In the media

Tackling fare evasion in account-based ticketing schemes

Morten Schultz

By Steve Carden, Morten Schultz

Railway Industry Association

27 March 2024


Metros around the world lose hundreds of millions of pounds to fare evasion every year and this trend is worryingly on the rise. Tackling this issue effectively and changing behaviours is vital for the financial sustainability of public transport and operators are seeking innovative strategies and technologies to combat fare evasion and ensure fair and equitable revenue collection.

Effective revenue protection is dependent on the ability to identify fare evasion at the point of inspection. Under many existing card-centric systems (such as ITSO and TfL’s Oyster Card), inspectors can easily access travel history and concessions stored on a card when inspecting passengers during their journey.

This all changes as Public Transport Authorities move to open-loop and Account-Based Ticketing (ABT) solutions in an effort to provide passengers with a convenient and flexible way of paying for their journey while reducing the cost of revenue collection by phasing out legacy infrastructure and services.

In the new open-loop/ABT world data is stored in the back-office meaning that while it is possible to identify fare evasion retrospectively, operators may need to establish technology solutions for real-time checks. These checks should identify whether a contactless payment card has been correctly ‘checked in’ at the start of a journey or whether special concessions (i.e. discounted or free travel) has been associated with the card.

While most ‘check in’ transactions are transmitted rapidly from front line devices to the back-office, there are situations where delays will occur e.g. as a result of network failure. Although statistics for account-based systems suggest that typically around 99% of check-in transactions are available in the back-office in a timely fashion, it is not always clear whether such performance is good enough to identify fare evasion in real-time (rather than retrospectively).

PA has developed a model to determine the level of confidence that a real-time inspection could provide in an open-loop/ABT system. This model considers various factors, including the rate of card transactions reaching the back-office, average journey duration, and the current rate of fare evasion, which varies across transport modes.

At first, it seems that 99% of transactions in the back-office could provide a high level of confidence in real-time identification of fare evasion. However, applying PA’s model and considering industry average rates of fare evasion, the model shows that the confidence level of correctly identifying a ‘non-check-in event’ in real-time is as low as 80% – hypothetically leading to 1 in 5 “on the spot” penalty fares being issued mistakenly.

To raise the confidence level, Public Transport Authorities therefore need to consider how to get transactions to the back-office faster and more reliably while also re-thinking procedures and data used to identify fare evasion.

Using our broad experience across the transport ticketing domain, PA are now helping our client, a world leading metropolitan transport authority, with options and strategies for enhancing real-time fare evasion detection. This includes options for upgrading infrastructure and inspection devices but also explores how additional datasets could increase real-time confidence.

Improving the ability to identify and tackle fare evasion in account-based ticketing schemes, is likely to not only bring direct financial benefits but also increase the deterrent effect and drive a change in public behaviour.

This was originally published in The Railway Industry Association’s (RIA’s) ‘Destination: Revenue Growth’ report.

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