Integrated Ticketing

This measure was provided by INSTITUTE FOR TRANSPORT STUDIES (ITS) in 2014 under the CH4LLENGE project, financed by the European Commission.


Integrated ticketing allows a passenger to transfer within or between different public transport modes using a single ticket for their entire journey. Many examples of integrated ticketing can be found around the world, with the majority of ticketing taking the form of paper tickets with magnetic stripes (e.g. the London Travelcard) or, increasingly, smart cards (e.g. the Oyster card in London or Hong Kong’s Octopus card) which store much more detailed information about the traveller and how they travel and allow travellers to upload credit for expenditure on either the transport system or other activities such as retail.

Integrated ticketing can achieve large user benefits. In particular existing and new passengers will benefit from reduced boarding times (buses) and greater throughput at rail/metro barriers and will no longer have to understand complex tariff structures and travel conditions from different, often competing public transport operators. Time can also be saved as a result of not having to purchase different tickets. Financially, there can also be cost savings with customers benefiting from discounted, flexible ticketing.

For operators there are benefits from faster boarding for customers enabling more efficient scheduling of services and potential reduction in operating costs, reduced fraud as travellers are paying for their entire journey in advance and potentially more customers as a result of modal switch from car and generated trips by existing users.

For transport authorities and local/central government integrated ticketing can help reduce congestion levels by attracting car users to switch mode for certain trips. This in turn can reduce environmental pollution and improve safety.

In order to realise these benefits and especially to enhance them, case study evidence suggests that the introduction of integrated ticketing needs to be accompanied by a well-designed information and marketing campaign to fully explain the new ticketing to existing public transport users and potential public transport users; and in addition actual improvements in the quality and service levels of public transport.

Introduction

Ticketing is the mechanism by which public transport operators charge passengers for travelling on their services.  If a passenger wishes to travel on the public transport services of more than one operator or/and across more than one mode then they face the prospect of having to purchase more than one ticket in order to complete their journey, e.g. a bus ticket to get from their home to the train station and then a train ticket to travel by train to their destination. Integrated ticketing circumvents this by allowing a passenger to ‘transfer within or between different public transport modes’ (Wikipedia, 2014) using a single ticket for their entire journey.   

Many examples of integrated ticketing can be found around the world, with the majority of ticketing taking the forms of magnetic striped cards (e.g. the London Travelcard) or, increasingly, smart cards (e.g. the Oyster card in London or Hong Kong’s Octopus card – Puhe et al, 2014).  Recent developments have seen a push towards mobile ticketing using Near Field Communication (NFC) enabled smart phones or bank cards (Rodrigues et al., 2014, Puhe et al, 2014).  There has also been a movement to offer additional complementary services with the integrated ticket, for example discounted entry to tourist attractions (Swiss Pass) or the opportunity to purchase goods and services via a smart card ticket.

Terminology

Whilst this instrument is entitled ‘Integrated Ticketing’ there will be inevitable reference to some the technology that is being utilised to ensure more efficient integrating ticketing. ‘Magnetic strip cards’ are still widely used and can be either paper or plastic based.  They store information in the magnetic strip that inform ‘readers’ (devices which read the card) what travel service the bearer of the card is entitled to use and for what period of time they can use it.

‘Smart cards’ have an embedded microchip which can store, process and write data securely.  From a travel perspective they provide much more useful information to transport operators as they contain personal details alongside journey details which can be uploaded and analysed.  They can either be pre-loaded or be re-loadable to enable cash to be converted in an electronic transaction (Smart Card Alliance, 2011).  Smart cards can either be contact-based (e.g. needs to physically touch a reader) or contactless (needs to be placed within 10 cm of a reader).

Mobile ticketing enables the passenger to purchase and download a virtual ticket onto a mobile phone, tablet or PDA (personal digital assistant). Whilst several different technologies can be used to do this the technology that appears to be the market leader is contactless NFC (near field communication) which stores information in the NFC memory of the mobile device being used.

Description

As a concept, integrated ticketing allows a passenger to transfer within the same or/and between different public transport modes using a single ticket for their entire journey. In order to achieve this a number of key stakeholders (transport companies, transport authorities and other government bodies) have to agree on a common fare structure and travel conditions plus a method of apportioning revenue from the use of an integrated ticket.  Increasingly the use of smart card technology means that additional stakeholders (telecommunication and financial transaction companies) are also involved, potentially adding to both the complexity of the task and the cost.

Once achieved, integrating ticketing can lead to passengers benefiting from being able to make more efficient and much simpler journeys.  In particular passengers no longer have to understand complex tariff structures and travel conditions from different, often competing public transport operators.  They also save time by not having to purchase different tickets and, with the advent of smart cards, from quicker boarding times.  Financially, there can also be cost savings with customers benefiting from discounted, flexible ticketing.

