House of Commons - Transport - Written Evidence

Select Committee on Transport Written Evidence

Memorandum from Iosis Associates (TPT04)

INTEGRATED TICKETING

1. Is ticketing sufficiently integrated across different modes of transport and between different geographical areas?

2. From my point of view, in general terms, nowhere near, despite the 1998 Integrated Transport White Paper and the new Bus White Paper "Putting Passengers First". The new White Paper totally ignores integrated ticketing, although it does mention "through ticketing" without defining the term. Also the new White Paper is generally internally inconsistent and sloppy in its use of terms. See the Annexes to this submission for analysis and comment on the White Paper.

3. My viewpoints are two:

— that of passenger, using bus services in my local near-metropolitan area (Greater Bristol), bus services in other areas that I visit, long distance coach services, heavy rail services, metro services (eg London), and the half-way house of Merseyrail Electrics; and

— that of technologist in ICT areas that include the ITSO secure ticketing and journey management environment

4. As with so many questions in an area of service delivery to a large number of people, the 80/20 rule comes into play. If the service offered is perfectly adequate for 80% of the people or for 80% of the transactions, is that good enough? Different situations of course produce different splits 60/40, 90/10, 99.99/0.01 ... Different people will therefore give different opinions.

5. In terms of expectations following the 1998 Integrated Transport White Paper, the answer to the Committee's question is overall "No". In terms of the desire to minimise the growth of private car traffic, even reduce it, the answer is very definitely an overall "No".

6. Geographically, in some areas of the country the answer is "Almost Yes and improving"—London is the example most often cited as having good ticketing provision. Oyster demonstrates, as does for example the current national scheme in The Netherlands, that integration must be organised and managed at the level of a natural geographical and demographic region. To some extent the PTEs have been able to provide integration across different operators and even, as in Merseyside, across bus and rail modes. But overall the application of competition law has brought about a deterioration in the progress of integration, and has even caused the ceasing of some integrated ticketing schemes.

7. To people who live in another town or city that has public transport that the local residents rate as "poor" together with heavily congested roads (eg Greater Bristol, which does not have a PTE and has recently been described as the largest metropolitan area in the country that is not a metropolitan county), once we learn how the Oyster scheme works we want it in our area. Those of us who know that the current Oyster technology is not scalable and not interoperable with clones of itself in other urban centres are aware that the forthcoming overlaying of ITSO technology on the Oyster scheme will be a boon.

8. The initial integration of further heavy rail London local services into the Oyster scheme is a start, but essential is resolute and expert progress with the growing commitment by DfT to ensure that longer distance heavy rail services implement ITSO technology and do it properly. However, the longer distance heavy rail service ticketing provision, currently supposedly at the start of implementation, is the subject of very considerable internal disagreement within the industry, and DfT gives all the appearance of not having the expertise or knowledge to resolve the problems.

9. We should temper the answer "No" with an assessment of the possibility of doing better without significant extra cost. Here we frequently hear about, and some of us experience for ourselves, public transport systems in European cities or further afield (eg the far east) that in metropolitan areas are better integrated. If we look at the difference between their way of doing things and ours, we very often see a publicly owned service (eg Brussels, Paris), or at least a much better partnership between public and private sector (eg Holland). In fact Holland is a good place to study, for they are currently installing a fully integrated public transport ticketing system from one of the only two companies recognised as being capable of delivering (with suitable partners) a fully integrated ticketing system over a complex multi-modal network. [1]

10. A major characteristic of the public transport networks in the urban areas of those other countries is consistently and carefully applied capital investment. It is the careful application of that investment that really matters: we fall down on that in this area of technology, as we do with many areas of technology applied to public services. Thankfully, there is a move (eg Transformational Government, but perhaps more importantly a growing feeling that more and more civil servants are determined to do better) to be more careful in our use of investment money, but I still believe that there are major lacunae that continue to negate much of the possibilities for benefits.

