Multipurpose Smart Cards in Transportation: Benefits and Barriers to Use

Never carrying change. Needing only one identification card. Downloading concert tickets. Providing access to buildings. Tracking frequent flyer programs. Smart cards are the technology that allows each of these functions to occur. Although the technology evolved in the 1980s, it was only used for simple functions like pay phones. In the last decade, there has been a rapid increase in the use and scope of smart cards. Smart cards have been used to hold heath records, allow electronic signatures and act as electronic purses. In transportation, smart cards could become the next fare payment media replacing or supplementing cash, tokens and passes. But we are at an interesting time. A few transport agencies have adopted smart cards; more are considering it. However it is not yet clear how such programs will be structured. What will multipurpose mean? Are smart cards to be used only for transportation, allowing regional fare integration and toll payment programs? Or will smart cards replace cash, making it a universal currency accepted by all vendors including transport agencies? This paper seeks to understand the major issues implicit in these questions by looking at how smart cards have been used in many situations, particularly Hong Kong and Paris. These examples highlight the four main reasons for adopting smart cards: cost reduction, service improvement, fare policy flexibility and increased revenues. Analysis shows that the size of the benefit depends on existing conditions, implying that introducing smart cards will not necessarily improve profitability. Because of this it is 2 critical that there be a clear business rationale for implementing smart cards. Smart cards should not be implemented because they are the 'new, new' thing. When smart cards do make sense, there are a set of implementation questions, particularly institutional arrangements, technical systems, user requirements and system equity, to be evaluated. The next section deals with these issues concluding that there is no single implementation plan which will work universally. Instead local conditions, particularly usage and fare structure, should govern the implementation decisions. Finally, I will consider the implications of this discussion on the proposed smart card project in the San Francisco Bay Area, TransLink. Intended to integrate regional transit fare payment, this project highlights the importance of having control over fare policies to ensure that the full benefits of smart cards emerge. Without this control, there will be cost reductions and service improvements, but it is unlikely that there …