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TOCs are in no man's land on smart cards
Back in the 1990s I was an enthusiastic attendee at the annual smart card conference and exhibition in London . I listened to the papers about pilot schemes aimed at making a smart Card bought in Newcastle valid on the Madrid Metro or able to by a morning café crème and croissant in Paris . Then I went round the stands getting updates on railway applications.
But as each new exhibition came around, more and more stand holders shrugged at the mention of railways, the papers on transport, let alone UK transport applications diminished. Now I don't bother to go. Which is worrying, because, as Transport for London 's Oyster Smart Card or the Octopus Card in Hong Kong show, smart cards have enormous potential for railways.
In 1995 there was growing concern within the Passenger Transport Authorities that there were no standards available for inter-operable smartcard ticketing. Lo cal transport smartcard proposals were starting to proliferate and technical developments were making interoperability possible.
These initial discussions drew in other authorities, transport operators and Department of Transport and in 1 998 the Government funded Integrated Smart Card Organisation (ITSO) was formed. ITSO's role was to build and maintain a specification for the key element in interoperability – secure 'end- to-end' inter-operable ticketing transactions. This would be based on ISO (International Standards Organisation) and emerging CEN (the Euro Norm body) standards. 
As is fashionable these days ITSO is a member controlled organisation. It maintains the ITSO Specification for its members and the Government.
A Users Group was formed in 2003. This became the Association of ITSO Licensed Operators (AILO) in May 2004. As yet, there are no ITSO licensed operators and a better title would be APMBIODILO, as in ‘Association of Potential and Might Be Interested One Day ITSO Licensed Operators'. Nor can you actually implement ITSO ‘off the shelf'. The back-office – the critical part of smart card systems, is still in the process of being certified
Implementation of ITSO resembles the problem faced by renaissance popes – how to get all the Italian city states run by powerful families (aka the PTEs) to cooperate on something for the common good. The desirability of a national inter-operable travel smartcard is a no-brainer: implementing it collaboratively through local politicians is another matter.
Meanwhile, DfT is funding three pilot schemes where local authorities with existing smart card systems are upgrading to ITSO compliant kit. These legacy schemes are Cheshire , Nottingham and Southampton . My local country authority Hertfordshire, which was one of the transport Smartcard pioneers, declined the opportunity to take part, allegedly on grounds of cost.
Also in 1995, London Regional Transport - now Transport for London - decided to upgrade the existing Underground Ticketing System (UTS) through a Private Finance Initiative. In 1998, the year ITSO was formed, this became the PRESTIGE project.
In the competitive bidding for the PFI contract, Cubic, which had designed, manufactured installed and maintained UTS, joined forces with EDS to form the winning TranSys consortium. Within the consortium, Cubic is responsible for the design, manufacture, installation and maintenance of the system's hardware and software, while EDS provides the operational services.
PRESTIGE begat the Oyster smart card which went into full scale service in 200????. Today there are over three million Oyster cards in use, valid on London Underground, London Buses, Docklands Light Railway, Croydon Tramlink and at number of TOC stations.
Behind the 4,000 ticket selling facilities and 16,000 ticket validators, is a network of over 300 sub-computers tied into a central system. The system handles both the Oyster contactless smart card and magnetic stripe tickets.
As you might imagine DfT is not impressed with PRESTIGE since it is not ITSO compliant. However you could add ITSO Security Access Modules (ISAM) to Oyster to handle ITSO compliant smart cards when they exist.
In Oyster we have another 400lb gorilla which sleeps where it chooses. This has presented an interesting problem for the commuter TOCs round London . Do they fraternise with Ken and embrace Oyster, or keep on the right side of their paymaster and choose ITSO compliance?
At joint stations fraternisation was unavoidable since tickets are sold by TOCs for use on London Underground trains. An unused printer facility on the BR All Purpose Ticket Issuing Machine (APTIS), plus some tight software coding, enabled the big black box to issue Oyster cards using a device called an ANT.
TfL paid for Cubic to adapt 100 APTIS to take ANT. By the end of last year these machines were selling Oyster Cards at the rate of over 1,000 transactions per day. The top seller was Ealing Broadway, at around 200 per day followed by Wimbledon , Richmond and Barking, all over 100.
No more APTIS have been modified, partly because they are due to be withdrawn in 2006. TfL did offer to pay for more conversions but the TOCs declined the offer, either through inertia or fear.
APTIS is now being replaced by one of three machines: Tribute, Shere Smart, and Fujitsu Star. According to Informed Sources none of these can sell Oyster cards.
