What is driving the need for account-based ticketing in public transport?
While each public transport network has a unique set of circumstances and constraints, common themes are emerging regarding the benefits, which are driving the need for implementing ABT models. We asked eight representatives why they had originally decided to adopt an account-based ticketing system. While there was a variety of responses, they can be boiled down to these four key drivers that an ABT system promises to deliver.
1. Reducing the cost of fare collection
The most common reason why cities are opting for account-based solutions, is the idea that costs can be reduced by moving the fare policy intelligence from the vehicle equipment to the back-end system. Alongside that is less reliance upon a top-up infrastructure, such as issuing cards and paying retailer or agent fees. Transport operators have found that both alone and in conjunction with other broader ticketing initiatives, account-based ticketing has allowed them to significantly reduce the cost of fare collection. For Transport for London (TfL), several initiatives have allowed them to reduce their cost of fare collection (COFC) from 14 in 2006 to around 9 in 2012. However the introduction of EMV presented them with another opportunity to reduce costs further.
2. Improving the customer experience
Improving the customer experience is cited as the second priority for making the change to ABT. With an industry that is built on long procurement contracts of 10 years or more, it has been increasingly difficult to stay relevant and modern, compared with consumer products that are moving at a much faster rate. Customers simply don’t understand why their transport experience can’t match other everyday transactions such as mobile banking. ABT provides a much easier pathway for the public transport authority to provide modern, mobile and digital customer experiences. The end goal for most transport operators is to increase patronage and offer an improved experience. For authorities moving from a card-based system, the fact that ABT is real-time makes it a more attractive option than a system where customers are unable to access their funds immediately after topping up.
3. Improving flexibility
The third most common driver was to improve flexibility, such as applying capping or promotional type fares for special events. This becomes simple when the logic is held in the back-end. In Chicago, where free public transport is made available on New Year’s Eve, resources required to action this fare policy change have been reduced from several hours and a group of staff to just 30 minutes with their new ABT system.
Others provided examples of the simplified ability to trial new fares or to support events. This flexibility allows a transport authority to innovate and start to tap into customer travel data and to create new services to meet changing demand. This is a significant opportunity, not currently available with card-based systems without significant effort.
4. Simplifying integration with new technology
Finally, ease of integration with new technology was seen as a compelling reason to move to an ABT model for these cities. Mobile wallets such as Apple Pay and Android Pay are popular examples, as well as bike sharing. In an ABT world, these options become more about the business decision, rather than a deep technical integration. As more and more transport options enter the market as well as payment technologies, the goal here is being able to adapt as new market developments constantly re-shape customer needs. This capability also supports the trend towards providing connected and smart cities.
Account-based ticketing is widely regarded as the next generation transport ticketing model of choice.
Driven by the need to reduce costs, improve the customer experience, allow greater flexibility and facilitate future integration, cities are adopting this model as a means to solve multiple existing problems and future-proof their fare collection infrastructure.
To read more insights from early adopters of ABT systems, download our latest whitepaper.
Register for the webinar