What’s an open-fare system anyway?

[Creative Commons/Flickr]

[Creative Commons/Flickr]

This isn’t the first time the Chicago Transit Authority has worked with Cubic Transportation Systems. In fact, the San Diego-based company developed the CTA’s magnetic strip fare card 17 years ago, and developed the Chicago Card in 2002.

What makes the Ventra contract different is that it’s an open-fare system. Here are a few facts you need to know about the new system CTA has chosen:

What’s the big deal?

The Ventra contract is the largest fare collection contract ever awarded in North America, coming in at more than $450 million, according to Cubic’s website. It’s not only the first large-scale open payment system in North America but will also have a “public-private finance structure supported by Cubic’s financing which will create an ongoing revenue stream per transaction,” the company says.

What’s an open fare system anyway?

The open-fare system allows riders to pay for their ride using a bank card, rather than having to purchase a CTA card. 

What does this mean for Chicago?

In Chicago, maintenance of the fare system and collection of fares will be run by Cubic Transportation Systems, and the new Ventra card will eventually replace the magnetic swipe transit card and the Chicago Card. According to the CTA, “fares collected by the new system are deposited directly into CTA’s custodial bank,” and the bank is not authorized to invest any of these funds.  

Open fare has to be in use somewhere else.

You’re right, it is. New York, Salt Lake City, Dallas, Washington, D.C., and London have all implemented some degree of an open fare system.

How has it gone elsewhere?

Gapers Block dug into the experience of other cities that have worked with Cubic. It found that the switch over in London from the Oyster card transit fare collection system to the “Wave and Pay” systems, both separate Cubic-run systems, wasn’t entirely smooth: When Cubic implemented a contactless bank card “Wave and Pay” system on buses late last year, riders reported that if their Oyster and bank cards were touching each other when swiping the card reader, they would be charged on the wrong card, or simply double charged. Meanwhile, there were £53 million worth of unclaimed refunds from dormant Oyster cards (i.e. unused in the last 12 months) as of April 2013, and no easy way to reclaim the funds. The story goes further into the technical glitches and extra payments experienced by riders in other cities that have their fare systems run by Cubic, and it is worth a read.
Anything else we should be worried about?

Metro Magazine, a California-based industry publication, says that while open-fare systems are more convenient for riders, the problem is still cost.

“MasterCard, Visa and the associated banks charge transaction fees. Currently, credit card transaction fees are still greater than the cost of processing cash,” Metro writes.

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