Going somewhere new

The payment and information revolution is reshaping the whole basis of how customers relate to and use passenger transport with far reaching implications for the industry

New Transit’s scene-setting preview for the Travel 2020 exhibition and conference

At present, the way public transport is sold and services publicised remains more akin to a nineteenth century experience than the twenty-first across most of the country. The scene at large railway stations during peak times as passengers queue in slow moving lines to pick up paper tickets from booking office clerks hardly reflects the fast-moving, customer service-led private sector enterprises which passengers deal with in the rest of their daily lives.

For bus passengers, waiting at the stop can be like putting your trust in a remote, unreachable higher authority who may or may not deliver. And when buses and trains are delayed, information on the impact that will have on catching connecting services is virtually non-existent.

Over the past year or so, however,building blocks have been put in place for a radical transformation in customer service encompassing the way journey options are communicated, how public transport fares are paid for and how passengers are kept informed during travel. Judging by the technology-driven revolutions that have taken place in television, mobile phone services, retailing and banking, when the pieces are fitted together change will be rapid. Radical developments are predicted to occur well within five years, and in 10 years the service could be unrecognisable.

Instead of paying at the station or on the bus, passengers will hold an electronic entitlement to travel, purchased at home, while walking to the station or bus stop, or in any location they happen to be. Travel authorisation will be distributed to mobile phones or picked up automatically at ticket validators.

When planning multi-modal journeys, passengers will be able to go to their favourite ‘one-stop-shop’ trip advisor and obtain rapid, personalised plans instead of having to hunt through a variety of websites and timetables. Real time updates will be available throughout their journey on whether connections remain feasible with alternative itineraries provided if they are not.

Achieving the vision will mean major cultural, operational and commercial shifts that will effectively turn the traditional business model upside down. It will involve revising fares structures, cleansing data, devising appropriate industry standards for technology applications, setting commission structures so that ticket sales can pass from transport operators to professional retailers, and agreeing arrangements for cash collection to pass to banks. Progress on these and other issues which are central to the services that passengers will receive in the future will be displayed and debated next month at the New Transit-sponsored Travel 2020 conference and exhibition in London by some of the leading consultants and technology suppliers in their fields.

Jeremy Acklam, a director of consultancy Venture Innovators will be among the contributors to the debate. At present he says that the rapid developments in mobile communication services, provided through iPhones with email, internet access and GPS maps, make it difficult to predict exactly how passengers will pay for travel and receive information in the future. But he has no doubt that change is coming.

Existing iPhone apps (short for applications) such as Google Sky which enables users to view a map of the constellations in whichever direction they point their iPhone, give some inspiration for the way in which journey planning could develop.

“Let’s imagine,” says Acklam. “You could hold your phone up at a bus stop in a particular direction and it would tell you when your bus will arrive and show you on a map where it is going. If you are on a train it could tell you how long you have to make a connection and how to get to the right platform. It could tell you whether there is a bus service to complete your journey and the way to leave the station to get to the stop. It’s not that difficult to do and we will get things like that within five years.

“It’s about combining data in a way that makes you think ‘I’ll go by public transport because it is so easy’.”

To complement the convenience of new journey planning facilities, pricing, too, will become increasingly personalised. New products are expected to emerge giving passengers the right to travel at will without having to work out which ticket would be most suitable, and giving them options on the price they are prepared to pay rather than having it dictated to them.

Public transport is also destined to be integrated into the wider world in which it exists. Peter Miller, chief executive of public transport information and data management consultancy ITO World, foresees personalised services evolving which move beyond today’s basic journey planning concepts. He expects that within 5-10 years, internet maps available over mobile phones will be combining information on public transport options with the location of facilities such as cashpoints, restaurants, sports centres and other places of interest. “The sort of things you could see are mobiles telling you we know where you are and what sort of places you want to visit,” he says. “So you could be shown, say, a list of English Heritage sites within 10, 20, 30 minutes, and here’s how you get there and the price.”

Leading software manufacturers expect the development of such applications will have a profound impact on how public transport is viewed. Google engineer Joe Hughes believes it will transform public transport into a “first class citizen” and lead to it becoming the natural choice for many journeys rather than the car.

