Victorian Government Submission Submission to the Legislative Council Select Committee on Train Services

Contents

myki and the impact on train services 4

How myki works 4 myki pass and myki money 4

Key benefits of electronic ticketing systems 4

Key myki advantages 5

Division of responsibilities 5

Scope and intent of myki 6

Cost 6

Purchase of off-the-shelf systems 6

Implementation timeframes 7 myki progress 7 4 Victorian Government Submission: Submission to the Legislative Council Select Committee on Train Services myki and the impact on myki pass and train services myki money

The Select Committee on Train Services is inquiring into the There are two components to every myki card – myki pass factors leading to, and causes of, failures in the provision and myki money. of metropolitan and V/Line train services. The inquiry myki pass replicates the periodic Metcard (weekly, monthly, has recently been expanded to include the impact on yearly) and is best for those who travel regularly or commute, those services as a result of the purchase, operation, and normally travel in the same zone(s). Passengers can buy implementation and oversight by Government of the myki a myki pass for 7 days or anywhere between 28 and 365 days ticketing system in Victoria, including an examination of travel. of performance, costs and the integration of the myki ticketing system. myki money is a cash “purse” stored on a myki and is best for those who travel occasionally or want more flexibility. myki has not and will not affect the operation of train services in Victoria, however this submission and the information Short-term tickets will also be available later in the system provided by DOT and the TTA witnesses are intended to assist rollout and will operate in a similar manner to Metcard tickets. the committee to understand myki and its operation. They are currently available on regional buses. Considered in the context of the Select Committee inquiry, there are two key features of the myki project that should be highlighted: Key benefits • International experience suggests smartcard ticketing systems normally take five years or more to implement. of electronic • The state has no option but to move to a new ticketing system. Metcard will cost more to maintain into the future, ticketing systems and device components and technical support will become increasingly difficult to source. Metcard was Melbourne’s first electronic ticketing system using magnetic strip technology, replacing a How myki works paper‑based system. The main benefit of electronic systems is the ability to cope with increasing passenger numbers without a commensurate Electronic smartcards such as phone cards, credit and debit increase in the number of tickets sold. A customer purchasing cards, and building access cards have become an accepted a 10x2hour ticket can make one transaction rather than 10 means of conducting transactions all over the world. Such separate transactions. This has kept the length of ticket cards have an embedded microchip which can handle and queues relatively short and helped bus travel by ensuring store information, as well as an internal aerial. When the card fewer tickets are purchased on board. is touched to a card reader or inserted into an ATM, power flows through the aerial and information moves from the card However, because of its reliance on increasingly outdated to the reader and back again. technology, Metcard will become increasingly expensive to maintain and device components and technical support will myki has similarities to all of these systems. Communication be increasingly difficult to source. Victoria has no option but between the myki card and the reader is by radio signal to move to a new ticketing system. and should take about one second. The reader is linked to the ‘back office’ system for reconciliation of transaction and payments. 5

