Ticketing and fare policy for public transport

In general, integration implies the opportunity to use the entire public transport system across a local or regional area independently of transport modes, tariffs, fares, schedules, ticket systems, etc. Non-integrated public transport systems tend to neglect the needs of customers, which ultimately results in a decrease of ridership. In particular, the absence of an integrated public transport system causes the following problems and inconveniences for customers and authorities, such as comfort (more than one ticket is needed for a single-trip ride), information (the customer faces a non-transparent jungle of tariff systems), travel time (timetables and connections between operators are not harmonised), and costs (in some relations, parallel, competitive services exist).²

Besides network and timetable integration, a further important step in implementing an integrated public transport system is the integration of tariffs and fares. Tariff integration usually follows network and timetable integration as a second step. However, tariff and fare integration is a milestone for reducing access barriers to public transport. Ideally, tariff and fare integration should be implemented in parallel with the network and timetable integration. The benefits of network and timetable integration are significantly reduced if the customer needs several tickets and tariffs for his trip depending on transport mode and operator. The customer will only use the public transport system if he/she can use one ticket inside a transparent and easy tariff and fare system. Network and timetable integration is complemented by tariff and fare integration: both issues have to be resolved in order to enjoy their full benefit.

The FP6-project SPUTNIC³ provides an overview of different levels of implementation of tariff and fare integration within Europe:

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  Mutual acceptance of tickets on the same route: This is the first and lowest level of tariff integration. Operators with services on the same route mutually accept each other’s tickets. Mutual acceptance of tickets is often feasible without complex revenue allocation, especially if both operators have approximately the same shares concerning the scope of public transport supply, the number of tickets sold and the number of passengers. Obviously, if one operator sells many more tickets than the other (thereby earning all the respective revenues) or provides far more services than the other on a common route, compensation payment is needed. With this level of tariff integration, network integration is less important because a customer’s trip with an integrated ticket is limited to one route, usually without changing. This integration level is suitable in cases where national and regional legislation is weak. Often operators initiate the mutual acceptance of tickets on the same route by themselves.
  
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  Mutual acceptance of tickets within the same network: The next level of tariff and fare integration is the mutual acceptance of tickets not only on the same route but across the whole network of two or more operators. Depending on the extension of the network and the number of participating operators an adequate revenue allocation is indicated. Furthermore, network and timetable integration becomes more relevant because a larger number of customers will use several transport modes and operators for the same trip. This integration level is also suitable in cases where national and regional legislation is weak and politicians are insufficiently interested in the issue of public transport integration. Operators often initiate the mutual acceptance of tickets within the same network by themselves.
  
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  Tariff unions: Tariff unions are the next integration level and once again offer higher quality and comfort for customers. All operators in a specific network establish a tariff union which aims to integrate several tariffs of different operators within the same region to create a transparent and easy tariff and fare system (i.e. one ticket for all). Tariff unions are also suitable where there is no supporting national or regional legislation. Although often implemented by the operators themselves, tariff unions can also be established at the request of local/regional politicians. Within a tariff union involving several operators covering a large network area, revenue distribution is undoubtedly necessary. Similar to the mutual acceptance of tickets, tariff unions can also be distinguished according to their level of ticket acceptance. Firstly, a season pass tariff union involves the existence of one monthly or yearly pass for all modes of public transport and all operators within the whole union area. Only regular public transport users benefit from a season pass tariff union. As a result, season pass tariff union can lead to a welcome shift in ticket sales from single tickets (i.e. irregular customers) to season passes (i.e. regular customers), thereby increasing customer retention. Season pass tariff unions are often implemented as an intermediate step on the path to an integrated tariff union. Secondly, in an integrated tariff union all ticket types (i.e. passes, single and multi-trip tickets, etc.) are valid for all modes of public transport and all operators in the respective union area. Occasional customers or tourists as well as regular customers can benefit from an integrated tariff union. Thus an integrated tariff union is very important in attracting potential customers.
  
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  Transport associations: Transport association demonstrates the highest integration level. From the point of tariff integration there is no difference between tariff union and transport association. In the latter, service integration is much more developed. In the case where the public authority (state and/or regional government) is interested to improve public transport for the benefit of the customers the authority will set the framework (legislation, financing, rules etc.) and establish a responsible public transport authority (authority initiative).
  

