Modernizing Fare Collection to Meet the Needs of Today’s Transit Riders

00:00 Stop Requested.

00:01 Levi McCollum: Welcome to Stop Requested, the podcast where we discuss everything transit.

00:05 Levi McCollum: I’m your co host, Levi McCollum, director of operations at ETA Transit.

00:10 Christian Londono: And I’m your co host, Christian Londano, Senior Customer Success Manager at ETA Transit.

00:25 Christian Londono: Hi, Levi, how you doing today?

00:28 Levi McCollum: Hey, Christian. I’m doing pretty well.

00:29 Levi McCollum: How about yourself?

00:31 Christian Londono: I’m doing great. I’m looking forward to another conversation today in our podcast, Stop Requested.

00:38 Christian Londono: And for our topic today, we have a very interesting topic.

00:43 Christian Londono: I think a lot of transit systems around the country are looking at farebox technology and just fare collection systems

00:56 Christian Londono: in general. Maybe they are looking into renewing their systems, maybe they are looking into slightly upgrading their systems, and

01:06 Christian Londono: maybe they’re right now with a very legacy system that they have for many years and they maybe are getting

01:15 Christian Londono: ready for a complete transformation of their fare collection system.

01:19 Christian Londono: But I am really looking forward to this conversation about fare technology today.

01:25 Levi McCollum: Yeah, this is going to be a good one.

01:27 Levi McCollum: I like to talk about the farebox technology not only because it’s a major part of the operation, but because

01:35 Levi McCollum: it’s the way that transit agencies are able to make a majority of their cash.

01:39 Levi McCollum: So it’s good for the transit agencies to make money.

01:44 Levi McCollum: They need to be able to fund the service in some way.

01:48 Christian Londono: Yes. And as part of the discussion, we’re going to touch also how it impacts a lot of the areas

01:55 Christian Londono: of the operation and also how it translates into the rider experience.

02:01 Christian Londono: Right. How it can help with efficiencies or it sometimes might be something that is hurting the way the system

02:08 Christian Londono: operates. But first I wanted to start by reminiscing a little bit, trying to go back in our minds with

02:17 Christian Londono: some of the early, I don’t want to say technologies, but let’s say methodologies of, you know, fair collection in

02:26 Christian Londono: the past. Is that, is there some early systems that you know of or, you know, some early ways of

02:32 Christian Londono: collecting cash that you can think of? Levi?

02:36 Levi McCollum: Well, maybe not as much in the U.S.

02:40 Levi McCollum: but, you know, you can’t take a step back in time when you travel abroad.

02:45 Levi McCollum: And you know, one thing that always stuck with me about going to Bolivia, where my wife is from, is

02:51 Levi McCollum: that the bus operators there have a wooden drawer, like a wooden cash drawer.

02:59 Levi McCollum: And it would, you know, it would have the, all the different scents and coins just kind of laid out

03:08 Levi McCollum: and they’re just pulling from this drawer and handing them back to you whatever change that you need.

03:13 Levi McCollum: And they’re doing this while they’re driving.

03:15 Levi McCollum: You know, probably not the safest thing, but that is how it Happens somewhere.

03:19 Levi McCollum: Of course, you can think about the, you know, the more traditional, like, steel boxes, rectangular boxes.

03:28 Levi McCollum: And, you know, I’m thinking of like Diamond Manufacturing, who makes probably one of the better known fareboxes.

03:35 Levi McCollum: Those don’t have any sort of tech on them whatsoever, as far as I know.

03:39 Levi McCollum: It’s just a slot with, you know, a clear glass or sort of plexiglass front and then, yeah, steel around

03:49 Levi McCollum: it. What about you?

03:51 Christian Londono: I’ve seen those, and it’s interesting.

03:55 Christian Londono: I visited some systems here in the US that still have that very, you know, early methodologies of.

04:03 Christian Londono: Of fair collection, which is. That is.

04:06 Christian Londono: It’s almost like a clear box where people drop their fare.

04:10 Christian Londono: And it’s, of course, a clear box so the driver can actually confirm the fare.

04:14 Christian Londono: So each person has to wait.

04:16 Christian Londono: The driver is looking at the fare.

04:18 Christian Londono: Okay, that’s the right amount. You know, maybe, you know, $1 and there’s $1 and then there’s like a lever

04:25 Christian Londono: that or sometimes a button or something they press for the money to drop into of, you know, aluminum steel

04:35 Christian Londono: box. And that’s kind of how they confirmed that the people paid and they’re ready to go.

04:40 Christian Londono: There’s definitely challenges with some of those early ways of cash collection.

04:45 Christian Londono: And it’s funny and, you know, some.

04:47 Christian Londono: Some of our listeners might be in an agency that still have some kind of like, outdated technology for cash

04:54 Christian Londono: collection. So they might be able to empathize with some of what we’re saying.

04:58 Christian Londono: But, you know, there’s definitely some challenges with that.

05:02 Christian Londono: The boarding process could take a lot of time, especially if you get to a stop where there’s a lot

05:09 Christian Londono: of riders waiting to get on.

05:11 Christian Londono: And then you have to do the cash collection and then kind of like the fair validation for every person.

05:17 Christian Londono: And it could take a couple, you know, could take up to a couple minutes, right? It could take, you

05:21 Christian Londono: know, maybe 30, 40 seconds to, you know, a couple minutes.

05:26 Christian Londono: You know, if you’re giving change, right, like people are giving you a $5 and it’s $2, and then the

05:34 Christian Londono: driver have to handle change, then it can take even longer than that.

05:39 Christian Londono: And another challenge with that specifically that I can think of.

05:43 Christian Londono: And, you know, so thinking about traveling and going to other countries is that, you know, sometimes bus operators get

05:52 Christian Londono: wrong. Like there’s people that jump on the bus and they want to take the cash.

05:56 Christian Londono: And, and especially, you know, if the driver has like a pouch around, you know, on his waist or, or

06:02 Christian Londono: somewhere where there’s. There’s money, then that always opens that risk of you know, getting robbed.

