After months of delay, the board vote on a much-anticipated award of a contract for the Key 2.0 fare system by Philadelphia transit agency SEPTA was scheduled for today. The agency staff has recommended that Cubic Transportation Systems be hired for the $211 million project.
Then SEPTA abruptly pulled the agenda item late last week, with an agency spokesman telling Mobility Payments only that,
After months of delay, the board vote on a much-anticipated award of a contract for the Key 2.0 fare system by Philadelphia transit agency SEPTA was scheduled for today. The agency staff has recommended that Cubic Transportation Systems be hired for the $211 million project.
Then SEPTA abruptly pulled the agenda item late last week, with an agency spokesman telling Mobility Payments only that,
The largest group fare contract of its kind in the U.S. will become at least a little bit bigger in 2025, when the NEORide council of governments says it will add five to six more transit agencies to the 15 agencies now live with its EZfare ticketing service across four states, Mobility Payments has learned.
NEORide’s ticketing vendor, UK-based Masabi, and its chief rival for software-as-a-service ticketing projects in North America, Cubic Transportation Systems and its Umo platform, are promoting the idea of regional fare projects.
To be sure, regional and nationwide fare-system procurements have been a growing trend for years globally, including those in Ireland, New Zealand and the Netherlands. These are mainly system integrator-led projects, however. In car-dominant North America, the early regional projects are using SaaS platforms and are targeting smaller transit agencies.
The largest group fare contract of its kind in the U.S. will become at least a little bit bigger in 2025, when the NEORide council of governments says it will add five to six more transit agencies to the 15 agencies now live with its EZfare ticketing service across four states, Mobility Payments has learned.
NEORide’s ticketing vendor, UK-based Masabi, and its chief rival for software-as-a-service ticketing projects in North America, Cubic Transportation Systems and its Umo platform, are promoting the idea of regional fare projects.
To be sure, regional and nationwide fare-system procurements have been a growing trend for years globally, including those in Ireland, New Zealand and the Netherlands. These are mainly system integrator-led projects, however. In car-dominant North America, the early regional projects are using SaaS platforms and are targeting smaller transit agencies.
Electric vehicle charging networks are growing substantially in such countries as the UK, but there are challenges to deal with, including how to ensure ease of payments while avoiding fraud.
There has been no shortage of ways to pay for the electricity needed to power the growing number of EVs on the road today. Historically, public charging networks have relied on multiple methods of taking payments. In addition to a large variety of mobile apps, customers have also used RFID fobs, contactless cards, QR codes and open-loop payments.
Electric vehicle charging networks are growing substantially in such countries as the UK, but there are challenges to deal with, including how to ensure ease of payments while avoiding fraud.
There has been no shortage of ways to pay for the electricity needed to power the growing number of EVs on the road today. Historically, public charging networks have relied on multiple methods of taking payments. In addition to a large variety of mobile apps, customers have also used RFID fobs, contactless cards, QR codes and open-loop payments.
When we talk about public transit, we’re not just talking about buses and trains—we’re talking about people, communities, and the essential lifelines that connect them. So when the idea of zero-fare transit comes up, it is something I take to heart. It’s a compelling idea: making transit more accessible, equitable, and environmentally friendly. Zero-fare policies, while well-intentioned, can lead to more problems than they solve.
Zero-fare transit seems like a surefire way to boost ridership and support those who need it most. As with many things, reality is complex. What looks good on paper doesn’t always deliver in practice.
When we talk about public transit, we’re not just talking about buses and trains—we’re talking about people, communities, and the essential lifelines that connect them. So when the idea of zero-fare transit comes up, it is something I take to heart. It’s a compelling idea: making transit more accessible, equitable, and environmentally friendly. Zero-fare policies, while well-intentioned, can lead to more problems than they solve.
Zero-fare transit seems like a surefire way to boost ridership and support those who need it most. As with many things, reality is complex. What looks good on paper doesn’t always deliver in practice.
In 2019, Houston Metro conducted a comprehensive year-long study on the benefits and challenges of implementing zero-fares across their bus and rail network. Soon after, data confirmed that offering zero-fares would boost annual ridership by 30.4 million. However, it would lead to a loss of approximately $70 million in fare revenue each year and an additional $170.6 million in operating expenses to accommodate the increased demand with more vehicles and staff.
A 2024 study by APTA’s Emerging Leaders Program surveyed agencies with zero-fare experience. The study found mixed results. While zero-fares improved access and equity, concerns about disruptive passengers, rider comfort, and safety were common. The report emphasized the need for thorough public marketing, government support and long-term planning for zero-fare programs.
During the COVID crisis, many agencies offered free fares only to return to charging once budget pressures resurfaced. Nearly all of them have returned to charge fares, in order to close the same budget gaps that Houston predicted.
Free transit has undeniable advantages for riders. By removing fare collection, systems become more frictionless, which allowed passengers to transfer seamlessly without worrying about ticket validity or costs. This ease of access has been shown to increase ridership, with national studies suggesting jumps of 20% or more. Kansas City, for example, saw an estimated 31% increase in ridership under its zero-fare program.