For operators there are also benefits in the form of faster boarding for customers enabling more efficient scheduling of services and potential reduction in operating costs, reduced fraud as travellers are paying for all their journey in advance and potentially more customers (with modal switch from car and generated trips from existing users, see Matas, 2004 & Abrate et al., 2009). 

For transport authorities and local/central government integrated ticketing can help reduce congestion levels by attracting car users to switch mode for certain trips.  This in turn can reduce environmental pollution and improve safety.

In order to realise these benefits and especially to enhance them, case study evidence suggests that the introduction of integrated ticketing needs to be accompanied by a well-designed information and marketing campaign to fully explain the new ticketing to existing public transport users and potential public transport users and, in addition, actual improvements in the quality and service levels of public transport (Mirco & Daniela, 2013).

The delivery of integrated ticketing takes various forms from paper based tickets to smart cards.  The advent of the latter has opened up numerous other benefits for both passengers and operators (Weinstein, 2009), for example, better operational information for the latter and automatic lowest fare charging for the former.  Examples of integrated ticketing are widespread (see Table below) and tend to be focused on large cities and their surrounding conurbations.  There are very few national integrated ticketing examples (e.g. SwissPass) due to the complexities in reaching agreements with the very large number of stakeholders that this would entail.

Ticket Name

Location

Technology

Scope

No. of Users

Oyster

London, UK

Contactless smart card (CSC)

Public transport

43 million cards in 2012

Mi Muovo

Emilia Romagna region, Italy

CSC

Public transport

0.2 million cards issued

Octopus

Hong Kong, China

RFID smart card

Public transport, tourism, retail shopping, eGovernment

>10 million cards issued by 2007

T-money

Seoul, S.Korea

RFID smart card

Public transport, retail

25 million issued by 2009

EZ link

Singapore

RFID smart card, NFC smart phones

Transport, tourism, retail shopping, e-Government

12 million issued by 2012

Ventra

Chicago, USA

RFID smart card

Public transport, retail

n.a.

Cityzi

Nice, France

NFC smart phones or simcards

Public transport, retail, loyalty program

n.a.

Iamsterdam City Card

Amsterdam, Netherlands

RFID smart card

Public transport, tourism

0.13 million a year

St Petersburg City Card

St Petersburg, Russia

Pre-loaded RFID smart card

Public transport, tourism

n.a,

Smartcities Card

Southampton, UK

Dual contact & contactless smart card

Public transport, library, leisure, toll and loyalty program

0.08 million issued by 2012

Source:  Derived from Puhe et al., 2014

There is a danger though in blurring the lines between what is attributable to the introduction of integrated ticketing per se and to the advancement in ticketing technology.  Our focus for the rest of this assessment will attempt to be on the former.

Why introduce integrated ticketing?

Integrated ticketing allows a passenger to transfer within the same or/and between different public transport modes using a single ticket for their entire journey. The introduction of integrated ticketing enables passengers to benefit from more efficient and easier to understand journeys. In particular passengers:

  • No longer have to understand complex tariff structures and travel conditions from different, often competing public transport operators; 
  • Can save time from not having to purchase different tickets;
  • Can benefit from quicker boarding times given a reduction in cash fares;
  • Can benefit financially from discounted, flexible ticketing.

For operators there are benefits in the form of:

  • More efficient scheduling of services and potential reduction in operating costs as a result of faster boarding times;
  • Reduced fraud as travellers are paying for all of their journeys in advance;
  • Increased revenues, with modal switch from car and generated trips from existing users.

For transport authorities and local/central government integrated ticketing can:

  • Help reduce congestion levels by attracting car users to switch to public transport for or certain trips; 
  • In turn can reduce environmental pollution and improve safety;
  • Provide a sense of community.

In order to achieve integrated ticketing a number of key stakeholders (transport companies, transport authorities and other government bodies) have to agree on a common fare structure and travel conditions plus a method of apportioning revenue from the use of an integrated ticket.  Achieving such agreement is normally the main barrier to the implementation of integrated ticketing.  This is especially the case where there is fierce competition between public transport companies and there will be resistance to surrender any market position (DfT, 2009).

Increasingly the use of smart card technology means that additional stakeholders (telecommunication and financial transaction companies are involved in the consultation, possibly adding to both the complexity of the task and the cost.

