October 15, 2007

Smart Card. Smart Travel.

TransLink® Card Procurement Study UpdatePresentation to theTransLink Operating Group

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• In 2004, the TransLink® Consortium set aside about $7 million for smart card procurement– Staff estimated this would enable procurement of 1.3 million

cards– At that time, staff estimated that demand would exceed 1.3

million cards within the 10-year budget horizon• MTC has already executed two smart card orders

– The first order covered 400,000 cards– The second order covered 95,000 cards

• As of October 12, about 19,750 Phase II TransLink cards were in circulation

Background

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The existing TransLink® card uses an ST-19 microchip that is no longer in production

• To ensure sufficient inventory, MTC and BART initiated a study to identify the direction for replacement TransLink cards

• The study scope includes:– Review of industry trends, including use of other form factors,

limited use smart cards, and moving to a contactless-only environment

– Development and evaluation of alternatives for replacement cards:

• Replacement chip for ST-19• Open standards-based dual-interface card• Contactless-only card

• To address the immediate need of ensuring sufficient card inventory, priority was put on the next card procurement

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TransLink® card inventory appears adequate in the short term

Original Inventory

Inventory after 2nd

Procurement

Inventory after Free Card

Giveaways*Adult Cards

251,000 306,000 136,000***

Senior Cards

61,000 71,000 71,000

RTC Cards 90,000 120,000** 120,000Total 402,000 497,000 327,000• As of October 12, 2007, 19,750 cards were in circulation. 6,150

of the cards were RTC TransLink Cards. Only a small fraction were Senior Cards.

* Free cards will be distributed over time** RTC cards will be distributed at a rate of 36,000 per year*** Reflects 170,000 free cards to be distributed by Phase 2.2 and 2.3

agencies

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The forecast shows adult card inventory running short by mid-2009

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Adult Cards RTC Discount Card Senior CardsAdult Inv. RTC Inv. Senior Inv.

Adult Card Inventory = 306,000

Adult card inventory will run out in Q2 2009

RTC Card Inventory = 120,000

Senior Card Inventory = 71,000

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Maintaining Card Inventory in the Short and Mid Term

• Card demand forecast shows demand will average about 11,500/month over the next two years– If procurement timetable is 12 months, inventory should never

fall below 138,000 cards (11,500 x 12 months) in the next 2 years

• Beginning in mid-2009, the program anticipates rapid growth in the number of cardholders– Policy decisions at SFMTA regarding continued availability of Fast

Pass® will affect speed of adoption• Recommendation: order 450,000 cards to meet forecasted

demand through late-2010– This quantity should allow maintenance of minimum inventory

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MOT/ERG submitted a proposal outlining options for replacement cards

• Utilize existing card architecture– Option 1: Replace with an ST-19 compatible chip, no

enhancements– Option 2: Replace with an ST-19 compatible chip with

enhancements (increased memory, etc.)• Open source architecture

– Option 3: Port the TransLink application to a Java card• Parallel development

– Option 4: Option 1 or 2 in parallel with Option 3

The proposal did not address a contactless-only and non-proprietary open source standards

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After review of the proposal, the task force recommends Proceed with Option 4

• Replacement with the ST-19 compatible chip, no enhancements– Minimizes system risk– Minimizes schedule risk (approximately 1 year)– Solution with no additional development costs

• Continue discussions with Contractor for a future open source solution– Allows for competitive sourcing of cards– Allows most flexibility for future of TransLink (other form factors,

additional applications, etc.)

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Next Steps

• Obtain Consortium approval for change order for card order #3 (450,000 cards, per Contract, ~$4.50/card)– Price break occurs at orders greater than 100,000 cards

• Issue change order for card order #3• Continue discussions for open source solution

– Issue change notice for Contractor to provide cost for an open source solution

• Continue to look at contactless-only cards as a possible long-term approach

• Complete review of industry trends• Request participation from other operators

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Timeline for card orders

Activities

Month

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct NovObtain Approval and Issue Change Order for Card Order #3

Procurement of Card Order #3

Issue Change Notice for additional option

Continue discussions for future solution

Selection of option for future card orders – TBD

Receive cards