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

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65   This chapter is divided into three sections: a summary of each case example is presented, fol- lowed by a comparison of the nine case examples, and then emerging trends and key findings are discussed. Summary of Case Examples This section presents a summary of each case example. 1. San Francisco Municipal Railway (Muni) in San Francisco, CA: Muni focused on cable cars, which have unique fare collection challenges due to the historic nature of the vehicles, with no fare collection equipment and multiple points of entry. Muni implemented a pilot program that took a step toward cashless by aiming to significantly reduce onboard cash payments. The market for cable cars is primarily tourists, so the agency focused outreach and customer education on this group. The primary motivations for reducing cash fares on board were to improve operator safety (conductors also help with braking the cable car) and to 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 on a single bus route to evaluate cash-free boarding. During the pro- gram, the agency collected both customer and operator surveys, and in general, both groups liked cash-free. WMATA also conducted a detailed technical evaluation of the program; how- ever, operational metrics such as running time showed limited, if any, difference. After the program ended, WMATA resumed onboard cash fare collection on the pilot route. A key finding of WMATA’s evaluation was that low baseline cash use before the pilot likely limited the potential benefits. Perhaps if the agency had selected a route with higher cash use, there would have been more discernible impacts. 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 for 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; eliminating cash transactions on board reduced operator-customer interactions and helped ensure social distancing. TriMet customers were encouraged to pay fares using the account-based Hop system, which includes a fare app and a contactless card. The results of temporarily suspending onboard cash collection are unclear since there were numerous other service changes during the same timeframe. TriMet intends to continue collecting cash fares on 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 fares on both bus and C H A P T E R 4 Comparison and Emerging Trends

66 Considering the Unbanked in Cashless Fare Payment at Point of Service for Bus/Demand-Response Services commuter rail service for a short period (approximately 4–6 months in 2020) during the COVID-19 pandemic. The primary motivation was public health concerns; eliminating cash transactions on board reduced operator-customer interactions and ensured social distancing. NJ TRANSIT did not undergo a formal planning process; instead, operational and policy changes were made quickly due to the unusual emergency circumstances of the pandemic. The agency also needed to ensure it adhered to local and state regulations pertaining to the pandemic, such as executive orders from the governor. Cash payments resumed on bus and commuter rail services in summer 2020. The results of temporarily going cashless are unclear since there were numerous other operational and policy 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 fares on buses during the first 2 months of the COVID-19 pandemic. The sole motivation was public health con- cerns; this 2-month period gave the agency time to install barriers at the front of vehicles to protect bus operators. To facilitate social distancing, Port Authority implemented rear-door boarding, instructed passengers not to use the fareboxes, and asked customers to prepurchase period passes on smart media. Similar to the previous two examples, the results of tem- porarily suspending onboard cash fares are unclear since numerous other operational and policy changes were made during the same timeframe. 6. Central Ohio Transit Authority (COTA) in Columbus, OH: COTA does not have specific plans to move to a fully cashless fare system, but it is under consideration. The agency aims to significantly reduce the amount of cash collected on buses as it implements an account- based fare collection system in fall 2021. COTA has begun conducting market research to understand how many riders have access to financial instruments (such as credit/debit cards), smartphones, and the internet. Like many other transit agencies, COTA recognizes 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 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: Over a 1-year period (2020–2021), RTA gradually launched an account-based fare system, Tapp Pay, on its bus and paratransit system, which included eliminating cash fares on buses in fall 2021. RTA also plans to eliminate cash on paratransit vehicles, in an effort to create a 100% cashless onboard experience that is universally accessible. To plan for this, RTA collected rider surveys and feedback, held public meetings, and conducted community outreach as part of the Title VI process to assess the impacts of eliminating