06:10 Christian Londono: So any other challenge or any other risk associated with those traditional farebox technologies, Levi, that you can think of?

06:19 Levi McCollum: Yeah, I think you touched on the main ones, right.

06:22 Levi McCollum: You are putting the operator, or really anyone on board the vehicle in a pretty vulnerable spot when you’re driving

06:29 Levi McCollum: around with cash or coins. That does seem concerning.

06:35 Levi McCollum: But the dwell time from an operational standpoint is a big one.

06:39 Levi McCollum: It impacts your on time performance and you’re trying to keep the system moving, especially as an operator.

06:46 Levi McCollum: And we’ve been on those buses where some operators, they, they just, they want to get to that next stop,

06:52 Levi McCollum: right? They want to get to that next time point.

06:54 Levi McCollum: They want to make sure that they’re staying on schedule because that’s their job is to stay on schedule and

07:00 Levi McCollum: they want to do a great job.

07:02 Levi McCollum: So you are impacting them. Of course you have to have the labor to be able to count all the

07:08 Levi McCollum: coins. You know, how, how many positions do you take up, you know, in a, in an agency’s administration just

07:17 Levi McCollum: handling the fare collection. Right. It, it’s pretty significant when you think about it, even at a small agency and

07:24 Levi McCollum: how much money are they bringing in, you know, are you even able to pay for those positions for the

07:30 Levi McCollum: people who are having to count the coins there? There are a lot of challenges, certainly.

07:37 Christian Londono: Yeah. And it’s in a way from your revenue, right.

07:40 Christian Londono: If you have to have all these infrastructure for counting the cash for, you know, validating for collecting, for doing

07:48 Christian Londono: all these things, then that’s eating away from those profits that you’re collecting.

07:52 Christian Londono: Also, you know, something else that came to my mind is when you’re doing kind of like visual validation, there’s

07:58 Christian Londono: more opportunities for people to, you know, use a fake currency, you know, and then after you’re doing the cash

08:09 Christian Londono: counting and then you, you know, going through the money, then you’re finding all these counterfeit dollars and, and that’s

08:17 Christian Londono: again eating away from your revenue.

08:21 Christian Londono: So I, I’ve seen the more prominent technology being used today is, you know, after you have just, you know,

08:29 Christian Londono: playing all cash collection, some systems started using tokens, mostly in rail, you know, where people just buy the tokens

08:40 Christian Londono: and then they use the tokens as a way of you’re paying for one ride and there’s a way of

08:46 Christian Londono: kind of like exchanging cash for in a way like, you know, like a ticket to ride.

08:52 Christian Londono: And that leads to the other part of the technologies that we see today is the actual ticketing, like getting

08:59 Christian Londono: that ticket in the form of a magnetic stripe or you know, just Kind of like something that you’re either

09:06 Christian Londono: showing the bus or you’re swiping and that gives you access to the system.

09:11 Christian Londono: So that magnetic stripe, it seems to be the technology that is, you know, existing out there in the market

09:19 Christian Londono: the most currently. However, a lot of systems are transitioning to the latest and greatest.

09:26 Christian Londono: And so I, I want to, before we actually describe latest and greatest, a, I want to talk to you

09:33 Christian Londono: about the benefits of upgrading the farebox system.

09:36 Christian Londono: So just a, you know, tell me what are some of those benefits? Levi, what do you know about the

09:44 Christian Londono: reason and the benefits why you should consider changing airbox technology today?

09:50 Levi McCollum: Yeah, well, I think that it works on a couple different levels.

09:54 Levi McCollum: You know, from an operator standpoint, if you’ve got some antiquated technology, it might not have the ability to have

10:02 Levi McCollum: a single sign on with your cad, avl, you know, hardware and software.

10:08 Levi McCollum: So by making that upgrade, you can have a single sign on into the mdt, for example, your mobile data

10:15 Levi McCollum: terminal, and that will power everything that that’s on the bus.

10:20 Levi McCollum: So that’s just one less step, one less headache that an operator has to go through to get ready in

10:25 Levi McCollum: the morning to operate. You know, of course, I think that it goes beyond just the potential hurdles that the

10:35 Levi McCollum: operator has. And to elaborate on my point earlier about the amount of labor that goes into cash counting, right,

10:44 Levi McCollum: you have to have people that are, that are counting.

10:46 Levi McCollum: You have to have trustworthy people that are counting.

10:48 Levi McCollum: You have to have someone overse seeing the person that’s doing the counting.

10:53 Levi McCollum: It just, it requires a lot of resources.

10:55 Levi McCollum: And as we know, transit agencies are already pretty resource strapped.

10:59 Levi McCollum: So, you know, the revenue is fairly thin as well.

11:06 Levi McCollum: You want to make sure to maximize your revenue as much as possible.

11:10 Levi McCollum: And when you’re spending it on people just doing the fare counting, it can be, you know, it’s kind of

11:18 Levi McCollum: a hard pill to swallow. Like, are we really doing ourselves a disservice? Is this actually, or is this a

11:25 Levi McCollum: benefit for us in any way by even collecting fare? You know, I think some agencies have kind of gone

11:32 Levi McCollum: around that by saying, look, we’re just not going to collect fare anymore.

11:35 Levi McCollum: That was very popular, you know, in 2020, 2021, even into 2022.

11:42 Levi McCollum: And I think some agencies have continued with, you know, being a fairless system or zero fare system.

11:49 Levi McCollum: Others are starting to reconsider that so they can start to get some of those revenues back that they were

11:54 Levi McCollum: losing before. But now you’re right back in the same position.

11:57 Levi McCollum: You know, you got to hire the People, you have to have some folks, some utility workers that are, you

12:03 Levi McCollum: know, taking the cash out of the bus.

12:06 Levi McCollum: So those are some of the big challenges that I see.

12:10 Levi McCollum: The infrastructure is like unreasonably expensive in some cases.

12:15 Levi McCollum: You know, you’re spending millions of dollars to collect, you know, change in a lot of cases.

