One Payment System is Needed For All Transportation

By Boris Karsch

Boris Karsch is the vice president for strategy at the California-based Cubic Transportation Systems. He leads the execution of Cubic’s NextCity vision for the integration of payment and information systems with direct responsibility for strategy development, partnerships, and acquisitions.

One of the ironies of the advancements in mobility over the last decade has been the driving force of competition involved – and perhaps no development has affected the recent landscape more than the rise of ridesharing companies like Uber and Lyft. These and other companies, driven by the cutthroat battle for customer bases in America’s largest cities, unleashed a new transportation platform that has fundamentally changed the way that American travelers get from Point A to Point B. Why is this ironic, considering the role of competition in most of history’s great technological developments? Because as the larger story of mobility progress unfolds over the next few decades, it will be integration and collaboration, not competition that move us toward our goals.

Integration is a necessity for the future of mobility, extending to every aspect of the transportation infrastructure. From using one account to pay for journeys with multiple transit agencies to collecting valuable data in one database, the mobility industry will be at its most efficient when it is built upon unified solutions. And as executives, engineers, and thought leaders work for the next developments in mobility, it is imperative to acknowledge that we will only take our largest steps by working together toward integrated solutions.

In most American cities, Boston included, travelers rely on multiple transportation agencies to meet their needs. Once you’ve considered taxi services, personal vehicles, ridesharing, and alternative forms of transportation such as bicycles and ferry services, the average traveler in a major metropolitan area could be considering more than a dozen options on their commute to work. While it isn’t necessary for each of these transportation options to end up under one roof in our mobility future, it is essential that the traveler be able to pay for these transportation services from one unified payment account.

On top of providing simplicity and ease of use to the traveler, a single, integrated account-based system would allow service providers to price journeys across multiple transportation modes based on distance traveled. This model allows users to determine the most efficient route for their journey – including first/last mile options – and results in an overall reduction in congestion as passengers are naturally dispersed over a wider variety of transportation modes. It also supports all payment sources – whether bankcard, bank account, or cash. For city agencies, cash still plays a crucial role in ensuring access to mobility for all citizens and demographics. The transit provider’s merchant network system delivers a channel for cash payers to buy agency transit products with cash and load value to the all-important one account.

While passengers benefit from increased access to transit options, the transit agencies themselves have the potential to benefit from improved insights into travel patterns and mobility demand. With all service providers integrated into a single account, each journey offers valuable insight into the efficiency of the transportation system. These data sources are not limited to journey data, but can also include infrastructure such as traffic sensors and fare collection devices – tools that are already built into our transportation systems throughout the country. The more data that we have to inform the decisions of our transit agencies, the better, and the potential grows exponentially when organizations cooperate and data are shared. The fare data collected by the MBTA could lead to a breakthrough in efficiency for San Francisco’s BART system, for instance.

Our goals for mobility should be to optimize the usage of our transportation resources and provide mobility services to every traveler regardless of their home or destination. More trip data would allow service providers to effectively predict when and how often a route should be offered; congestion statistics inform decisions on pricing in peak travel times, alleviating the problem by encouraging travelers to utilize other platforms by notifying passengers in the event of an incident or delay on their chosen mode of transportation. Each decision informs the next as systems are fine-tuned to provide near-perfect mobility services to passengers.

As data advancement will allow us to reach our goals of efficiency and optimization, technological advancements will allow us to reach our goal of providing mobility services to every traveler. From designing and developing new transportation tools such as driverless cars to devising new strategies for the maintenance and utilization of our existing infrastructure, we must work tirelessly to solve issues such as traffic congestion, the last mile problem, and climate change. Integration and collaboration are key to these advancements as well. Very few companies have the answers to all of the questions; instead, many industry-leading companies or executives offer a wealth of expertise in a single subject area such as cloud computing, mobile application development, or data analysis. For our passengers to benefit from broad, turnkey solutions in the transportation industry, companies must collaborate generously and openly to pool resources and make strides that would otherwise be impossible. Ensuring new mobility solutions are built on technical architectures that facilitate integration significantly removes technical barriers for collaboration between solution and mobility providers. In my own work, I am proud that we can count on companies such as Microsoft for their Azure cloud platform and Mastercard for their mobility and purchasing statistics; these invaluable resources make progress towards Cubic’s NextCity vision possible.

This is not at all to say that companies shouldn’t be competing or that we should abandon individual dreams and goals for one common vision. There is room at the mobility table for advancements of all kinds, and many of these will undoubtedly result from competition: striving to provide a solution that is better, faster, or more affordable than someone else’s. I only wish to point out that more information to sort through than ever before, and with more complex problems than have ever been faced in the transportation industry, a healthy dose of good will enabled by open-technology architectures could go a long way in helping us to reach our goals faster.

For us to understand the role that integration will play in the future of mobility, we need look no further than the cell phone found in their purse or pocket. Our smartphone represents both progress made and potential remaining in integrated solutions. Consider the individual functions and pieces of equipment that have been consolidated into a single device and consider the potential uses that have yet to be included in mobile service. A Boston commuter can pay for an MBTA ticket through the mTicket app and check the arrival time of a train, bus, or ferry through the City Transit app, but their MBTA tickets will be charged separately from the Uber ride that gets them from the station to the office, and a train-tracking app is unlikely to predict a surge in congestion based on a taxi drivers’ strike. A truly integrated solution would synthesize the available information and determine the most convenient possible route for every journey and every passenger. While we may not be there yet in terms of providing that service to travelers, it can be achieved through integration and collaboration. These potentials abound throughout the transportation industry. We only need to come together to see them become realities.

Discussion

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2 Comments

  1. Ignacio Dayrit

    To me, the most important phrase in this article is “On top of providing simplicity and ease of use to the traveler, a single, integrated account-based system would allow service providers to price journeys across multiple transportation modes based on distance traveled. ” And I couldn’t agree more. In the SF Bay area (with the exception to rides on taxis/ride sharing) whether one takes any combination of Caltrain, BART, Samtrans, VTA etc., getting from Point A to Point B on the same trip – perhaps allowing for a short stop – should cost the same regardless of transit provider. Transferring between transit agencies increases the cost of public transit a lot more, and makes driving more attractive.

    Reply
  2. Leo Bentvelzen

    Maybe is cryptocurrency the solution? DigiByte

    Reply

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