Report to/Rapport au :
Transit Commission
Commission du transport en commun
14 September 2011 / le 14 septembre
2011
Transit Services/Services du transport en commun
Safety,
Business Services and Customer Relations/Sécu, Serv op & Relations client
613-842-3636 x2126, jane.wright@ottawa.ca
|
Ref N°: ACS2011-ICS-TRA-0020 |
That the
Transit Commission approve the principle of transferability and non-photo ID
requirements for the smart card, as well as the age category adjustments, as
detailed in this report, and that any resulting financial implications be
addressed through the budget process.
Que
la Commission du transport en commun approuve le principe de transférabilité et
les exigences d’identification sans photo pour la carte à puce, ainsi que les
ajustements aux tranches d’âge, comme il est expliqué en détail dans le présent
rapport, et que toute implication financière qui en découlera soit traitée par
le biais du processus budgétaire.
On
December 7, 2007, Council approved a partnership with the Greater Toronto Area
Fare System (GTAFS) and working with the PRESTO smart card system. PRESTO is a partnership between the
Government of Ontario, GO Transit, eight other transit systems in the Greater
Toronto / Hamilton area, and Ottawa, to implement a public transit smart card
system.
By
working with GTAFS and PRESTO to implement a smart card system in Ottawa, the
City will achieve significant cost savings, reduce implementation risks, and benefit
from the resources already committed by the Province. The PRESTO model, and experience in
implementing similar systems elsewhere, was an important element in designing,
developing and implementing a seamless smart card
system in Ottawa.
The
PRESTO system uses contactless smart cards and readers, which are considered
industry best practice because they enhance customer service, allow rapid
boarding, and provide increased security for both OC Transpo and its customers.
Customers are able to use their smart card both as a pass and as an e-purse.
Reloading of the card can be done remotely over the phone, the Internet (via home
or mobile devices), or at OC Transpo Sales and Information Centres and some
City Client Service Centres.
Updates have been provided to Council throughout the development of this
project, including:
·
August 2008 – Memo
sent to Council – progress update;
·
May 2009 – Amendment
to Smartcard Project Report (ACS2009-ICS-TRA-0004),
which detailed the revised commission structure of credit cards;
·
June 2010 – Technical
briefing, which outlined the progress of the project;
·
March 2011-
Information presented within the OC Transpo Marketing Plan; and
·
May 2011 –
Presentation to Transit Commission highlighting milestones and implementation
schedule.
The
vision statement for PRESTO is: To provide
eTransit fare and information management systems that improve client service
while enabling revenue collection and efficient operations for Ontario Transit
Agencies.
The PRESTO system is
already operating on a number of Ontario transit systems, including GO Transit
Rail, TTC (limited stations), Brampton
Transit, Burlington Transit, Durham Region Transit, Hamilton Street Railway, Mississauga
Transit, Oakville Transit and York Region Transit. As of September 12, 2011, PRESTO has issued
71,500 smart cards with total fare payments at $35.5M.
PRESTO
is an operating unit of Metrolinx, an agency of the Government of Ontario under
the Metrolinx Act, 2006. Pursuant to Council direction (ACS2007-PTE-TRA-0010), OC Transpo signed
the PRESTO Smartcard Procurement and Operating Agreement with Metrolinx on
October 19, 2009. In doing so, the City
committed to the PRESTO model, which includes no photo identification on the
card.
In
summer 2012, the City of Ottawa will begin the roll-out phase of the PRESTO
smart card. The smart card will provide
OC Transpo customers with a new, secure and convenient way to purchase fares
and bus passes.
In order to finalize the business plan and implementation strategy for
the PRESTO smart card, the issue of transferability must be addressed.
Photo ID
While
photo identification is currently being used on OC Transpo passes, research and
new technology confirm that this requirement is no longer necessary.
Photo
ID serves two purposes. The first is to limit pass transferability by linking a
particular bus pass to a specific customer. The second is to have
identification immediately available at the time of inspection so that proof of
payment can be established. Currently,
OC Transpo passes consist of two pieces – a photo ID and a monthly paper
voucher – both of which have corresponding validation numbers.
