17-Dec-2020 23:38:54
by James Gooch

2020 Review: The Transit Industry Rises to the Challenge and Fare Payments Trends for 2021

While the COVID-19 crisis has dramatically changed all of our lives, around the world we’ve seen transit agencies step up, doing their bit to confront this unprecedented challenge, whether by maintaining services or taking the necessary steps to protect drivers and riders.

We couldn’t be prouder to be part of this industry, and to have played our small part during this difficult year working alongside our partners and agencies around the world.

 

As we look to 2021, with breakthroughs such as vaccines hopefully signalling a turning of the corner on Covid, we wanted to reflect on the developments agencies we are working with have made during 2020 and the trends we are seeing as they focus on plans to safely bring riders back during 2021. 

We hope this is helpful and, as ever, please do let us know your thoughts. Prior warning, this blog is LONG(!), and we know not everyone will have the time to read it. So if you want a summary of the trends you can skip to “2021 and the road to recovery” for a high level overview.

For us, four themes have stood out from 2020 as we move into 2021, these are; 

  1. Agencies have been prioritizing ‘safe ways to pay’
  2. Bringing riders back. The shift to Account-Based Ticketing
  3. No agency is an island. Partner ecosystems really matter - cash digitization and Mobility-as-a-Service
  4. Doing more with less. Agencies are facing revenue and cost pressures and we all need to help #SavePublicTransit
  5. Conclusion: 2021 and the road to recovery

 

 

Safe Ways to Pay 

One of the main ways agencies have helped make public transit safe for riders in 2020 has been by providing mobile ticketing. The beauty of mobile ticketing is that it can be live quickly, allowing riders to purchase tickets anytime, anywhere - helping to keep both riders and drivers safe. The list below are some of the launches we’ve made with our agency partners this year. 

Some interesting highlights include launches for Montreal, St Louis, Calgary, Santa Cruz and Valencia, the development of regional multi-agency projects, and the expansion of Practical Mobility-as-a-Service with ticketing integrated into leading mobility apps. 

Europe and Japan:

Canada:

USA:

 

 

Bringing riders back: Why agencies are moving to Account-Based Ticketing (ABT)

In 2020 we have seen the trend towards Account-Based Ticketing accelerate, and we think this will continue in 2021 as agencies focus on bringing ridership back to pre-COVID levels.

This year, Rochester RTS (NY) has launched a landmark Account-Based Ticketing solution for their riders, the first in the world to be powered by a MaaS-Enabled Fare Payments-as-a-Service Platform. For riders, this means they no longer need to buy a ticket or understand fares before traveling  – and are able to use their RTS Go smart card or RTS Go mobile pass which is integrated into the Transit app to simply tap and ride. Riders are then charged the best possible price for their journey. For the industry, it marks the beginning of the end for traditional fare collection as we know it, with full fare payment systems delivering agencies of all sizes the latest ‘Fare Payment’ innovations ‘as a Service’, quickly and for a fraction of the cost of bespoke systems. Saskatoon will also be launching their own mobile and Account-Based Ticketing system next year and we know many other agencies are following their lead.

But why, you may be asking, would Account-Based Ticketing help with encouraging riders to return to public transit?

With Account-Based Ticketing, passengers simply jump on a mode of transport by tapping a secure ‘token’ on a validation device. The ‘token’ is typically a contactless bank card, mobile phone or smartcard, depending on how the system is configured, with the right to travel and fare calculations done in the back office. This is key!

Rider recovery:

  1. Convenience. ABT provides the ultimate convenient ticketing experience for riders by eliminating the need for passengers to buy a ticket before traveling or understand which fare they need to choose.
  2. Rewarding transit usage. ABT enables every rider to benefit from period passes, even when they can’t afford to purchase them up front. Instead, they simply tap and ride when they need to travel and the back office ‘caps’ their fare - the more they travel the more they save, rewarding them the more they ride.
  3. Fare Flexibility. ABT gives agencies the ability to implement new fares extremely quickly, which is particularly useful as agencies look to attract riders back. With flexible working affecting travel habits, new more flexible fares to reflect this can be pushed live quickly controlled and calculated in the back office.

This year we have also seen increased demand for electronic validation to help keep drivers (operators) safe. For ABT systems to work validation is key. Justride Validators (JRVs) were designed from the ground up by our team to meet the demands of Account-Based Ticketing at a price point that for the first time makes it affordable for all. In 2020, JRVs have been deployed in Rochester, Dayton, with Lurraldebus in Spain and for Laketran (US), with lots more agencies launching in 2021.