12:21 Levi McCollum: And I think that for a lot of agencies, they’re, they’re considering what is another option to be able to

12:28 Levi McCollum: do this in the future, especially as technology continues to be a major part of the bus.

12:33 Levi McCollum: Right. We talked about it before.

12:35 Levi McCollum: It’s a, it’s a high tech piece of equipment now.

12:39 Christian Londono: Yeah, no, 100% agree. And you know, if a fare box or fare revenues only account, at least for bus

12:50 Christian Londono: service, but for transit in a large degree, you know, transit service is heavily subsidized, so it only accounts to

12:59 Christian Londono: like 15 to 20% of the operational cost, which is still significant.

13:05 Christian Londono: And you know, if you’re talking about a small system, it might be a hundred thousand, a couple, you know,

13:10 Christian Londono: hundreds of thousands. But when you’re talking of its size or large agency, it could be in the millions.

13:17 Christian Londono: So although going fair free might be something that they might be considering, it might not be feasible from the

13:29 Christian Londono: budgetary standpoint. It also takes a lot of leadership in, you know, for the community to make a decision to

13:38 Christian Londono: go ahead and reduct or get rid of, do away with fares.

13:43 Christian Londono: To me, one of the most important benefits of upgrading the farebox technology or even going cash free is saving

13:53 Christian Londono: on running time. I mean, and I put my transit planner hat on and, and running times is, is everything.

14:00 Christian Londono: It, which is, it also equates to travel time and to make transit more attractive, people need to be able

14:08 Christian Londono: to get quicker from one place to another one.

14:10 Christian Londono: So if you were to go cash, you know, cashless or, or, or, I mean, not cashless, but just fair

14:16 Christian Londono: free where you’re not collecting any fare.

14:18 Christian Londono: I think it would make the system more efficient in terms of running times and travel times.

14:23 Christian Londono: You could open, if you have two doors, you open both doors and let people borrow a light, you know,

14:27 Christian Londono: whichever one of the doors, and then off you go, I think you move quicker.

14:32 Christian Londono: But you know, back to my original point in terms of, you know, the, the, the revenue and the important,

14:41 Christian Londono: the importance for the budget of an agency being able to pay for their operations, even if it’s just a

14:46 Christian Londono: fraction of the operations, is still very important.

14:50 Christian Londono: So because of that, you know, a lot of those agencies cannot make that decision.

14:55 Christian Londono: I know the country of Luxembourg, you know, a few years ago, decided to go fare free for public transit

15:03 Christian Londono: in the entire country. And those are some, again, policy decisions that some different, you know, entities make.

15:11 Christian Londono: And I think it’s, you know, great for the writing public as well.

15:16 Christian Londono: They don’t have to deal with that.

15:17 Christian Londono: But, you know, being able to put a technology in place that is going to reduce the boarding time and

15:25 Christian Londono: it’s just going to make it easier for both the riders to, to me, primarily the writers, but also for

15:34 Christian Londono: the agency in terms of streamlining their processes and then even, you know, increasing the revenues, their net revenues after,

15:43 Christian Londono: you know, deducting the cost of, you know, handling the fares.

15:49 Christian Londono: So that’s definitely a, you know, something to keep in mind.

15:55 Christian Londono: So let’s, let’s talk about technologies that should be considered today.

16:01 Christian Londono: And Levi, I’m going to ask you to put your kind of like innovator hat on and be thinking about

16:08 Christian Londono: all those innovations and those systems that are releasing the latest and greatest on Firebox technology.

16:15 Christian Londono: So could you tell me a little bit about the technologies you’ve seen out there and what has been implemented

16:21 Christian Londono: recently?

16:23 Levi McCollum: Yeah, well, I certainly think that the growing trend is for contactless payment.

16:28 Levi McCollum: You know, using a contactless card to be able to tap on, tap off.

16:33 Levi McCollum: That’s been in use for quite a while, especially with rail systems.

16:38 Levi McCollum: And you know, it’s slowly starting to pick up speed with bus systems as well.

16:44 Levi McCollum: Now on the sort of bleeding edge here, it seems that you’re using your phone, the phone is almost ubiquitous

16:52 Levi McCollum: now, right, for payment or using a watch for payment, some sort of smart device is really where agencies are

17:01 Levi McCollum: leaning towards, you know, whether that’s Google or Apple Wallet, you know, being able to have a special card on

17:08 Levi McCollum: your phone where, you know, you could do the double click or do a double click on your watch and

17:14 Levi McCollum: then be able to tap to a smart device.

17:17 Levi McCollum: And those NFC readers are, you know, we’ve seen them.

17:22 Levi McCollum: You could, you could go anywhere, right? Grocery store, you go to Walgreens and why not transit? So I think

17:28 Levi McCollum: that’s, that has been the approach that some of the more cutting edge agencies are, are using lately.

17:36 Levi McCollum: It makes a lot of sense, right? The world is increasingly digital and making use of those sort of high

17:44 Levi McCollum: tech solutions, you know, in this digital world is very fitting.

17:50 Levi McCollum: It does have some trade offs though, like with anything, you know, you were talking about going fearless earlier and

17:57 Levi McCollum: being able to reduce your dwell time, maybe have better schedule adherence.

18:02 Levi McCollum: Well, the trade off here with, you know, having a digital first fare collection system is that for folks who

18:11 Levi McCollum: are cash based, it makes it fairly inconvenient, we’ll say.

18:16 Levi McCollum: You know, I think that’s probably being conservative.

18:18 Levi McCollum: But you know, those folks who are using cash for most of their purchases now, they’re, they’re having to go

18:26 Levi McCollum: to special locations, you know, retail locations to be able to load up a card or you know, to buy

18:34 Levi McCollum: a card. So, you know, it doesn’t have a completely clean record, but I don’t know the way to be

18:45 Levi McCollum: able to slow the train down, you know, no pun intended there.

18:48 Levi McCollum: It just is increasingly moving this way and our world is digital.

