Project: mticketing for Commuter Rail and Ferry Services

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1 Project: mticketing for Commuter Rail and Ferry Services Category: Digital Government Government to Citizen Commonwealth of Massachusetts Sandra Edler Commonwealth of Massachusetts Information Technology Division One Ashburton Place, Room 804 Boston, MA Phone: Project Initiated: April 2012 Project Completed and Launched: November 2012

2 Section 2: Executive Summary To meet customer demand for convenient fare payment options during a time of ongoing economic constraints, the Massachusetts Bay Transit Authority (MBTA) needed a rapid, cost-effective way to employ automated fare collection beyond its core subway and bus network and out to its commuter rail lines and ferries. The MBTA had been working internally to expand use of its CharlieCard smartcard system, currently in use on subways and buses, to rail and ferry customers. But the undertaking was proving too complex and too costly to continue pursuing. Building upon the success the Massachusetts Department of Transportation enjoyed when developers built mobile apps for customers to track the whereabouts of their bus and train, the MBTA decided to consider a mobile (phone) approach to ticketing. To understand what mobile ticketing or mticketing options were available in the industry, the MBTA conducted an RFI for vendor solutions. Response to the RFI was so tremendous that the MBTA decided the time was right to move to a new solution. In 2012, the MBTA partnered with Masabi, a transit mticketing pioneer, to fully roll-out an end-to-end smartphone ticketing system called JustRide to serve all commuter rail lines and commuter ferries. The system comprises customer applications for ios and Android, conductor validation applications for staff, and a cloud-based back-office for customer support. Through the customer-facing app, users can purchase mobile tickets anywhere, anytime, in seconds. Repeat users can make purchases in as little as 15 seconds as the application intelligently remembers previous trip selections and securely stores payment details. Use of mticketing enables the MBTA to minimize the sale of on-board tickets (which requires valuable staff time during operation of the train/ferry) while reducing lines at transit ticket offices and machines, saving time and reducing aggravation for riders. The MBTA deployed mticketing within just 7 months of signing the contract. mticketing employs a Bring Your Own Infrastructure model that uses the customer s own smart phone as both the vending machine and ticket, meaning the Commonwealth incurred very little upfront cost. As a measure of success, more than $5.6 million worth of tickets in well over 280,000 transactions have been sold since the application launched in November of Currently, more than 16% of tickets on the system are being sold via mobile. Most importantly, the roll-out of mticketing for commuter rail and ferry services gave the agency an effective, successful virtually no-cost alternative to the approximately $70 million an extension of its subway smartcard solution would have cost. 2

3 Section 3: Business Problem and Solution Description Business Problem The MBTA struggled for years to expand the CharlieCard automated fare collection system used on subways and buses to commuter rail and ferry service. Ultimately, the CharlieCard expansion effort was deemed too complex and too costly to continue pursuing, but the MBTA still needed a way to improve fare collection on commuter trains and ferries. Less than a third of the MBTA s 135 commuter rail stations have vending equipment through which train tickets are sold and less than ten have onsite staff selling tickets during business hours. In many cases, the only ticket sales location is at a neighborhood retail partner that is often too far from the train platform to be convenient for commuters. Together, these factors lead to a significant portion of tickets being purchased on-board from conductors in cash transactions a time-consuming and somewhat cumbersome process. Historically, modernizing fare collection meant millions of dollars in cost, years of development, a learning curve for all customers, and constant maintenance of new systems. The MBTA needed a fresh approach to tackling the fare collection challenge. Solution Description In late 2011, the MBTA decided it was time for a new approach. Rather than relying on expensive, complex, and maintenance-intensive infrastructure, the MBTA decided to take advantage of what customers already had in their pockets. Following on the MBTA s award-winning efforts to deliver information to customers on their mobile phones, the agency began exploring ways to enable customers to buy and use tickets on their phone. Project Approach To understand the potential offerings available in the industry, the MBTA conducted an RFI for solutions in late Vendor response to the RFI was so tremendous that the MBTA decided that the time was right to try a new approach and partnered with mobile ticketing vendor Masabi. By partnering with a vendor with experience in mobile ticketing for transit, the MBTA was able to deploy mticketing within seven months of signing the contract a fraction of the time they would have needed to deploy a legacy ticketing solution. This deployment served all commuter rail lines and commuter ferries. Instead of using a traditional payment model which would have entailed up-front and ongoing costs, the MBTA and Masabi agreed to a revenue-sharing payment model. They used the same commission structure that the MBTA employs with their neighborhood retailers of tickets: the vendor earns 2.8% of their ticket sales in this 3