onboard cash collection. RTA also partnered with two companies to provide a large retail sales network where customers can load cash into their Tapp Pay account. One component of RTA’s Title VI fare equity analysis was identifying retail sales locations within ¼ mile of a bus route or transit center; this helps ensure that riders who want to pay cash have a sales channel nearby. As part of the new fare system, RTA intro- duced daily and monthly fare capping, which the agency believes is important from an equity perspective for riders who cannot afford the up-front cost of a period pass. To encourage all customers to try out the new system, RTA is currently (at time of writing) offering discounts on the fare-capped price. Additionally, RTA plans to add a “one more journey” feature once the system goes cashless; this will let customers carry a negative balance for one trip so they have the opportunity to reload. 8. Massachusetts Bay Transportation Authority (MBTA) in Boston, MA: Over a 5-year period (2020–2024), the MBTA is launching a unified payment system. One of the proposed phases eliminates onboard cash payment and implements all-door boarding on buses and light rail (Green Line). A key motivation is decreasing dwell times and making bus service more reliable. However, the MBTA is not using the term “cashless” because it is not elimi- nating cash from the system; it is shifting the cash options off the vehicles to enable faster boarding and improved operations. The MBTA is planning to expand the number of locations

Comparison and Emerging Trends 67   where customers can use cash via three primary sales channels: TVMs in all subway stations, streetscape vending machines at a select number of bus stops and other locations, and an expanded retail sales network. The MBTA also intends to introduce a “one more trip” policy to let customers carry a negative balance for one trip and transfer before reloading. 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 burden on low-income populations. Finally, the MBTA is undertaking an extensive community engagement process, including community meetings, focus groups, policy working 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 program to evaluate cashless fare collection on its entire bus network. This was initially moti- vated by 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. Agency staff conducted extensive customer commu- nication and education about contactless fare options and the cashless program. Big Blue Bus gave riders one free 30-day pass to help increase adoption of contactless options, which helped soften the initial implementation of the program. Once the pilot was underway, the agency was able to reallocate some staff from 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 revert to using cash after the pilot ends; however, some riders are concerned about possibly disenfran- chising vulnerable populations 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. Comparison of Case Examples As shown in Table 13, various geographic regions were considered in the case examples, including midsize and large cities on the East and West Coasts and in the Midwest. In terms of the modes considered, the case examples focused primarily on buses and paratransit; however, cable cars were also included because they have similar challenges to local bus operations (e.g., frequent stops without stations). Two of the case studies conducted small-scale (1–3 routes) pilot programs to evaluate moving to cashless fare collection (Muni and WMATA), and another three had temporary suspensions of cash fares due to the COVID-19 pandemic (TriMet, NJ TRANSIT, and Port Authority). One agency (the MBTA) is planning for permanent systemwide removal of onboard cash fares as an upcoming phase in its new fare system (tentatively planned for 2023). Similarly, Dayton’s RTA recently eliminated onboard cash payments on buses as part of its new fare system, and plans to eliminate cash on paratransit vehicles in the future. Last, Big Blue Bus is currently conducting a 6-month systemwide pilot to evaluate cashless fare collection on its bus network; at time of writing, the agency is evaluating whether it should be made permanent. As Table 13 shows, one overarching conclusion is that the impacts of going cashless have not been well studied or, in some cases, are inconclusive. For example, the detailed technical evaluation WMATA conducted as part of its single-route pilot showed limited benefits, which may be because the route had low baseline cash use before the pilot. Similarly, the results of the three case examples that temporarily suspended cash during COVID-19 (TriMet, NJ TRANSIT, and Port Authority) are difficult, if not impossible, to assess because there were other major service and policy changes during the same period. As Big Blue Bus conducts its pilot and other agencies like Dayton’s RTA begin to implement cash-free boarding policies, it will be important to conduct systematic, detailed evaluations of the impacts particularly on vehicle operations like dwell times, speed, and reliability.

