T overhauls fares for $723 million

MBTA OFFICIALS WILL unveil the next generation of fare payment and collection which they say will reduce waits, increase efficiency, minimize the need for cash, and let riders use their own credit cards and cell phones to board trains and buses, all at a cost of more than $723 million over the next 13 years.

T officials on Monday will make a presentation for the new system – dubbed AFC 2.0, which stands for the next phase of Automated Fare Collection – to the Fiscal and Management Control Board and recommend the contract to develop and run the system be awarded to a joint venture of Cubic Corporation of California in partnership with British-based John Laing Group.

“This is a very important project for the MBTA,” said T General Manager Luis Manuel Ramirez in a briefing for reporters on Friday in advance of the presentation. “It is the single most important thing in terms of how our ridership is going to be interacting with the entire MBTA ecosystem… It really impacts the ridership in a lot of ways and it is also in our view the future of the MBTA in terms of how well we implement this system.”

According to David Block-Schacter, the MBTA’s chief technology officer who is overseeing the project, a pilot program will start sometime in mid-2019 and the roll-out of the system will begin in about three years. The plan requires an overhaul of all gates in the subway system, installing vending machines and readers for bus and commuter rail stops and outfitting all the buses and Green Line cars with on-board fare validators.

Capital costs for the project will run $356.8 million while operating costs over the 10-year initial phase of the contract, once the hardware and software are in place, will be $366.5 million, made in monthly payments. There are also two five-year options the T can exercise.

The Cubic/Laing bid beat out a former Xerox company called Conduent for the contract. Two other firms were eliminated earlier in the process, which began in July of 2016.

Block-Schacter touted the public-private partnership between the T and Cubic/Laing as a first for the aging agency and said a key to the contract is the authority’s ability to claw back as much as 50 percent of a monthly payment if the vendor doesn’t hit certain performance benchmarks.

“It’s important that not only the right system gets built but is operated by the standards our customers and we expect,” Block-Schacter said.

The current system costs the MBTA about $32 million with about half paid out in labor costs and the price projected to increase each year. That doesn’t include potential upgrades and reinvestment to keep the system functional/

The cost of the proposed system will be higher each year through fiscal 2022, in part to keep the old system running while the new system is brought online. Beginning in fiscal 2023, the annual costs for AFC 2.0 is projected to be below the estimated costs of the current system.

With the new system, all fares will be paid prior to boarding and, in the case of buses and commuter rail, be verified on board by the validators on bus and Green Line cars. Block-Schacter said when the new readers are installed, people can use a smartphone app or their own credit card, if it is enabled for noncontact payment, to wave for an individual fare or to reload passes.

Block-Schacter said about 7 percent of customers use cash on buses and Green Line and those people will have to get a new form of CharlieCard and pay for it at the vending machines, which he said will never be more than 1,000 feet from a stop.

Also, riders, who now can get a CharlieCard for free, will have to pay $5 for the new card and reuse that. Block-Schacter said since the CharlieCard was introduced, the MBTA has issued more than 18 million cards, many of which land in drawers never to be used again at a loss to the cash-strapped agency.

The T will also work with commuter rail operator Keolis to install machines at all suburban stops that will read a person’s credit card, smartphone app, or pass, which will then be validated on-board by conductors with handheld devices. When a rider disembarks the train, he or she will have to tap the payment form again with the cost of the trip then calculated and debited from the device.

At T subway stations, all the gates will be replaced with a new style that will make them wider and more efficient, said Block-Schacter. The current gates, which often times stick open and allow peo0ple through without paying, slide open, requiring the supports to be no wider than the gate panel. The new gates will swing in and out for entering and exiting, allowing for the wider gates for disabled passengers or riders with children in strollers.

The new system will have readers placed on entry and exits at each gates so riders will have to use their payment form to go in and open the potential for mile-based fares in the future.

Block-Schacter said the emphasis on multiple platforms for paying will reduce the need for cash while still accommodating those who have neither a smartphone or credit card. He said cashless boarding will allow all-door boarding for the Green Line and buses and reduce trip time by as much as 10 percent.

“The best fare collection is one that disappears, then gets out of the customers’ way,” he said. “And that’s what we intend to provide.”