18:54 Levi McCollum: So agencies, I think are, you know, well within their rights to try to make the system as efficient as

19:02 Levi McCollum: they can and reduce their cost, you know, as long as it’s not impacting service.

19:07 Levi McCollum: What do you think? Did I miss any?

19:09 Christian Londono: Yeah, no, no, no, that, that, that was, that was, that was good.

19:13 Christian Londono: And I agree. I mean the vision and the latest we’ve seen in technology, I think that vision is that

19:19 Christian Londono: people can, you know, pay with anything they have on them.

19:22 Christian Londono: You know, credit cards, wearables, their phone.

19:26 Christian Londono: They could use a smart card a, to pay for their fares, some systems and also to be able to

19:35 Christian Londono: be mindful of those folks that today would still prefer using cash, that maybe there’s some folks out there that

19:43 Christian Londono: they’re very technology adverse and they’re like, I don’t have a smartphone, like I still have a flip phone, you

19:49 Christian Londono: know. And again, every day there’s less and less of those.

19:52 Christian Londono: But some agencies still keep the vehicle, the cash collection as an option.

19:58 Christian Londono: So you can really pay with anything you have on you, including cash.

20:02 Christian Londono: But the trend that I’ve been seeing in some systems that, you know, according to what we’re, you know, reading

20:10 Christian Londono: about, they’re really going just digital and contactless.

20:14 Christian Londono: Like they’re, they’re really getting rid of cash.

20:16 Christian Londono: And it seems that there’s going to be a future where cash is no longer going to be used.

20:25 Christian Londono: And I know it’s an inconvenience for those that have cash they might need to reload in different places.

20:31 Christian Londono: Although I will tell you that what I’ve known is that when that’s the case for like a smart card

20:37 Christian Londono: or you know, for people to translate cash into, you know, smart card for writing the system, they do have

20:46 Christian Londono: a big network of retail locations.

20:49 Christian Londono: So you seem like, you know, Walmart’s and CVS and Walgreens, like retailers, 7, 11, like retailers that are pretty

20:58 Christian Londono: much all over, you know, most of the cities and, and you know, communities where it’s going to be fairly

21:06 Christian Londono: accessible for those folks that, you know, still want to use cash and, and then would have to.

21:12 Christian Londono: Whenever a new technology like this is, is implemented, we have to transfer their cash or translate their cash into

21:21 Christian Londono: smart card to be able to ride.

21:24 Christian Londono: But eventually I think that the future will be cashless.

21:30 Christian Londono: But the benefits of the transition are certainly there.

21:34 Christian Londono: And I think a lot of those systems that have transition already, they’re starting to benefit from those conversions and

21:41 Christian Londono: from those implementations in terms of saving money on cash collection, reducing the staff.

21:49 Christian Londono: You know, some agencies can be dropping and I’m just kind of like coding random numbers.

21:56 Christian Londono: But you know, I’ve experienced this type of transition, but I know, you know, 30, 40%, if not more of

22:04 Christian Londono: reduction in cash counting because a lot of folks are using contactless payment and using credit cards and these things

22:13 Christian Londono: that allows the back end and all the technology today that exists for processing credit card payments and so on

22:20 Christian Londono: to do those transactions where there’s no physical cash.

22:23 Christian Londono: And it’s just so much quicker for the agency to be able to account for those revenues.

22:28 Christian Londono: So that, that definitely drives some operational efficiencies.

22:32 Christian Londono: You no longer have to be watching a footage, you know, of people in, you know, bulk room where they’re,

22:39 Christian Londono: you know, counting cash. And then you have to outfit them with this suits with no pockets and everything, you

22:45 Christian Londono: know, to make sure that nobody’s stealing any money.

22:48 Christian Londono: And all these things that, you know, traditionally had to be done for, you know, a long hours of cash

22:55 Christian Londono: counting and processing cash. So that’s definitely something that is transforming transit technology and onboard technology and helping riders just

23:06 Christian Londono: use the system with more ease.

23:12 Levi McCollum: Yeah, absolutely. You know, as you were talking there, I was thinking about some of my experiences riding transit across

23:19 Levi McCollum: the country. And the infrastructure that goes into it is certainly costly.

23:26 Levi McCollum: As we mentioned previously, turnstiles alone are really pricey.

23:32 Levi McCollum: But there’s cases where you have some light rail systems like let’s say Dallas Dart in Dallas, they don’t have

23:41 Levi McCollum: turnstiles for their light rail. But you know, you would go into the GoPass app and you, you’re buying your

23:49 Levi McCollum: pass, you know, completely digitally and you have to activate it by making a swipe.

23:56 Levi McCollum: I don’t know if it’s still that case.

23:57 Levi McCollum: I haven’t been to to Dallas in a number of years, so I haven’t tried it recently.

24:02 Levi McCollum: But you know, these are other ways for agencies to be able to have some time limit to the use

24:09 Levi McCollum: and also engage people with their mobile device that they already have instead of having just another card to have

24:19 Levi McCollum: to keep up with and make sure that you have on you at all times.

24:23 Levi McCollum: I don’t know if you’ve seen any other technology other than, you know, maybe buying the pass on the mobile

24:29 Levi McCollum: app or the card, but that’s.

24:32 Levi McCollum: That’s what I can think of in the moment.

24:34 Christian Londono: Yeah, I think it’s, you know, sometimes there’s an app, right, where you can purchase through the app and then

24:40 Christian Londono: the app generates a QR code and there’s a validator on the bus.

24:46 Christian Londono: You know, that’s one way that’s kind of like a digital wallet, per se.

24:50 Christian Londono: So you just, you know, like you alluded earlier today, pretty much every one of us, we walk around with

24:56 Christian Londono: our cell phone and that’s kind of like an item that is with us every day.

25:02 Christian Londono: And that’s, you know, a convenient way for both the users and for the transit system.

25:07 Christian Londono: Right. To use that device as a way of storing your digital wallet like all your transit fare.