4 case, all tickets sold via mticketing. This structure is in place with Masabi through the first year of the solution s life. The Technology, Features, and Functionality The Masabi JustRide system is a comprehensive mticketing platform comprised of customer-facing apps for ios and Android, conductor validation apps for staff, a management console, secure payment integration, and a cloud-based back-end for customer service and support. Using this cloud-based end-to-end solution in a bring your own infrastructure model (e.g. the customer s personal phone), the MBTA was able to quickly and easily roll out mticketing. In Practice Through the customer app, users can purchase tickets anywhere, anytime, in seconds. Repeat users can make purchases in as little as 15 seconds as the application intelligently remembers previous trip selections and securely stores payment details. Customers can purchase tickets any time before riding and keep them in the My Tickets section of the app until they need them. When riders board a train or ferry, they activate the ticket they wish to use. A dynamic, color-changing code appears on the phone s screen, acting as the customer s visual flash pass. When conductors pass by to collect tickets from riders, mticket holders show their phone screen to the conductor, who can visually validate the ticket at a glance. By beginning with this lightweight approach, the MBTA was able to reduce initial costs and begin piloting a system quickly. In addition to the flash pass functionality, the MBTA opted to also support advanced barcode scanning. For this more sophisticated method of ticket validation, Masabi provides an app that on-board staff can use to scan tickets in seconds. As commuter rail and ferry conductors were already being issued iphones for other applications, the validation application was simply added to this device. Customer Research and Outreach During the summer of 2012, the MBTA conducted a customer survey on two train lines during morning and afternoon peak commuting times to determine the level of interest in using one s mobile phone for buying tickets. In addition to providing insight into the types of devices commuters typically use onboard, the results of the survey indicated that half of riders already made mobile purchases. They further determined that just under half of respondents indicated that they were likely to use their phone to buy their train ticket. 4

5 When mticketing was ready for launch in November of 2012, the MBTA announced the news via press release and by blog and posted a YouTube video demonstrating how to use the new app. Section 4: Significance Transit agencies everywhere aim to collect fares at the lowest possible cost, while continually enhancing the customer experience of riding public transit. mticketing provides a rare opportunity for agencies to both lower the cost of fare collection and provide customers with a drastically improved transit experience. As the first public transit agency in the nation to employ mticketing, the MBTA began saving money while enhancing service delivery with its launch. Two of the most common challenges that transit agencies face are reducing the length of time it takes to complete each transaction and collecting cash from riders. mticketing provides an elegant solution on both fronts. mticketing puts a user-friendly vending machine with a personalized memory for repeat users in the palm of each customer s hand while simultaneously minimizing cash transactions. Ticketing can now be as easy as taking out one s phone and tapping a few times. As more transit agencies turn to mticketing, services like JustRide will continue to improve, ensuring that enhancements and new features will continue to make their way to customers quickly. The successful partnership between the MBTA and Masabi demonstrates to the industry the tremendous potential of mticketing to transform transit. mticketing represents the next major culture shift in how transit agencies will meet the evolving needs of customers. Looking Ahead in Boston Across all of its branches bus, subway, rail, and ferries the MBTA is responsible for approximately 1.3 million trips in and around Boston each day. The commuter rail and ferry services represent slightly more than 10% of that number on average, with ~132,000 trips each day. As a result of the success of mticketing thus far, the MBTA is considering extending mticketing beyond rail and ferry services. While still in what could be called the discovery stage, they are looking into the feasibility of adding barcode readers to subway gates and bus fare boxes to accept the mticketing barcode. Section 5: Benefit of the Project In the six months since launch, the results have been tremendously positive both from the customer and agency perspective. Customers are overwhelmingly pleased with the 5

6 ability to buy tickets anytime, anywhere with the device in their pocket. At the core of the positive customer reaction are three key elements: 1. Customers are able to select tickets via a from and to station list. o This is a vast improvement over the MBTA s traditional approach in which online ticket sales and explanation of fares are done according to the zone to/from the rider is traveling; the zones are not intuitive and are often not well understood by customers. 2. Customers can now use credit/debit cards to purchase tickets when riding into town from outlying stations. Of the 135 commuter rail stations, only a handful have ticket vending machines, meaning most customers only had the option to purchase with cash-on-board. o This has the significant added benefit of freeing up valuable conductor time during travel time as they spend less time handling cash transactions. 3. For riders who board through a major station with an open ticket booth and/or vending machines and purchase a ticket on-board with cash, a surcharge of $3.00 is added to the ticket price. When these riders face long lines at the ticket booth or machine and/or are simply pressed for time as they race for a train, they can now avoid that surcharge by buying their ticket in moments on their phones. o Riders avoid the surcharge and conductors avoid another cash transaction. Conductors and other agency staff are overwhelmingly positive about the release of the application. Conductors especially have been able to focus their efforts on more core responsibilities as they no longer have to collect as much cash on board. While staff is sometimes resistant towards new technology, conductors have praised it and worked hard to promote the new solution to customers. As a measure of success, more than $5.6 million in tickets have been sold since the application launched in November of 2012, reflecting more than 283K tickets sold. Currently more than 16% of tickets on the commuter rail system are being sold via mobile an amazing accomplishment. Most importantly, all of this was achieved without any significant expense, which is a tremendous win for the perpetually cash-strapped MBTA and for the Commonwealth as a whole. The cost avoidance of implementing mticketing versus expanding the state s existing CharlieCard system is huge, at approximately $70 million. Alignment with Key Priorities Highlighted by NASCIO mticketing also aligns with a number of NASCIO s 2013 state CIO priorities, including: cloud services, mobility, budget and cost control, and legacy modernization. 6

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