11. A final note: long distance coach services are currently operated entirely separately from other modes, with no sign of a move towards integration with those other modes, either of ticketing or, in the larger picture, of services.

2. Does the Government have an adequate strategy for developing the integration of ticketing systems?

12. Not any more; perhaps it never really did, as it may well have been that only a small number of civil servants (the key one in DfT, Eric Sampson, has recently retired) really understood what ought to be done, although I submit that their concept of how it should be done has never been adequate: nowhere enough application of the needs for thorough planning and for engineering discipline.

13. Having been working recently with the trade association PSSG[2] on this topic, I do not know of any such strategy, despite the commitment to seamless travel as long ago as the 1988 Integrated Transport White Paper. Indeed, on heavy rail services ticketing has become more fragmented and increasingly difficult for either customers or sellers to understand. In particular, the selling by or for TOCs of tickets for use on specific, timed rail services has been causing considerable distress, because ticket validity is not checked at the point of boarding: after departure, those who get on the wrong train are charged the full open ticket fare by the Train Manager. The "Putting Passengers First" paper (see Annexes below) about bus services concentrates only on proposals that attempt to improve punctuality and reliability (note that those are very technical terms in the industry and in regulatory circles, not necessarily having the meaning that the common man or woman assign to them), to the exclusion of all other benefits to the passenger. For long distance coach services there are no government strategies for integration of ticketing, either within that mode or between that mode and other modes.

14. The strategy has to have two parallel streams:

— commercial arrangements that benefit the traveller; and

— technology and management that enables effective and efficient delivery.

15. Commercial arrangements have been severely restricted by the application of competition law. There have been some improved guidelines recently, but I believe that that is nowhere near enough for the large commercial organisations currently operating most of the UK's surface and sub-surface public transport. Despite guidelines from OFT, there is always the risk that massive commercial disruption will be caused if OFT changes its mind. An operator of public services needs a long term stable environment, and so do the passengers. I have repeatedly used the phrase: "its no good accepting a guideline if the OFT can on a whim change it and come and hit you with a hammer"—they can stop what you do, tying up company executives in a long and expensive investigation, and levying massive fines. Bus operating companies[3] in particular run lean on supervisory, admin and managerial staff, so that any investigation is extremely disruptive.

16. Technology has to be carefully planned and managed: its an engineering job. The TfL Oyster scheme in the end came good after a shaky early development period, but with its present technology it is not scalable much further than its present scope, and separate Oyster technology schemes in different areas of the country cannot link up in the way that ITSO-compliant schemes are designed (and proven) to do—thus there is no interoperability between Oyster technology schemes. Oyster may, however, by adding ITSO technology, be capable of being economically applied to other urban areas linked into national interoperability[4]—but present tests indicate that, even with some optimisation, performance of an ITSO compliant mode embedded in an Oyster scheme, in terms of throughputs through station gates, may not always meet the current contractual performance commitment to TfL.

17. Currently it is unfortunately the case that ITSO Ltd and its developments are not managed as a Best Practice engineering company and project, and DfT, despite its significant funding for ITSO Ltd, has failed to trigger improvements. [5]The generic problem with a Company Limited by Guarantee without shares is that the Members have little opportunity to influence the incumbent management, and most of the Directors (generally operating as volunteers) find it extremely difficult to influence a dominant cohort of managers (or even of Directors). By contrast with ITSO Ltd, Network Rail works extremely well, through having an excellent team in charge, but in the long term such a corporate arrangement has some in-built risk. Nevertheless, Network Rail is successful in delivery terms and has gained the financial strength to source additional funds. It is therefore sensible for Network Rail to look beyond the rail network and consider supporting all modes of surface and sub-surface public transport. With DfT policy now being to spread ITSO technology onto heavy rail, and the financial needs of ITSO Ltd, it makes sense to fold one Membership Company (ITSO Ltd) into the other one (Network Rail).