The
key for inspection purposes is not the photo ID, but the corresponding numbers
between the picture identification and the pass.
In
the 2006 the Revenue Processes Audit of OC Transpo and Para Transpo, and the
follow-up audit in 2009, photo IDs were examined by the City’s Auditor
General. The recommendations pertaining
to passes and photo identification dealt with their handling, issuance,
information tracking, presentation and communication. The intent of the Auditor General’s
recommendations was to secure fare collection, ticket and pass distribution and
ensure accountability by OC Transpo. The
smart card is an important means of achieving these outcomes.
DISCUSSION
As
a result of the Auditor General’s recommendations, as well as discussions with
PRESTO, and lessons learned from the other municipalities, staff undertook an
analysis and identified the best option moving forward to prove ownership of a
pass. This option takes into account
issues such as security, integrity of the discounted fare, technology,
transferability and customer service.
Based
on the results, staff concluded that the best option is to provide OC Transpo
customers with a smart card that does not require photo ID (to prove ownership)
and is legally transferable within class.
Importantly, this model is compatible with PRESTO.
It
is to be noted that transferability will be restricted to the same fare
category (class). For example, a Student
Pass may be used by another student but not by someone requiring an Adult Pass;
a Senior Pass may be used by another senior, but not by a student. An Adult Pass, however, could be used by
anyone as it represents the highest level of pass and provides no discount.
Benefits of
Transferability
The
most important attribute of providing a transferable smart card is customer
convenience. Industry best practices
confirm that enhanced customer convenience increases a customer’s commitment to
the service, promotes transit to infrequent riders and improves the reputation
of the transit provider.
In
the case of a transferable smart card, customers will benefit from increased
convenience in many ways. Specifically,
customers can:
· Purchase fares on-line, eliminating the requirement to
visit a store or client centre to purchase monthly pass/tickets;
· Purchase fares and monthly passes to best suit their
day-to-day travel needs;
· Share and transfer their PRESTO smart card within the
same fare category;
· Carry a card instead of tickets; and
· Not worry about having cash (or exact change).
For
OC Transpo and the customer, there would be an avoidance of an additional
administrative requirement by not having to get an OC Transpo issued photo
identification card (annual event for students).
It is expected that ridership would increase because of improved customer
convenience, a strengthened OC Transpo brand, and potential customers would
have more opportunity to use the system.
Customers using another person’s card would account for part of the ridership
increase, but it is anticipated that new customers purchasing their own pass or
e-purse in the future would be attracted because of improved customer
experience.
In line with the experience
of other transit agencies around the world who have adopted this model, a
non-photo ID card will also enhance service for OC Transpo customers by:
·
Increasing
promotion opportunities for OC Transpo to infrequent or potential new customers
that would generally not use OC Transpo.
·
Reducing the cost
of a smart card (specialized equipment and administration required to do photo
ID increases costs) – $6 card issuance fee, but an additional $8.50 charge to
customers for photo ID.
· Reducing line-ups at Sales and Information Centres and
the City Client Service Centre at City Hall.
·
Integrating
PRESTO smart card with partnering municipalities – for example, in the future
OC Transpo customers will be able to use their card (e-purse) when they travel
to Toronto (GO Transit, TTC, etc.). This would
also work for people travelling to Ottawa from the partnering municipalities
who have a PRESTO smart card and will use OC Transpo.
·
Supporting the
PRESTO business model where customers can purchase their mode of transit fare
payment from their home or through their personal PDA (smartphone, tablet,
laptop, etc.). This allows greater access to all customers (rural, for example)
because they may purchase online.
·
Ensuring the security
of the PRESTO smart card is more advanced than current fare instruments.
The full benefits of the PRESTO smart card – including
the ability to purchase fare instruments online - will not be fully realized
with a photo ID requirement.
Risks and Mitigation Factors of Transferability
At OC Transpo’s request, KPMG prepared an assessment
of the potential impact of transferability on fare revenue, which incorporated
a number of potential risks and benefits and included an analysis of trip
patterns by households.
Using various assumptions, KPMG identified a range of
potential fare revenue loss between $170K and $2.6M. This analysis is in line
with OC Transpo’s original conservative estimate that customers transferring
their transit pass could potentially represent an annual revenue loss of up to
$1.5M.
