Canada to hop aboard smart transit bandwagon

Although Canadian transit authorities have been slower to embrace smart card technology for public transportation than their counterparts in Europe and Asia, this is changing as large cities and small- and mid-market centres catch on to the concept.

One of the latest efforts in Canada is

taking place in the Greater Toronto Area, where 12 transit agencies, including the Toronto Transit Commission and GO Transit, are banding together to deploy a smart card system that will be completely rolled out in 2008 or 2009.

This service will allow customers to use a fare card to ride on any participating GTA transit service without pre-purchasing tickets or passes, having the exact cash fare for each service provider or knowing in advance the fare policies.

Smart cards contain embedded chips that are recognizable to an electronic reader even through a purse or wallet. Customers never have to pay directly for fares again, as more money can be uploaded to smart cards overnight from bank accounts if they choose.

Smart cards, which are digitally encrypted, are designed to provide better security than simple cards with magnetic stripes. Even if someone was able to crack the technology’s code and add monetary value to the card, the system will quickly discover it’s a “”rogue reload”” and shut down the card, said Paul Gooderham, president of the Gooderham Group in Newmarket, Ont., a consultancy specializing in the implementation of smart card fare collection systems.

“”If you go around the world, you’ll find over a hundred places that utilize smart cards in what I would refer to as a closed system,”” explained Michael Jordan, associate partner of consultancy Accenture in Toronto. “”That’s a single system.

“”What we’re trying to do here in Toronto is to extend that from one single system to multiple transit systems. So from a closed to an open system.””

Other large Canadian munipalities like Montreal, Vancouver and Ottawa are also exploring smart card solutions. Montreal, which conducted a competitive procurement process almost three years ago, is in the process of implementing systems based on smart cards and magnetic stripes, said Gooderham.

“”In Vancouver’s case, they have a magnetic system. They are doing studies as we speak to determine the viability of implementing a smart card system to replace the magnetics,”” he said. “”There’s a groundswell of interest with these small to medium-sized transit properties who are seeing that those economies can be available to them as well.””

For instance, St. John’s, Nfld. is in the midst of developing a service to be used for its 54 buses. Saskatoon is preparing a business case outlining the viability.

He said in the U.S., San Francisco is “”well down the road to implementation;”” Washington, D.C. is running a good solution; Seattle is putting in a system; and Minneapolis, San Diego, Houston and Atlanta are “”all at various stages of implementation.””

Although the GTA’s regional smart card system is pegged at $200 million, Gooderham said ones that have multiple applications, such as loyalty programs involving several merchants, tend to be more expensive.

The real challenges of developing this strategy has less to do with the actual technology than the business issues, said Jordan. Setting up a regional system requires “”a mechanism to clear and settle the payments between the participating transit properties or agencies,”” he said.

In the case of the GTA, a clearinghouse mechanism will allow commuters travelling across the borders of the participating12 agencies to travel seamlessly and pay only one fare, he said.

Other business hurdles include convincing transit agencies to agree to fare card policies and developing rules on sharing the cost of the common infrastructure, added Jordan.

As the GTA develops its plan, it will probably look to the Netherlands, a country with a population of about 17 million people in which 15 transit operators have banded together to create a regional smart card service for bus, tram and rail services that will be complete in 2007 .

“”People are using it like mad. It’s taking away thresholds of public transport,”” said Jeroen Kok, CEO of Trans Link Systems in the city of Amersfoort, last week at a conference on transit issues in the GTA.

Kok said one of the smartest decisions he made was to set up a separate company in which the five largest operators in the Netherlands are shareholders, giving them the right to approve annual budgets but no other mandate. As far as he’s aware, it hasn’t been done elsewhere.

Usually a government body or a single entity that expands will oversee this type of project, he said. In other cases, a steering committee is in charge, but he warned it’s hard to work like this on a massive regional transit effort because “”everybody wants to decide on everything on a daily basis.””

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