In terms of paying for travel, a number of new technologies are vying to replace paper tickets in what Ben Whitaker, chief executive of m-ticketing technology developer Masabi, expects to be a “battle royale of new ticket formats” designed to eliminate queuing and make payment simpler. Some operators regard mobile barcode ticketing as the primary way forward for their market, others prefer smartcards in the expectation of a transition to NFC phones and others are taken by the potential benefits of contactless EMV bankcard ticketing. Some have a more flexible view and see a world incorporating several new forms of payment in each market, depending on passenger preference.

A kick start towards more rapid uptake of new payment technology was provided by the Department for Transport’s ticketing strategy, published last December, with new incentives for bus operators to adopt smartcard systems through enhanced Bus Service Operators’ Grant payments. At the same time, £20m was provided for the nine largest urban areas outside London to roll out smart ticketing infrastructure.

Neil Scales, director general of Merseytravel, the Merseyside PTE, and chairman of RTIG-INFORM expects the injection of government funding and pressure created by the current spending squeeze to use existing transport infrastructure more efficiently to lead to “an explosion in smart ticketing” and journey planning services for city bus networks over the next five years.

Some momentum has begun to build with Stagecoach committing to introduce smart ticketing equipment across its bus fleet this year, prior to developing multi-modal, multi-operator schemes with other companies, and Go Ahead planning to equip its bus fleet by April next year. Meanwhile, PTEs are starting to equip smaller bus operators with smart ticketing technology.

In the rail industry, the ticketing strategy confirmed the DfT’s plans for smartcard ticketing across the railway and the Con-Lib coalition is now considering how to push forward the timetable for its delivery. However, the schedule for letting new franchises means there are long lead times for its introduction in some parts of the country. In addition, the £740m set up costs are twice as high as in the bus industry, the rail industry’s markets are more diverse and different technology options are emerging, leading operators to question whether adhering to the DfT’s vision of a national smartcard network is appropriate for all franchises.

Although the ticketing strategy did leave the DfT room for some flexibility over technology choice, train operators believe that the DfT’s current policy points to mandatory smartcard schemes being specified in the next round of franchising, with little room for alternative technologies.

Many believe this would be a mistake.

“For me it’s very much looking at moving beyond the government’s one size fits all vision regardless of the type of market to a more holistic approach making use of emerging technology and technology that is already here that can be applied to rail travel,” one senior executive commented. “For long distance travel outside the urban network of gated stations, barcode ticketing is the way to go.” He argues that advantages of bar code ticketing over smartcards on the long distance network include lower ticket distribution costs, the potential to avoid the expense of gating every platform and customer convenience. Occasional travellers who make up a large proportion of the long distance market have a visible record of the trains they need to catch on their barcode ticket and would not need to go to the trouble of hunting down their smartcard.

Long distance operators have already started trialling barcode systems for advance purchase fares with Virgin adopting a self-print variant. Cross Country and East Coast are also trialling both self-print and direct to mobile barcode ticketing between Edinburgh and York, and London and Leeds respectively. Elsewhere on the network, Chiltern Railways has an advance purchase scheme in place, as do Heathrow Express and First Capital Connect on its airport services. Recent advances in technology and fraud prevention could see barcode ticketing rolled out beyond these specific applications to a wider range of ticket types and operators in the near future.

EMV contactless bankcards are also set to become a mainstream means of payment, in the capital at least, in the wake of Transport for London’s decision to earmark EMV as its choice for Oyster MKII, with a target of early 2012 on the bus fleet and late 2012 on the Tube. The technology’s potential to offer a more convenient payment method than a dedicated transport smartcard and reduce costs by outsourcing cash handling to banks is also being sized up by bus and train operators throughout the country, with Stagecoach currently conducting a trial on its buses in Merseyside.

However, international ticketing consultant, Paul Rooijmans, believes EMV could offer a much greater range of benefits than UK operators envisage and prove to be a game changer in the quality of service train operators offer to customers and their ability to manage demand.

