Considering the Unbanked in Cashless Fare Payment at Point of Service for Bus/Demand-Response Services (2022)

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1   Over the last decade, a handful of transit agencies in the United States have considered eliminating cash fare collection on buses. Although many bus rapid transit (BRT), light rail, and heavy rail operators require prepayment of fares before boarding vehicles, nearly all midsize and large local bus operators in the United States continue to accept cash on board vehicles. Removing cash from buses has many potential benefits, including improv- ing operations, safety, and security. But fare collection on buses presents unique challenges because of the sheer number of bus stops distributed throughout large metropolitan areas with few—if any—stations or terminals where fare collection infrastructure can be easily installed and maintained. Even when new fare payment systems that rely primarily on per- sonal devices and payment instruments such as smartphones and credit/debit cards are implemented, transit agencies recognize they have diverse constituencies of riders, includ- ing those who prefer or need to pay with cash. The challenge is to find ways to continue to accommodate riders who are “unbanked,” which is typically defined as lacking a checking or savings account at a bank or credit union. In light of this, the objective of this study is to inform transit agencies of the potential impacts of going cashless. This study focuses primarily on bus operators and considers various facets of cashless fare collection systems, including operational aspects, advantages and drawbacks, policy and regulations, and populations of riders such as the unbanked. To meet the objective, detailed case examples were compiled. Telephone interviews with rep- resentatives from nine transit agencies were conducted. The agencies selected for the case examples have publicly stated they are considering cashless or have eliminated onboard cash fare collection in a temporary, pilot, or permanent manner. Key findings from each of the nine case examples are as follows. 1. San Francisco Municipal Railway (Muni) in San Francisco, CA: Muni focused specifi- cally on cable cars, which have unique fare collection challenges. Muni implemented a pilot program that aimed to significantly reduce onboard cash fare payments. The market for cable cars is primarily tourists; the transit agency therefore focused marketing and outreach on this group. Motivating factors for reducing cash payments on board were to improve operator safety (conductors also help with braking the cable car) and improve security by reducing cash handling. At time of writing, the agency has not decided to go fully cashless. 2. Washington Metropolitan Area Transit Authority (WMATA) in Washington, DC: WMATA conducted a 1-year pilot program on a single bus route to evaluate “cash-free boarding.” During the pilot, the agency collected both customer and operator surveys, and in general, both groups liked the cash-free boarding pilot. WMATA also conducted a detailed technical evaluation of the program, but found operational metrics such as S U M M A R Y Considering the Unbanked in Cashless Fare Payment at Point of Service for Bus/Demand-Response Services

2 Considering the Unbanked in Cashless Fare Payment at Point of Service for Bus/Demand-Response Services running time showed limited, if any, difference. After the 1-year program ended, WMATA resumed onboard cash fare collection on the pilot route. 3. Tri-County Metropolitan Transportation District (TriMet) in Portland, OR: TriMet temporarily suspended cash fare collection on buses during the COVID-19 pandemic. The suspension lasted approximately 6 months in 2020, which gave the agency time to install barriers at the front of vehicles to protect operators. The primary motivation was public health concerns. The results of temporarily suspending onboard cash fare collection are unclear since there were numerous other service and policy changes during the same timeframe. TriMet intends to continue collecting cash fares on board buses in the future. 4. New Jersey Transit Corporation (NJ TRANSIT) in the state of New Jersey: Similar to the previous case example, NJ TRANSIT temporarily halted onboard cash fare collec- tion on both bus and commuter rail for a short period in 2020 during the COVID-19 pandemic. The primary motivation was public health concerns. Onboard cash payments resumed on bus and commuter rail in summer 2020. Similar to the previous example, the results of temporarily moving to cashless fare collection during the COVID-19 pandemic are unclear since there were numerous other changes during this timeframe. 5. Port Authority of Allegheny County (Port Authority) in Pittsburgh, PA: Similar to the previous two case examples, Port Authority temporarily suspended cash fare collection on buses during the first 2 months of the COVID-19 pandemic. The sole motivation was public health concerns. To facilitate social distancing, Port Authority implemented rear- door boarding, instructed passengers not to use the fareboxes, and asked customers to prepurchase period passes using smart media. Similar to the previous two examples, the results of temporarily suspending onboard cash fare collection are unclear since numer- ous other changes were made during the same timeframe. 6. Central Ohio Transit Authority (COTA) in Columbus, OH: COTA currently does not have specific plans to move to a fully cashless fare system, but it is under consideration. The agency is aiming to significantly reduce the amount of cash collected on buses as it implements a new account-based fare collection system in fall 2021. Like many other transit agencies, COTA recognizes that Title VI concerns could be a hurdle to moving toward a fully cashless fare system. COTA is learning from other transit agencies in the region that are implementing new fare systems and reducing cash collection, particularly Dayton, OH, which is the next case example. 7. Greater Dayton Regional Transit Authority (RTA) in Dayton, OH: RTA is gradually launching a new account-based fare system called Tapp Pay on its bus and paratransit services. One phase of this program included eliminating cash fares on buses, which was implemented in fall 2021. To plan for this, RTA collected rider surveys and feedback, held public meetings, and continues to conduct community outreach as part of the Title VI process. RTA has also recently partnered with two companies to provide a large retail sales network where customers can load cash into their Tapp Pay accounts. Additionally, RTA plans to add a “one more journey” feature once the system goes cashless; this will let customers have a negative balance for one trip so they have the opportunity to reload. 8. Massachusetts Bay Transportation Authority (MBTA) in Boston, MA: The MBTA is gradually launching a new unified fare system. One of the proposed future phases eliminates onboard cash payment and implements all-door boarding on buses and light rail to decrease dwell times and make bus service more reliable. The MBTA is not using the term “cashless” because it is not eliminating cash from the system; it is shifting the cash options off the vehicles. The MBTA is planning to expand the number of locations where customers can use cash via three primary sales channels: ticket vending machines in all subway stations, “streetscape” vending machines at a select number of bus stops, and an expanded retail sales network. The MBTA also intends to introduce a “one more trip” policy, which is similar to the previous case example. A Title VI fare equity analysis has recently been completed to assess the proposed network of fare sales locations, and the results found no disparate impact on minority populations and no disproportionate

