free concessionary travel are smart cards going to help? chris brown managing director mcl
Post on 29-Dec-2015
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MCL
• First UK Smartcard scheme for concessionary fares in Milton Keynes
• Wide range of consultancy work projects• Design/development of schemes• Scheme management/administration under
outsource contract (9 counties, 1 million concession holders, 200 bus operators, £60m)
• Pioneered use of ETM data• A number of Smartcard evaluations undertaken
and/or underway
Travel Concessions
• Two basic types:
– Pass (proving entitlement to a discount)
– Cash value (fixed contribution eg in the form of tokens or vouchers)
• Passes are the basic statutory entitlement;
• Discretion exists to enhance the statutory minimum or offer a cash value alternative.
The “big” change
• The current statutory minimum is a pass to provide local travel at no more than half-fare;
• From 1 April 2006 this will change to local travel, free of charge;
Scale Impacts
• Financial scale increases by 2.5 to 3 times;
• 25% to 45% more passholders;
• 45% to 70% more concessionary journeys;
• Current discretion remains to enhance the statutory scheme or offer alternatives.
Other Impacts
• Reduced accuracy of journey count data recorded manually on Electronic Ticket Machines (ETMs);
• Difficulty in measuring the value of each journey;
• Increased scope for “exploitation” (eg fare scales);
• Need for more monitoring and audit.
Reimbursement
• There is a duty to reimburse transport operators for the revenue they forego;
• To measure this we need to know as accurately as possible:– The number of journeys– The fare for each journey– The value of generated travel
Potential Evolution
• Pass > Smart Card
(entitlement and data transfer)
• Cash Value > Smart Card
(stored travel value)
• Pass and/or Cash value > Smart Card
(entitlement, data, stored value and cash?)
Costs Generators
• System Design (ITSO)
• Issuing system and cards
• On-vehicle card reading hardware:– Conventional buses (ETMs)– Community Transport, Taxis, etc (handhelds)
• Back office system
User Benefits
• Single LA Interface (intangible);
• Less cash handling (now irrelevant with free travel);
• Much simpler than token/vouchers (intangible and only applies to a relative few);
• Keeping pace with technology (intangible)
Administrator Benefits
• More information (but not much more if you are already using ETM data);
• Improved accuracy of journey count (but still a danger of under-counting);
• Greater control of misuse;
• Keeping pace with technology;
• Issuing efficiency and savings (dubious except for tokens/vouchers).
We lose the one big benefit – the virtual elimination of surveys
which are now still needed for free travel
Operator Benefits
• Removes the need for driver to select ticket class and prevents mis-coding;
• More detailed information;
• Possible commercial spin-off (but not a high priority);
• More accurate reimbursement (BUT some win, some lose).
Is there a Business Case?
Typical county scheme:
• 8-year evaluation period (ITSO life-span)
• Set-up costs: £1m
• 8-year benefits: £0.1m
• Conclusion: Concessionary Travel alone cannot justify the set-up investment
Main Issues
• High initial capital costs to equip the public transport fleet;
• This is a huge cost “hurdle” compared with “static” smart card applications and there seems to be failure to recognise this;
• Free travel undermines the business case;
• Transport operators are generally unenthusiastic.
What is needed?
• Share with other LA users to extend benefits and share costs;
• Persuade operators to share costs;
• Place a higher value on the “smart cards are good” argument;
• Persuade Government to fund the card-reading infrastructure on the passenger transport network.
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