Calgary councillor suggests transaction fee to offset mobile transit ticket costs
Although it's a step toward the future, the proposed mobile transit ticket idea will cost Calgary Transit more than their ticketing machines
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While Calgary Transit takes a step into the future with a committee approved mobile payment plan, the increased cost had some councillors raising their eyebrows.
On Tuesday, the Transportation and Transit committee voted in favour of administration recommendations to bring forward a mobile transit payment system to Calgary within a year. Council will ultimately decide if the project goes forward.
The city is calculating this new system will cost them more to collect the same amount of money. The upfront investment sits at $5 million and $2.4 million annually to run.
But Coun. Shane Keating is suggesting there’s a balance the city can strike to help pay for the increased cost, for the convenience of a mobile fare.
“Every time we do something it increases the costs, but can you add a transaction fee to this for anyone who wants the convenience?” said Keating. “That’s a possibility that they would have a two or three cent increase – it’s the same thing when you go to an ATM.”
In the states, the service has been ongoing for some time. Some jurisdictions like Dallas have had their mobile ticketing service live since 2013.
Paul Rose, spokesman for the San Francisco Municipal Transportation Agency, said it’s too soon for them to establish what the mobile payment will do to their fare collection and revenues. They introduced their mobile app in 2015. Although they already have a tap-and-go style system, Rose said the app was introduced as a way to capture the occasional users, tourists and even help reduce costs through enforcement.
“With time and additional marketing and creating incentives for people to use non-physical fare media, we’ll be able to push more people onto what some may call smart fares,” Rose said. “It just gives people another level of convenience.”
After a year, he said less than 5 per cent of their ridership are using the app.
Research by ACI Worldwide suggests cash is still king for riders. The survey of 2,006 riders from the nine largest metropolitan transportation systems in the U.S. showed that less than half are using mobile payment systems.
But Keating said that isn’t the point, Calgary needs to launch itself into the digital future, and getting a mobile payment system is part of that.
“We’ll have to keep some paper around,” said Keating. “There are a number of users who would prefer that, they don’t have smartphones so they don’t like the idea of using those.”
He said a high percentage of residents have smartphones, and that number gets higher when you look at the younger population.
Out of the council discussion came ideas about the mobile payment opening up possibilities for zone based fares, or even time-of-day based fares, which Coun. Andre Chabot was curious about.
Mac Logan, the city transportation boss, said ideally these new ticketing technologies will make those fare options possible, and the city may move towards that.
Paper isn’t being completely replaced, the city is also opting to update their ticketing boxes, which will have reached the end of their life by 2018. That’s going to cost another $15 million.