Can transit innovation overcome coronavirus' long-term effect on travel?

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Transit systems are suffering a dramatic loss in ridership, and must find a way to welcome back riders after the coronavirus pandemic ends, since many commuters will have canceled their monthly passes.

By swapping legacy closed-loop ticketing systems with contactless open digital technology, transit operators can also help stop the spread of future viruses.

Replacing paper tickets or prepaid fare cards reduces the need for commuters to touch surfaces and “push button” self-serve kiosks inside transit networks. The use of mobile wallets to load and pay for transit fares also produces data that can manage spikes in traffic to mitigate crowding, or in some cases target portions of a system for closure to protect against localized viral outbreaks.

“Today people have to go to a ticketing vending machine. Using smartphones is a way to reduce exposure,” said Randy Vanderhoof, director of the U.S. Payments Forum who has consulted on transit payment technology upgrades.

In the moment, transit ridership is falling quickly, but there will likely be at least a partial spike as cities reopen. The Republican Senate financial stimulus proposal includes $20 billion for transit systems, according to Reuters, adding the funds would be direct grants as opposed to loans. The Democratic-backed House bill allocates $25 billion for transit, according to New York Magazine. These funds will probably go to shoring up finances, a strategy that already included cutting overhead by moving ticketing and fare collection out of transit networks to open payment systems.

Embedding transit payments in a mobile wallet, similar to New York’s OMNY, places transit ticketing near other financial information, as well as information about nearby merchants and general news. Even if there’s not a direct in-app link, information about closures or other safety alerts is much easier to access through a mobile payment app.

Transit payments are typically part of global “smart city” initiatives which use digital interoperable authentication to streamline building access, ticketing payments and government identity.

“In a smart city, environment concerns about safety and security will be accessible via mobile and people can quickly control their actions based on that,” Vanderhoof said.“A lot of this is not reinventing the wheel. The technology is there and can be repurposed and used quite well.”

One challenge is improving the ability of transit systems to work together to create a more universal system of payments that works across networks, Vanderhoof said.

In major cities where infections have slowed, transit systems are reopening and using new ticketing techniques to mitigate virus spread. Beijing, which is gradually coming out of a lockdown that lasted more than a month, is testing a subway-by-appointment system to reduce crowding.

Riders use a choice of apps to pay and make appointments to use the subway, according to CNN. Riders use a QR code that’s valid for a half-hour window, a move to stagger ridership. Other systems, such as Taiwan, are pairing body temperature screens to mobile boarding.

Transit systems in North America are already using similar technology. Montreal, for example, as early as 2013 installed a loyalty app that tied using transit at off-peak hours to perks at local merchants.

“This whole idea of moving from buying tickets just for transit is transforming to seeing transit as part of a broader journey, one of several steps that you take when moving around,” said Nick Mackie, head of Visa’s global mobility initiative, who suggested open loop transit payments make metro systems part of e-commerce, with all of the ancillary data benefits that come with digital “not present” mobile payments.

Major card companies are investing in transit payment technology, potentially linking transit payments to nearby merchants, thus connecting two parts of the economy that will need help. Visa Ready for Transit has built a network of more than 100 transit systems that are embedding new payment technology. Mastercard has also invested in new transit technology, including participation in New York's OMNY pilot. Visa would not comment directly on the coronavirus and Mastercard did not return a request for comment.

The U.K.'s Imperial College coronavirus report, which has reportedly informed government response in the U.K. and U.S., does not make direct recommendations for mitigation or suppression. But it suggests a near-term suppression strategy — which would be the current state of mass lockdowns and stay-at-home orders. This would be followed by a re-opening of society after a period of between 3 to 7 weeks, followed in the long-term by periodic partial closures based on localized spikes in infections until a vaccine is available at scale in about 18 months.

Transit payments apps can make these responses more targeted and less random, according to Ben Whitaker, head of innovation at Masabi, a ticketing payments technology company.

“Paris has ‘smog days’ in which transit is free for people with odd or even driver's licenses,” Whitaker said. “That’s a blunt instrument. Account-based transit ticketing can streamline that by turning up or turning down rates based on goals to control ridership levels.”

Mobile apps can also tie to medical IDs or digital ID for other first responders, Whitaker said, enabling reduced or priority service for those professionals.

“You wouldn’t want 100% of the ridership based on these types of IDs,” Whitaker said. “Anonymous transit is important, but you can also manage ridership during the crisis or manage spikes as cities spool back up.”

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Coronavirus Contactless payments