The pressures on the public transport sector continue as the slow recovery from the current recession continues to be felt by both local authorities and passenger transport operators, driving the need to tightly control costs. Any investment needs to be carefully considered against the potential benefits.

It is tempting to do what has always been done to keep the costs down during lean times. However, the cost of continuing to retail traditional paper-based tickets is not sustainable long-term. Also, continuing to bear the costs associated with ticket retailing is no real answer when the cost base needs to be lowered.

From models that we have developed for clients during this time, you can observe the shift away from and hence lowered efficiency of the traditional channel. This is referred to as ‘channel cannibalisation’ where more modern ways of selling tickets eat into the volumes sold via the traditional way of selling tickets.

The move towards encouraging passenger adoption of a more self-service model also has hidden costs associated with the present two major mainstream technologies:

  • Ticket vending machines - can be complex to use and may or may not sell the right/best ticket for the passenger needs. They are also expensive to maintain and costly due to anti-vandal and theft prevention requirements.
  • Internet ticketing - Tickets sold over the web have still got to be distributed. The ‘golden age’ of Internet Ticket Issuing Systems (WebTIS) where the full 9% commission was paid by the TOCs to the vendors are long gone. This reflects the reality of the cost of web based sales. Further, distribution costs are high reflecting the costs of distributing the ticket.

Operators are facing a plethora of smart ticketing types, each with its own standards and technology to support. Each type has a different potential impact on customer convenience, revenues, existing channels and costs to deploy. Some of the popular offerings today are:

  • Print@home – allows a person buying a ticket before travel (usually on the Internet) to print their own ticket. Print@home is increasingly being adopted across all modes of transport and especially in aviation.

The technique saves money for the operator as there is no cost of fulfilling the ticket other than producing an electronic file for printing. Therefore, as a minimum, an operator saves on postage costs (typically equating to £1.25 - £1.50 per ticket sale).

The downside of this type of ticket is that it is less secure than other media. Where the person is identified specifically this is not an issue (which is why it is popular for flights). However, it would be difficult to use anonymously (the way the traditional ticket is used).

The inclusion of bar code printing allows the use of optical readers to validate the ticket, but other than for air travel most operators have not invested in the equipment, preferring instead to validate the tickets manually.

  • Mobile ticketing (m-ticketing) – The use of mobile phones to act as a vehicle for tickets is not new; we developed the first European m-ticketing system over 12 years ago. Since then, mobile ticketing has seen only limited uptake with some operators finding it useful and popular.
  • Smartcard schemes – There are currently several differing smartcard-based schemes in operation across the UK and many more at a global level. These fall into one of two camps. Smartcard schemes are either proprietary (such as Oyster for TfL or the current Southampton City scheme), or based on an open standard (ITSO in the UK or Calypso worldwide).