Group Small-Scale Pilot Program Temporary Suspension due to COVID-19 Considering, Planning for, or Implementing Cashless Systemwide Agency Muni WMATA TriMet NJ TRANSIT Port Authority COTA RTA MBTA Big Blue Bus Region San Francisco, CA Washington, DC Portland, OR New Jersey Pittsburgh, PA Columbus, OH Dayton, OH Boston, MA Santa Monica, CA Mode Cable Cars Bus Bus Bus and Commuter Rail Bus Bus Bus and Paratransit Bus Bus Timeframe (Pilot, Temporary, or Permanent) Pilot program made permanent 1-year pilot program Temporary (approximately 6 months) Temporary (approximately 4–6 months) Temporary (approximately 2 months) To be determined Permanently eliminated cash from buses in fall 2021; planning to eliminate from paratransit vehicles Planning for permanent removal of cash from vehicles 6-month pilot program Status (Planned or Implemented or Completed) Implemented steps to reduce onboard cash fares but did not go fully cashless Implemented cash-free boarding and conducted a detailed evaluation Completed; cash fare collection was reinstated in October 2020; no future plans for cashless Completed; cash fare collection was reinstated in summer 2020 Completed; cash fare collection was reinstated in May 2020 No specific plans; currently in the early stages of considering cashless Implemented cashless on buses in November 2021 as one phase in its new fare system; planning for cashless on paratransit in the future Planning cashless as one of the upcoming phases in its new fare system, tentatively scheduled for 2023 Ongoing systemwide cashless pilot from July to December 2021 Geographic Scope (One or Multiple Routes) Three routes One limited -stop route All bus routes All bus (local and commuter) and commuter rail All bus routes To be determined All bus routes and paratransit vehicles All bus routes and light rail (Green Line) All bus routes COVID-19- Related No No Yes Yes Yes No No No Partially Additional Findings The primary market was tourists. Low baseline cash use on the route before the pilot program likely limited the potential benefits. The results are unclear since there were other service and policy changes due to COVID-19. The results are unclear since there were other service and policy changes due to COVID-19. The results are unclear since there were other service and policy changes due to COVID-19. COTA is closely watching other transit agencies in the region, particularly Dayton, OH . RTA wants to create a 100% cashless onboard experience that is universally accessible. The MB TA plans to implement cashless all - door boarding on bus and light rail to decrease dwell times and improve reliability. The agency is currently evaluating whether the pilot program should be made permanent or not. Table 13. Comparison of case examples.

Comparison and Emerging Trends 69   Emerging Trends and Key Findings This section presents ten key findings and emerging trends based on transit agency staff inter- views and the case examples. 1. Nearly all local bus operators at midsize and large metropolitan transit agencies in the United States continue to accept cash on buses. The concept of cashless is a nascent idea for American transit operators. Most midsize and large transit agencies in the United States continue to accept cash on local buses and other modes with similar fare collection challenges (like cable cars). A few agencies like WMATA and Muni have conducted pilot programs to evaluate cash-free boarding on one or a limited number of routes. Similarly, a handful of agencies like TriMet, NJ TRANSIT, and Port Authority stopped accepting cash on buses for a limited time during the COVID-19 pandemic. However, a few leading transit agencies are actively planning, piloting, or implementing cashless fare collection systemwide, including the MBTA (tentatively planned for 2023), Big Blue Bus (conducting a 6-month pilot in 2021), and RTA (implemented cashless on buses in fall 2021). 2. The industry lacks standard terminology to describe cashless fare systems. In the semi- structured interviews conducted to compile information for the case examples, staff from multiple agencies commented that they generally do not use the term “cashless.” One reason for this is that all the fare systems considered in this report still accept cash; it has simply been shifted off transit vehicles. Some agencies used the term “cash-free” instead; however, there does not appear to be industry-standard terminology to refer to this concept. 3. Convenient alternatives for cash customers are critical. In the case example interviews, transit agency staff were asked to describe the operational aspects of their cashless fare system (whether planned, piloted, or implemented), and one of the most critical themes was to pro- vide customers convenient alternative options to pay cash. First, most agencies mentioned having a robust retail sales network where customers could load cash into their transit account or purchase tickets close to bus stops (such as a ¼-mile catchment area). Second, numerous agencies had TVMs distributed throughout their transit system, although these tended to be located at major transfer facilities or in rail stations. Last, one agency (the MBTA) was considering installing streetscape or roadside ticket machines where customers could purchase tickets using small vending machines installed at some bus stops. 