The other main barrier to the introduction of integrated ticketing is the size of the initial investment needed to achieve compatibility between transport operators with regard to the acceptance and ability to process a single integrated ticket.  There is an additional issue in who bears the cost of this initial investment.  These costs can differ according to how the integrated ticketing is introduced (e.g. paper based system vs smartcard system) and the physical coverage of the ticket (e.g. Southampton vs Greater London).  It would appear that regardless of the system adopted the majority of the investment cost is shouldered or subsidised by a transport authority or central/local government in order to facilitate the launch of the integrated ticketing scheme.  Once launched, the operating costs of the system prove to be less of a barrier.

Demand impacts

Responses and situations
Response Reduction in road traffic Expected in situations
Unlikely to alter the departure time of existing car users.
Unlikely to alter the route of existing car users.
Unlikely to alter the destinations of existing car users.
Main beneficiaries of an integrated ticket will be existing public transport users.  However, expected that some modest mode transfer away from car users so reduction in overall road traffic.
Greater simplicity and reduced generalised PT travel costs likely to lead to shift in trips away from car to PT and reduction in overall road traffic.
May encourage certain segments of travellers (e.g. no dependants, low income) to sell car. Will also depend upon other geographic factors and levels of PT provision & road congestion (e.g. Oyster card in London more likely to succeed vs Smartcities card in Southampton).
Unlikely to lead to house moves by existing car users.
= Weakest possible response = Strongest possible positive response
= Weakest possible negative response = Strongest possible negative response
= No response

Short and long run demand responses

Demand responses
Response - 1st year 2-4 years 5 years 10+ years
Unlikely to alter, over time, the departure time of existing car users.
  Unlikely to alter, over time, the route of existing car users.
  Unlikely to alter, over time, the destinations of existing car users.
  Expect greater modal switch from car to PT over time as the benefits of the integrated ticket becomes apparent.
  Expect greater modal switch from car to PT over time as the benefits of the integrated ticket becomes apparent.
  Maybe a greater propensity to sell the car if actual improvements to the PT system are also put in place.
  On its own not enough to lead to relocation of homes.
= Weakest possible response = Strongest possible positive response
= Weakest possible negative response = Strongest possible negative response
= No response

Supply impacts

In a purely physical sense integrated ticketing will not increase the supply of public transport (PT) per se, although its introduction is sometimes accompanied by improvements in PT service levels (Mirco, 2013).  However, by overcoming a number of key barriers that might have prevented travellers from using certain PT modes (e.g. information barriers), the introduction of integrated ticketing can lead to an increase in PT supply (available PT options) for certain individuals.  In addition, reductions in boarding times may enable PT suppliers to schedule more PT services than is currently the case.  Similarly, increases in patronage may also lead to corresponding additional services. 

Financing requirements

The financing arrangements for integrated ticketing will vary depending upon the scale of the arrangement and the type of ticketing system in place.  A paper based system is likely to be less costly to implement than a smart card system but may not realise the same operational cost savings or user benefits.  Similarly, a small scale system will not require the same initial outlay as a large scale system but it is not clear if one considers the average cost per passenger what the difference would be.

Expected impact on key policy objectives

Contribution to objectives

Objective

Scale of contribution

Comment

  Produce user benefits (e.g. reduced boarding times) and operational benefits (e.g. operator cost savings) as well as potential reductions in congestion.  Likely, that the scale of such benefits will be magnified if smart card technology introduced at the same time.
  Reduction in car trips will improve the liveability of the streets.  Not likely to be a strong effect. 
  Modal shift away from car likely to lead to reduced CO2 and local air pollutants.
  From a user perspective, existing PT users likely to benefit the most.  A higher propensity for low income socially excluded citizens to be positively affected.
  Modal shift away from car likely to lead to reduced accident levels.
  Unlikely that integrated ticketing per se will lead to significant economic growth.  A possibility that a more efficient transport system will nurture additional growth.
  Costs are dependent upon the scale of the system and the technology behind it.  Usual for initial funding to be provided wholly or largely by a transport authority or central/local government. 
= Weakest possible positive contribution = Strongest possible positive contribution
= Weakest possible negative contribution = Strongest possible negative contribution
= No contribution

Expected impact on problems

Contribution to alleviation of key problems

Problem

Scale of contribution

Comment

Congestion

Whilst main beneficiary will be existing PT users it is possible that car users will switch to PT modes when they see improvements in time savings, ease of use and reduced/best value fares for PT travel.