• Customers no longer need to carry multiple tickets Key myki advantages to get the best fare (many customers need to carry a combination of Metcards to ensure they get discounted fares) There are four main operational reasons for myki’s superiority over the current Metcard system. • Customers who do not wish to purchase in bulk will be able to access the discounts provided to customers who They are: currently purchase 10x2hr, 5xDaily or 5xWeekend Daily • myki will provide an integrated ticketing system across tickets by using myki money. Victoria and removes the need for Victorian public • myki tickets are more physically robust than paper tickets, transport users to navigate three different ticketing reducing the likelihood of loss or damage that can occur systems; Metcard in Melbourne; V/Line tickets for regional using long-term tickets, such as weekly, monthly and trains and coaches; and paper tickets for regional buses. yearly tickets – as well as yearly and half yearly student • myki is fully electronic (containing no mechanical passes. components), bringing with it all the benefits of a fully • Customers have less need to be aware of zone programmable ticketing system such as the ability to add boundaries or the range of products available – customers discounts or incentives into the fare structure more easily using myki money are charged the lowest fare, as long as over time. they touch on and touch off as required when they travel. • The number of passengers on the metropolitan train • Customers will have a wider range of ways of paying for network has more than doubled since Metcard was travel – including reloading online, registering for auto-top installed and without a new ticketing system, significant up from a nominated account, from vending machines at investment in additional, yet outdated, Metcard equipment major tram stops, bus interchanges and train stations. would have been required. • Customers can register their card against loss - if they lose • myki is an open-architecture system, not proprietary. Open their card it can be replaced with their balance intact for a architecture is a common protocol which allows devices small fee. from different manufacturers to work together. This allows • Customers using passes will be able to purchase for the flexibility of adding, upgrading and swapping 7 days (weekly) or any number of days from 28 to 365, components over time. Proprietary software does not give providing customers with far more flexibility than is this flexibility. possible with Metcard. As an example, a customer who There are additional customer benefits: uses public transport to commute to work and is going on annual leave in six weeks’ time, might currently need to • myki will make it easier for customers to access the lowest purchase a monthly ticket and then two weekly tickets and available fare for their journey. This ensures that customers a few daily tickets under Metcard. With myki, this same using myki money automatically receive the following customer can purchase a pass that expires the day before benefits: he or she goes on leave. –– Travellers in metropolitan Melbourne (zone 1 & 2) will pay a maximum of $3 per day on weekends or public holidays. –– Seniors travelling in metropolitan Melbourne (zone Division of responsibilities 1 & 2) will pay a maximum of $3.30 per day on weekdays, $3 on Saturdays or public holidays and will The Transport Ticketing Authority automatically travel free on Sundays. The Transport Ticketing Authority (TTA) was established in –– Fares are capped at a maximum of $9.92 for adults June 2003 as a state body with a dual role: and $4.96 for concession card holders in metropolitan Melbourne (the Zone 1+2 Daily cap). Customers using • to oversee Victoria’s Metcard public transport ticketing myki money will save up to 70 per cent compared system contract; and to the cost of using individual tickets (eg. a Zone 2 • to procure and manage the new myki ticketing system concession customer who currently pays $1.70 for a for Victoria. 2-hour Metcard ticket will pay just $1.01 with myki). The TTA is led by a Chief Executive Officer, Bernie Carolan, who reports to a Board of Directors chaired by Patricia Faulkner. As a state body formed under the State Owned Enterprises Act 1992 (SOE Act), the TTA Board reports to the Minister for Public Transport on transport policy matters and to the Treasurer for matters relating to the SOE Act. 6 Victorian Government Submission: Submission to the Legislative Council Select Committee on Train Services

The Director of Public Transport myki represents the latest smartcard micropayment technology favoured by international cities including London, The Director of Public Transport helps deliver the Paris and Hong Kong, as well as Brisbane and Perth. government’s objectives for public transport by planning and developing service and project plans and managing the myki allows for greater integration of travel between transport contractual and regulatory relationships of Victoria’s rail, tram, modes and across the state, more streamlined payment bus, taxi and hire car operations. options for customers, and enhanced security and durability to protect customers’ investment. In relation to myki, the Director is responsible for fares and ticketing policy. Cost Kamco

Keane Australia Micropayment Consortium Pty Ltd (Kamco) The myki project is regularly portrayed as “costing $1.35 is the company engaged to design, build, implement, billion”. This portrayal sometimes suggests that $1.35 billion is operate and maintain the myki ticketing system. Kamco is a the cumulative spend on myki to date, which is inaccurate. wholly‑owned subsidiary of US company Keane Inc. The figure of $1.35 billion includes the cost of building Many subcontractors are assisting Kamco in delivering key and then operating the new system until 2017, and costs components of the new ticketing system. These include ACS associated with Metcard and running the TTA. Solutions Schweiz AG (software supplier and manufacturer of most myki devices), Wayfarer Transit Systems Limited (bus and tram driver console manufacturers), Giesecke & Devrient Australasia Pty Ltd (card suppliers), and Gunnebo Entrance Purchase of off-the-shelf Control AB (who provide electronic station gate solutions). systems