 

 

No agency is an island. Partner ecosystems really matter - cash digitization and Mobility-as-a-Service

Transit is fundamentally a team game, with a whole ecosystem of companies and stakeholders working together to make sure the trains or buses run on time, and fare payment is no different. 

This year has placed tremendous focus on the importance of public transit being available for everyone, and we are delighted to have rolled out cash digitization in two US cities, Dayton and Las Vegas, with partners T-CETRA and InComm. Riders can now use local retailers to top up their mobile ticketing app with tickets and stored value using cash. This means that access to a contactless mobile ticketing service is no longer limited only to those with debit or credit cards. This is really important for agencies, and we expect this to continue in 2021.

Attracting riders back is going to be crucial in 2021 and this year we have seen an acceleration in agencies focusing on Practical Mobility-as-a-Service (MaaS) in 2020. Using the Justride SDK our partners are able to incorporate mobile ticketing into their existing applications and help enable a MaaS experience for riders quickly and cost-effectively. 

We have mentioned a number of these earlier in the blog, but here are some examples from this year alone with our existing partners:

At Masabi, 2020 saw us announce new partnerships, strengthen existing relationships and work closely with regional transit players, industry innovators and leading global brands that make up our partner network. Key new partnership headlines from us this year included:

 

 

Doing more with less. Agencies are facing revenue and cost pressures 

This year has been really hard, not least because fare revenue has dramatically reduced and in many cases agencies and operators have needed government support to keep providing crucial services for key workers.

In 2020 we have seen a record number of agencies move away from the old way of delivering fare payment solutions, where each agency purchases and operates their own bespoke systems. These systems are expensive to build, operate and maintain, and cumbersome to deploy and update (if updates happen at all!)

Instead, agencies have been opting for a Fare Payments as a Service (FPaaS) approach where multiple agencies sign up and use the same platform which is configured to meet their needs. This removes the cost, risk and complexity of providing the latest fare payment innovations as the costs are shared and the system is live with a roadmap of functionality provided for everyone using the platform. 

33 agencies have opted to have services delivered using a multi-tenant fare payments platform this year (which is a Masabi record). We believe we will see a further significant shift to this better way of providing fare payment systems in 2021, because of the cost-savings and the ability to enable constant innovation. 

 

#SavePublicTransit

We joined with our APTA partners and the entire US public transportation industry in December to collectively fight to #SavePublicTransit with a day of mobilization and engagement.

The transit industry is facing a dire financial crisis, not only in the US but around the globe, and emergency funding has never been more urgent. 

So we are calling on Congress and the Administration to provide at least $32 billion in emergency funding to ensure that public transit agencies can survive, helping communities and the nation by transporting essential workers to their jobs and speeding the recovery from the economic fallout of the pandemic.

This issue is not going away as we move into 2021 and we will continue doing what we can to support campaigns around the globe ensuring crucial public transit services are kept going. Public transit will be critical in driving recovery!

 

 

2021 and the road to recovery

Most agencies we speak to envisage a full return of ridership numbers in 2022, with a ramp up in 2021 starting in the spring. However, remote working may mean commuters stay away longer, and there may be an overall reduction in commuting as people work more flexibly.

Now there is a light at the end of the tunnel, agencies are beginning to move from ensuring services are COVID-safe, to ask how they attract riders back to public transit by offering a convenient experience, new flexible fares and safe ways to pay and travel. However, costs and funding are a big concern with agencies potentially needing to reduce costs and explore new revenue generation options, as well as needing more government support.

From a fare payments point of view the need to reduce costs while at the same time enabling contactless ways to pay, convenience, MaaS and new flexible fares to bring riders back will see more agencies speed up transitions to a Fare Payments-as-a-Service delivery model in order to deploy Account-Based Ticketing using mobile phones, contactless bank cards and smartcards. This, together with the delivery of cash-digitization with local retailers, will help ensure all riders can make use of these contactless services and benefit from MaaS rider experiences, helping agencies recover ridership.

As we close out 2020, we’re hopeful and excited to see what 2021 brings and wish all of our colleagues in the transit world a great festive break and prosperous new year. 

Written by James Gooch

Head of Marketing at Masabi.
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