Community impacts

The introduction of an integrated ticketing system can enhance community/civic pride in a city/area.
Environmental damage Modal switch away from car will result in reduced greenhouse gas emissions and local pollutants too.
Poor accessibility for those without a car and those with mobility impairments Reducing the barriers to travel on public transport will improve accessibility for both users and non-users, despite there not being any physical increase in the PT supply.
Social and geographical disadvantage Easing the barriers to travelling by public transport will improve accessibility for both existing PT users and non-users.  Given the pre-disposition of those socially disadvantaged to use PT, the introduction of integrated ticketing will be of benefit to this group.  Given that there will be no change in the physical provision of transport the impact on the geographically disadvantaged is likely to be minimal.
Accidents Modal switch away from car will result in reduced accident levels.
Poor economic growth Integrated ticketing per se is unlikely to lead  to significant economic growth.  A possibility that a more efficient transport system will nurture additional growth.
= Weakest possible positive contribution = Strongest possible positive contribution
= Weakest possible negative contribution = Strongest possible negative contribution
= No contribution

Expected winners and losers

Winners and losers

Group

Winners/Losers

Comment

Large scale freight and commercial traffic

Reduction in car traffic will reduce congestion levels and provide some benefit to freight and commercial traffic, particularly, those operating in urban areas.

Small businesses

If urban based likely to benefit from reduced congestion levels and from better access to the urban area by customers and employees.

High income car-users

High income is associated with high value of time. The congestion benefits associated with integrated ticketing will therefore provide some benefit to high income car users.
Low income car-users with poor access to public transport Low income car users will benefit from reduction in congestion.

All existing public transport users

Existing PT users will benefit strongly, particularly from time savings and convenience benefits.

People living adjacent to the area targeted

Will benefit from a reduction in congestion levels in the adjacent area.  May also be able to take advantage of the integrated ticketing it they use PT within the adjacent area.
Cyclists including children Will benefit from reduced congestion levels and the corresponding reduced risk of accidents.
People at higher risk of health problems exacerbated by poor air quality Will benefit from reduced congestion levels and the corresponding reduced levels of greenhouse gas and local air pollutants.

People making high value, important journeys

The time savings that result from integrated ticketing will result in strong benefits for this category of people.
The average car user Average car users will benefit from reduction in congestion. 
= Weakest possible benefit = Strongest possible positive benefit
= Weakest possible negative benefit = Strongest possible negative benefit
= Neither wins nor loses

Barriers to implementation

The main barrier to implementation is cost. Some concerns may be also raised about visual intrusion of new signs. However, by reducing the number of stationary road signs it is here suggested that properly designed VMS can reduce negative aesthetic impacts. Long distance car commuters are likely to benefit the most, which may raise political issues of disproportionate advantaging of this group in the future.

Scale of barriers
Barrier Scale Comment
Legal Depends upon the legal framework operating in the country. For example, in the UK it is very difficult to force transport operators to co-operate with each other to introduce an integrated ticket. In fact co-operation might be deemed anti-competitive  The legal context is closely related to that for service regulation.
Finance The size of this barrier will depend upon the scale of the integrated ticketing scheme and the technology behind it.  It is likely that transport authorities or local/central government will provide all or a large percentage of the initial investment required to ‘get the scheme off the ground’.
Governance Requires the agreement of key stakeholders who are involved in the integrated ticketing schemes. The barrier will be higher the more parties are involved in the agreement.
Political acceptability Likely to be minimal if no political barrier to the introduction of an integrated ticketing system.  Integrated ticketing is seen as bringing benefits to public transport users (voters) and a sense of civic pride.  Any opposition that does exist will largely surround issues regarding finance.
Public and stakeholder acceptability / Public acceptability likely to be high. The benefits of the scheme are seen to be high whilst the costs are not prohibitive. Other stakeholders, particularly PT operators, are likely to be less supportive, especially if there is considerable competition between them.
Technical feasibility Depends upon the scale of the system and the technology behind it. As more schemes come on line the technology is becoming more standardised and easier to roll out in new areas. Innovative features are still being added by different schemes in terms of the technology used (NFC mobile) and its application (retail).
= Minimal barrier = Most significant barrier

Our aim in this section is to try to provide evidence on performance that stems from the introduction of integrated ticketing alone.  Finding recent evidence for this is difficult, since the introduction of integrated ticketing is now normally associated with the introduction of smart card ticketing technology system at the same time, which by itself brings considerable benefits.

The case studies below attempt to do this and indeed one compares the cost benefit analysis from introducing just an integrated ticketing system on its own and introducing one alongside smart card technology.

Case Study 1 – London Travelcard

Context

London has a population of around 7 million, who are served by a range of different public transport systems (bus, Tube, light rail & river) under the control of Transport for London (TfL), the city’s transport authority (Booze & Co., 2009).  They are also served by heavy rail services which are operated and controlled by Train Operating Companies (TOCs).

