In part 1 of this series, we described seven ways transit agencies can raise revenue. In part 2, we cover the other side of the revenue equation – how to reduce expenses.
At public transit agencies, less than 20 percent of operating budgets typically come from fares collected. However, even at the smallest percentages, fares can make the difference between an agency thriving or surviving. Agencies know all too well that even small efficiencies in collecting these fares can have a big impact on already tight (and shrinking) budgets and margins.
Today’s fare collection systems have the potential to save money, not just by lowering the cost of fare collection, but also by driving efficiencies using the data collected during fare collection.
Opportunities to save money
“There are many opportunities for transit agencies to become more efficient, from operations to planning to minimizing cash slippage,” says Bill Kerr, commercial general manager at Genfare. “Small savings spread across multiple points in the fare collection process can add up to keeping significantly more of the money that comes in through fare boxes.”
Here are seven ways your fare collection solution can help your agency reduce expenses to improve your bottom line:
1. Digitize cash
The cost of cash collection is generally higher than other methods of fare collection. This is due to a variety of factors such as more frequent maintenance of farebox components that validate cash, the cost of staff and space needed for vaulting, counting, and transporting cash, theft and accidental loss, and slower boarding of cash-paying riders.
While adopting and promoting open payment, smart cards, and mobile payment is great, there will always be unbanked or underbanked riders and riders who are uncomfortable with digital payments. For these riders, providing opportunities to digitize cash is key. This could include:
- Ticket vending machines
- Administrative and retail point of sale terminals
- InComm and other retail networks
Read Why your transit agency should be digitizing cash
2. Optimize operations
Streamlined operations are critical in raising your agency’s reputation, keeping riders satisfied, and costs down. Cloud-based backend software like Genfare Link streamlines processes to reduce inefficiencies and optimize resources, alleviating pressure on staff. By reducing time spent creating reports, responding to requests for data, and solving problems, it frees agency staff to focus on higher impact tasks.
Making data available on demand to people across the agency also arms operations staff with the information they need to keep the fleet in motion. Here are just a few ways Genfare Link can benefit operations.
- Reduces probing time with data transfer using Wi-Fi or cellular data the moment buses enter the garage
- Eliminates dedicated workstations, freeing up space in garages and reducing computer hardware maintenance and replacement
- Automatically pushes updates and fare structure changes to all devices and platforms
- Informs predictive maintenance to address potential problems before they take equipment offline
- Tracks inventory of consumables such as printer heads and fare media so you can order smarter
Read 9 ways Genfare Link supports transit operations
3. Outsource administration to organizations
By using the organizations module in Genfare Link, transit agencies get more riders in bus seats and more revenue in fareboxes without dedicating more administrative hours. Employers, schools, tourism bureaus, and non-profits can all handle distribution of passes, from single ride tickets to unlimited monthly or semester passes.
“Organizations is a huge opportunity for introducing efficiency and effectiveness,” says Bill.
Any transit agency with Genfare Link already has access to the organizations feature — CDTA, in Albany, N.Y., is a super-user. The organizations module, like the rest of Genfare Link, is cloud-based and permissions-restricted. This allows the transit agency to extend access to only the people at the organization authorized to administer the program. And the organization can also see only the rider accounts and reports related to them.
Other than optional equipment for encoding fare media, no dedicated hardware is required – all functions are accessible from the user’s computer. Flexibility in how the program is structured makes it work for any organization and every transit agency.
Read Get organized to increase ridership and revenue
4. Use data to inform planning
“A fare collection system that can give you the big picture and the level of demographic detail you need for data-driven decision-making can be very powerful,” says Bill. “Planning is enhanced when you know the different types of riders and how they are paying, the percentage of each route’s riders that are reduced fare, and how each sales channel effects ridership.”
Effective reporting unifies teams, clarifies decisions, and helps agencies become proactive. Agencies that make it a priority to modernize their data-collecting systems will find exciting opportunities for route or timetable optimization, fare discounts, vehicle service options, and community collaborations that can bring or keep riders on board. Data-driven decision-making makes the entire transit system function better.
Read How data-driven decision making advances the first pillar of equitable mobility
5. Future proof your fare collection solution
Future proofing helps insulate your fare collection solution from major shifts or disruptions in technology to ensure it consistently functions well and can be used by your agency and riders for years to come. It ensures that you won’t have invest capital funds in overhauling or replacing your solution as changes arise, giving you peace of mind that your solution won’t become obsolete.
Making sure that your solution is adaptable and flexible to future changes can save your transit agency time, money, and effort. The steps you can take to ensure that your fare collection solution remains viable despite developments in the technological landscape fall into four categories:
- Consider modular hardware
- Choose dynamic, updateable software
- Look for technology with broad integration capabilities
- Ensure your technology is secure
Read 4 ways to future proof your fare collection solution
6. Reduce cash slippage and streamline reconciliation
“Accurate, real-time reporting better supports cash reconciliation, identifies discrepancies early, and reduces slippage,” says Bill. When all revenue data streams are centralized and accessible, transit agencies become better equipped to track and reconcile cash at every step, down to the penny.
Having complete data transparency into how your cash moves through your system makes it easier to investigate discrepancies and improve fare collection practices that contribute to shrinkage. In addition, agencies using Genfare Link could theoretically decrease time spent on report reconciliation by up to 90% per week, which could translate into savings of more than $120,000 per year.
Read How Genfare Link can help your transit agency save time and money on fare collection
7. Prioritize digital security
It’s critical to ensure your fare collection solution is equipped with comprehensive security protocols to protect the volumes of sensitive data collected during fare collection and funds moving through the system. Hackers who get into an unsecured system can also shut down the system entirely, resulting in major disruption to fare collection.
A breach could lead to reduced trust in your transit agency, along with the possibility of revenue loss from breached fare collection. Additionally, encountering security issues may oblige your organization to undergo costly measures and audits to become secure once again.
Data and transaction security can be grouped into three features:
- PCI certification: GenPay is Level 3 PCI certified, maintaining the highest industry standard of payment processing security.
- Data encryption and tokenization: End-to-end data encryption and tokenization ensures that only the banking institution and fare collection partner can access sensitive information.
- Secure data storage: Amazon Web Services, on which Genfare Link is built, maintains secure, redundant data warehouses to prevent data loss and minimize downtime.