Creating a new payment system was part of Stockholm Transport’s efforts to provide higher-quality public transport services. The previous ticketing system of the public transport operator Stockholm Transport had been introduced in 1992. As part of a long-term project to introduce a more modern system corresponding better to passengers’ needs, Stockholm Transport began investigations into available ticketing systems and the experiences of other transport operators. These investigations showed that smart cards would be the most appropriate solution for Stockholm Transport’s requirements. A prototype smart card was tested in 2000. Ticket validation machines were installed in all buses operating on one of the city routes and card readers were installed on the automatic barriers in two metro stations. The aim was to gauge the reactions of passengers and transport personnel to using a card that had to be validated by machine rather than simply shown to a bus driver or controller. On the whole, both passengers and personnel were very positive about the system. It then took Stockholm Transport over one year to draft the 7,000 requirements for the system, based on their own needs, the wishes of passengers, and the experience of other European transport operators. For example, the smart card used in the system had to correspond to the standards of Resekortsföreningen i Norden (RKF, an association of transport operators in Sweden and Denmark), allowing passengers to use the card throughout Sweden and also when using the bridge (Öresundsbron) between the southern parts of Sweden and Själland, Denmark. An Australian company (ERG Ltd) was selected as the supplier at the beginning of 2003. By the end of 2004, workshops had been held in Perth, Brussels and Stockholm and some of the product specifications had been reviewed. The new ticketing and payment system would comprise both back office and front office products. The back office product included a clearing system to enable travel across borders and between provinces and counties. The front office included card readers for automatic gates and automatic ticket dispensers. With the possibility of Internet purchase, the focus moved to self-service sales, although the new system also featured a higher number of easily accessible sales points. The new smart card system, Stockholm Transport Access, was introduced to the public in 2009 and the old system was gradually replaced. Between 1998 and 2004, Stockholm Transport attracted 60,000 new passengers, and the satisfaction level rose by 4 percent, and by the end of 2010 a total of 2,900,000 cards had been distributed, with 850,000 in use on a regular basis.⁵

In a pioneering measure, Krakow aimed to create seamless intermodal connections in the city through the use of common tickets and tariffs for national railway and local public transportation services. Prior to measure implementation, there were no integrated tickets for the national railway service and other modes of transportation. In order to promote the use of public transportation and improve passenger flow, the city decided to test an integrated ticket and tariff solution. Due to budget constraints, the pilot application was limited to one transport corridor (Krzeszowice – Kraków). According to a feasibility study, the introduction of integrated tariffs and tickets in Kraków could be based on experience acquired in the Polish city of Wrocław, where an agglomeration ticket can be purchased by means of a surcharge on the public transport season ticket, allowing an unlimited number of journeys on rail and bus lines. Meetings between the city of Kraków and the Polish Federal Railways resulted in the preparation of a contract on integrated tariffs and ticketing. The trial project, integrating tickets for the railway line between Krzeszowice and Kraków with one line of the city’s public transport system, was launched in March 2008. Based on the success of the first trial, when the integrated ticket achieved a 10 percent market share, it was decided to extend the system to four additional corridors. The trial was then transformed into a commercial service, with all stakeholders (the Polish Federal Railways, local transport operator and Kraków authorities) extremely confident about the success of the partnership.⁶

Bologna has introduced the new integrated fare and ticketing system that foresees season tickets as contactless smart cards. One of the key aspects for the success of such a system is the creation of a widespread network of recharging points for season tickets cards. The measure implemented a recharging service available at self-service points (ATMs) of banks that are already used in everyday life and familiar to citizens. The main objectives of this measure are to increase the quality of the public transport service and the public transport use. The measure started with contacts with bank institutes in order to evaluate the feasibility of the system and they showed great interest for this new system. After the feasibility study the system was implemented and started in September 2011 coinciding with the period of renewal of most season tickets. Season tickets can be recharged each day around the clock at more than 300 ATMs in Bologna and province. From September 2012 the service was also available through the public transport company website, thus allowing customers to renew their season tickets online using their credit card. An intense information campaign was carried out to promote the new system, and evaluation activities based on the data collected through the system have been completed, as well as a phone survey on customer satisfaction and service accessibility, which involved 500 season ticket holders. The survey conducted in 2012 demonstrated that season tickets holder appreciate the new service and consider it convenient and time saving, since they can recharge the ticket when they want in several locations in their city. From August 2011 to September 2012, 5,636 season tickets were renewed through ATMs, and the new system had a positive impact also on the operational costs of the ticket offices: a personnel saving of 4,360 hours per year has been achieved, which is equivalent to about EUR 100,000.00 (11.75 percent of the total personnel costs at the ticket offices).⁷

Apart from the above mentioned CIVITAS examples, there are a plenty of further examples on integrating ticketing in European cities. In this context, three case studies from Europe, Province of Bolzano (Italy), Turku (Finland) and Zürich (Switzerland), offer insights in the field of integrated ticketing and fare policies for public transport.