In 1983 the London Travelcard was introduced, offering an integrated ticketing solution for travel around the city regardless of mode.   The system is based on a paper ticket incorporating a magnetic strip.  This facilitates entry and exit to Tube and heavy rail stations via insertion into electronic readers at unmanned gates and can be shown (flashed) to bus drivers when boarding buses. 
Pricing is based on a system of 6 concentric zones and time (e.g. all day, off peak) and can be purchased at ticket machines in London, manned ticket offices in London or bought whilst purchasing heavy rail tickets at any UK rail station/online.

A smartcard version of the travel card was introduced by TfL in 2003 but TfL still retain the Travelcard aimed at non-London residents who make infrequent trips to London. 

Impact on demand

A number of potential benefits have been linked with the introduction of integrated ticketing:

  • Journey time savings to existing passengers as a result of faster boarding on public transport, e.g. reduced number of cash payments.
  • Simplicity/convenience benefits resulting from not having to understand different fare structures, no need to carry cash, time savings when purchasing different tickets & possible cost savings from discounted ticketing.

In case of Travelcard and London, Fairhurst (1993) reports a series of demand statistics which are attributable to the effect of fares integration alone between 1983 & 1992:

    • A 10% increase in underground patronage
    • A 16% increase in bus patronage between
    • A 33% increase in underground passenger miles
    • A 20% increase in bus passenger miles.

This was supported by White (2009) who estimated that 32% of the patronage growth between 1999/00 and 2005/06 could be attributed to fares reform; in particular, the elimination of the interchange penalty and reductions in ‘dwell’ times and faster journey times as a result of integrated ticketing. 

The introduction of the Oyster card has reinforced these benefits with more than 85% of all rail and bus travel now made by Oyster (TfL, 2014).  In addition to Oyster, bus travellers are also able to make contactless payment using EMV enabled credit and debit cards, with 11 million bus journeys made since 2012.  The combined effect is that only 1% of bus journeys are now paid for using cash compared to 25% in 2000.  This has led to further reductions in boarding times and fewer delays.

In 2014 buses will become cashless and in addition EMV payments will be fully integrated across all transport modes, with the ability to mimic Oyster card, e.g. offer daily and weekly price capping and ability to check transactions on line.

Impact on supply

The introduction of integrated ticketing will not directly alter the supply of public transport miles but it will have a number of other indirect supply related impacts. 

Firstly, it will improve the operation of public transport services, in particular it will reduce boarding times, allowing more throughput of passengers at gates/bus stops and in effect improving transport supply. Part of the benefit results from the technology employed (automatic card readers) and another part is a result of not having to purchase another ticket or pay cash.  Weinstein (2009) notes that the operational capacity on the Tube with travel cards is 20 passengers per minute per gate, compared to 25 with Oyster.  For bus passengers, a move from cash fares to smartcard is estimated to have saved between 2-3 seconds per boarding (DfT, 2009).

Secondly, it will improve the operational performance of public transport, especially buses.  The reduced dwell and journey times noted by White (2009) will improve reliability and mean that public transport supply is spread more evenly throughout the day, reducing overcrowding and providing a perception of increased public transport supply. 

Third and finally, a combination of increased demand and operational cost savings may encourage public transport operators to increase public transport supply.    Figures from TfL (2014) would suggest that in London’s case public transport supply is increasing (see the table below) as demand grows.  Clearly, this cannot all be attributable to integrated ticketing but a sizeable proportion certainly can be according to Fairhurst (1993) and White (2009).

TfL Operational Performance – Passenger Journeys (vehicle kilometres) in Millions

Mode/Year

2008/9

2009/10

2010/11

2011/12

2012/13

Buses

2,247 (478)

2,257 (483)

2,289 (486)

2,344 (490)

2,335 (490)

Underground

1,089 (70.6)

1,065 (69.4)

1,107 (68.9)

1,171 (72.4)

1,229 (76.0)

Overground

33.2 (3.4)

34.3 (3.4)

57.2 (5.2)

102.6 (6.9)

124.6 (7.5)

Light Rail

66.0 (3.9)

69.2 (4.6)

78.3 (4.7)

86.2 (4.9)

100.0 (5.7)

Tramlink

27.0 (2.7)

26.5 (2.6)

27.9 (2.7)

28.5 (2.7)

30.1 (2.9)

Other impacts

Several other impacts have been linked to the introduction of integrated ticketing in the case of London, namely reductions in fraud and transaction/administration costs. In pre-Oyster days, the travelcard was credited with a 7% fall in the total revenue lost due to fare evasion between 1980 and 1992 (London Transport, 1993).  Further reductions were achieved after the introduction of gating in 2001, whilst the introduction of Oyster has led to a fall (from 2.5% to 1.5% of total journeys made) in the number of irregular journeys (trips made on the wrong ticket or with no ticket), representing a saving of £40 million per year  (DfT, 2009). 

