decade away, sums up Mr Leininger. In the US, one reason the banks are not widely deploying the cards is because they say the reader technology is not widely available. Another reason for not issuing them, they say, is cost of issuance versus a magnetic strip, or chip-and-pin solution.
Current industry estimates, according to Mr Leininger, predict that contactless bank issued credit cards are not likely to represent more than 20% of the market for the foreseeable future. Instead, the banks are relying on mobile wallet solutions to address the contactless payment option.
Note 3: in London, passengers can use their contactless Visa cards for payment on bus, Tube, tram, Docklands Light Railway (DLR), London Overground, Transport for London (TfL) Rail, and most National Rail services.
In Poland, contactless Visa payments have been available on Warsaw and Wroclaw public transport since 2012
Note 4: click here for more Mobility articles on ticketing.
BY THE WAY…
To rewrap up our interview, given that the COP21 climate summit is now underway in Paris, Mobility couldn’t resist going off the ticketing radar to ask Mr Leininger about energy, the environment, and pollution issues. Is it unfair to say they are not priorities for US public transit authorities such as DART?
For the top 50 transit agencies in North America, I would say these concerns are front and centre, he says. Plus don’t forget that we are all subject to stringent environmental requirements. At DART, all our buses run on natural gas, and we are testing nine electric buses on a single route in downtown Dallas. The light rail system is electric, and we have a streetcar that is battery powered when crossing bridges to avoid having to install overhead power lines.