Every time New Yorkers swipe their Metrocards in the turnstiles of the city's sprawling subway system, an amazing amount of computing power kicks in, tracking how much fare is spent, where and when it's used across the system, and how much is left on the card.
Every time Londoners flash their OysterCard, the same thing occurs.
Behind both "smart" systems is Cubic Transportation Systems, a firm that's focused on bringing smart, connected technology to our roads, tunnels and trains.
The firm is hard at work on a next-generation system for New York City. I spoke with Northeast and Mid-Atlantic regional director Steve Brunner about what's next in automated fare collection -- including near-field communications and advanced radio frequency identification cards -- as well as the push to go mobile and the challenges of a building an infrastructure that's made of rapidly changing parts.
SmartPlanet: Let's start at the beginning: what does Cubic do?
SB: Cubic Transportation Systems is a subsidiary of Cubic Corporation in California. We're the world's largest provider of automated fare collection for mass-transit systems.
We handle turnstiles, ticket vending machines, communications network, data collection and reporting systems. We also provide services to operate and maintain those services. In some places, that's just equipment, in some places it's services, for some it's both.
We have systems in place in Brisbane, London and San Francisco. We have more than 175 active clients in 40 major markets in the world.
- New York -- We're the original supplier of Metrocard system. The equipment.
- London -- We're behind the OysterCard system. Equipment and some services, like maintenance, call center support and the reporting system.
- Washington, D.C. -- Mostly equipment, as well as customer service support for the WMATA.
- Los Angeles -- Some equipment, some services, such as gating, ticketing and maintenance.
- San Francisco -- We're behind the Clipper card. That includes some equipment, operations and customer service.
We also recently won a big job in Sydney, and have a partnership with IBM in Vancouver.
SmartPlanet: That's a lot of major cities. So what are you seeing out there, the state of the industry?
SB: What we're really seeing in this industry right now is an evolution in the way we're going forward. A lot of it has to do with budgets. You certainly have to have a lot of patience in this industry. It's been conservative.
What we're seeing now is that they're really looking at getting out of the business of fare collection themselves and outsourcing a lot of it -- whether the technology or the operation. They want to go away from proprietary-based systems and into new, open fare payment technologies. With the banking industry getting into open payments and contactless media, we have another source putting media on the street. Agencies are saying, "Why not do that?"
Banks are one of the big key distributors of the media: debit or credit cards, so long as it's a contact-less device. In addition, phone companies -- phones can be a form of contactless media.
It could be a student card or a government card. The technology has evolved.
SmartPlanet: The obvious question, then: why don't we have these technologies yet? My hometown, Philadelphia, still uses tokens.
SB: Most of the barriers for technology are pretty much gone. We've seen pilots that have shown that the technology works. You haven't seen it before because it hasn't been out there, but just recently technology has improved and wireless networks have improved and banks are issuing new cards.
Philadelphia is committed. They're probably the farthest along in terms of procurements of new technologies.
Washington is going to come out with a procurement. Chicago has a procurement in process right now for open payment. Toronto has an open procurement on the street. Part of the Vancouver job is that. You're seeing a lot of enthusiasm.
To be honest, you've seen a lot of smart card systems go into play. Miami has transitioned to 100 percent contact-less smart cards. Chicago, Washington, New York's PATH system, Boston.
We're definitely sharing the business models with agencies like the MTA and SEPTA. You make an investment; a city as big as New York is a huge investment. They did that in the mid-to-late 1990s [with the MetroCard]. Compared to tokens, it's saved them a lot of money from lost fares, fare evasion and the cost of collecting them.
Over the last few years, we have gone in and pitched to them on how the same improvement in their business practices. Tokens lasted about 90 years. Magnetic media lasted about what, 15 years? The half-life of this technology is changing. But it's a big investment every time you change technology.
SmartPlanet: Infrastructure isn't designed to change quickly. How do you plan for upgrades?
SB: The next round of upgrades will become more flexible. When the MTA goes from the Metrocard system to an open payment system, they're not going to have to go back to the ground and take out out the gates. They can just bolt readers on what they've already got.