Savings are also now made from an operational viewpoint with a large reduction in the number of tickets sold per day.  Between 2003-09 daily tickets sold dropped from 1.8 million to 0.6 million, with the largest drop seen on bus.  In 1999, 30% of bus journeys were based on cash transactions.  That fell to 19% with the advent of the travel card and then with the introduction of Oyster to 1.4% (DfT, 2009).  

There does not seem to be strong evidence on modal shift away from car, which may be explained by the London context itself, namely the strength of public transport already in the city.

Contribution to objectives
Objective Scale of contribution Comment
  Delivers strong time savings for PT users and operational benefits too.  These have been enhanced by combining with smart card technology and gating.
  No real evidence on modal shift away from car.
  No real evidence on modal shift away from car leading to reduced CO2 and local air pollutants.
  With strong benefits for existing PT users then likelihood that low income will benefit.  Some residual concern about moving away from cash fares on bus for occasional users.
  Lack of evidence on modal shift away from car and whether integrated ticketing has reduced accident levels.
  No evidence on direct economic growth as a result of integrated ticketing.  Strong possibility that the improved efficiency in the transport system will have led to a positive impact in this area.
  Not a major obstacle for London given the size and income generation of TfL. Strong reduction in fraud and operational savings have helped minimise the operational aspects of the scheme.
= Weakest possible positive contribution = Strongest possible positive contribution
= Weakest possible negative contribution = Strongest possible negative contribution
= No contribution

Case Study 2 – Smart & Integrated Ticketing for Scotland

Context

This case study reviews a study conducted by consultants PricewaterhouseCoopers for Transport Scotland.  The study assessed the business case for the introduction of a national smart and integrated ticketing system for Scotland.  The study  distinguishes between the costs and benefits that accrue from the introduction of a paper based integrated ticketing system and a smart card system  (PWC, 2011).  This allows us to present the paper based integrated ticketing analysis only.

As part of the background to the study it is noted that Transport Scotland already operates a Concessionary Fares Smartcard on buses throughout Scotland, with 1.1 million cards, 7,100 ETMs and back office IT support systems.  In addition First ScotRail (FSR) has piloted a smartcard season ticket between Glasgow and Edinburgh.  Non-smartcard examples of integrated ticketing include:

  • Strathclyde Partnership for Transport (SPT) – ZoneCard, DayTripper and Roundabout.
  • East Central Scotland – OneTicket
  • National Rail services – Plusbus.

The study draws on a review of evidence and in particular draws upon a Booz & Co  (2009) study of integrated ticketing in major urban areas and  found:

  • Substantial increases in patronage, in the range of 6% to 20%, with some transport modes experiencing increases to the order of 40%;
  • Limited evidence to support increased revenues, with the reported increase varying widely from a 1% to a 12.6% increase in total revenue;
  • Limited quantitative evidence to support a link between modal shift and fare integration, with some case studies suggesting an overall increase in public transport usage;
  • Some evidence to suggest improved satisfaction from fare integration primary due to increased convenience and fare savings;
  • Limited evidence of faster boarding times as a result of integrating ticketing, with some transport modes experiencing in order of a 10% reduction in passenger in-vehicle time; and
  • Limited evidence to suggest that integrating ticketing in isolation has reduced fare evasion.

Source: PWC (2011)

The PWC study also relies on outputs from a business case document compiled by DfT (2009) for rolling out smart ticketing across England which depends upon a number of important assumptions:

  • Smart ticketing can achieve savings in dwell times, journey times and ticket buying times;
  • Full take-up of smart ticketing by passengers and operators;
  • The time gap between spending on equipment and achievement of full benefits is short;
  • The risks of the project are successfully managed;
  • Smart ticketing can work in a variety of market situations (or that market situations change to accommodate smart ticketing); and
  • Operators and Authorities can work together to produce integrated IT and back office functions.

Source: PWC (2011)

In addition the PWC study also notes that there is only anecdotal evidence supporting reduced transaction and administration costs as a direct result of the implementation of simplified and integrated ticketing.

The study sets out three options: (1) Integrated ticketing (paper based); (2) Smart ticketing; and (3) Smart & Integrated ticketing. 

