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Author: Ana Stanca
Demand Generation Leader, Enghouse Transportation
This is a time of unprecedented challenges for public transit agencies across the world. Governments increasingly expect public transportation to assist in reducing car use in urban areas and to help meet carbon reduction targets.
At the same time, passenger expectations are evolving and growing more complex. Remote working and the ongoing impact of the Covid-19 pandemic have reduced passenger numbers, and government budgets are increasingly stretched.
Transit agencies have been facing shortfalls in revenue that, if not addressed, represent a threat to the continuation of services. Those agencies that rely predominantly on passenger fares have been hit the hardest, but few have escaped entirely. As government support for agencies in the face of Covid-19 lockdowns is withdrawn, agencies face a fiscal cliff.
Updating Infrastructure & Addressing the Recruitment Crisis
At the same time as agencies are attempting to cope with reduced revenues, there is a pressing need to update decades-old infrastructure and address a growing recruitment crisis. Chronic underfunding, deferred maintenance and a significant cohort of Baby Boomer staff reaching retirement age are adding to the complexity of the challenge.
The only means by which these complex interlinked challenges can realistically be addressed is through securing further funding, increasing fare revenue and cutting operating costs. Withdrawing routes with lower passenger numbers or decreasing the frequency of services disproportionately impacts low-income populations while reducing overall confidence in public transit.
Raising fares similarly hits transit-dependent communities the hardest, and in a time of workforce challenges, employee layoffs are rarely practical nor desirable.
Does Technology Have the Solution?
While digital innovation is unlikely to completely solve the revenue crisis facing bus transit agencies, it will play a key role in the solution.
Automated Fare Collection (AFC) promises to reduce operating costs while improving the overall passenger experience. This has already been proven in practice with agencies that have implemented AFC seeing drastic reductions in the cost-of-fare provisioning and collection.
With AFC, customer service staff are freed to concentrate on improving the overall passenger experience, reducing the number of frontline staff required. AFC takes transit agencies out of the fare collection equation, meaning that there’s no need to install, maintain and repair a complex fare collection infrastructure. Open-loop fare collection means there’s no need for an agency to develop and maintain its own fare card system. The underlying payment systems are also extremely secure with payments linked to a credit account. Passengers with insufficient funds are flagged up immediately and can be denied travel.
Some AFC systems can consolidate numerous low-value transactions into a single consolidated credit card payment, reducing fees for both the operator and passenger alike.
Another great advantage of open architecture platforms is that it allows agencies to mix and match components, building a bespoke system that meets their needs. New technologies can be integrated without the need to overhaul the entire fare infrastructure. This flexible modular system allows for cost-effective incremental improvements.
Sustainable Revenue & A Future-Ready Service
While AFC solutions are unlikely to solve all the complex set of problems bus transit agencies currently face, they will be a key component.
Read our whitepaper – The 3 Biggest Challenges Facing Bus Agencies & One Smart Solution, to find out more about how AFC solutions can help bus companies create sustainable revenue and develop a future-ready service.