The readers and the computers and the technology we put on there in the turnstiles of the future…we've thought about the next generation: phones, contactless, a watch, a key fob. All of this technology is going to be built to some form of open standard.
SmartPlanet: Is this a transportation revolution, or evolution?
SB: It's a combination of slowing down and speeding up.
Reliability and speed are the most important things to us. We want to get people through gates and boarding buses rapidly. We're partnering with people from Silicon Valley and the people who make phones -- there's a much closer relationship than there was in the past.
One of the big hurdles, which exists but has improved, is the ability to accept credit cards on buses. You have to be able to communicate back to authenticate and authorize cards. The improvements that have been made -- 4G networks, for example -- are allowing us to introduce this technology.
SmartPlanet: What is your biggest challenge?
SB: Working with all these different technology and service providers and being able to put teams together to address these needs. A lot will be based on wireless technologies.
We've improved a lot, but it's still not uncommon to have your phone call dropped. If it will slow your boarding times, that's unacceptable. We have to come up with ways to protect ourselves and the transaction.
SmartPlanet: Will there be unified accounts across systems, such as having a common account in Philadelphia and New York?
SB: Things are looking to be more regional. For New York, we didn't do much with Metro North and Long Island Railroad. Now you're talking the region: NJT, commuter railroads, Port Authority and PATH.
There are many people living in this area who transfer across systems using many different pieces.
The regions are going to expand. There are already discussions happening to make it global. Any form of ID that can be associated to an account for payment: you'll be able to use it in New York, London, Philadelphia.
It's simpler and more convenient to support a single system. For the user, it will be transparent.
SmartPlanet: When can we expect this feature?
SB: We'll start seeing systems within 12 to 18 months.
The procurement process can take longer than the implementation process. We recently did a system in Miami; we replaced their entire system. The procurement process took years, the implementation took 14 months.
There is a global demand for these types of open payments. The biggest difference between the United States and Europe is the security standard for their cards. In Europe, every card has a chip and PIN. It allows you to do more authentication and authorization locally without going back to the bank. It doesn't exist at all in the U.S. right now. The concept is very similar.
Most people who play in this space make products that support either environment. Canada is looking at EMV [Europay, MasterCard, Visa] more. We are partnering with different kinds of people than we did before: banks, card-issuing companies, et cetera.
SmartPlanet: What are the benefits here?
SB: With that same card, you can get local benefits: in London they have other policies, such as "capping" -- so you get the best price regardless of the kind of ticket you buy. They're paying as you go.
SmartPlanet: As a New Yorker, London's requirement to scan your ticket upon exiting the system always frustrates me.
SB: Places like Washington and London charge by the distance, and to do that, you need to know where someone got in and where they exited.
SmartPlanet: Is there a place for GPS in that scheme?
SB: There is -- that's probably a next-generation technology. Phones with GPS built into them, maybe you can determine where people get off. That's probably in the next evolution.
SmartPlanet: How about ensuring wireless connectivity in old subway systems deep underground -- can it work?
SB: I think it can. You need some network within a station -- a wireless LAN to an access point above ground to get to the broadband wireless network to communicate to the master system. We don't necessarily need it in tunnels and tubes, just entry and exit points.
SmartPlanet: Surely that's an expensive proposition.
SB: Well, you put in a wired network, it's more expensive. If we have to put in that network, wireless is going to be less inexpensive.
SmartPlanet: Does there exist equipment to deal with harsh conditions underground?
SB: We do have that -- that's one of our key points of expertise. We bring to the table our experience in mass-transit, taking Silicon Valley technology and bringing it into this environment for 40 years.
On a bus, it's more about driving down the streets that aren't so smooth.
SmartPlanet: Is there interest for Cubic to expand into the smart grid for cities space?
SB: Business has changed, but it's picked up. As a corporation, this year was a record year for us. These agencies want to move to more efficient systems.
We see more requirement for justification and return. With this new technology, we believe we can bring efficiencies and customer convenience to them.
There certainly is more of a move toward providing the system and services. It's more of a general investment by us as a company -- the initial capital investment -- that's what we're seeing more of.