Ticketing and Concessionary Travel on Public Transport - United ...

Ev 118 Transport Committee: Evidence
Is the industry taking up modern smartcard technologies adequately <strong>and</strong> appropriately?
13. A commercial entity will take up new systems <strong>and</strong> product oVerings that are appropriate to its
commercial success. There is nothing, in our opinion, to suggest that the industry has not considered the
commercial viability of modern smartcard technologies. Specifically, we have worked on a number of
business cases to evaluate precisely this on behalf of parts of the industry.
14. A more relevant issue is perhaps a question as to why there are generally not business cases for the
adoption of smartcard technology. In our experience, we have seen that the business case for smartcard
technology is generally made on the back of two things—technological refresh <strong>and</strong> uptake profile.
15. Firstly, when all the ticketing assets of an organisation are being replaced, the marginal cost of
including a smartcard ticketing system are small in comparison with the cost of the replacement of the
ticketing assets themselves. The problem with this in the transport industry is that ticketing assets tend to
last for a long time, sometimes because of integration requirements. Changes to systems to retrofit smartcard
ticketing are necessarily expensive. In particular, the rail franchising systems makes investment in such
systems diYcult outside the franchise renewal process.
16. Secondly, the update profile is an important factor in consideration as this determines how quickly
non-smartcard ticketing systems can be removed. Leaving systems in side-by-side without m<strong>and</strong>ating or
incentivising a change in customer behaviour leaves the necessity for two systems to run in parallel, thus
adding a cost without removing one.
17. Amending these two restrictions would lead to a faster uptake in smartcard ticketing technologies.
Does the ITSO system cater for the needs of all passengers <strong>and</strong> travel providers?
18. ITSO is, as are other schemes, capable of catering for the needs of all passengers <strong>and</strong> public service
providers.
19. That ITSO specification schemes have not been implemented for all passengers <strong>and</strong> all travel
providers suggests that it is not the only alternative to meet the needs of specific passengers, particularly in
a closed geographic environment, <strong>and</strong> travel operators.
20. This however raises the question as to what needs would be catered for by ITSO specification schemes
over <strong>and</strong> above non-ITSO specification schemes.
21. The first point is that we have yet to see a significant impact on passengers based on the specification
of a scheme. Passengers are most influenced by the ticketing proposition <strong>and</strong> usability, which should not be
aVected by the specification used to build a system.
22. In terms of travel providers, this is not necessarily clear-cut as diVerent scheme types will have
diVerent advantages for diVerent reasons. Proprietary schemes can provide benefits to their operators <strong>and</strong>
users, just as open-specification schemes can. The same applies for the disbenefits.
23. An open-specification scheme allows more theoretical choice down-stream with components <strong>and</strong>
exp<strong>and</strong>ability <strong>and</strong> discourages monopoly supply but requires separate systems integration eVort whereas a
proprietary scheme allows a thinner client function to start with but increases barriers for competitor entry
longer-term <strong>and</strong> can push prices up for system changes. The ability to achieve inter-operability on a large
scale without absolute control over all the participating schemes necessitates an open specification.
What can be learned from the experiences of areas such as London <strong>and</strong> Scotl<strong>and</strong> where smartcard technology
is already in place?
24. The main lesson to be learned from these experiences is that where there is a single entity in control
of, <strong>and</strong> responsible for, ticketing technology (whether a public body, or private entity) there is much more
likelihood that a system will be implemented. This factor has helped to reduce the commercial blockages
referred to in the answer to the first question. One size doesn’t necessarily fit all with smartcard schemes,
but if passenger choice & flexibility is a goal then must be within a business, commercial & technological
framework that enables interoperability.