25:16 Christian Londono: And then every time that you use transit, you’re using those validators to take advantage of your balance in your

25:27 Christian Londono: wallet and ride the system. It makes it quick for the user.

25:31 Christian Londono: It makes it also convenient and quick for the agency as well, and of course, the credit cards.

25:37 Christian Londono: So that’s also. I really like that piece because, you know, let’s say you’re visiting another city that’s not your

25:45 Christian Londono: kind of like your local city where you live, and.

25:48 Christian Londono: And then you’re going to ride the transit system and you just didn’t figure out the app or, you know,

25:54 Christian Londono: you’re only there for like a day or two and then having the possibility to just pull out one of

25:59 Christian Londono: your credit cards or do something like Apple Pay, that just makes it so much more convenient.

26:05 Christian Londono: So definitely the solutions for agencies to consider and start putting in place.

26:11 Christian Londono: And, you know, I personally, I’ve seen the transition happening, and I know there’s challenges with the implementation.

26:20 Christian Londono: Going from, in a way, archaic system or a very old and traditional system into the latest technology is certainly

26:31 Christian Londono: painful not just for the agency and, and being, you know, being kind of forced to change processes internally, but

26:39 Christian Londono: also for the writers. Right. That you’re educating, you know, the writing public about the new technology that is being

26:47 Christian Londono: implemented, the new ways that you’re writing the system.

26:50 Christian Londono: Right. Because, you know, fair is something that you have to take care of before you can have access to

26:56 Christian Londono: the system. So it’s something that you have to educ.

27:01 Christian Londono: You’re riding public on and they have to be on board with as well.

27:05 Christian Londono: Like, you have to know your constituents because you, you might have an uproar, you know, after you go through

27:11 Christian Londono: the implementation. So it’s, it’s definitely something that the larger the transit agency is, the most stakeholders it has, I

27:21 Christian Londono: think that the more complex could be.

27:23 Christian Londono: And, you know, if you’re trying to anticipate as much as you can before you go to one of these

27:28 Christian Londono: transitions and talked with everybody in advance, but it’s bumpy going from one technology to the next, particularly for the

27:38 Christian Londono: writers. So I want to ask Levi, when agencies go about these implementations, what do you think an agency could

27:47 Christian Londono: do to ease the transitioning from one fair technology to the newest one?

27:55 Levi McCollum: There are two things that stick out for me.

27:58 Levi McCollum: I think you’ve touched on one of them.

27:59 Levi McCollum: Education, right? Making sure that you’re out in front of it, that you’re on the ground, that your boots on

28:05 Levi McCollum: the ground, talking to people about when this transition is going to place take place, rather what steps they need

28:13 Levi McCollum: to go through to be able to redeem any fare that they already have on an existing card.

28:20 Levi McCollum: If that’s such a concept for that particular agency.

28:26 Levi McCollum: I think that those are the big ones.

28:28 Levi McCollum: I’m thinking of our time at Palm Trend here, Christian, where we had several events that we took buses to

28:36 Levi McCollum: the intermodal and we talked to the writers face to face, one on one, and got them squared away with

28:44 Levi McCollum: a new account, made sure that we were able to load money for them on the card if that’s what

28:49 Levi McCollum: they chose to do there in the moment.

28:53 Levi McCollum: You know, if they had any issues with, you know, being able to add money to the card, then we,

29:01 Levi McCollum: we had experts there, you know, from a technical perspective, who are able to resolve those issues if they had

29:07 Levi McCollum: questions about where they could go to reload the card.

29:11 Levi McCollum: And, you know, where is this on their, their normal route? Right.

29:15 Levi McCollum: I might be traveling on Route 3 and then I transfer to Route 2.

29:19 Levi McCollum: You know, can I go to this Wawa or this other gas station over here and reload the card? Well,

29:25 Levi McCollum: sure you can. You know, we were in over a hundred or, you know, 200 different retail locations, so a

29:33 Levi McCollum: lot of that is just about education.

29:35 Levi McCollum: It’s, it’s very hand to hand and you, you need to have that white glove type service if you’re trying

29:44 Levi McCollum: to, you know, continue having goodwill with your customers.

29:48 Christian Londono: Yeah, those are great strategies, Levi.

29:50 Christian Londono: And what I’ve seen some agencies doing as well is leading up to the technology swap or, you know, discontinuing

30:02 Christian Londono: one, you know, technology either, you know, the Magnetic stripes or you know, just the traditional Dropbox, just removing those

30:13 Christian Londono: maybe a few days before putting the new system in and then kind of going fairfree for a few days

30:19 Christian Londono: while you’re transitioning. So you know, that’s going to, for the public is good, like oh, we’re not paying, we’re

30:26 Christian Londono: saving a few dollars for a few days.

30:28 Christian Londono: Then you know, it’s excellent for me.

30:30 Christian Londono: I mean they’re not going to be complaining.

30:31 Christian Londono: No, I want to pay. And then after you put the new technology in place and all the vehicles are

30:39 Christian Londono: outfitted with the new farebox or new technology, you also have some, you know, period of time where you’re working

30:52 Christian Londono: with the public, right. If the technology doesn’t work or there’s an issue, you’re still going to let them ride.

30:57 Christian Londono: So kind of like self enforcement of fare collection, you know, as they’re being acclimated into the new system.

31:04 Christian Londono: And I think outreach is the most critical component of the entire strategy for conversion.

31:12 Christian Londono: You know, you talked about education in 100% education.

31:16 Christian Londono: People, people have to know about it.

31:18 Christian Londono: People have to know what they’re supposed to do, how it’s going to work.

31:21 Christian Londono: And when the technology allows for account base ticketing.

31:28 Christian Londono: Something that I’ve seen agencies do is start, you know, maybe a few weeks or a month early before the

31:36 Christian Londono: live day to create accounts for people and then give him promotions.

31:41 Christian Londono: Like maybe you’re going to load $20 of balance in that transit account if they create an account.

31:48 Christian Londono: And then you start doing outreach and creating, helping people create their account with the new transit system.