18. The present commercial arrangements (with the competition problem mentioned above, and the short termism still built into rail franchising) militate against significant investment by the service providers, and of course central government doesn't want to fund large capital programmes. But there may be a light at the end of the tunnel as far as ticketing systems are concerned, although the tunnel appears to be currently blocked by DfT inaction—hence the statement made by PSSG this week.

19. It has recently become clear that there are two strands being discussed and perhaps developed within DfT:

— roll out electronic ticketing right across heavy rail (perhaps 25,000 items of ticketing equipment).

20. But there is no co-ordinated action, and, at the March 19th Supplier Briefing session for the DfT procurement of services for Concessionary Bus Travel, there was a clear statement that there is no DfT policy to roll out ITSO technology across all of surface and sub-surface public transport in England.

21. The probable timescale is five years, ie roll out to be completed by 2012. If that is coupled with effective on-line ticket purchasing across the internet[7], it should be possible to leverage a large proportion of the capital investment out of the private sector—that is because with multi-modal deployment there will be a long term future for the methods. I believe that Eric Sampson was right when he said to me that the big service operators have to get to the stage where they all decide to move together and authorise the investment in interoperable electronic ticketing. Currently I believe that none of the major operating groups has a positive business plan for the rollout on their own: they see costs but not enough financial benefit[8], but they will invest if they see a national policy announced and taken forward. DfT has to show us a co-ordinated five year project if integrated ticketing is to be delivered, and DfT has to manage the programme far better than hitherto.

22. It should be noted that the ticketing environment resulting from a nationwide rollout will not just be a rollout of smart cards. Other physical formats of smart media will be used, as will (with care) print at home (using bar codes for security) and "show and go" ticket to mobile phone. New secure short range technology is coming along (Near Field Communication is currently the best suggestion, embedded in mobile phones), and could fit onto the front end of ITSO style schemes. The ITSO Method is capable of adaptation to these different ticketing media, although currently a very rigid DfT mandate for "all cards to be usable everywhere"[9] is inhibiting, and there is no credible way for extensions to be managed.

THE USE OF SMARTCARD TECHNOLOGIES

3. Is the industry taking up modern smartcard technologies adequately and appropriately?

23. No, but why should it? "Industry" in the shape of the set of public transport operators has an overwhelming duty to its shareholders, and until recently there have been indications that they see introduction of the technology as having a massively negative business case for them unless about £250M is pumped in by government. Also, in the absence of measures to promote growth in public transport, the necessary parallel introduction of interoperable ticketing has a negative business case to a service operator, because it increases competition. But now I believe that they see the benefits of improved service management that the ITSO Environment delivers, plus a determination within government to improve public transport services.

24. The answer to this one is already presaged in the answer to Q2: we need:

— a co-ordinated 5 year strategy and programme from DfT, designed to leverage most of the investment out of the private sector; and

— a change in the way that the technology is managed.

25. But, even if the technology stays as it is now, it will still need over £100 million of investment from the public sector[10], plus on top of that will be perhaps £50 million to re-issue all 10 million concession passes, although some of that pass issuing funding will already be budgeted for over the five year period as part of the normal cycles of replacement and accretion of new entrants.

26. Scotland may soon get its second wind, after a stuttering start to its ITSO-compliant smart media bus-based ticketing scheme. Wales has issued ITTs for an all-Wales scheme similar to that in Scotland.

4. Does the ITSO system cater for the needs of all passengers and travel providers?

27. No, but it is capable of extension (needs capital investment for development, and a security management organisation that also needs public funding).

28. Some extensions (to different media) have already been mentioned above, but the particular missing link is that there is no provision in the ITSO Method for on-line purchase of tickets for direct download into the ticket media. This extension is particularly important for heavy rail. It requires a significant re-think of security methods, and, if a competitive market in systems and equipment is to be maintained, a rigorous application of the international systems level standard ISO EN 24014-1[11], which the UK has been very active in developing out of the basic principles of the ITSO Method. Currently ATOC/RSP, after a request from DfT Rail, has proposed a centralised architecture rather than the distributed one described in the standard and implemented in the ITSO Method—that proposal must be rejected.

