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4.  MOTIVATIONS FOR PARTNERSHIP

4.1 Introduction

The costs of the RFC Project are considerable in terms of both the monetary costs of the vendor contract as well as the time spent by the agencies in coordinating and developing the system specifications.  It is natural to ask why an agency would choose to participate in the project.  The answer to that question is different for every agency.  This chapter describes each agency’s motivations to participate in the project and highlights the lessons learned regarding issues associated with motivation that may be useful to others considering a fare card program.

4.2 Expected Benefits

The desire to improve customer service has been a driving force in the project from the very beginning.  Most agency officials and project personnel interviewed during the evaluation believe that use of the fare card will offer significant advantages to commuters: it will avoid the need to carry cash or fumble with change, it will allow use of a variety of financial media (cash, credit cards, checks) to add card value, and it might decrease boarding time.

It is hoped that the fare card will be an advantage to the transit operators as well.  Although not seen as a major source of cost savings for small and medium sized agencies, there will be less cash that needs to be manually counted and secured.  The fare card may also reduce loses due to fare evasion and employee theft.  In addition, the fare card will almost automatically provide improved data on transit patron travel patterns.  The data could be used to better plan transit services and routes.

Because of circumstances unique to the Central Puget Sound region, Sound Transit will receive the greatest financial benefit from access to better data.  Sound Transit bears the cost risk of the current Puget Pass program, but the new fare card will allow this risk to be shared among all of the participating agencies.  The expected savings from that switch are enough that it was in Sound Transit’s financial interest to subsidize the participation of three of the smaller agencies.

The details of the arrangement are as follows.  Currently, all the agencies except Kitsap Transit participate in the Puget Pass Program.  Monthly Puget Passes are available in a range of denominations in increments of $9, from $18 a month (equivalent to $0.50 per ride) to $144 a month (or $4.00 per ride).  The Puget Pass is accepted at any of the agencies for its face value towards the fare.  For example, if a rider has a Puget Pass with a denomination of $2.00, she can travel for no additional cost on Everett Transit, where the regular bus fare is $1.00.  When she transfers to the commuter express bus operated by Community Transit, she will need to pay an additional $1.00 to cover the total $3.00 fare of the commuter bus.

In the absence of accurate data on actual inter-system transfers, Sound Transit redistributes the revenue received from the Puget Pass to each of the agencies based on the number of rides each agency provided to Puget Pass Riders and the average fare per boarding received by each agency.  Those statistics are calculated using annual or biannual rider surveys.  Besides the expense of conducting these surveys, Sound Transit is responsible for making up any revenue shortfall between the revenue collected from the Puget Pass sales and the amount due to each agency based on the surveys.  Once the fare card project is in place, revenue allocation will be based on the actual observed ridership patterns.  After that, Sound Transit will no longer be responsible for financing any shortfalls.  The cost of financing the shortfalls and conducting the rider survey was high enough that it was worthwhile for Sound Transit to provide a substantial subsidy to encourage the participation of three of the smaller agencies (Everett Transit, Community Transit, and Pierce Transit) in the fare card program.  For the agencies, however, there is no guarantee that they will receive as much revenue from the Puget Pass under the new fare card regime as they receive under the current redistribution procedure.  Nevertheless, each of the agencies stands to benefit from the more accurate redistribution of revenues anticipated under the RFC Project.

Another expected benefit of the RFC Project is increased regionalism.  Many interviewees evoked this, but it was not easy to develop a clear definition.  For some agencies, it means aligning and coordinating the various agencies within the region in order to have greater weight with the state legislature.  In addition, some smaller agencies noted that joining the project might avert efforts to create a super-agency that would assume responsibility for all transit operations in the region.

4.3 RFC Project Goals

The agencies have prepared and adopted a more formal statement of the goals of the fare card project.  Many of these goals are in fact statements of the benefits expected from the project.  These project goals, as outlined below, will eventually be used as the basis for a self-evaluation.

Improve the Customer’s Experience:

  1. Implement the regional planning vision of  “seamless” travel, which reduces barriers for customers to use more than one system by ensuring the technical capability to support “customer friendly” transfer and/or payment policies among all modes – bus, rail, (potentially) vanpool and ferries (walk-on and vehicle passengers and vehicle + driver).
  2. Increase ridership and customer convenience by providing fare media that is convenient to purchase and use, and that can reduce customer security concerns (about carrying cash or a high value pass).
  3. Reduce operator /customer fare disputes.

Improve System Operations:

  1. Develop and install a smart card system that is accurate, reliable, low maintenance, and easy to use by customers, drivers, sellers and other transportation agency staff.  The system must provide timely, complete and error free fare payment reconciliation among the agencies, based on patron use.
  2. Improve the accuracy and timeliness of regional and local ridership data collection and reporting, which will enhance the quality of route/service planning and customer marketing initiatives.
  3. Reduce passenger boarding times.
  4. Minimize operator involvement with fare payment and simplify fare payment procedures.
  5. Reduce the volume of physical cash and paper ticket payments.