Impact on demand

The demand for public transport in Scotland in 2009 is outlined in the following table:

Mode

Passenger Trips (millions)

% of Trips

Ticket Revenue (£ millions)

Local Bus Service

467

82.8

626

Rail

72

13.7

307

Subway

14

2.5

Na

Ferry

6

1.1

Na

Total

565

100.0

933

These figures are the base figures in a cost benefit analysis which reports, for both bus and train, an assumed increased in patronage of 6% based upon the convenience benefits that arise from integrated ticketing, e.g. more flexible choice of modes, route, timing, easier interchange and ease of use.  Interestingly, no patronage impact is assumed to occur from faster boarding, despite assumptions that bus passengers would save around 3 seconds each using an integrated ticket and 2 seconds each using a smart card.  For rail passengers the time saving is even larger, with around 30 seconds assumed to be saved at the rail kiosk.  Monetising these impacts (over an 11 year appraisal period) leads to an increase in revenues for bus operators of around £45 million per annum, whilst for rail operators the figure is around £22 million.  Time saving benefits are assumed to accrue to the passengers and are valued at £211 million for bus users and £43 million for rail users.

Impact on supply

The study does not implicitly mention impact on supply but does note that the reductions in dwell time may lead to reductions in operator costs, if these can be realised. As a result it estimates potential cost savings for Scottish bus operators of around £3 million but assumes no such saving for rail, presumably because of the different operational procedures.

Other impacts

A number of other impacts come across quite strongly in the study and are outlined below.  Note all impacts are monetised over an 11 year appraisal period:

Bus:

  • Convenience benefits to existing bus passengers (£67.3 million)
  • CO2 reduction in buses – due to a reduction in dwell times (£0.6 million)
  • Benefits to new bus passengers (50% of the convenience and time saving benefits for current passengers) - £5.3 million.
  • Marginal external car benefits resulting from modal shift from car to bus (excluding CO2), e.g. congestion benefit & accident benefit - £35 million.
  • CO2 saving from modal shift from car to bus - £1.8 million
  • Fraud disbenefit – it is assumed that the use of paper based ‘flash cards’ rather than smart cards would lead to more fraud - £77.4 million (negative)

Rail:

  • Convenience benefits to existing rail users (£22.2 million)
  • Savings in ticket sales - £1.1 million
  • Benefits to new rail passengers (50% of the convenience and time saving benefits for current passengers - £0.8 million
  • Marginal external car benefits resulting from modal shift from car to rail (excluding CO2), e.g. congestion benefit & accident benefit - £30 million.
  • CO2 saving from modal shift from car to rail - £1.5 million

In terms of cost the study estimates (over an 11 year appraisal period) that the capital cost for the introduction of a paper based integrated ticket for both bus and rail would be £2 million, with operational costs of £27.4 million. 

The total economic benefits for the introduction of a paper based integrated ticketing scheme across the entire Scottish bus and rail network are £432.6 million over an 11 year appraisal period.

Contribution to objectives
Objective Scale of contribution Comment
  Produces large user benefits (e.g. reduced boarding times& convenience benefits) and operational benefits (e.g. operator cost savings). 
  Reduction in car trips not quantified but will improve the liveability of the streets.  Not likely to be a strong effect.
  Suggestion of modal shift away from car leading to reduced CO2 and local air pollutants.
  With strong benefits for existing PT users then likelihood that low income will benefit.
  Evidence of modal shift away from car and so a reduction in accident levels.
  No evidence on direct economic growth as a result of integrated ticketing.  Strong possibility that the improved efficiency in the transport system will lead to a positive impact in this area.
  Very low cost estimate suggests that financing such a scheme will not be problematic.  Instead securing agreement from the multitude of stakeholders might be the real issue.
= Weakest possible positive contribution = Strongest possible positive contribution
= Weakest possible negative contribution = Strongest possible negative contribution
= No contribution

Contribution to objectives

Contribution to objectives and problems
Objective Scale of contribution Comment
  Clear evidence that integrated ticketing can produce strong user benefits (e.g. reduced boarding time & convenience benefits) and operational benefits (e.g. operator cost savings). Very likely, that the scale of such benefits will be magnified if smart card technology introduced at the same time adhering to best practise methods.
  Likely that there will be a reduction in car trips, although not strong evidence. This will improve the liveability of the streets but not likely to be a strong effect.
  Likely modal shift away from car likely to lead to reduced CO2 and local air pollutants.
  From a user perspective, existing PT users likely to benefit the most. A higher propensity for low income socially excluded citizens to be positively affected.
  Likely modal shift away from car will lead to reduced accident levels.
  Unlikely that integrated ticketing per se will lead to significant economic growth. A possibility that a more efficient transport system will nurture additional growth.
  Costs are dependent upon the scale of the system and the technology behind it. Usual for initial funding to be provided wholly or largely by a transport authority or central/local government. A much larger problem will be procuring agreement from participating stakeholders.
= Weakest possible positive contribution = Strongest possible positive contribution
= Weakest possible negative contribution = Strongest possible negative contribution
= No contribution