OC Transpo based their analysis on the very extensive
Origin-Destination Survey 2005, which provides a wealth of information on
travel patterns in Ottawa and the surrounding area. The survey concluded that
on a typical weekday, approximately 100,000 households in Ottawa have at least
one member making a trip by transit. Of these, 960 households – or roughly 1
per cent of all households making transit trips – have another household member
also making a transit trip who could have used a transferable pass given the
arrival time of the first person’s trip (typically returning home) and the
departure time of the second person’s trip.
It is safe to assume that only one round trip per day
could be made on a transferred pass for any of those 960 households, given
typical trip times of day and trip lengths. Annualizing this number of trips
(including proportions for weekend days) yields approximately 560,000 one-way
trips. Using the conservative assumption of a $2.60 fare per trip (i.e. no pass
used, no discounted fare, or no valid transfer time for the return leg),
results in $1.5M revenue lost annually.
KPMG provided OC
Transpo with additional information based on composition of households and
experiences in Toronto. However, this
analysis does not provide the in-depth information required by OC Transpo
(actual trips made), nor does it provide an “apples to apples” approach in the
case of the Toronto experience.
In the end, the risks of fare revenue losses are
reduced by practical considerations for many households, starting with the
logistics and timeliness of physically passing a shared card from hand to hand.
These risks are
further offset, in part, by lower administrative costs, related to the issuance
and delivery of photo IDs (e.g. new specialized photo equipment required), and
privacy issues related to the collection, storage and use of customer
photos. The cost of new
equipment to permit printing of pictures is estimated at $120K plus $75K per
year in operating costs. These start-up
costs would significantly increase if additional equipment was purchased to
set-up temporary sites to accommodate the increased volume during the
deployment of the PRESTO smart card – allowing transferability would eliminate
these costs entirely.
Based on the
mitigation factors and lower administrative costs outlined within this report,
OC Transpo believes the $1.5M estimate of potential revenue loss is high and
that the real figure will likely be much less – closer to the point of revenue
neutrality.
Further,
providing a PRESTO smart card that is transferable significantly reduces the
risk of fraud and counterfeiting. The
smart card also improves fare collection by eliminating tickets and reducing
cash fares. Mitigation of
transferability is also achieved by:
As mentioned, the
transferability of the PRESTO smart card will provide current OC Transpo
customers with many benefits while, at the same time, promote the service to
infrequent and non-users. Importantly, transferability will streamline the fare
payment process, both for OC Transpo and for the customer.
The
implementation of photo ID smart cards will be much more difficult to align
with PRESTO and the partnering transit agencies.
For example, a
non-transferable smart card would require a mandatory photo ID for all transit
passes. For this, a number of additional
steps – at an additional cost to the customer - would be required for customers
to still have the ability to order their passes remotely after they had
purchased their photo ID.
If a photo ID is required for
all smart cards then a transit pass could not be purchased initially online and
each of the approximately 55,000 OC
Transpo monthly pass holders would be required to visit a Sales &
Information Centre to purchase their PRESTO smart card to have a photo taken.
This would result in long line-ups for photo IDs during the launch. Additionally, a
number of temporary sites would need to be set up to accommodate customer
demand.
Of
the approximately 30,000 adult monthly pass holders, there would be no benefit
to ordering their card on-line as a visit to an OC Transpo facility would be
required to procure a photo. The volume
of customers that would require photos during a relatively short time frame
would require additional resources by OC Transpo and add to the costs of
implementation.
In
more practical terms, a photo ID requirement would delay deployment of the
PRESTO system as it would put OC Transpo outside the PRESTO operating model.
Also, a number of steps would need to be undertaken and endorsement by the
Office of the Information and Privacy Commission of Ontario would be required
to make these changes.
Fare Enforcement
Transit
Fare Inspectors and Special Constables are responsible for enforcing the
Transit By-law proof of payment requirements. The Transit By-law currently
requires that customers produce a transit pass that includes both a renewable
voucher and an OC Transpo issued photo identification card. From the perspective
of a Fare Inspector or Special Constable, the principal piece of information
for verification is the corresponding numbers on the photo identification card
and the renewable voucher, rather than the photo itself.
