National Academies Press: OpenBook

Business Models for Mobile Fare Apps (2020)

Chapter:Front Matter

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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2020. Business Models for Mobile Fare Apps. Washington, DC: The National Academies Press. doi: 10.17226/25798.
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Business Models for Mobile Fare Apps A Synthesis of Transit Practice Candace Brakewood University of tennessee, Knoxville Knoxville, TN 2020 Research sponsored by the Federal Transit Administration in cooperation with the Transit Development Corporation Subject Areas Public Transportation • Administration and Management • Passenger Transportation T R A N S I T C O O P E R A T I V E R E S E A R C H P R O G R A M TCRP SYNTHESIS 148

TCRP SYNTHESIS 148 Project J-7, Topic SA-46 ISSN 1073-4880 ISBN 978-0-309-48133-5 © 2020 National Academy of Sciences. All rights reserved. COPYRIGHT INFORMATION Authors herein are responsible for the authenticity of their materials and for obtaining written permissions from publishers or persons who own the copyright to any previously published or copyrighted material used herein. Cooperative Research Programs (CRP) grants permission to reproduce material in this publication for classroom and not-for-profit purposes. Permission is given with the understanding that none of the material will be used to imply TRB, AASHTO, FAA, FHWA, FTA, GHSA, NHTSA, or TDC endorsement of a particular product, method, or practice. It is expected that those reproducing the material in this document for educational and not-for-profit uses will give appropriate acknowledgment of the source of any reprinted or reproduced material. For other uses of the material, request permission from CRP. NOTICE The report was reviewed by the technical panel and accepted for publication according to procedures established and overseen by the Transportation Research Board and approved by the National Academies of Sciences, Engineering, and Medicine. The opinions and conclusions expressed or implied in this report are those of the researchers who performed the research and are not necessarily those of the Transporta- tion Research Board; the National Academies of Sciences, Engineering, and Medicine; or the program sponsors. The Transportation Research Board; the National Academies of Sciences, Engineering, and Medicine; and the sponsors of the Transit Cooperative Research Program do not endorse products or manufacturers. Trade or manufacturers’ names appear herein solely because they are considered essential to the object of the report. Published reports of the TRANSIT COOPERATIVE RESEARCH PROGRAM are available from Transportation Research Board Business Office 500 Fifth Street, NW Washington, DC 20001 and can be ordered through the Internet by going to http://www.national-academies.org and then searching for TRB Printed in the United States of America TRANSIT COOPERATIVE RESEARCH PROGRAM The nation’s growth and the need to meet mobility, environmental, and energy objectives place demands on public transit systems. Cur- rent systems, some of which are old and in need of upgrading, must expand service area, increase service frequency, and improve efficiency to serve these demands. Research is necessary to solve operating prob- lems, adapt appropriate new technologies from other industries, and introduce innovations into the transit industry. The Transit Coopera- tive Research Program (TCRP) serves as one of the principal means by which the transit industry can develop innovative near-term solutions to meet demands placed on it. The need for TCRP was originally identified in TRB Special Report 213—Research for Public Transit: New Directions, published in 1987 and based on a study sponsored by the Urban Mass Transportation Administration—now the Federal Transit Administration (FTA). A report by the American Public Transportation Association (APTA), Transportation 2000, also recognized the need for local, problem- solving research. TCRP, modeled after the successful National Coop- erative Highway Research Program (NCHRP), undertakes research and other technical activities in response to the needs of transit ser- vice providers. The scope of TCRP includes various transit research fields including planning, service configuration, equipment, facilities, operations, human resources, maintenance, policy, and administrative practices. TCRP was established under FTA sponsorship in July 1992. Proposed by the U.S. Department of Transportation, TCRP was authorized as part of the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA). On May 13, 1992, a memorandum agreement outlining TCRP operating procedures was executed by the three cooperating organi- zations: FTA; the National Academies of Sciences, Engineering, and Medicine, acting through the Transportation Research Board (TRB); and the Transit Development Corporation, Inc. (TDC), a nonprofit educational and research organization established by APTA. TDC is responsible for forming the independent governing board, designated as the TCRP Oversight and Project Selection (TOPS) Commission. Research problem statements for TCRP are solicited periodically but may be submitted to TRB by anyone at any time. It is the responsibility of the TOPS Commission to formulate the research program by identi- fying the highest priority projects. As part of the evaluation, the TOPS Commission defines funding levels and expected products. Once selected, each project is assigned to an expert panel appointed by TRB. The panels prepare project statements (requests for propos- als), select contractors, and provide technical guidance and counsel throughout the life of the project. The process for developing research problem statements and selecting research agencies has been used by TRB in managing cooperative research programs since 1962. As in other TRB activities, TCRP project panels serve voluntarily without compensation. Because research cannot have the desired effect if products fail to reach the intended audience, special emphasis is placed on disseminat- ing TCRP results to the intended users of the research: transit agen- cies, service providers, and suppliers. TRB provides a series of research reports, syntheses of transit practice, and other supporting material developed by TCRP research. APTA will arrange for workshops, train- ing aids, field visits, and other activities to ensure that results are imple- mented by urban and rural transit industry practitioners. TCRP provides a forum where transit agencies can cooperatively address common operational problems. TCRP results support and complement other ongoing transit research and training programs.