31:54 Christian Londono: I mean technology which a lot of the times is in the form of smart card or you know, some

32:01 Christian Londono: agencies brand that. So you alluded when we were at Palm Trend and that smart card was released, we call

32:08 Christian Londono: it Paradise Pass. And that didn’t exist in the past.

32:12 Christian Londono: It was just paying the fare.

32:14 Christian Londono: There was no. Maybe there was a name for the, for the, the card in the past, but I don’t

32:21 Christian Londono: recall it. But I think that, you know, we went full on marketing the new technology, call it Paradise Pass

32:27 Christian Londono: and then in advance getting people to start creating their accounts and getting acclimated with the technology.

32:33 Christian Londono: If there’s an app, then downloading the app, right? Like the app has to be ready, people have to be

32:39 Christian Londono: introduced into the app well in advance and then you know, just kind of supporting a little bit.

32:45 Christian Londono: What you said is once you go live like almost every day you have to have boots on the ground

32:51 Christian Londono: helping people with their questions. And there’s people that even Though you advertise the new for technology, they don’t look

32:59 Christian Londono: into it, they don’t care because it’s not affecting today.

33:02 Christian Londono: And then the day goes live and there is like, oh shit, shoot, I don’t know, I didn’t know about

33:06 Christian Londono: this. How do I get my paradise pass or my smart card? And then you have people at key locations

33:13 Christian Londono: where they can help those writers create their accounts and kind of like be acclimated into the technology.

33:19 Christian Londono: So that’s definitely key components of making a success of it, right?

33:24 Levi McCollum: Yeah, you need those ambassadors, those people who are going to be able to help the stragglers, the ones who

33:29 Levi McCollum: have not made the transition yet who said that they didn’t know.

33:33 Levi McCollum: Right. Because that happens. But regardless you have that support for them and you touched on something that was really

33:41 Levi McCollum: powerful there. And really at not any cost to the agency, but the promotions, right.

33:47 Levi McCollum: Loading it with that 5 or $10 in advance or $20 if you really want to go all out, it’s

33:54 Levi McCollum: not so detrimental to the transit agency.

33:58 Levi McCollum: But again, you’re building that goodwill with your customer base.

34:02 Levi McCollum: So it makes a lot of sense to utilize the account based system to its full.

34:09 Levi McCollum: Right. Take advantage of that and go ahead and preload them with some fair amount where they can just start

34:17 Levi McCollum: using it right away. And you touched earlier on a point that I think also is really important.

34:23 Levi McCollum: But more than just going fair free for that transition period, I think having a large overlapping period where you’re

34:32 Levi McCollum: phasing one out and burning another one in is pretty crucial.

34:37 Levi McCollum: Right? Because having those really hard dates like this ends on this date and we’re beginning that the other fare

34:45 Levi McCollum: technology on the, on the same date as the other one ends can really set you up for failure.

34:52 Levi McCollum: So you have to be able to support both for an extensive period of time.

34:58 Levi McCollum: You know. Now how do you define extensive period of time is really up to the transit agency and how

35:03 Levi McCollum: you feel that you’re customers are going to adapt to the new technology.

35:07 Levi McCollum: But you need to define that time period and I would say at a minimum, absolute minimum of like a

35:16 Levi McCollum: month. But really if you can aim for probably like a three month period or a six month period if

35:22 Levi McCollum: you’re a really large system, perhaps a year.

35:25 Levi McCollum: But I wouldn’t make any sort of transition to a smart technology without having that overlap.

35:34 Levi McCollum: Would you agree? Or maybe my time, sir.

35:37 Christian Londono: Okay, yeah, no, no. 100. You know, people buy monthly pass and you buy.

35:45 Christian Londono: So when you’re in the traditional magnetic stripe, right, like you, you’re now buying or paying a, for a one

35:55 Christian Londono: way ticket. Right. Like a lot of times if you’re just taking a one way ticket, you’re able to pay

36:01 Christian Londono: cash. So the fare is $1, $2.

36:04 Christian Londono: You just pay that and then you get to ride that, that service and complete that trip.

36:09 Christian Londono: But those daily commuters, it’s more, you know, effective for them in money saving to, to be able to buy

36:20 Christian Londono: they are a weekly pass or a monthly pass.

36:22 Christian Londono: I mean if you ride the transit system, that’s the way you get to school, that’s the way you get

36:27 Christian Londono: to work. You’re buying the monthly pass.

36:29 Christian Londono: So now you’re a little concerned because yeah, you know, if I’m buying my monthly pass, you know, a two

36:37 Christian Londono: weeks before the new service comes in, so I’m gonna lose two weeks worth of trips or how can I.

36:45 Christian Londono: So that, that creates a concern.

36:46 Christian Londono: And also there’s people that maybe bought passes in advance.

36:49 Christian Londono: There’s stuff that have been distributed out there where people exchange money already for passes and they have not used

36:56 Christian Londono: them yet. So would they lose that money that they paid on those passes? So, so you do need to

37:01 Christian Londono: have or sustain that old system for a period of time to help people transitioning and sometimes is in the

37:11 Christian Londono: form of letting people know that they can exchange their monthly pass for the new monthly pass using the new

37:17 Christian Londono: technology. And then the transit agency helps them going through that, you know, exchange or sometimes they have that redundancy

37:27 Christian Londono: in the vehicle where can still validate the previous fair technology and they can still use it for the time

37:36 Christian Londono: that they have it. If it’s a monthly pass, they’ll be able to use it until the end of the

37:41 Christian Londono: month. But yeah, it takes time and you have to have a transition period to allow folks to go from

37:49 Christian Londono: the previous third technology into the new one.

37:52 Christian Londono: And then if they’ve been holding on to passes that we’re planning to use in the future, give them a

37:57 Christian Londono: time frame where they can go ahead and exchange them.

38:01 Christian Londono: And you know what I’ve seen is that it does have an expiration date, right? Like you know, sometimes it’s

38:06 Christian Londono: a year out, but you know, two years from now if somebody comes with a offer, you know, ticket, unfortunately

38:17 Christian Londono: you’re not going to be able to use it anymore at that point.