Now all these smart card politics mean nothing to the TOCs' customers within the London travelcard zones. They want the pre-pay facility offered by Oyster.
How do we know this? Well a comparison of Travelcard sales between 2003 and 2005 shows that for One Day Travelcards, which still use magnetic stripe tickets, sales have gone up by around 20% on both LUL and the TOCs. Outside the LU Zone boundary, sales of Period Travelcards, available only as magnetic tickets and mostly sold by TOCs, are also up 20%.
But inside the Zones TOC Period Travelcard sales (magnetic stripe) are down while TfL sales (Oyster) are up. When you make various adjustments to create a common basis for comparison, and allow for the fact that TfL will be selling Travelcards that get used on TOC services, TOC Period Travelcard revenue is flat while TfL's revenue is up by about 30%.
Could these contrasting fortunes be linked to the types of ticketing being offered? Well, it seems feasible that Oyster is helping TfL generate this revenue growth.
With APTIS having, probably, less than a year to run, you might expect that joint station TOCs would want to continue selling Oyster with their whizzo new ticket issuing machines. Well you might, but in fact ATOC has stopped work on a Card Issuing Device to go with the Fujitsu, Shere and Tribute machines.
This is, of course, just what you might expect from a TOC with a couple of years of the franchise to run. There is little incentive to spend money on card issuing bolt-ons.
Cubic might be able to supply a suitable system before der tag. But this would mean extending what is seen as the Cubic monopoly.
Meanwhile, around the turn of the year, TfL proposed extending Pre-pay to all TOC services within the Travelcard Zones. This is tied in with the DfT's current considerations of what powers the Mayor should have over national rail services within London .
Once again this is a not a straightforward issue for the TOCs. As Jeremy Long, now of Hong Kong MTR but formerly of Anglia Railways, explains, there is a degree of resistance to smart cards among TOCs because it represents extra cost and risk.
He likens it to a credit card: the convenience for the customer generates business, but the supplier has to pay a commission. The TOCs, being ephemeral constructs, and thus risk averse, are unlikely to sign up to Pre-pay in particular, and smartcards in general, until the cost and risk can be written into a replacement franchise business plan and thus paid for by the passenger or through subsidy.
So we muddle on with Oyster valid on joint lines and at joint stations but not on other National Rail services within London . And it must be costing TOCs, and thus DfT, money.
For example, someone comes out of the Underground at Finsbury Park , taps the Oyster card on the reader at the top of the spiral staircase and gets onto an inner suburban 313, alighting at a station within the Travelcard Zone. That is a phantom journey as far as WAGN is concerned.
In London , the 400lb gorilla rolls on and it is likely that the Mayor will get greater powers over national fares within the Travelcard zones. According to informed sources TfL is working up a scheme to extend pre-pay, with the target of rolling out the new regime before the next Mayoral election. This means either universal Oyster or some mixed system with the DfT controlled TOCs using some Oyster/ITSO kludge for their new machines.
Meanwhile, what about the rest of the country? Well, if some PTE does decide to go ahead with a transport smart card it faces an interesting choice.
Does it go with the promised interoperability of ITSO or does it buy a proven project? Apart from Oyster, the proven systems include the Hong Kong MTR Octopus, which has a contract with Amsterdam, as part of a national smartcard scheme, and is now promoting the system in the UK.
There is also the Calypso programme, which claims a total of 35 million smart cards and 30,000 terminals in 40 towns in 14 European countries. Calypso was launched in Paris in 2002 as Navigo and is now coming to the end of second phase which extends coverage to monthly and weekly passes and carnets.
RATP also has a co-operation agreement with ITSO. This seems to be about ITSO's superior security.
However, all three systems are not interoperable.
This is because cards issued by one user can't be processed by the back office of another. For example, Oyster uses the standard Mifare card, but had added additional security features.
Thus getting off the Pendolino at Euston with your GMPTE Oyster, you would probably find that the gates would say ‘yer what?'. This is why ITSO was invented.
But, supposing West Midlands PTE adopted Oyster, not its own Oyster, but an extension of the TfL Oyster managed by Transys from a common back office? You could then have an interoperable smart card valid in the West Midlands and London and at National Rail stations in between.
If DfT reads this it will give them a fit of the vapours, because the whole point of ITSO is to avoid monopoly suppliers. But such a threat might persuade the DfT to offer Transys money to make Oyster ITSO compliant. Don't forget that Transys is a PFI not part of the TfL collective.
So it is another fine mess entering critical stage. All it needs is a PTE to opt for Oyster. Watch this space