4. Some new fare policies—particularly “one more journey”/“one more trip”—are likely to be implemented by agencies with account-based fare systems that want to eliminate onboard cash collection. Account-based fare systems enable more flexible fare policies. One of these under consideration by both the Greater Dayton RTA and the MBTA is known as a “one more journey” or “one more trip” policy, which lets customers carry a negative balance for one trip so they have the opportunity to reload. In addition to this, multiple agencies with account-based fare systems also already offer fare capping (such as daily or monthly caps). Some of these agencies mentioned that eliminating cash payments on board may help encourage riders to switch to fare media like contactless cards or mobile phones that will automatically tabulate fare capping and give customers the best value. 5. A key motivating factor for removing cash on board is operator health, safety, and secu- rity. In nearly every interview, transit agency staff mentioned potential benefits to operators of removing cash from vehicles. First, there are security issues with having cash on board. Some agencies mentioned that fares were a common cause of conflicts with passengers; removing cash from vehicles is therefore likely to reduce operator assaults and verbal con- flicts. Second, public health concerns were mentioned by numerous agencies, particularly those that temporarily suspended cash fares during the COVID-19 pandemic. To address public health and security issues, many agencies are installing plexiglass barriers at the front of vehicles around operators. Last, safety is a consideration because onboard staff are

70 Considering the Unbanked in Cashless Fare Payment at Point of Service for Bus/Demand-Response Services primarily focused on operating buses; this was also noteworthy in the case of Muni cable cars, since conductors help with vehicle braking. 6. Many agencies suggested that operational improvements are a potential advantage of removing cash from vehicles. More research is needed to quantify these impacts, however; only limited research has been conducted to evaluate these potential benefits. For example, WMATA conducted a detailed technical evaluation of its cash-free pilot bus route and found minimal operational benefits. On the other hand, the MBTA evaluated “free fare days” on the Silver Line and concluded that there were dwell-time and running-time savings. Big Blue Bus, which is currently conducting a systemwide 6-month cashless pilot, has been able to change schedules to reduce running times; however, its formal assessment of the cashless pilot is ongoing at time of writing. In summary, more research is needed on the impact cash-free boarding has on dwell times, vehicle speeds, and/or vehicle reliability. 7. Removing cash from the vehicle may facilitate all-door boarding. Traditionally, cash is only collected at the farebox at the front of buses, which requires front-door boarding. Some agencies view removing cash fares from vehicles as a way to facilitate all-door boarding, since customers will have to prepurchase fares. For example, the MBTA is planning to transition to a proof-of-payment system with prepayment and all-door boarding. All-door boarding has the potential to significantly improve vehicle operations. 8. Transit agencies considering cashless fare systems want to understand how many riders are unbanked and how to meet their needs, as well as investigate what other populations may have specialized needs. In the case example interviews, transit agency staff recognized that some populations of riders want or need to pay with cash, particularly those who lack financial instruments like credit/debit cards or savings accounts. The FDIC conducts regular nationwide surveys and makes state-level and some metropolitan-level data available about the unbanked; the FDIC website is an important resource for transit agencies to assess the size of the unbanked market in their region. Some transit agencies have added questions to their regular customer surveys about the use of credit/debit cards or other financial instruments to get more precise information about unbanked transit riders in their region. In addition to the unbanked, numerous transit agencies mentioned concerns about riders whose primary language is not English; in particular, agencies want to clearly communicate proposed system changes like removing cash from vehicles to these riders. Finally, there were some other pop- ulations that warranted special action in some of the case examples; for example, Muni’s cable car pilot program necessitated additional outreach to tourism-related organizations, since tourists make up a large percentage of cable car customers. 9. Title VI analyses are likely to be needed as transit agencies plan for cashless fare systems. The FTA requires transit agencies with 50 or more fixed-route vehicles in large urban areas to evaluate fare changes to determine whether they will have a discriminatory impact based on race, color, or national origin. Three of the case examples (RTA, the MBTA, and Big Blue Bus) that are actively planning for, piloting, or implementing systemwide cashless fare systems have conducted Title VI fare equity analyses. Other transit agencies will likely need to con- duct similar Title VI analyses as part of their planning process for cashless systems, which could be viewed as a hurdle to implementation. 10. Public outreach and communication are key parts of the planning process for cashless fare collection. As some transit agencies—particularly RTA, the MBTA, and Big Blue Bus— are actively planning for, piloting, or implementing systemwide cashless fare systems, they are undertaking extensive public outreach and engagement processes. This includes public meetings, surveys of riders, outreach to community groups, online forums, and/or other avenues of communication.