38:20 Christian Londono: But you want to allow enough time for writers to be acclimated to the new technology and not be, you

38:29 Christian Londono: know, scared about losing money on, on the current one.

38:33 Christian Londono: Definitely you want to make this the most beneficial for them and they see the value and they, they’re not

38:40 Christian Londono: concerned about it. You know, talking about those transitions and you know, we, we alluded to palm trend and we

38:50 Christian Londono: were able to see firsthand and be part of transitioning from, you know, pretty much it was getting obsolete fair

38:59 Christian Londono: technology system to a state of the art like latest and greatest, all the new features that are available today

39:08 Christian Londono: for fair collection and see that transformation.

39:12 Christian Londono: And there’s an article I, I shared with you from Mass Transit magazine that was published last week and it

39:21 Christian Londono: talks about one of the, you know, biggest, largest transit systems in the country going to that transition.

39:29 Christian Londono: So could you tell us a little bit about that, Levi?

39:34 Levi McCollum: Yeah, well, you know, New York is the, the largest system MTA in the country, I think, on a number

39:42 Levi McCollum: of different metrics. But yeah, that article explains that they’re moving away from the Metro card and any ability to

39:51 Levi McCollum: use cash to pay for your fare directly.

39:56 Levi McCollum: You’d have to go to a retail location to be able to load a card and use cash that way.

40:05 Levi McCollum: But they’re going all in on contactless payment.

40:10 Levi McCollum: Being able to use smart devices, you know, wearables, things like that for this new Omni service that they have.

40:19 Levi McCollum: And it will be supported regionally as far as I understand.

40:23 Levi McCollum: So throughout the New York area, which I think is pretty critical.

40:28 Levi McCollum: Right. A lot of folks are not staying put in one location, especially when it’s a very dense area like

40:35 Levi McCollum: New York. You know, in the New York City Metro, if you think about South Florida, for example, you know,

40:42 Levi McCollum: where we have a commuter rail, people are traveling from, you know, many tens of miles away, up and down

40:50 Levi McCollum: the coast. You have to have your stakeholder buy in and to make sure that the fare collection, that fare

40:59 Levi McCollum: technology works regionally. So, you know, kudos to them for, for thinking that way, for thinking a little bit broader

41:06 Levi McCollum: instead of, you know, only for one particular system or, you know, one particular service.

41:13 Levi McCollum: You know, my understanding is that they, they still are working out, you know, some of the finer points like

41:20 Levi McCollum: being able to pay for the paratransit service with the, the Omni.

41:27 Levi McCollum: But those will come with time.

41:29 Levi McCollum: And if I recall correctly, there’s this transitional period switching from the Metro card to the Omni card and the

41:41 Levi McCollum: Omni payment form through the end of the year.

41:44 Levi McCollum: So they have a pretty significant time frame there where they’re allowing you as the user to be able to

41:51 Levi McCollum: pay in either direction. Did I miss anything on that or did that sum it up?

41:57 Christian Londono: Yeah, that sums it up. And I think the Metro card is one of those smart cards, transit systems around

42:06 Christian Londono: the country, brand their smart cards and there’s several around the country.

42:13 Christian Londono: But I think the Metro card for us transit professionals is one that everybody has heard of.

42:20 Christian Londono: And if any of you listening have visited New York City, I’m pretty sure that you dealt with a Metro

42:26 Christian Londono: card. You know exactly how they look like.

42:28 Christian Londono: You can even remember the feel of touching the Metro car or holding it in your hand.

42:35 Christian Londono: So it’s monumental. I think it’s definitely showing that, you know, transit systems are 100% going this way and that’s

42:44 Christian Londono: the next step. I’m really looking forward to see how it’s going to work out once this is released and

42:51 Christian Londono: is implemented. Some of the things that they’re projecting that it’s going to do for the writers of the system

42:59 Christian Londono: and for the agency. One is that they’re projecting that it’s going to put money back into customers pockets.

43:09 Christian Londono: So they’re going to see more benefits of that account base system where you’re going to have that fair capping,

43:17 Christian Londono: that real for capping so you don’t have to figure it out the day one.

43:21 Christian Londono: If you’re buying a daily pass or a weekly or a monthly or maybe, you know, like this is what’s

43:26 Christian Londono: going to work out better for me as the writer, right.

43:30 Christian Londono: Like when you’re using account base, then it’s you’re going to pay the lease, you have to pay for the

43:37 Christian Londono: amount of trips that you’re taking.

43:38 Christian Londono: So that altogether they’re projecting that those that are writing the system, they’re going to benefit greatly from maximizing, you

43:45 Christian Londono: know, their funds that they’re using for, you know, riding a public transit in New York.

43:53 Christian Londono: And they’re also forecasting about 20 million in annual operating savings for the system by eliminating the sale of the

44:02 Christian Londono: Metro card and fully transitioning to the one fare collection method.

44:08 Christian Londono: You know, MTA is projecting to save 20 million annually in the cost related to the Metro car production and

44:15 Christian Londono: distribute, distribution, vending machine repairs, cash collection and handling the cash.

44:22 Christian Londono: And something very interesting, kind of like tying this in those projections and then reflecting on when Palm Trend transitioned

44:31 Christian Londono: from the magnetic stripe to the all in one state of the art fare collection system that includes contact list,

44:42 Christian Londono: account base, kind of like smart card and all those things is that in the past we were printing all

44:51 Christian Londono: these physical cards that people have to use and then throw away, right? Like if you use, you know, a

44:56 Christian Londono: monthly pass or is it a weekly pass, you know, you use or a daily pass, you use it for

45:02 Christian Londono: the day and then you throw it away.

45:03 Christian Londono: It’s kind of like, disposable. And you’re printing all these, and then you’re, of course, distributing to all your retail

45:09 Christian Londono: locations, you know, libraries and, you know, train stations and in transit hubs.

