Select Committee on Transport Written Evidence


APPENDIX 19

Memorandum submitted by Transport for London

OYSTER CARD

1.  INTRODUCTION

  1.1  Transport for London (TfL) introduced Oyster, London's travel smartcard, to the public in June 2003. Travelcards and Bus Pass season tickets can be put on the card, and it can also be used as a pay as you go system (known as Oyster Pre Pay). Oyster cards with Travelcards are valid on Tube, Docklands Light Railway, tram and National Rail services within designated zones and can be used across the entire London bus network.

2.   What are the benefits of Oyster?

  2.1  There are a number of benefits with using Oyster. Customers save time when passing through the station gates and boarding buses is quicker. Oyster is also helping to cut queues at Tube station ticket offices as passengers can top up their Oyster cards online or over the phone. An additional benefit of this is that Tube station ticket staff can spend more time working on station platforms enabling them to interface directly with customers therefore helping passengers with their journeys. Oyster offers greater counterfeit protection than paper tickets with the ability to "stop" lost or stolen Oyster cards so that no one else can use them. This provides TfL with an estimated fraud saving of £2 million per year. In addition to this, the new fares announced by the Mayor in January 2006 mean single journeys are either cheaper or frozen at last year's prices and cheaper day travel is available with daily price capping.

  2.2  Regrettably, at present, it is not possible to use Oyster Pre Pay on the majority of National Rail routes in London.[7]

3.   What has TfL done to actively pursue a fully integrated fare structure in London?

  3.1  TfL has made a number of attempts to enable Train Operating Companies (TOCs) to take up Oyster. Before Oyster went live Train operators refused an offer from TranSys[8] to provide Oyster retailing capability at all London rail stations free of charge. As a result of this decision customers cannot get Oyster at over 250 rail stations in London (out of a total of 304 stations).

  3.2  In 2004, TfL offered to finance £25 million worth of TOC investment in smartcard infrastructure required to extend Oyster Pre Pay to all rail stations throughout fare zones 1-6. This offer was refused, but had it gone ahead the infrastructure could have been in place by the end of 2006. In 2005, the TOCs estimated the cost of implementing Oyster Pre Pay at £65 million. TfL believe that this is an inflated figure, because the proposal covers long standing National Rail fare and revenue control issues. Although an attempt to solve these issues, it is at the expense of delaying public access to Oyster.

  3.3  In 2005, TfL invested £500,000 to survey National Rail stations in anticipation of the extension of Oyster Pre Pay to all stations in zones 1-6.

  3.4  Also in 2005, many TOCs refused to review station drawings related to installation of equipment for extending Oyster to stations within zones 1-6. One TOC even demanded to be paid for the time of the personnel required to perform the review.

  3.5  TOCs have raised concerns over the potential for fraud and revenue control risks with the use of Oyster on National Rail. TfL believe that this possibility has been overstated by TOCs. Evidence from the DLR and other works show that these risks can be managed and do not prevent progress.

4.   Why did TfL progress Oyster ahead of a National scheme?

  4.1  Integrated Transport Smartcard Organisation (ITSO) is the smartcard ticketing standard supported by the Department for Transport (DfT). The DfT is unwilling simply to agree to extend Oyster Pre Pay to train services in London because it would like any extension of smartcard ticketing to be based on the ITSO standard. Oyster is a system from one manufacturer: ITSO is an open standard and any manufacturer could make compatible equipment.

  4.2  When London Transport awarded the contract in 1998 for smartcard ticketing (prior to TfL being established), ITSO had not been developed. The alternative would have been to delay the contract award which would have delayed passenger benefits and network improvements until ITSO was mature. Indeed, passengers would still be waiting.

  4.3  TfL will come on board with ITSO when:

    —  It is proven to work.

    —  It is secure enough to handle financial transactions.

    —  It does not degrade the performance of the existing system.[9]

    —  There is no cost to TfL as a result of implementing ITSO.

  4.4  TfL has assured the TOCs and DfT that Oyster devices could be modified to accept ITSO products when they are proven. As detailed above, TfL strongly feels that standards and funding are long term issues with ITSO. In the mean time, Oyster is being used for more than half of Underground journeys and almost half of all bus journeys. Therefore the London wide implementation of Oyster would now be in the best interests of the travelling public.

5.   What could TOCs do immediately to improve access to Oyster?

  5.1  TOCs could do a number of things in the short term to improve access to Oyster. For example, two-part season tickets could be offered. This would involve a paper ticket for the part of the journey outside London and an Oyster card for the part inside London.

  5.2  Train operators could also have Pre Pay enabled at 35 non-jointly operated, gated stations. This would increase the number of train passengers making single or return journeys that could use Oyster.

6.  CONCLUSION

  6.1  In total, 2.9 million people currently use Oyster and more than 3 million journeys are made each day with the card. Fare incentives introduced in January 2006 make Oyster even more attractive. The use of Oyster means passengers can take advantage of cheaper pre-pay fares and lower daily price capping. Passengers on lines where Oyster is not available cannot take advantage of these benefits.

  6.2  With continued growth in customer demand, TfL wants to encourage the TOCs to integrate the system to include all public transport in London. TfL have made it clear that when standards are proven we will be willing to come on board with ITSO. In the mean time, many customers are missing out on the benefits provided by Oyster.

January 2006





7   There are currently 10 National Rail routes where Pre Pay is valid. Back

8   TranSys is the contracting consortium which provides the Prestige Project, a 17 year private finance initiative awarded in 1998 to cover almost all aspects of TfL's ticketing infrastructure. Back

9   For example, Oyster takes 0.2 seconds to transact/open the gates. Preliminary trials on London buses to assess the use of ITSO show it currently takes 3 times longer to register/read than Oyster. Back


 
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