29. There is also the problem that reading the ticket or tickets in the smart media cannot at present be carried out with a low cost reader, thus requiring tickets for a complex multi-leg multi-modal journey to be sold with a printed itinerary.

30. At the management level, the ITSO Licensees (scheme owners/operators) have recently agreed to form a co-operative of the schemes. [12]However, there is no provision for overall security management across the network of schemes[13], and some key supporting ITSO specification material has not been delivered.

31. DfT is currently looking at BIBO technology (Be-In Be-Out), ie automatic detection of the passenger's token as the passenger enters a vehicle, automatic charging, and automatic detection of exit. Revenue protection is exceedingly difficult with this method.

5. What can be learned from the experiences of areas such as London and Scotland where smartcard technology is already in place?

32. London's scheme is not scalable (or interoperable with other schemes using the same Oyster technology) unless it is updated by adding ITSO technology. Considerable funding has already been provided for this upgrade, but may not be enough. London's scheme is expensive to run and more expensive to change; it does not translate well to more rococo areas (eg rural areas).

33. Scotland got the contractual organisation massively wrong, and their attempt to marry up transport ticketing with use of smart cards for citizen services was bungled. A recent presentation to the DfT-supported Transport Card Forum, by Anne Gibson of Transport Scotland, illustrates the difficulties that they have been and are having. An officer from the NoWcard scheme (Cumbria, Lancashire, Blackpool and Blackburn) indicated at the time that they have made the same mistakes.

34. Planning for system integration in Scotland was neglected, with delays to rollout of the acceptance network now apparent and serious concerns by the commercial software contractor. The same delays can be seen in the NoWcard project (Lancs and Cumbria—the same consultants as were used in Scotland were used for NoWcard). DfT has recently published a report on the early stages of ITSO and Oyster integration[14], again showing project planning failures, causing significant delays—the same consultants were involved (and many of us knew about the contractual difficulties that would be encountered). By contrast, Merseytravel's Stage 1, to issue ITSO-compliant concession passes and outsource much of the operation of the scheme, had project planning and system integration managed in-house by an expert Information Systems team, and has quietly and successfully started issuing smart media passes. [15]

35. Revenue protection is often very difficult in an electronic ticketing system, but most publicly owned public transport schemes in dense urban areas (ie in other countries, and perhaps also TfL) don't concern themselves too much about people who travel without paying: public transport is a public service.

REVENUE PROTECTION AND THE POWERS OF TICKET INSPECTORS

6. Is the legal framework within which ticket inspectors function appropriate?

36. This is not an area about which I am knowledgeable.

7. What appeal mechanisms exist for passengers, and are they adequate?

37. As a user of public transport, I do not know of an appeal mechanism, other than to write to the operator of the service. More generally, the notices on First Group buses list a general complaints procedure which is misleading: it appears from the notice that the ultimate authority is the Traffic Commissioner when we know that the Commissioner's powers are very limited. [16]

8. Are the rights of passengers and the powers of ticket inspectors well-balanced?

38. Again I do not know.

9. Do operators of public transport take adequate measures to protect fares revenue?

39. Yes, by definition, because they are private sector companies and so their measures are adequate until shareholders (or in some cases govt) discover that they are not. From the public sector's point of view, I do not know what government's attitude is to public transport as a public service, and am aware that the present controls over the application of public sector funding for concessionary travel are, for a significant number of local authorities, significantly inadequate.

40. However, for revenue protection of concessionary travel funds, there is no need to have a rollout of the complete ITSO method: costs could be saved by using a lower cost method of accepting slightly modified ITSO media—this has been partially designed by the author of this submission, using Merseytravel funding. That stage of the Merseytravel project is shortly to be taken forward in a limited way: at the gates on Merseyrail stations; DfT is aware of the concept but ITSO Ltd ignores it.