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  In 2012 the Province of Bolzano introduced an electronic ticketing system on its public transport network. With the same contactless card people can travel on almost all buses, trains and cableways in the Province and the more they travel on public transport, the less they pay. The AltoAdige Pass project started with the aim of improving the quality of public transport in the Province of Bolzano, especially for attracting new passengers. Although the public transport system was already of high quality, both in terms of infrastructure and vehicles, a further investment was made in ticketing technology. Thanks to the AltoAdige Pass all trips made by individuals are registered and counted on an annual basis. Different fares are then applied, with a kilometre cost which diminishes with the increase of total travelled kilometres. Travelled kilometres are counted from the check-in at the beginning of the trip to the check-out at the end of the trip. Commuters are granted with an initial credit of 500 km. Discounted rates (by about 25 percent) are available for families, while people from 60 plus pay only a forfeit per year ( EUR 150.00). Seniors (70 plus) are admitted for free as well as people with a percentage of disability over 74 percent. Students (up to secondary level of school) are also granted the pass for free. The incentive mechanism of decreasing fares while increasing travelled kilometres was conceived in order to encourage people to use public transport more intensively, and that is what has actually happened. In the first year of operation of the new ticketing system over 120,000 passes were distributed, with an increase in season tickets of 75 percent. The friendly interface of the system with an online account with personal status, the availability of multiple options for recharging the card and, last but not least, the convenient fares applied, have convinced people to use public transport and although they may not always use it, it is certainly more than ever before. The system has proved to be widely appreciated, thus offering a best practice example for further exploitation and application.⁸
  
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  Turku, a city of 180 000 people, is currently planning to develop two new districts, Skanssi and Castle Town, and has also plans to modernise its urban mobility. The city wants to expand its bus network and lay the foundations for the possible redevelopment of its tram network. Turku has set ambitious targets to realise its vision as a city of walking, cycling and public transport. In late 2013 Turku began collaborating with a global firm that develops intelligent transportation systems (ITS) to fit public transport vehicles with innovative on-board computers and ticketing systems. The vehicles would feed information about traffic conditions and problems, reducing waiting times and updating customers with new information quickly, thus enhancing intermodal transport in the city. Turku has now installed this system on hundreds of its buses, and aims to increase the quantity of public transport by 2 percent a year between 2010 and 2030 - in other words, 24 percent greater than in 2009. The city is also aiming for a 50 percent increase in bicycle use per inhabitant (compared to 2006) by 2035. Around 25 million journeys take place in Turku every year, on a network that includes 300 buses spread between seven bus operators. With about 2,000 bus stops, Turku’s local public transport system is one of most modern and innovative ones in Finland. In July 2014 new regional public transport was launched covering six municipalities with a total of 280,000 people. As part of this, the transport authorities in Turku expanded and modernised the bus network. Turku chose a new state-of-the-art solution to control its local public transport: an integrated telematics, passenger information and electronic fare collection system from INIT, a supplier of ITS and electronic ticketing systems for public transport. The contract was worth over EUR 4 million. The system involves three technological innovations. The first is a terminal with a large touch-screen that takes care of the ticketing and control functions within the vehicle and communicates with the head office. This is important to ensure that passengers get reliable and real time information on all channels, such as displays, via the internet and on smartphones. The technology includes a fast thermos-ticket-printer. In autumn 2015 Turku introduced barcode scanners that read coded tickets stored on paper or on mobile phones. A self-service on-board ticketing machine allows passengers to get onto vehicles quickly and select an appropriate ticket for purchase or swipe their smartcard or barcode tickets. The innovative software has now been implemented in a total of 300 buses in Turku. The key achievement of this technology is the ID-based ticketing, enabling new ticket products for travellers. Turku previously only had two period cards (30 and 90 days). With this new system, Turku launched a new ticketing possibility in September 2015 allowing customers to a wider range of ticketing options, anything from 10 to 235 days.⁹
  