Scope and intent There is no such thing as an off-the-shelf smartcard system. While all smartcard systems use common components, of myki systems in every city are built around specific rules like fare structures, concessions and refunds, making it impossible to myki is the name of Victoria’s new public transport ticketing adapt an existing system to a different jurisdiction. system and the smartcard that customers use. The basic hardware components used for myki have generally The project involves: been deployed and proven in other cities around the world. However, the non-proprietary software that is at the heart of • the development of software communicating with around myki was developed specifically for Victoria, and is designed 20,000 ticketing-system devices and an expected to calculate the best fare for passengers, wherever they are million‑plus smartcards in the medium term and in the state, based upon a range of factors such as time, 2 million‑plus in the longer term; location, concessions status and so on. • an extensive civil works program requiring more than The myki project is particularly complex and large-scale 25,000 hours of work; because it: • establishment of a major retail network; • operates in metro and regional areas; • training for up to 7,000 transport operator staff; and • allows customers to use stored value (myki money) and • an extensive public information program. passes (myki pass); • is multi-modal: train, tram, bus (including V/Line train and coach); • combines time-and-zone fares; and • covers one of the largest geographic areas of any smartcard system in the world. 7

Implementation myki progress timeframes myki is operating on more than 330 buses in Geelong, Ballarat, Bendigo, Seymour, Warragul and the Latrobe Valley and began operating on trains in Zone 1 and 2 in Melbourne The myki project has taken longer to deliver than originally in late 2009. expected by Government but not an unusually long time by international standards. With hindsight, the original delivery There are around 25,000 regular myki users on Melbourne’s timeframes were overambitious, as international experience trains each day, as well as 20,000 regional bus users and has shown that smartcard projects take time to deliver, 25,000 myki student passes in circulation. More than 340,000 particularly projects of this magnitude. top-ups have been processed at card-vending machines since myki began operating. During the implementation phase, Metcard has continued to operate and train services have not been affected. Around 320,000 people took up the introductory offer of a free myki when the system began operating on Melbourne’s trains. A review of smartcard applications throughout the world As at 30 June 2010, there were a total of 430,410 myki cards suggests implementation periods of five years or more are in circulation across metro and regional Victoria. The number the norm. of unique myki cards used during January to June is 188,373 A summary of smartcards and their implementation periods is (44 per cent of the total). Given the vast majority of regular displayed below. public transport passengers in Melbourne use more than one mode each day, it is not surprising that many have chosen not Number of Delivery City Card name to use their myki at this stage. devices timeframe Victoria myki 20,000 5-6 years Staff known as myki mates have been employed on the SE Queensland Go Card 8000 5 years metropolitan train network educating customers about the Perth smartrider 4000 4 years new system. All staffed Metro stations have myki forms and London Oyster 16,000 6 years brochures to help customers learn about myki. Hong Kong Octopus 3 years There are more than 310 myki machines for card top-up at San Francisco Translink/Clipper 12-plus years Metro stations throughout Melbourne. Paris Navigo 10-plus years All devices required for myki to begin on trams and buses Holland OV-Chipkaart 7-plus years have been installed. Card vending and myki check machines Los Angeles TAP 6000 5-plus years at tram stops and bus interchanges will take time to become Houston Q-Card 5-plus years operational once a decision to go live on these modes is Minneapolis Go-to-card 5-plus years made. Ireland ITS 5-plus years Sydney T-Card Tender released in 1997 – re-tendered 2010

Although myki began operating on the metropolitan train network on 29 December 2009, it was decided not to commence operations on Melbourne’s tram and bus systems until myki could be proven more reliable on those modes. Since that time, the TTA and Kamco have been working to improve myki on metro tram and bus to ensure a more reliable customer experience. DOT5137/10