SEPTA awarded a Maryland company a $129.5 million contract Thursdayfor the long-awaited "smart card" fare system to allow bus, subway, trolley and rail passengers to pay for their trips by tapping a card on an electronic reader.
The contract awarded to ACS Transport Solutions Group of Columbia, Md., will enable riders to use credit or debit cards they already own or get smart cards from SEPTA. The system is also being designed to eventually accept payment from smartphones.
SEPTA's board of directors unanimously approved ACS, at the recommendation of staff, over two other bidders, Cubic Transportation Systems Inc. of San Diego and Scheidt & Bachmann of Germany.
Installation will take about three years, so SEPTA riders won't immediately shift from their current tokens, passes, tickets and cash.
Bus and subway riders will get the new system first, by late 2013. Regional Rail will make the switch a year later.
"Regional Rail will be the challenge," said SEPTA board chairman Pasquale T. "Pat" Deon Sr. He predicted the new system will be more convenient for riders and will save SEPTA money.
Deon said SEPTA will push ACS to make the deadlines called for in the contract so the new system isn't plagued by the kind of lengthy delays that have dogged the roll-out of SEPTA's new Silverliner V rail cars. The contract calls for financial penalties if ACS does not deliver on time.
"We'll have our foot on their throat," Deon said.
ACS has installed more 400 than fare-collection systems, including in Montreal; Lyon, Paris; Melbourne, Australia; Los Angeles, Houston, Cleveland, and Charlotte, said spokesman Kevin Lightfoot.
The company also has a pilot smart-card project on six NJ Transit bus routes in North Jersey and New York.
The company may be most familiar as the operator of electronic payment systems on about half of the nation's toll roads, including E-ZPass systems in New Jersey, New York, and Maryland.
SEPTA will be among the first transit agencies in the nation to install an "open" fare system that allows riders to use any contactless bank card instead of a "closed" system that requires a card issued by the transit authority.
By opting for an open system, SEPTA is gambling on a future that is still taking shape.
Right now, only 10 to 15 percent of the 750 million credit and debit cards in the United States are contactless, equipped with a computer chip that communicates with a card-reader.
That number is expected to grow rapidly, as Visa in August announced financial incentives for merchants and banks to switch to contactless cards and readers.
For most bus, subway, and trolley riders, electronic fares won't mean a big change in commuting habits - new card readers will simply replace old subway turnstiles and bus fare stanchions.
For rail passengers, though, electronic fares will alter their traveling experience.
An organization of rail passengers urged SEPTA Thursday to postpone the Regional Rail portion of the new fare system.
One of the biggest changes for rail riders will be gates and turnstiles in Center City train stations to herd passengers past electronic fare-readers.
At the other end of their trips, riders will need to "tag in" or "tag out" with a smart card for their fares to be deducted. That may be done at stationary readers on a train platform or by conductors with handheld devices on trains.
Either way, it's sure to mean a change for riders used to rushing to and from trains and simply presenting a pass or ticket to a conductor.
And the zones that determine how much rail riders pay may also change as part of the shift to electronic payment.
SEPTA officials will meet next week with county officials and rail users to discuss changes in the zone boundaries.
"We continue to believe that a turnstile and tag-off system will be a great inconvenience to riders, and that the risks of revenue losses at outlying points will offset any gains in increased reliability of Center City fare collection," Tony DeSantis, president of the Delaware Valley Association of Rail Passengers, told the SEPTA board before Thursday's vote.
SEPTA chose ACS after a three-year-long process.
The company offered the lowest bid, $5 million less than Cubic and $84 million lower than Scheidt & Bachmann. And it scored highest in technical reviews by SEPTA staff.
"They've told us this is their top project," said SEPTA general manager Joseph Casey. "They've put together an A team."
Steven Frazzini, ACS vice president for fare payment solutions, said the SEPTA project "is very important to us," and he called the three-year timeline "reasonable, yet aggressive."
One of the losing bidders, Cubic, said it would now concentrate on its Chicago installation.
"We had hoped for a different outcome, but ... we are focusing on the positive and we're eager to hit the ground running with the exciting new payment technologies we are delivering to Chicagoans," said Paul Muldoon, senior vice president of business development for Cubic.
SEPTA's move to an electronic-fare system has fallen far behind the schedule announced in November 2008, when the agency said it hoped to award a contract by April 2009.
A major issue for SEPTA is that about 30 percent of its riders don't have bank or credit cards.
Those customers will need to buy SEPTA-issued, reloadable contactless cards.