If
OC Transpo permits transferability of the PRESTO smart card within class and
repeals the current photo identification card component of the transit pass
from the Transit By-law, as recommended in this report, adjustments to fare
enforcement processes and amendments to the Transit By-law will be
required. As a result of a new
transferable-within-class pass structure, Transit Fare Inspectors and Special
Constables will no longer verify proof of ownership of passes but instead
verify proof of payment and proof of discounted fare eligibility.
In
order to provide Transit Fare Inspectors and Special Constables with the
ability to verify customer entitlement to use a student or senior pass the
Transit By-law will require that as a condition of use of the pass the customer
meet the eligibility rules for the pass and that the customer produce their
driver’s license, Ontario photo card, or other photo ID as specified in the
By-law. In addition, the Transit By-law will be amended to include the offences
of being ineligible to use a student or senior pass and failing to produce
valid identification, thereby allowing Law Enforcement the ability to issue
Provincial Offence Notices to customers who fail to produce the required ID.
In
conclusion, OC Transpo expects that fare enforcement processes will be
simplified when the focus of fare inspection shifts from confirmation of proof
of pass-holder ownership and proof of payment to verification of customer
entitlement. Fare Inspectors and Special
Constables will only occasionally require a customer to produce ID, and only
customers who hold a student or senior pass will be required to produce ID.
Most importantly, many of the issues seen currently with OC Transpo issued
photo identification cards, such as Provincial Offence Notices issued to
customers who have not recorded their OC Transpo photo identification card
number on their voucher, will be eliminated by the Smartcard implementation.
By-law Amendment
PRESTO
has built its operating model as a non-ID card with transferability as an
option. Since the present Transit By-law
does not provide for transferability, it is recommended that staff be directed
to amend the By-law to permit transferability, as well as, to remove the OC
Transpo photo identification card requirement, and have these and other amendments
related to this report brought forward in a report for Transit Commission and
Council approval.
In
addition, other by-law amendments may be required to address discounted fare
categories and blocks, as approved by Council. Specifically, there are two
areas which will require alignment with PRESTO’s universal age rules: child
class and student class. At OC Transpo,
a child age is currently considered to be 6-11, under the universal class rules
a child is 6-12. This extends the child fare by one year. The student age rule is anyone that is in
full time school. The universal class
rules define a student as 13-19.
However, this will have no impact on customers as students age 20-64
will be able to access a student bus pass through a special discounted fare
category.
Privacy
Transit
Services is subject to the protection of privacy requirements found in Part II
of the Municipal Freedom of Information
and Protection of Privacy Act (MFIPPA) in the same manner as the City. In addition, Transit Services is also subject
to the Federal Personal Information
Protection and Electronic Documents Act (“PIPEDA”) with respect to employee
information.
Both
laws prescribe rules that govern the manner in which personal information is
collected, used and disclosed. The
Privacy Impact Assessment Final Report for the PRESTO System Project (the
“PRESTO PIA”) dated August 04, 2009, provides a detailed privacy analysis of
the PRESTO System Project. The PRESTO PIA was completed by the Office of the
Chief Information and Privacy Officer (OCIPO) of the Ministry of Government
Services.
Section
2.4 of the PRESTO PIA sets-out a key assumption that the “PRESTO project will
not collect or apply photos of cardholders to the PRESTO card” and further
states that “[a]ny change in this decision should be subject to further privacy
analysis.”
OCIPO
emphasizes the need for a further privacy analysis should photos be collected
or applied because a photograph often constitutes “personal” information as
defined under MFIPPA. Any such further privacy analysis would need to confirm
the need to collect the photographs for fare enforcement purposes.
The
privacy analysis would also analyze the risk of an unauthorized use and/or
disclosure of customer personal information and make findings on how the City
ought to address that risk. The current
OC Transpo practice is to use “hard copy” photo IDs, which means they are not
stored electronically. Any further privacy analysis would need to include a
consideration of security issues associated with the storage of data and
ensuring that customer photographs are used only for fare enforcement purposes.