The National Academy of Sciences was established in 1863 by an Act of Congress, signed by President Lincoln, as a private, non- governmental institution to advise the nation on issues related to science and technology. Members are elected by their peers for outstanding contributions to research. Dr. Marcia McNutt is president. The National Academy of Engineering was established in 1964 under the charter of the National Academy of Sciences to bring the practices of engineering to advising the nation. Members are elected by their peers for extraordinary contributions to engineering. Dr. John L. Anderson is president. The National Academy of Medicine (formerly the Institute of Medicine) was established in 1970 under the charter of the National Academy of Sciences to advise the nation on medical and health issues. Members are elected by their peers for distinguished contributions to medicine and health. Dr. Victor J. Dzau is president. The three Academies work together as the National Academies of Sciences, Engineering, and Medicine to provide independent, objective analysis and advice to the nation and conduct other activities to solve complex problems and inform public policy decisions. The National Academies also encourage education and research, recognize outstanding contributions to knowledge, and increase public understanding in matters of science, engineering, and medicine. Learn more about the National Academies of Sciences, Engineering, and Medicine at www.national-academies.org. The Transportation Research Board is one of seven major programs of the National Academies of Sciences, Engineering, and Medicine. The mission of the Transportation Research Board is to provide leadership in transportation improvements and innovation through trusted, timely, impartial, and evidence-based information exchange, research, and advice regarding all modes of transportation. The Board’s varied activities annually engage about 8,000 engineers, scientists, and other transportation researchers and practitioners from the public and private sectors and academia, all of whom contribute their expertise in the public interest. The program is supported by state transportation departments, federal agencies including the component administrations of the U.S. Department of Transportation, and other organizations and individuals interested in the development of transportation. Learn more about the Transportation Research Board at www.TRB.org.

C O O P E R A T I V E R E S E A R C H P R O G R A M S CRP STAFF FOR TCRP SYNTHESIS 148 Christopher J. Hedges, Director, Cooperative Research Programs Lori L. Sundstrom, Deputy Director, Cooperative Research Programs Gwen Chisholm Smith, Manager, Transit Cooperative Research Program Mariela Garcia-Colberg, Senior Program Officer Sheila A. Moore, Program Associate Eileen P. Delaney, Director of Publications Natalie Barnes, Associate Director of Publications TCRP PROJECT J-7 PANEL Brad J. Miller, Pinellas Suncoast Transit Authority, St. Petersburg, FL (Chair) Mallory R. Avis, City of Battle Creek, Battle Creek, MI Mark Donaghy, Greater Dayton RTA, Dayton, OH Michael Ford, Regional Transportation District, Denver, CO Christian Kent, Consultant, Virginia Beach, VA Ronald Kilcoyne, TMD, Walnut Creek, CA Jeanne Krieg, Eastern Contra Costa Transit Authority, Antioch, CA Elizabeth Presutti, Des Moines Area Regional Transit Authority, IA Robert H. Prince, Jr., FOOT PRINCE, Jacksonville, FL Jarrett W. Stoltzfus, Proterra, City of Industry, CA David Wilcock, Vanasse Hangen Brustlin, Inc., Boston, MA Faith Hall, FTA Liaison Arthur Guzzetti, APTA Liaison William Terry, NTI Liaison TOPIC SA-46 PANEL Jamie Adelman, Sacramento Regional Transit District, Sacramento, CA Dwight A. Ferrell, METRO, Cincinnati, OH Gerald Kane, SEPTA, Berwyn, PA Sharareh Kermanshachi, University of Texas at Arlington, Arlington, TX Moyin Li, Pace Suburban Bus Service, Arlington Heights, IL Polly Okunieff, Go Systems and Solutions, LLC, Boston, MA Jane Schroter, Capital Metropolitan Transportation Authority, Austin, TX Carl Woo, York Region Transit, Richmond Hill, ON Brian Jackson, FTA Liaison Jeffrey Roux, FTA Liaison

