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PwC research finds a majority of the travelling public still chose paper tickets but could be persuaded by incentives to use smart card technology

Prior to the Department for Transport announcement last week for a pilot of its plane for Smart Cards on all South-East trains, the management consultants PwC published research suggesting less than half of current public transport users would prefer smart cards or similar, but 80% could be persuaded it smart cards offered better value.

A pilot project is to try out smart cards on c2C trains in Essex as the first test of the £45 Million government South East Flexible Ticketing (SEFT) programme, which intends to introduce smartcards for rail commuters in the south-east of England.

The survey of by PwC (commissioned from Opinium Research) of over 2,000 members of the general public across the UK in Spring 2013 asked about travel habits, and what would make the respondents switch from traditional paper tickets to smart technology ticketing such as smart cards, mobile phones and bank cards.  

It found almost half (49%) of all bus and rail users responding still use paper tickets, with only 45% citing a preference for using another form of payment currently.

However, overall, if an incentive was offered to the same bus and rail users, four out of five (80%) who currently use paper tickets (said they) would move to smart ticketing:

  • Offering just a 5% discount on travel compared with paper tickets would encourage 14% of consumers to switch to smart ticketing; whereas a 10% discount would persuade over half (53%) to make the change;
  • Even in the absence of price discounts, 42% would be persuaded to use smart ticketing if it guaranteed the lowest available fare for their journey;
  • 12% of respondents would use smart ticketing if it offered them tailored, real time journey information;
  • 8% of car travellers would consider moving to rail, and 5% to bus if offered incentives enabled by smart technology.

Greater insight of travellers' journeys 

According to PWC, the technology behind smart ticketing gives transport companies greater insight into individual journeys meaning passengers can potentially receive tailored information on service disruptions, timetable changes, or special offers. From the operators’ point of view, it has the potential to reduce costs from maintaining and fixing ticket printing machines, and allow better management of peak and off peak demand.

Public need some encouragement

Grant Klein, director and transport specialist at PwC, said, “While the results are encouraging for supporters of smart ticketing, it’s clear the public shift won’t happen without some encouragement."

“The opportunity to link both ticket payment, and real time information through smart technology is not a leap of the imagination for consumers or operators. There’s significant untapped potential demonstrated in these results to use it to increase public transport use by making service timetables, information and fares more accessible.”

“At first glance, some of these findings may seem insignificant, but even a a 5% shift from cars to bus, or 8% for trains would represent a significant uplift for public transport operators, and a boost to the Government’s plans to get more people on public transport.”

Indicators to realising the benefits of smart ticketing

PWC said the findings from the survey provide some important indicators to realising the key benefits that smart ticketing can offer:

1. Convenience is paramount

Any changes to ticketing need to make the process of selecting a ticket, purchasing, fulfilling and then using it much easier than is currently the case.

Smart ticketing has the potential to fully automate the selection, purchase and fulfilment of ticketing.

2. Better information can encourage modal shift.

Providing better, more accessible timetable and real time information has the potential to encourage more people to switch to public transport. The enhanced data and personalisation that comes with smart ticketing means this should go hand in hand with improved, relevant and timely information provision.

3. The appetite for smart ticketing is growing.

Even without incentives there is a growing awareness of and interest in using smart cards, contactless bank cards or smart phones in place of paper tickets – across all age groups, but particularly in Generation Y.

But a mixed ticketing economy seems inevitable without an active decision to stop paper ticketing.

4. Price is the key driver for passengers to change to smart.

Reducing ticket prices for smart compared with the price for a conventional ticket can have a major impact on converting people to the newer forms of ticketing.

5. Fare commitments provide a compelling case to switch to smart.

Offering passengers a guarantee that they will pay the lowest available fare if they use smart ticketing could have a major impact in switching people to smart ticketing – without the need to discount or reduce fares.

6. Separating roles will enable widespread rollout.

Providing a seamless customer experience through smart ticketing across the country will require changes to the operating model for the sector, separating out the roles of account provider, retailer and operator.

7. The business case is improved if services are shared.

Making use of common or shared facilities to support these services will improve the return on investment for all parties.

PWC concludes by claiming that success for smart ticketing will depend on the extent to which the public transport sector – whether PTEs or private operators – decide to put smart ticketing at the heart of their services. Government has been encouraging this through subsidies and incentives. But, PWC claims, operators and local authorities will need to have a clear, joined-up vision on the customer offering if it is to return on the investment required to achieve significant market penetration.

The survey suggests that there is appetite for smart ticketing, which suggests the scale necessary for a good return on investment can be achieved. This will happen only if the customer proposition is clear and there is a high degree of collaboration between operators, authorities and the government. Success will mean a better, more efficient and lower cost public transport system for all.

Smart ticketing – what rail passengers want in the South East want

Transport consumer group Passenger Focus has also recently commissioned its own research into consumer attitudes with similar findings, except that it also found that security, flexibility and personal tailoring were also seen as key principles that any introduction of smart ticketing should address.

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