45:15 Christian Londono: And when the new smart card was released, what was interested is that we thought a lot of people were

45:23 Christian Londono: gonna go for the physical car.

45:25 Christian Londono: Right. Like, because most likely they’re gonna have a physical car.

45:27 Christian Londono: This is Omni, and that’s the one that you’re tapping everywhere.

45:31 Christian Londono: You know, you’re tap and go.

45:32 Christian Londono: But what was interesting is the majority of the people were using their cell phones.

45:38 Christian Londono: They didn’t want to go get a physical card or do all these different things.

45:42 Christian Londono: I have my cell phone me all day.

45:45 Christian Londono: Well, let me just get the app.

45:46 Christian Londono: And then they just scan their cell phone.

45:48 Christian Londono: They use the digital wallet. So that translated in savings, in printing cards, in distributing the cards, and then, you

45:55 Christian Londono: know, having all the points of sales doing all these transactions for those cards.

45:59 Christian Londono: So, you know, that projection from MTA on 20 million annual operating savings, I can see that.

46:06 Christian Londono: And I think that it might be beyond that once they put it in place.

46:09 Levi McCollum: Right. And that 20 million is significant, no doubt.

46:13 Levi McCollum: But a part of me is a little saddened in a way that there’s this loss of the physical component.

46:21 Levi McCollum: And maybe it’s just a bit of nostalgia or my knack for wanting to collect transit things.

46:29 Levi McCollum: I’m no Jerome Horn, but I do collect the cards that I get from different systems, and I’ve probably got

46:39 Levi McCollum: 10 or 15 of those in a drawer somewhere around here.

46:43 Levi McCollum: You know, just before I went to Palm Trent, I was at Lee Tran, and we transitioned to the Tropi

46:48 Levi McCollum: card. That’s what we branded our card as at Litran.

46:52 Levi McCollum: So, you know, I. I have some kind of sentimental value attached to those physical plastic cards, even though they’re.

47:02 Levi McCollum: They don’t really mean anything. And I know where it’s trending.

47:05 Levi McCollum: You know, it’s going to be digital in the future, and it probably won’t offer any sort of card.

47:11 Levi McCollum: But, you know, it does make sense.

47:13 Levi McCollum: Right. The agency is having to produce those cards, and that just costs money.

47:19 Christian Londono: Yeah, I share the same nostalgia.

47:23 Christian Londono: I also have drawers where I have, you know, fair tickets and smart cards like that from different systems, from

47:35 Christian Londono: commuter rail systems, light rail systems, and also, you know, just fixed route and any.

47:41 Christian Londono: Any. Any transit system that has their own branded card.

47:45 Christian Londono: So it’s kind of like also a reminder that you went to that city and you wrote that system.

47:50 Christian Londono: Because when you’re a transit nerd and you Know, I know a lot of our listeners, you know, transit professionals,

47:56 Christian Londono: every time that you visit another city, you’re always looking at what’s their public transportation, you know, like, and then

48:03 Christian Londono: a lot of times got the opportunity to ride the system.

48:06 Christian Londono: And then, you know, sometimes some of us, just like you, Levi, we keep that card, you know, even though

48:12 Christian Londono: we don’t live there. We already left the city, we don’t even know if we’re coming back or not.

48:16 Christian Londono: It’s like, well, I have one more to add to my collection.

48:20 Christian Londono: And it’s always fun to do those kind of like pure exchanges in a way or, you know, those comparisons,

48:26 Christian Londono: you know, for you to learn how others run their public system.

48:29 Christian Londono: But yep, we’ll, we’ll be saying goodbye to that one now.

48:32 Christian Londono: It seems, you know, the Omni card is going to have a physical card, so that’s another one to add

48:36 Christian Londono: to the collection.

48:38 Levi McCollum: You gotta get it, I gotta add it.

48:40 Levi McCollum: And that, you know, this might be the, the last round.

48:43 Levi McCollum: Who knows, the, the next set of tech here might be like eye scanning, you know, full minority report, you

48:50 Levi McCollum: know, that, that.

48:51 Christian Londono: I think that I’ve seen a lot of that in terms of fingerprints, face recognition, all that.

48:57 Christian Londono: Where for certain purposes they’re. Now you’re, I think in, in Asia already, people can pay with their, with facial

49:05 Christian Londono: recognition, you know, so those are things you opt in for.

49:10 Christian Londono: But the technology has the capability, right? And you see it at airports.

49:15 Christian Londono: They use facial recognition. They’re, they’re scanning you, they’re scanning everything because they’re able to, you know, pinpoint to who

49:21 Christian Londono: you are just with that technology.

49:23 Christian Londono: So imagine applying that to, you know, bank transactions, you know, your, your bank information or your credit cards associated

49:32 Christian Londono: with, you know, that face of yours.

49:34 Christian Londono: And then if you want to pay for something, you don’t have to have anything on you.

49:38 Christian Londono: Imagine just getting on a transit vehicle and automatically that $1 is being deducted from your account.

49:44 Christian Londono: Like you don’t have to even think about paying.

49:46 Christian Londono: You just know that if you get on that vehicle, you’re being charged for it.

49:50 Christian Londono: And then the fair capping, all that is happening in the background and you don’t even have to think about

49:55 Christian Londono: it. So that, that might be something that, that is in the future for sure for the time being.

50:00 Christian Londono: This tap and go. Being able to pay with whatever you have in your person is definitely something that, that

50:07 Christian Londono: is going to help transit agencies run more efficiently and, and hopefully a way better user experience for those riding

50:14 Christian Londono: transit around the country.

50:18 Levi McCollum: Yeah, well, this has been another really interesting episode.

50:21 Levi McCollum: Always great to talk transit with you Christian.

50:24 Levi McCollum: And thank you to our listeners who are tuning in with us every Monday for the the latest episode.

50:30 Levi McCollum: We really appreciate your listenership and your support.

50:34 Levi McCollum: If you know you ever have a topic in mind, send US emails or LinkedIn messages comments.

50:41 Levi McCollum: I think you know how to get a hold of us.