If OC Transpo were to not collect customer photos, these additional
privacy risks would be eliminated and OC Transpo could continue to rely on the
findings of the PRESTO PIA.
U-Pass
Currently,
the U-Pass is out of the scope of this phase of the project and will remain a
paper-based transit fare. This is due
to the student associations’ role in the issuance and distribution of their
institutional passes with photo ID because of the unique specifications of
eligibility for student groups.
An
assessment may be completed in conjunction with the universities and with PRESTO
at a later stage of development.
ENVIRONMENTAL IMPLICATIONS
The convenience of providing a
transferable bus pass (within class) and e-purse should increase public transit
usage. As a result, more ridership would
reduce the number of vehicles on the road and reduce greenhouse gas emissions.
STRATEGIC DIRECTION
B1 – Achieve 30 per cent modal split by 2021
H4 – Deliver agreed to level of service at the lowest possible cost.
Public consultation has occurred through the OC Transpo Usage and
Attitude Survey in which transferability was presented as a topic for
feedback. This survey is conducted every
year through telephone interviews with 2,000 randomly selected residents, whether
they are OC Transpo users or not.
The 2010 Survey demonstrated how very favourably survey
respondents react to the notion of a smart card. The research showed that smart
card has received the highest "anticipatory" rating by customers
compared to other OC Transpo initiatives. When asked, people cite convenience
as the main reason they take transit. Once the survey digs deeper into why
people are so favourable to smart cards it is because they see the technology
as serving to add even more convenience.
Examples of questions from the 2010 Usage and Attitude
Survey:
1.
If instead of lining up each month to
purchase or renew a monthly pass, customers could renew their smart card
monthly pass online, by phone, or at a self-serve kiosk.
·
95 percent positive response
2.
If instead of requiring the correct change
or number of tickets, a smart card reader automatically deducted the
appropriate fare when boarding the bus.
·
92 percent positive response
3.
If instead of being non-transferable,
smart card transit passes were transferable.
·
85 percent positive response
4. Once OC Transpo implements a
smart card fare payment system, will your transit use increase?
·
64 percent answered “the same”
·
25 percent answered “slightly more”
·
6 per cent answered “significantly more”
As noted by staff in this report, if the decision is
to include a customer photo as part of the PRESTO smart card system then this
would necessitate a further Privacy Impact Analysis in order to ensure full
compliance with protection of privacy obligations in applicable
legislation.
The current Transit By-law does not account for the
PRESTO smart card as a fare instrument, and, furthermore, does not allow for
the transferability of fare instruments.
Should Council approve the 2012 Business Plan as discussed in this
report, authority should also be sought at that time for By-law amendments
related to the implementation of the smart card. Amendments will be required to allow
transferability and to establish requirements in the By-law for proof of
payment and proof of discounted fare eligibility for smart card users,
including the required regulatory provisions and prohibitions. Amendments to the Transit By-law will be
required to eliminate the photo ID as part of OC Transpo discounted fare
instruments, as recommended in this report.
Furthermore, the PRESTO Universal classes will need to be reflected in
the By-law and the redundant OC Transpo categories will be deleted where
required. Furthermore, any corresponding
changes to the related fares of each category will also be required.
RISK MANAGEMENT IMPLICATIONS
There are
risk implications. These risks have been identified and explained in the
report and are being managed by the appropriate staff.
RURAL IMPLICATIONS
N/A
Any budget implications will be addressed during the
2012 Business Plan and budget process.
OC Transpo estimates that the impact of PRESTO smart
card transferability on revenue will be neutral.
The restriction of transferability to within the same
fare category, coupled with the tools made available to Fare Inspectors and
Special Constables to validate a fare category, will serve to minimize
potential revenue losses.
While it will be difficult to isolate the impact of
the above upon implementation, we will monitor revenues to assess any change in
trends over time or from anticipated results and take action where
required.
The broader implications of the PRESTO smart card must
also be considered as it will introduce a significant change from current
processes, including both financial and efficiency changes.
IT IMPLICATIONS
There are no IT implications
directly related to the issue of smart card transferability.
N/A
Following Transit Commission approval, OC Transpo will
prepare a report for Transit Commission and Council regarding the proposed
By-law changes.