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  Zürich is one of Europes' most prosperous cities with a very high rate of car ownership. And with over 50 percent of all travel being by public transport it is also fêted as having one of the most successful urban transport in Europe. As such it is living proof that where there is high-quality, closely integrated and reliable fixed-infrastructure transport even wealthy car-owners will choose to use it. Although part of this success is based on the types of transports used (electric trains, trams and trolleybuses) what binds everything together is the ticketing system. The overriding philosophy is to encourage passengers to buy advance purchase period and multiple-trip tickets by heavily subsiding them when compared to the cost of a single ticket such as is bought for immediate travel. This is primarily because once a person has a valid ticket they are more inclined to use it again and again, instead of going by car. These tickets are also cheaper for the transport operator (less cash to handle, less ticket card stock used, etc.,) and the savings are passed back to the ticket holder. In Zürich most tickets are just entitlements to travel, this means they are fully shareable between friends and family, as long as only one person is using it at a time. However, if lost they cannot be replaced. Some of the more expensive period tickets can also be personalised - although restricted to the holder only these can be replaced if lost. In Zürich tickets are easily available from a wide range of outlets including combined ticket sales and validating machines located at every stop, newsagents, local shops, hotels, railway stations and special staffed 'ticket here' booths located at a few very busy stops around the city. Once validated even standard single fare tickets allow the holder to travel at will (ie: make multiple journeys). This means that for no extra cost it is possible to break your journey, perhaps to do some shopping, and even make a return trip, providing all travelling is completed within a time limit. The only exception is with the short journey ticket which is designed for a single journey of only a couple of stops. Zürich has not forgotten the needs of less frequent passengers and to encourage them to use the transport there are several types of multiple fare tickets which are bought in advance and provide the equivalent of six individual tickets more cheaply than if bought individually. These too are also fully transferable between family and friends, and can even be used by several people travelling at the same time as long as the correct number of journeys are validated - and everyone travels together as one group. To encourage young adults who might also be thinking of buying cars to continue using the public transports people aged under 25 can buy certain types of the advance purchase multiple fare and season tickets at reduced (child) rates; this is done because this is a most important age group who would be in the process of forming habits that will last a lifetime - and the desire is to encourage them to form the habit of using public transport.¹⁰
  

A policy advice on innovative ticketing systems for public transport

CIVITAS cities that implemented information measures monitored their impacts on behaviour, society and economy, while measures on ticketing and tariffs have been mainly evaluated in terms of user awareness, user acceptance and transport quality. The public responded well generally to public transport information measures. Most respondents liked the information provided at public transport stops and in vehicles and the two measures on which cost-benefit analysis was carried out yielded positive results. Public transport users were generally accepting of and satisfied with ticketing measures - especially passengers having no previous experience with vending machines and e-ticketing systems. While, from an economic standpoint, transport ticketing usually involves substantial financial outlay, each of these measures demonstrated that the benefits outweighed the costs.¹¹

Many potential benefits from public transport ticketing measures were explored during CIVITAS.

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  For the public: The ease and convenience of purchase afforded by innovative ticketing systems in a city should attract more public transport passengers, resulting in less private cars entering the urban area and greater passenger satisfaction. The accessibility of public transport in general is enhanced with the introduction of a ticket valid for all services and vehicle types.
  
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  For individuals: Each public transport user can benefit from a new ticketing system as the new offers are better adapted to the needs and travel patterns of each person. When using a smart card or mobile phone, public transport passengers can save money because the best price for the trips is calculated automatically (for example after a certain amount of trips passengers get a price reduction). If ticket vending machines are provided at bus stops or in vehicles the time for boarding diminishes and the reliability and efficiency of public transport services increases due to the fact that tickets are not bought from the driver. An important issue is also the availability of sales points for different user groups (e.g. elderly people or people with reduced mobility).
  
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  For companies: Private companies and their employees can profit by the new systems when sale and subsidy of public transport fares for the employees are simplified. Public transport companies especially benefit from this measure by an increased number of passengers generated by the service. By offering tailor-made tickets for specific users groups new markets could be developed. Additional sources of information about customers are being created, providing valuable data for further analysis for public transport companies.
  

The up-scaling of these measures is both desirable and feasible. Most of the CIVITAS cities plan to up-scale information measures to all public transport vehicles and stops. The up-scaling of integrated ticketing and use of modern technology is not only technically possible, but appreciated by users as well. The general trend is to expand territories that feature integrated ticketing. While there is high transferability potential for these kinds of measures, the main condition for success is for ticketing systems to be integrated. This requires thorough research, co-operation between stakeholders, realistic financial planning and a reasonable time schedule.