“With EMV you can really move away from the concept of buying a ticket for a journey because it gives you different options that are like a cross between airline and mobile phone billing,” says Rooijmans.

The key to EMV’s potential is that it enables complex travel charges to be calculated directly in back offices rather than at ticket gates. This provides a platform for more sophisticated and flexible products to be offered to passengers, raising numerous possibilities for travel to be packaged differently.

  Customers could be offered mobile phone-style contracts with their operator who would tailor prices per mile and incentives to their individual needs. At the same time, this capability would open up a new range of tools to manage demand and make best use of capacity, rather than relying on blunt fare rises.

“For example, an operator could say to someone who has paid for 200 train miles, ‘if you can be flexible when you travel, you can have free off-peak travel and pay twice as much for the miles you need in the peak’ or whatever would be right for that person,” says Rooijmans. “The options really are endless.”

 In some European countries, he expects radical new models of charging to emerge in the near future, although change may take longer in the UK. “The current way of thinking in the UK will not support a massive change but in other countries such as the Netherlands and Denmark, the way people pay for public transport is changing very rapidly,” Rooijmans says.

At present operators in the UK are viewing use of contactless bankcards in more simple terms as a means of enabling passengers to make direct payment for journeys up to the £10 limit mandated by banks without the need for a dedicated transport smartcard.

A working group has also been set up to develop a standard for loading conventional smart tickets onto EMV cards which is expected to enable them to offer all the travel options ITSO can within two to three years. Some operators now believe this would make EMV a more logical ticketing choice than ITSO smartcards.

“If we were given the freedom by government we could go for leapfrogging ITSO,” one senior rail industry executive told New Transit. “It’s much simpler for passengers and they can see exactly what they have paid because it is itemised on bills at the end of the month.”

However, the current set up of EMV contactless bankcards does mean some issues have to be dealt with before smart tickets can be loaded on them. Dave Lynch, Go Ahead Group IT director, points out that at present EMV cards are configured for simple, London-style zonal fares structures rather than the more complex fares systems in the rail industry and in the multi-operator, multi-modal schemes that will be developed outside the capital. This would prevent detailed information on customer journeys that operators require being available to back offices.

“The amount of data space on the cards for public transport at the moment is miniscule,” he says. “One of the things ITSO has is space for all the information back offices require. It will be fixed, but it’s not there at the moment.”

While some issues with EMV remain to be resolved, technical problems which have contributed to slow progress in the roll out of smart ticketing on the rail network are gradually being overcome.

To date smartcard ticketing trials are limited to South West Trains, where they began at the end of 2008 and now cover over 50 stations, and London Midland where they began between Kidderminster and Worcester early this year, with a further roll out now planned on the Snow Hill lines.

At present, the trials are restricted to season tickets which passengers can buy online and pick up automatically when they touch in at ticket gates. However, the development of a new ITSO standard 2.1.4 in February has overcome one hurdle preventing operators from providing additional products.

“ITSO 2.1.3 really didn’t work properly for long distance rail tickets,” says Graham Bodman, transport strategy manager at Atos Origin. “2.1.4 has addressed that and opened the possibility of deploying it for a greater range of products.”

The new standard is also designed to enable capping regimes necessary for PAYG (Pay As You Go) products at commuter operations, but technical capability alone will not always make it practical for PAYG to be provided across a franchise’s operations. Many companies share routes with other operators and the different timescale for implementing smart ticketing at various franchises has thrown up numerous complexities. At London Midland, for example, Dave Lynch points out that a number of stations on the route are managed by Virgin, raising issues of who installs and pays for smart ticketing infrastructure and how schemes are managed.

“At some TOCs introducing PAYG will be easier to do because they have a monopoly of stations, at others it will be quite a big step to do effectively,” says Bodman. “It has to be agreed who pays for the implementation, and you need commercial relationships in place so everyone is paid what they are entitled to from the ticket revenue.”