ABOUT THE TCRP SYNTHESIS PROGRAM Transit administrators, engineers, and researchers often face problems for which information already exists, either in documented form or as undocumented experience and practice. This infor- mation may be fragmented, scattered, and unevaluated. As a consequence, full knowledge of what has been learned about a problem may not be brought to bear on its solution. Costly research findings may go unused, valuable experience may be overlooked, and due consideration may not be given to recommended practices for solving or alleviating the problem. There is information on nearly every subject of concern to the transit industry. Much of it derives from research or from the work of practitioners faced with problems in their day-to-day work. To provide a systematic means for assembling and evaluating such useful information and to make it available to the entire transit community, the Transit Cooperative Research Program Oversight and Project Selection (TOPS) Committee authorized the Transportation Research Board to undertake a continuing study. This study, TCRP Project J-7, “Synthesis of Information Related to Transit Problems,” searches out and synthesizes useful knowledge from all available sources and prepares concise, documented reports on specific topics. Reports from this endeavor constitute a TCRP report series, Synthesis of Transit Practice. This synthesis series reports on current knowledge and practice, in a compact format, without the detailed directions usually found in handbooks or design manuals. Each report in the series provides a compendium of the best knowledge available on those measures found to be the most successful in resolving specific problems. FOREWORD By Mariela Garcia-Colberg Staff Officer Transportation Research Board A mobile fare application (or app) is a software application that public transit riders use to purchase and access public transportation services. As the number of transit agencies using mobile fare apps increases each year, different business models are being deployed and costs are varying significantly. A transit system that decides to include a mobile fare app in its fare payment offering needs to consider the different business models that are available. TCRP Synthesis 148 documents current practices and experiences of transit agencies that offer mobile fare payment applications to transit riders. The report strives to give the reader an understanding of the different business models and arrangements available within the industry. The practical delivery from this synthesis will be information that can assist transit organizations to make an informed decision about their mobile fare apps. A literature review and detailed survey responses from 62 transit agencies are provided. Detailed case examples of six systems are included in the report and present additional insights on the state of the practice, including lessons learned, challenges, and gaps in information. Candace Brakewood from the University of Tennessee, Knoxville, collected and synthesized the information and wrote the report, under the guidance of a panel of experts in the subject area. The members of the topic panel are acknowledged on page iv. This synthesis is an immediately useful document that records the practices that were acceptable within the limitations of the knowl- edge available at the time of its preparation. As progress in research and practice continues, new knowledge will be added to that now at hand.

1 Summary 5 Chapter 1 Introduction 5 Background 6 Objectives of the Study 7 Technical Approach 7 Organization of the Report 8 Chapter 2 Literature Review 8 Prior Research from the Transit Cooperative Research Program 12 Chronological Summary of Prior References on Mobile Fare Payment Apps 15 Chapter Summary and Next Steps 16 Chapter 3 Transit Agency Survey 16 Survey Data Collection Procedure 17 Survey Results by Topic 28 Survey Results by Key Findings 30 Chapter 4 Case Examples 30 Big Blue Bus 34 Regional Transportation District 38 Capital Metropolitan Transportation Authority 42 Dallas Area Rapid Transit 45 Chicago Transit Authority 49 St. Catharines Transit Commission 53 Summary and Comparison of Case Examples 55 Chapter 5 Models and Emerging Trends 55 Models for Mobile Fare Payment Apps 59 Emerging Trend 60 Overarching Business Models 62 Chapter 6 Conclusions and Future Research 62 Overview 63 Future Research 65 References 67 Glossary 69 List of Acronyms 70 Appendix A Survey Participants 72 Appendix B Survey Instrument 97 Appendix C Case Example Interview Guide C O N T E N T S

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Five different business models for mobile fare payment apps are examined, as the world of apps used by transit agencies in the United States and Canada continues to steadily grow.

The TRB Transit Cooperative Research Program's TCRP Synthesis 148: Business Models for Mobile Fare Apps documents current practices and experiences of transit agencies that offer mobile fare payment applications to transit riders.

The report includes case examples from six cities: Santa Monica, Denver, Austin, Chicago, Dallas, and Ontario, Canada.

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