Summary 3   burden on low-income populations. Finally, the MBTA is undertaking an extensive com- munity engagement process, including community meetings, focus groups, policy work- ing groups, and public meetings conducted over a multiyear period. 9. Big Blue Bus in Santa Monica, CA: In summer 2021, Big Blue Bus began a 6-month pilot to evaluate cashless fare collection on its bus network. This was initially motivated by pandemic-related public health concerns; another key factor was potential operational improvements. Customer surveys were conducted in advance of the 6-month pilot and data from the surveys were used in a Title VI fare equity analysis. Transit agency staff conducted extensive customer communication and education about contactless fare options and the cashless pilot. Big Blue Bus provided riders one free 30-day pass to help increase adoption of contactless fare payment and soften the initial implementation of the cashless program. Once the pilot was underway, the transit agency was able to reallo- cate some staff who previously worked on farebox maintenance to bus maintenance, and adjust schedules to shorten running times due to operational improvements. Preliminary results from customer research conducted during the pilot suggest the majority of riders do not intend to use cash again in the future; however, some riders are concerned about possibly disenfranchising others who may be more vulnerable, such as the elderly or unbanked. At time of writing, the 6-month pilot is still underway and the agency is assessing whether it should be made permanent. Based on the results of the case examples, ten key findings and emerging trends in the industry were identified. In brief, these are: 1. Nascent idea: The concept of cashless is a nascent idea for American transit operators, and nearly all local bus operators at midsize and large metropolitan transit agencies in the United States continue to accept cash on board buses. 2. Terminology: The industry lacks standard terminology to describe cashless or cash-free fare collection systems. Some transit agencies prefer to say they accept cash, just not on board vehicles. 3. Convenient alternatives: One of the most critical elements in preparing for cashless fare collection systems is to provide convenient alternative options where customers can pay cash, including a robust retail sales network and ticket vending machines. 4. “One more trip” policy: Some new fare policies—particularly “one more trip” policies that allow a negative balance for one trip so customers have the opportunity to reload— are likely to be implemented by agencies with account-based fare systems who want to eliminate onboard cash fares. 5. Vehicle operators: A key motivating factor for removing cash on board is operator health, safety, and security. 6. Operational improvements: Many agency staff believe operational improvements are a potential advantage of removing cash from vehicles, but more research is needed to quantify these impacts. 7. Facilitating all-door boarding: Some agencies view removing cash fares from vehicles as a way to facilitate all-door boarding. 8. Unbanked: Transit agencies considering cashless fare collection want to understand how many riders are unbanked and how to meet their needs, as well as investigating what other populations may have specialized needs. 9. Title VI: Title VI fare equity analyses are likely to be needed as transit agencies plan for cashless fare systems, which could be viewed as a hurdle to implementation. 10. Outreach: Public outreach and communication are key parts of the planning process for cashless fare collection. The industry is slowly evolving and the next few years will be an interesting time, as a few leading transit agencies deploy new fare systems and eliminate cash payments on buses.