A further issue in rolling out PAYG schemes is the complexity of fare structures both from the point of view of passengers understanding how much they will be charged for each journey and enabling passengers to pass through ticket gates in acceptable time. “It’s undoubtedly a bigger challenge if you have a very big fares table for a reader in a gate to work out the right fare in a reasonable time,” says Bodman… “The current method of pricing, especially multiple peak and off peak fares, valid at different times, does not make it easy to implement PAYG.”

A further major issue is that ITSO tickets can not be accepted at present on London’s Oyster infrastructure. Dave Lynch points out that this is a precondition for significant expansion of smart ticketing on the rail network given that 70% of all journeys start or finish there.

“The key problem is the opening up of Oyster because, while it’s been a massive success, it’s a very closed standard,” he says. “At the moment we can’t go anywhere near London because the connectivity with London is not there. TfL need to come fully on board with ITSO and join up fully with the rest of the country.”

Work has started on addressing some of these difficulties with the government and TfL working on a project to open the Oyster system to ITSO ticketing. In addition, ATOC has started a project examining how to make pricing compatible with new technology. “It's about serving people in different ways that move with the times - having the right fare structures and products in place to support the way people now expect to be able to buy their travel,” says Andy Wakeford, ATOC head of fares and retail support. “That means acknowledging the popularity of channels such as internet and mobile retailing, as well as traditional counter purchases.”

The extent of the progress made will become evident soon enough in how far London Midland and SWT are able to extend smart ticketing and in the progressive introduction of schemes at new franchises. Go Ahead has contracted to deliver smart ticketing across the South Central franchise by January 2012 and roll out a multi-modal PAYG scheme in the Brighton/Crawley/Gatwick area later that year with its Metrobus and Brighton and Hove bus companies.

In the bus industry, the deregulated structure means that operators are likely to be able to move more rapidly than the railway to adopt new ticketing technology, as demonstrated by Stagecoach’s current trial of contactless bankcards on Merseyside.

Go Ahead’s preparations centre on installing ERG’s TP5700 ticket machine across its fleet to create a platform which enables it to offer new payment methods to passengers as they become available.

“At the moment, we are focusing on building a standard platform across the group, just as Marks and Spencer or Sainsbury have, that will allow us to be light on our feet and bring in whatever technology passengers see as positive in different markets as it emerges,” Dave Lynch says.

Initially, smartcards will be rolled out across the group with mobile applications and portals made available so that passengers can check the tickets and stored value balances on their card. When a suitable EMV application is available he sees it as a likely compliment to smartcards rather than a complete replacement.

“Our research has shown us that a lot of people like having cards for transport or business spend or leisure and don’t want a single card for everything,” Lynch says,

“and not everyone wants a single statement at the end of the month with 300 transactions on it.”

Further ahead, he sees a significant role for mobile ticketing as NFC phones become available in the UK. For now though it is not an option on the company’s bus services. “The big problem with mobile that we have found in trials is text tickets are open to fraud and GPRS doesn’t lend itself to integrated platforms. What does is NFC, but we have been hamstrung in the last three years by manufacturers not bringing them into the UK. I’m told at the end of this year Samsung will bring the first batch of NFC phones in.”

Passenger information as well as ticketing has taken some initial steps towards the next generation of services that will emerge over the next decade with the launch of iPhone apps such as ACIS’s Mytrip. The service’s functions include providing real time information for departures from the 10 nearest stops to any postcode entered. In addition, a Near Me facility tracks the phone’s location, and shows the users’ position relative to the nearest bus stops, the current locations of buses, and enables users to access information for each stop. A similar MyBus iPhone app was launched by Kizoom earlier this year.

Nonetheless, the experience provided by the best of the current journey planners is still some way off the ideal outlined by visionaries such as Jeremy Acklam and Peter Miller. Perhaps the most limiting factor in the development of journey planners has been operators’ and local authorities’ reluctance to release data, which Miller refers to as “database hugging disorder”. “In the dotcom boom data was valuable and bus operators thought they would make huge sums from it, but in fact the only thing that gives data value is for someone to use it,” he says.

