Foes warn price tag for new e-fare system might be too high

by: TRIBUNE PHOTO: JAIME VALDEZ - TriMet hopes that giving riders more opens for buying fares will reduce the use of its problem-prone vending machines, like this one in downtown Portland.TriMet riders will have more options to pay their fares in the future.

They still will be able to pay cash on buses and at light-rail vending machines. But they also will be able to pay with smartphone apps, TriMet-issued smartcards and bank cards with embedded chips.

“We’re always looking for ways to improve the transit experience, and I know that simple conveniences like mobile ticketing make a big difference for our riders,” says TriMet General Manager Neil McFarlane.

At least that’s the concept approved by the TriMet board in October 2012. Called the Electronic Fare Project, its goal is to use the latest consumer technology to make purchasing and using passes more convenient. The board is expected to approve soliciting bids for the project — which is estimated to cost as much as $30 million — in August or September.

But the union representing most TriMet employees has blasted the plan. In a July 25 letter to the board, Amalgamated Transit Union Local 757 questioned whether the agency could afford it, noting that fare increases and service cuts have forced a drop in ridership. The union also claimed that the plan’s costs already were out of control, saying the estimate had grown from $13 million to $20 million or $30 million.

“Sure, some passengers might enjoy using the latest technology, but does this new fare collection system really make fiscal sense, particularly when it appears management is having a tough time determining what the final cost of the project will be?” says ATU 757 President Bruce Hansen.

TriMet says the cost estimates have been updated as more research was conducted. The upfront costs will be financed with general fund revenue, including fares and payroll taxes. TriMet says the project eventually will pay for itself by reducing fare evasions and the cost of handling the cash the agency receives.

A pilot project to evaluate the new components will begin in September 2015 when the Portland-to-Milwaukie light-rail line. The entire system is scheduled to be implemented by 2018.

Portland Streetcar officials have been involved in the discussions but have not yet committed to using all the options when they are available.

TriMet riders are tech-savvy

TriMet officials say they should have moved in this direction a long time ago. Many other transit agencies in the country already allow customers to pay fares with smartcards. They include those in Los Angeles, San Francisco, Seattle and Washington, D.C. Transit agencies in Asia and Europe have been using them for years.

The TriMet board wants to leapfrog current technologies, however, and design a system with more options. To accomplish this, the board has entered into a five-year, $2.4 million contract with CH2M Hill consulting firm to development bid requirements and implement what could be the most advanced electronic fare system of its kind.

Is the average rider ready and willing to embrace these options? TriMet officials say yes. They point to the results of a 2010 demographic survey that shows TriMet riders tend to be younger, better educated and earn more money than either the general population or nonriders. These are the kinds of people most likely to use the additional options, TriMet says.

And, according to the survey, 84 percent of riders said they choose to take TriMet. About 80 percent of riders say they use TriMet even though they have a car. Only 16 percent of riders said they were dependent on TriMet because they have no car or cannot drive.

McFarlane says TriMet must keep giving riders reasons to choose transit instead of driving cars.

Multnomah County has a higher percentage of low-income riders than the Portland area’s other two counties, however. Twenty-nine percent of Multnomah County riders live in households that make less than $40,000 a year, compared to 21 percent in Washington County and 22 percent in Clackamas County. TriMet says its new 14-member Transit Equity and Access Advisory Committee is expected to provide information on how low-income riders can take advantage of the new payment options.

TriMet plans to take another ridership survey this fall.

Next-generation technology

TriMet officials say the current system for buying passes uses 19th century technology — cash and paper. By cash, they also mean credit and debit cards. Fare boxes on buses exchange cash for passes. Vending machines on light-rail stations take credit and debit cards and issue passes. More than 130 retailers currently sell passes, including Albertson’s, Fred Meyer and Safeway stores. Riders also can buy them at the TriMet Ticket Office at Pioneer Courthouse Square in downtown Portland. And employers can buy passes for their workers.

But, TriMet officials say, much of the retail world is moving away from cash purchases. Instead, more and more people are using prepaid and rechargeable cards to buy things. And apps are being developed that allow smartphones to be used like cards. The phones are tapped on special readers instead of being swiped like a bank or gift card. And, in fact, cards with embedded chips are now designed to be tapped, too.

TriMet officials say such technologies offer benefits for riders. Instead of having to buy passes every day, week or month, riders could buy their own TriMet-issued reloadable tap card. Such a card would protect riders who lose them. Now, if a paper pass is lost, all of the remaining value is lost, too. But riders who lose their cards could notify TriMet and the balance would be transferred to a new card.

Such cards also would allow low-income riders to received discounts that are now beyond their reach. For example, a $100 monthly pass allows unlimited rides and transfers for a full month. But many low-income riders don’t have that much money to spare. They can easily spend more than $100 a month by riding every day, however. A smartcard could track their spending and allow them to ride free once they spend $100 within a month.

A smartphone app offers the same features. So do bank cards.

And, TriMet says, customers could still use cash.

Recouping high initial cost

Developing the system will not be cheap — up to $30 million by the most recent estimate. The computer software to manage it must be written. Tap card and smartphone readers must be purchased and installed on buses and at MAX stations. And the existing vending machines must be either modified or replaced. TriMet wants them to only issue single-ride tickets when the new options are available. They sell a range of single- and multiple-ride passes, making them much more complex and harder to maintain than ones that issue only single-ride tickets.

TriMet believes that the new system scheduled to take effect in 2018 will be much cheaper to operate than the current one, however. For starters, reducing cash sales will save a lot of money. Collecting, handling and accounting for cash consumes 30 cents of every dollar that comes in.

Simplifying the vending machines also will reduce costs, officials say. Although vending machine currently only account for around 20 percent of all sales, they cost more than twice that to maintain. Improving reliability by reducing complexity also will reduce rider aggravation, TriMet says.

Other transit agencies already have made those changes. Seattle’s Metro Transit even offers its system for free to other transit agencies. But TriMet says that system is almost outdated and would need to be replaced within a few years to take advantage of new technology.

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