CONCESSIONARY FARES—THE RIGHT STRATEGY?

10. Is the Government's concessionary fares strategy, including the proposed scheme for concessionary bus travel, adequate?

41. From the debates in the Lords on the Concessionary Travel Bill (about which I have had some contact with both Lord Bradshaw and Lady Scott), the Lib Dems clearly think not on the technology front and in terms of the eligibility criteria, and both Lib Dems and Conservatives think not in the way in which the funds are administered, so this is partly a political question. However, I think that I detected in Lord Davies' answers in the Lords that govt may be thinking about extensions of eligibility (but probably only in association with rolling out better management of the services, using the ITSO smart media method, so we are looking at 2010-11).

42. Certainly I personally find the extended timeline of eligibility of concession passes provided in Greater Bristol to be a boon (09.00 to well past midnight), and would welcome this extension being applied nationally.

43. Technically, information reaching me (verbally, not confirmed) about the ideas within DfT for a five year rollout of the ITSO Method show no sign of taking advantage of the lower cost method mentioned in the answer to Q9 above.

44. The current proposal from the Concessionary Bus Travel team in DfT is for framework agreements with suppliers capable of re-issuing perhaps 6 million to 8 million passes before April 2008. Such a crash programme is unlikely to hit the target date, and the exchanges in the Lords suggest that, at a high level, govt is not expecting to by any means fully resolve the revenue allocation problems in time for the 2008-09 financial year. Such a crash programme might well trigger compensation payments on existing contracts between local authorities and their suppliers, and is already in trouble because LAs in some cases cannot fund the necessary database cleaning within the timetable. Much better would be to set up an 18 month programme to re-issue, and also to group local authorities by regions, with regional branding, rather than have a single national brand. For the summer of 2008 there could be special local agreements to accept all passes at holiday hot-spots such as Blackpool, along with DfT funding for training and inspectors.

11. Are concessionary fares schemes sufficiently integrated across different modes of transport and different geographical areas?

45. No, but, for geographical areas, the legal minimum 2008 provision will considerably improve matters; local arrangements for enhanced eligibility in dense urban areas (such as Greater Bristol) with multiple CTAs[17] will benefit many travellers. For transport modes, there are clearly numerous areas where multi-modal eligibility would be sensible from the customer's point of view.

46. The author of this submission is an independent ICT Strategy and Secure Technology consultant, particularly for e-government and electronic transport ticketing methods. He is also working with Smartex Ltd on the development of PSSG, a new trade association for businesses active in the same fields. Further information may be found in a CV already submitted to the Committee.

February 2007

1 Holland is using Thales, whereas London uses Cubic. Back

2 Public Sector Supplier Group. See their statement on this topic (submitted to Transcom and also available at www.pssg.biz) Back

3 The big groups organise their bus operations into many regional operating companies. Back

4 Eg in a competitive procurement process it might be that another metropolitan area purchases an ITSO compliant Oyster badged scheme. Back

5 DfT does not have a Director on ITSO's Board, and has to be careful not to be seen as a Shadow Director. Back

6 But it must be managed much better than the Scottish project. Back

7 Not using the clumsy method apparently currently being put forward-see later in this submission. Back

8 About three years ago someone from one of the big transport service groups showed me his figures: they were looking for a grant as subsidy that, divided by the number of buses in their fleet, came out at £3,000 per bus-however, since then many of them have already invested in new ticket machines, so the per bus figure will now be lower. Get them to move together, justifying the capitalisation of the funding, and they will do it themselves. Back

9 Which has already been deviated from. Back

10 A lower cost transitional method where only passes have to be accepted has been partly developed by the author of this submission in work done for Merseytravel, but it has yet to be deployed; DfT have been made aware of this method but have not responded. Back

11 Integrated Fare Management Architecture, currently awaiting publication after a successful final ballot. Back