Now he believes government pressure to make bus timetable information and schedules freely available through its open data programme could spark a revolution in journey planning. “Three years ago data availability was for geeks and nerds and a yawn, now it has become a Prime Ministerial issue,” he says. The open data programme which has made 2,500 public sector datasets freely available through the data.gov.uk website was given direct backing by Gordon Brown and subsequently David Cameron. This summer Greater Manchester PTE and Transport for London released their bus stop and timetable data. The response was such that when TfL released its data, pent up demand meant the system had to be switched off and the data released in a controlled way.

Miller characterises the wholesale release of information on public transport that he believes is coming as a move “from scarcity to abundance”. As an illustration of what that could mean, he refers to the www.citygoround.org website in the USA which features no fewer than 130 journey planning apps for national and city transport services, developed from over 100 US transit authorities releasing data. “That’s what happens when you have a revolution,” says Miller. In addition, the site names and shames the 700 transit agencies, and their directors, which have yet to make their data available to app developers.

As more and more data is released, Miller predicts new providers of journey planning services will emerge, including major IT firms entering the market with new services funded by advertising or sold directly to local authorities. A more bespoke range of journey planners will be developed by companies aiming to attract people to their outlets, while the greatest innovations could come from the ‘geek set’ who will develop new look journey planners just because they can. Other new services will provide an antidote to the proliferation of single mode single company websites which force passengers to search multiple sources of information to plan trips.

As more information is released under the open data programme, the quality and diversity of journey planning is likely to grow in a way that at present is scarcely imaginable.

“Look at all the places where there is currently no public transport information - internet maps, hotel sites and estate agents,” Miller says. “You can foresee new services - for example if you are looking at a new area to buy a house your app tells you how far away schools are from your location, the bus routes to schools and how long the journey takes. It’s getting our heads round all the services that don’t exist at the moment and asking if there is a good reason for that.”

Operators as well as local authorities will increasingly be required to release data. The government has already made a commitment that scheduling information will be released when rail franchises are relet and the ‘Big Five’ passenger transport providers are now working on a project to jointly release some bus data being led by Stagecoach. If there are delays, Miller believes the momentum behind the open data programme is likely to lead the government to consider compelling companies to move more rapidly, for example by linking Bus Service Operators’ Grant payments to release of schedules.

While there remain some significant barriers to resolve before the vision of truly integrated public transport journeys and information can be achieved, work behind the scenes to start creating a platform and standards for the widespread introduction of new technology suggest that significant changes are coming.

However, delivering new services effectively will be as much about a change in mindset as much as technology.

“It’s changing from looking at your customers as people going from, say, Edinburgh to London to looking at them as people making a whole journey from Edinburgh to Paris and why they might be doing so,” says Chris Garthwaite, chief executive of CGA Associates. “Once you have recognised that you can understand how to engage people differently and say we need to become more relevant to you and we will change our services to do so.”

On a recent visit to the Tate Modern, he was struck with how the gallery had adopted this philosophy of using technology to enhance customer experience by replacing Walkman guides with itouch guides.

“Each exhibit had its own icon and you had a beautiful interactive tour,” he recalls. “It allowed them to put a lot of different content into it and it gave me control and freedom. Applying that thinking to transport you would be providing applications for people to enjoy their days out. So as opposed to running a transport business you would be retailing leisure of which transport happens to be a part. That is quite a big step.”

Both Garthwaite and Paul Rooijmans believe this points to public transport sales moving from public transport operators to specialist retailers. “The industry tends to be inward looking rather than looking at the behaviour of customers,” says Rooijmans.

“I believe out there somewhere there are new retailers that can do it more efficiently for operators and more conveniently for customers.”

Perhaps surprisingly, Dave Lynch does not disagree, even if he does not foresee retailing being completely divorced from operators. He believes that when issues such as Oyster ITSO connectivity in London are resolved, and smart ticketing infrastructure is widely in place, leading specialist retail companies will start to view public transport as a natural market to extend into, and Go Ahead has plans to react to that.

“We certainly see, with our Key [smartcard] brand, bringing in large retailers and that providing benefits to the travelling public above and beyond what we do now,” he says... ”Certainly the plans we have are to work with larger retailers.”

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