Improve Project Management:

  1. Deliver the project at, or below, budget.
  2. Deliver the project on schedule.

4.4 Factors Supporting a Regional Partnership

By the decade of the 1990s, congestion was emerging as a serious problem in the Central Puget Sound region.  The congestion was fueled by economic and population growth, a freeway system constrained by local geography and land use, and an increasing level of automobile use, especially single occupancy vehicles.  People were traveling more and farther, and travel times were increasing.  The Washington State Legislature felt that more should be done to develop the regional public transportation system and offer an attractive transit alternative.  In 1992 it issued a “findings” that led to the establishment of the Regional Transit Authority (later to become Sound Transit) to take leadership in seeking solutions to the region’s transportation issues, and it said, in part, that

“…existing transportation facilities in the central Puget Sound area are inadequate to address mobility needs of the area.  The geography of the region, travel demand growth, and public resistance to new roadways combine to further necessitate the rapid development of alternative modes of travel.”[31]

The Legislature encouraged King County Metro and other transit agencies to work together to address congestion and mobility problems.  The perception was that these agencies were not meeting traveler’s needs because they had poorly integrated policies and products and were not taking advantage of new technology.

King County Metro, the largest transit agency in the region, wanted to pursue new technology, while other agencies were more cautious.  Some had made technology investments that turned out to be costly failures and this, together with problems encountered elsewhere with early fare card systems, reinforced a sense that the prudent course was to let others test the systems before adopting them in Puget Sound.

In 1996, Sound Transit was created with a charter that included integration and coordination of transit services across transit agencies in the region.  A few years later, it led the creation of the Puget Pass fare program.  This established a foundation and experience base on which to launch the current RFC Project.  Many feel that the RFC Project would not have been possible without the precursor Puget Pass program.

Sound Transit also underwrote the participation of several of the partner agencies in Central Puget Sound, and this helped convince them to join the RFC Project.  Each agency conducted its own analysis of the costs and benefits of participation and several found that the costs exceeded the benefits.  They nonetheless decided to join because of a desire to support what was best for the region, because they did not want to fall behind technologically, and because they felt it would be more costly to enter the project later than at the beginning.  Other perceived benefits included enhanced customer service, reduction in fraud and collection costs, reduced burden on bus operators, more equitable revenue distribution, and the potential for new revenue streams.

Public transportation agencies are strongly motivated to seek ways to increase ridership.  The RFC Project has the potential to attract new riders as well as retain existing ones.  Its smart card technology can also be used for purchases other than transit fares, and this marketing potential constitutes another incentive for adoption.  The RFC Project has sought to engage a private sector partner, such as a financial organization, to support retail applications for the fare card.  However, the Joint Board has made it clear that this does not fall under the current scope of the RFC Project, but rather should be viewed as a potential benefit to be achieved after successful implementation of the new fare card system.

Fare card technology is not without its costs and risks.  The RFC agencies worry about issues such as the long-term financial viability of the system vendor and the level of support they will receive.  They wonder if the system will become obsolete.  They are concerned about accommodating their specific fare structures within a coordinated regional framework.  While they value the prospect of a more rational and efficient fare reconciliation system, they are uncertain about its financial impact on them.

The new technologies have to be integrated with a variety of legacy systems in transit vehicles and agency back offices.  This presents different sets of challenges in each agency.  Challenges include ensuring that the systems will work compatibly together, and that operators, managers and maintenance staff will be comfortable with them and have the requisite skills to use them effectively.

A bottom line lesson from the RFC Project in all these tradeoff considerations is that it takes more time, patience, and flexibility than can possibly be anticipated at the outset to arrive at a workable partnership that effectively balances the needs of the region with the needs of each agency.  The RFC partner agencies in Central Puget Sound have decided that this has been worth their efforts.

 

Lesson:  Motivate Support for a Regional Fare Card Program

  • State legislatures are in a good position to recognize the value of a fare card program in addressing travelers’ needs for an efficient, cost-effective, seamless public transportation system.  In the case of the Central Puget Sound region, the state legislature provided the initial force that helped motivate the transportation agencies to focus on finding solutions to the region’s mobility problems.
  • One or more of the key partners in a regional fare card program can take a leadership role as an early adopter of new technologies.  Such partners are likely to be in the strongest position to assume the risks associated with the technology and can serve as a test bed, an example, and a resource to the other candidate partner agencies
  • The Central Puget Sound region has benefited tremendously by having several precursor fare pass programs implemented on a limited basis.  They increased riders’ familiarity and comfort with alternative integrated fare media, and demonstrated the value and viability of such a system.  While some areas around the country may not be able to begin with a small-scale implementation of a pass or fare card system, the value of that approach in generating support for the eventual RFC program in the Central Puget Sound was clearly demonstrated.
  • Some mechanism to underwrite the costs and liabilities for smaller agencies to join a regional fare card partnership may be the only way to assure full participation from all agencies at the start of such a program.  Riders need to be convinced of the value of participation, and institutional players need to be brought on board.
  • A regional fare card offers more uses than just transit rides.  These cards have the capability to be configured and used by customers to pay for a variety of goods and services in addition to transit.  This is expected to increase the utility of having a card and motivate participation.
  • Agencies promoting the use of a regional fare card need to understand the issues and concerns of potential partners, respond to their concerns, and demonstrate the value of the fare card program.
  • The regional partners need to understand thoroughly the potential impacts of the introduction of fare card technology on their existing systems and technologies.  They must also take account of other new systems that they may be planning to incorporate into their systems and vehicles.  This will include the conduct of human factors studies and the involvement of their operators in determining what will or will not work well for the agency.  These findings must then be addressed from the perspective of the regional partnership to determine how to specify the design requirements for negotiation with the system vendor.

 


 

[31] [1992 c 101 § 1.]; 81.112.010; Findings—Intent.

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