Metro riders grapple with persnickety farecards, broken bus fareboxes, receiptless vending machines and other glitches paying their way onto the Metro system. Now the transit agency is seeking a better way — by getting out of the business of handling riders’ money at all.
Metro is taking the next steps in coming up with a system that would allow riders to avoid buying farecards and instead use their cell phones, credit cards or even federal ID cards to pay fares.
The agency has been working on the project for a while. Metro’s board members gave initial permission to pursue a new payment system in May 2009, and the agency had hoped to seek proposals from financial institutions more than a year ago.
Now seven companies have submitted initial proposals and the agency plans to seek additional information from potential vendors later this month.
The new approach is what officials call a “contactless” payment system that other transit agencies around the country are pursuing. London already is using it, said Metro Chief Financial Officer Carol Dillon Kissal.
Riders would use their own devices to pay directly, rather than having Metro act as the middleman. The new system would include new faregates and new card readers in buses and parking garages.
Changing over has many benefits, Kissal told board members.
The current technology is outdated, she said, and it’s also proprietary, limiting Metro from doing some work in house. Problems with the system forced the agency to delay fare increases at the last minute last summer.
And it’s expensive to collect fares and maintain the equipment. Metro said it is spending $48.3 million this year processing fares and parking fees.
The agency would shift much of the collection cost to the credit card and bank companies. In a decade, Metro expects the new system to save $33.8 million a year.
Kissal said it also could create some opportunities for Metro to make money with partnerships modeled off a deal between Barclays Bank and London’s system. Or it could allow Metro to create a loyalty program.
But making the change would take an initial investment of about $60 million, officials said.
Some issues remain unresolved, such as how to handle riders who don’t have credit or debit cards.
Board member Jeff McKay also raised concerns about how the change would affect the communities that rely on the SmarTrip technology for their local bus systems. A massive push was completed less than three years ago to get them all on the same system.
