Challenges and Opportunities for the Future Roll-Out of Transport Smartcards in the UK Professor

The technical paper proposes to analyse and discuss the trends and developments in the UK transport smartcard market and discuss the technical, operational and business challenges and opportunities for the future roll out of innovative transport smartcard schemes in the UK. The use of an electronic smart card as an alternative means for users to access and pay for transport services is now emerging as a viable option for many operators. With the recent introduction of the Oyster smartcard by Transport for London and the plans by a number of PTEs (Passenger Transport Executives) and transport operators to launch smartcard ticketing, the UK is on the verge of an influx of transport and Local Authority-led smartcard schemes. Interoperability between schemes is being tackled by ITSO (Integrated Transport Smartcard Organisation) which will deliver a final version of a National Specification for transport smartcards in early 2004. The proposed paper for the ITS congress examines what smartcards are, why smart cards are now being widely adopted and ultimately will consider their benefits and impact on the public transport industry. Moreover new technical advances in smartcards such as their fusion with mobile phones, the use of low cost tickets, RFID and long range reading of cards and the implementation of biometric templates will all be considered for the UK market taking into account new policy drivers such as ID cards, pay as you drive, interoperable smartcard ticketing for public transport and transport security requirements. Obviously, Smart card technology is by no means new; it was invented more than 30 years ago and implementations have been made with smart cards for almost two decades. However in the transport sector many of the early pioneering trial of smartcard ticketing were based upon a technology-push rather than a market-pull which created a number of spectacular (and costly) failures (Blythe 1994 and Blythe 1997) which largely discourage the UK transport industry from investing in the technology throughout most of the 1990s. Notwithstanding this, by the late 1990s there was a gradual realisation in the UK transport industry that there may well be some real benefits for public transport in exploring the adoption of smart card ticketing, following the success of large-scale electronic ticketing schemes in Asia, leading examples being Hong Kong and Seoul, Korea. Small scale demonstrator schemes also emerged in the UK with varying degrees of success, however what they did achieve was to foster dialogue and awareness within the transport industry of smart cards and their capabilities. This also led to a realisation that potentially there could be a lot of uncoordinated and non-interoperable electronic ticketing schemes across the UK – which in a stroke would inhibit one of the key benefits of a smart card, namely the ability of the card to hold contracts and tickets with a number of different operators to facilitate, if wished for, seamless ticketing between public transport operators and/or between different operating regions of the UK. The then DETRs (now DfTs) White Paper ‘ A New Deal for Transport’ published in July 1998 (DETR, 1998), explicitly mentioned smartcards as the future of high-quality ‘integrated ticketing’ in the UK and directly led to the formation in 1999 of ITSO to address the integration and interoperability issue between operators. Since then the UK has begun to emerge as a leading proponent of innovative smartcard solutions to support the wider transport and social inclusion objectives of the government, these have included initiatives such as: National ID smartcard to be issued by the Home Office; The National Smartcard Project funded by the Office of the Deputy Primeminister with the explicit aim of developing guidelines and common solutions for local government smartcards to support the citizen, a secure ID, e-government transactions and mobility; ITSO the national transport smartcard interoperable specification for passenger fare payments; The DVLAs (Driver and Vehicle Licensing Agency) plans to replace the existing driving licence by a smartcard with biometric authentication; The Connexions smartcard for the under 21s (and its derivatives in different countries of the UK); and The move towards a National road user charging scheme which may see the replacement of the conventional paper car tax disc with a smartcard or smartcard with transponder. The paper shall review and analyse each of the above UK initiative and put into context how these various schemes will contribute to the evolution of robust, national smartcard schemes for ITS-related applications in the UK – and what other countries may learn from these experiences. Moreover the paper shall investigate how new technologies such as mobile-phone based ticketing may open up the market further. Taking this latter theme further: As seen from the above list, transport ticketing is only one application for smartcards, and use of mobile telephones for ticketing is not a major business objective for telephone companies. In Hong Kong, the success of Octopus for transport users led to consumer and retailer pressure to extend the use of the cards to small value purchases. This too was so successful that Octopus is now a registered financial institution and its cards are used for an increasing range of retain transactions. In London, local authority entitlement smartcards for leisure, library and similar services have been combined with Oyster ticketing on a single card. Many other multi-application proposals are being developed in the UK. CALYPSO in a number of European countries also offers multi-application as well as transport ticketing, as do smartcards in Moscow. Recent developments in security for contactless cards have led the financial sector to take an increased interest and contactless electronic purchase cards are now available from American Express, Mastercard and Visa (Contactless Cards, 2004). Integration of ticketing with other social and financial applications is therefore perfectly possible, and sharing the overhead costs of card issue and replacement, of back offices and of communications, networks will drive down the costs of implementing systems to the benefit of public transport operators. Multi-application is therefore one way of making systems more affordable. The other significant problem is the occasional travellers and for them both the low cost card and mobile telephony offer potential solutions. By encouraging the use of mobile telephones and e-ticketing for the occasional traveller, together with smartcards, a comprehensive ticketing offer can be envisaged. However, there are further opportunities with mobile telephones which, after all already have a chip in the SIM. If the interfaces and security can be developed so that the chip can operate over a contactless interface, then the phone itself can carry the tickets eliminating the need for a visual interface for SMS. This and other technological challenges remain to be solved but with the pace of change in communications and chip technology, within the next decade we could see further convergence. Similarly, there are opportunities for integration, as already noted, with other services based on information and communication technologies. Already databases of ticket holders are used by operators such as Anglia Railways in the UK to provide automatically information on delays and disruption affecting regular journeys by email or SMS to mobile phones or PDAs prior to travel. Such information could also be given via kiosks by inserting the customer’s smart device which would automatically initiate presentation of the relevant information (such as those being installed into e-kiosks in the Tyne and Wear region of the UK).