Contribution to problems

Contribution to alleviation of key problems
Objective Scale of contribution Comment
Congestion Likelihood of modal shift away from car and onto public transport.  Will lead to a small reduction in congestion during peaks.
Community impacts Integrated ticketing forges a strong sense of community identity.
Environmental damage Likely modal shift away from car will lead to reduction in environmental pollution in terms of green house gases and local pollutants.
Poor accessibility Despite no physical change to the supply of public transport, it is likely that integrated transport will improve accessibility by opening up more travel options and providing travellers with a much more convenient public transport service, e.g. greater flexibility when they travel, how they travel and what they will be charged.
Social and geographical disadvantage Given the pre-disposition of those socially disadvantaged to use PT, the introduction of integrated ticketing will be of benefit to this group.  Given that there is unlikely to be any change in the physical provision of transport the impact on the geographically disadvantaged is likely to be minimal.
Accidents Likely modal shift away from car will lead to reduction in accident levels.
Poor economic growth Probable that the greater efficiency of the transport system will lead to economic growth, with companies attracted by such systems, however no concrete evidence.
= Weakest possible positive contribution = Strongest possible positive contribution
= Weakest possible negative contribution = Strongest possible negative contribution
= No contribution

Appropriate contexts

Appropriate area-types
Area type Suitability
City centre
Dense inner suburb
Medium density outer suburb
Less dense outer suburb
District centre
Corridor
Small town
Tourist town
= Least suitable area type = Most suitable area type

Adverse side-effects

Several adverse side effects would appear to be worthy of highlighting:

  1. System inefficiencies may result in a number of contexts.  Firstly, by pursuing an agreement between competing PT providers, competition may be undermined which may benefit the least efficient/competitive operator.  This will lead to the less efficient production of public transport overall.  Secondly, if by doing this PT fares increase then passengers have to absorb some if not all of this greater inefficiency leading to a potential fall in demand. 
  2. Equity aspects may arise if integrated ticketing adopts smartcard conventions with the aim of eliminating cash from the system.  Provisions must be made for the irregular traveller not to face a potential barrier to travel as a result of not possessing a smart card.

Abrate, G., Piacenza, M. & Vannoni, D. (2009).  The impact of Integrated Tariff Systems on Public Demand: Evidence from Italy.  Regional Science and Urban Economics, 39(2), 120-127.

Booz & Co. (2009). The Benefits of Simplified and Integrated Ticketing in Public Transport.  Report for PTEG.

Department for Transport (2009). Smart and Integrated Ticketing Strategy.

London Transport (1993).  Fares and ticketing policy in London: from Travelcards to SmartCards.  LT Planning Department.

Matas, A. (2004).  Demand and Revenue Implications of an Integrated Public Transport Policy:  The Case of Madrid.  Transport Reviews, 24(2), 195-217.

Mirco, A. and Daniela, C. (2013). Measure Evaluation Results: BOL 2.1 Integrated PT Fare System.  Report for MIMOSA.  CIVITAS.

Puhe, M, Edelmann, M. & Reichenback, M. (2014). Integrated Urban e-Ticketing for Public Transport and Touristic Sites.  STOA (Science and Technology Options Assessment), Report for EPRS.

PricewaterhouseCoopers (2011).  Smart & Integrated Ticketing Report for Scotland.  A Report for Transport Scotland.

Rodrigues, H., Jose, R., Coelho, A., Melro, A., Ferreira, M.C., Cunha, J.F., Monteiro, M.P. and Ribeiro, C. (2014). Sensors, 14, 13389-13415.

Smart Card Alliance (2011).  A Guide to Pre-paid Cards for Transit Agencies.  White Paper No. TC-1 1 00 1).

TfL (2012). Join in the Celebrations Across the Capital this Summer with a Limited Edition Summer Oyster Card.  Press Release.

TfL (2014).  Transport for London Annual Report and Statement of Accounts 2013/14.

Weinstein, L.S. (2009).  TfL’s Contactless Ticketing: Oyster and Beyond.  Presentation downloaded from  http://www.bcs.org/upload/pdf/tfl-sep09.pdf.

White, P. (2009 Factors behind recent patronage trends in Britain and their implications for future policy.  Threadbo, International Conference Series on Competition and Ownership in Land Passenger Transport.

Wikipedia (2014) http://en.wikipedia.org/wiki/Integrated_ticketing.