The economic and environmental benefits are also significant. Zero-free policies can improve disposable income for riders, creating ripple effects in local economies, including job creation and increased personal income. In Kansas City, zero-fare transit is expected to increase employment and generate additional economic output. Furthermore, fare-free systems can contribute to sustainability goals. Kansas City’s policy reduced annual carbon dioxide emissions by about 7,000 tons.
In Luxembourg, the decision in 2020 to make public transit free nationwide created a frictionless system where passengers can easily switch between buses and trams without worrying about tickets. Equity is another critical benefit that the policy makers in Luxembourg hoped to achieve. Free transit disproportionately benefits low-income riders, students, seniors and individuals with disabilities. By eliminating financial barriers, these policies improve access to education, healthcare, and employment opportunities.
Despite its advantages, fare-free transit faces several challenges. Revenue loss is perhaps the most significant, with systems often needing to replace millions of dollars in fare revenues through alternative funding models. Kansas City lost $8 million to 10 million in fare revenue in 2020, relying heavily on federal support to sustain operations. In Luxembourg, the cost is even higher at 41 million euros ($43 million) per year.
Operational challenges also arise. Increased ridership can lead to overcrowding and slower service speeds. In St. Lucie County, Florida, for instance, increased boardings led to slower operating speeds and higher cleaning costs—up 25% due to increased wear and tear.
In Luxembourg, road congestion remains unchanged because free fares alone have not lured drivers out of their cars, partially because transit systems fail to offer the convenience of door-to-door travel. In May 2022, congestion on Luxembourg’s roads was equivalent to or higher than levels in May 2019, before the free public transit policy was introduced. The results suggest that the increase in transit ridership is from people that would have otherwise walked or ridden a bike.
Data from the Transit Center underscores this point: Riders prioritize frequency and reliability over cost. Fare-free transit might redirect focus and funding away from improving the overall quality and accessibility of the system.
That doesn’t mean cities shouldn’t consider making public transportation free, particularly for people who need it most — students, senior citizens, disabled people and low-income riders. Agencies can take intermediate steps to maximize equity benefits without the financial strain of systemwide fare-free programs.
For cities unable to implement full-scale zero-free programs, targeted strategies provide a viable solution. Offering free or subsidized fares to specific groups, such as students, seniors, and low-income individuals, allows agencies to deliver meaningful equity benefits without straining their budgets.
After Houston Metro completed the study in 2019 and found that zero-fares could significantly increase ridership but also lead to higher operational costs, the agency decided to shift to a fare structure that offers free fares through institutional programs, in addition to fare capping for all users. This model balances accessibility with financial sustainability.
Similarly, in St. Petersburg, the Pinellas Suncoast Transit Authority (PSTA) overhauled its fare- payment system to include fare capping and discounts for seniors, disabled persons, and students. This approach not only simplifies the payment process but also ensures that the system is inclusive, catering to a diverse range of passengers.
The San Francisco Bay Area’s Clipper Start program is a pilot initiative that enhances equity through targeted fare discounts. Eligible residents earning 200% or less of the federal poverty level receive a personalized Clipper card, which automatically applies a 50% discount on single-ride fares across participating transit agencies. This approach ensures affordable access for those who need it most.
In Los Angeles, Metrolink offers an innovative Mobility-4-All program for their riders. Anyone who presents a valid Electronic Benefit Transfer (EBT) card when purchasing a ticket receives a 50% discount on their fare, which includes transfers to other agencies. Metrolink’s ticket-vending machines can validate eligibility automatically, reducing administrative burdens.
San Diego’s MTS also stands out for allowing online applications for reduced fares. Using AI to verify eligibility streamlines the process and eliminates the need for riders to visit a transit center–an example of user-centric design driving adoption.
So, where does this leave us in the debate over zero-fares? While the idea of free rides for everyone is appealing, the practical challenges it brings—overcrowding, security issues, and financial instability—are too significant to ignore. Instead, we should focus on sustainable solutions that combine flexibility, financial viability and high service quality.
By embracing advanced fare systems and targeting subsidies to those who need them most, agencies can balance equity and sustainability. Public transit is more than a service—it’s a lifeline. By focusing on innovation and equity, we can build systems that truly work for everyone.
Carl Commons is the incoming CEO of INIT North America. He’s spent nearly 20 years in the fare industry based in the U.S. for INIT, Inc., the past five years as chief sales officer.
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Cubic Transportation Systems is expected to win the major fare-system project from the Southeastern Pennsylvania Transportation Authority, or SEPTA, an up to $211 million deal to implement and operate the agency’s planned Key 2.0 system.
Update: SEPTA abruptly pulled a proposed resolution from the board agenda for the Dec. 19 meeting this week to approve Cubic, with a spokesman telling Mobility Payments only that "discussions about the proposal will continue between board members and SEPTA staff." He did offer more details for the change. An earlier agenda (see page 17), as of last Thursday, Dec. 12, had the proposed resolution scheduled to go foward for a vote Dec. 19 with a recommendation to hire Cubic. There's no evidence yet that the SEPTA staff has withdrawn that recommendation.
Cubic Transportation Systems is expected to win the major fare-system project from the Southeastern Pennsylvania Transportation Authority, or SEPTA, an up to $211 million deal to implement and operate the agency’s planned Key 2.0 system.
Update: SEPTA abruptly pulled a proposed resolution from the board agenda for the Dec. 19 meeting this week to approve Cubic, with a spokesman telling Mobility Payments only that “discussions about the proposal will continue between board members and SEPTA staff.” He did offer more details for the change. An earlier agenda (see page 17), as of last Thursday, Dec. 12, had the proposed resolution scheduled to go foward for a vote Dec. 19 with a recommendation to hire Cubic. There’s no evidence yet that the SEPTA staff has withdrawn that recommendation.
Open-loop transaction value doubled for a small California bus agency last month, although credit and debit card payments still represented a small share of total fare revenue, Mobility Payments has learned.
The gains for Humboldt Transit Authority, in far Northern California, present perhaps a typical snapshot of one of the small municipal transit agencies that is buying its equipment through the state-backed Cal-ITP open-loop procurement program. The program is serving a few larger agencies, as well, and recorded its biggest quarter to date in terms of orders of nearly $1 million during the third quarter, as Mobility Payments reported.
Open-loop transaction value doubled for a small California bus agency last month, although credit and debit card payments still represented a small share of total fare revenue, Mobility Payments has learned.
The gains for Humboldt Transit Authority, in far Northern California, present perhaps a typical snapshot of one of the small municipal transit agencies that is buying its equipment through the state-backed Cal-ITP open-loop procurement program. The program is serving a few larger agencies, as well, and recorded its biggest quarter to date in terms of orders of nearly $1 million during the third quarter, as Mobility Payments reported.
Account-based ticketing offers big potential for transit agencies, but also poses challenges, a panel of representatives from agencies in Europe, the Middle East and North America that have rolled out the technology or are in the process of doing so said during a recent panel discussion.
Those challenges can include the need to maintain both the new and old ticketing systems for a “considerable” length of time; the lack of off-the-shelf software
Account-based ticketing offers big potential for transit agencies, but also poses challenges, a panel of representatives from agencies in Europe, the Middle East and North America that have rolled out the technology or are in the process of doing so said during a recent panel discussion.
Those challenges can include the need to maintain both the new and old ticketing systems for a “considerable” length of time; the lack of off-the-shelf software
Transit agencies in the U.S. and beyond will be watching to see whether a recent gambit by major agency Washington (D.C.) Metropolitan Area Transit Authority to hire small Australia-based payments service provider Littlepay over its large incumbent supplier, Cubic Transportation Systems, pays off.
WMATA made the unexpected move, as Mobility Payments reported earlier this month, to award an important contract to Littlepay to carry out the agency’s “Open-Payment Overlay” project. The overlay–one of the few projects of its kind globally–seeks to add open-loop acceptance on top of the agency’s existing network of closed-loop terminals quickly and cheaply.
It means that WMATA will have to continue to maintain a completely separate legacy closed-loop system, likely for years to come, using older card-based ticketing technology.
Transit agencies in the U.S. and beyond will be watching to see whether a recent gambit by major agency Washington (D.C.) Metropolitan Area Transit Authority to hire small Australia-based payments service provider Littlepay over its large incumbent supplier, Cubic Transportation Systems, pays off.
WMATA made the unexpected move, as Mobility Payments reported earlier this month, to award an important contract to Littlepay to carry out the agency’s “Open-Payment Overlay” project. The overlay–one of the few projects of its kind globally–seeks to add open-loop acceptance on top of the agency’s existing network of closed-loop terminals quickly and cheaply.
It means that WMATA will have to continue to maintain a completely separate legacy closed-loop system, likely for years to come, using older card-based ticketing technology.
Fare payments representatives with major transit agencies in Europe, North America and Australia have been quietly meeting to discuss merchant fees and fraud around open-loop payments, Mobility Payments has learned.
Also: Australian Government Launches Contactless Trial–Believed to be Token Gesture; Cal-ITP Program has Record Quarter, Thanks to Orders from Sacramento Agency.
Fare payments representatives with major transit agencies in Europe, North America and Australia have been quietly meeting to discuss merchant fees and fraud around open-loop payments, Mobility Payments has learned.
Also: Australian Government Launches Contactless Trial–Believed to be Token Gesture; Cal-ITP Program has Record Quarter, Thanks to Orders from Sacramento Agency.
Nearly nine months after open-loop payments pioneer Transport for London sent an unmistakable signal to banks and payments schemes that it was unhappy about rising transaction fees, not much appears to have changed.
Back in early March, Andrew Anderson, the agency’s head of customer payments, complained about increasing transaction fees and higher fraud losses, which he said threatened to kill the “golden goose” of contactless fare payments for the agency.
Nearly nine months after open-loop payments pioneer Transport for London sent an unmistakable signal to banks and payments schemes that it was unhappy about rising transaction fees, not much appears to have changed.
Back in early March, Andrew Anderson, the agency’s head of customer payments, complained about increasing transaction fees and higher fraud losses, which he said threatened to kill the “golden goose” of contactless fare payments for the agency.
