Exploring cashless fare collection in the context of urban public transport reform in South Africa

Abstract

As in many developing countries, in South Africa unscheduled paratransit services dominate urban public transport. Despite the resulting scale of fare revenue, the majority of the country’s minibus-taxis operate as cash-only businesses. Drivers typically keep the balance of fare revenue after vehicle rental and fuel consumption payments, while owners seldom include vehicle depreciation as a daily operating expense. There are a number of common consequences. Drivers behave recklessly as they seek to achieve as many peak period trips as possible to maximise income. Capital reserves or affordable finance are not available to renew vehicle fleets. Business owners find it difficult to make operating decisions based on an income-expenditure ledger and principles of profit and loss. Paratransit services are poorly integrated into multi-modal systems when passengers pay fares through different structures and media. Moreover, in contexts where crime and corruption are widespread, on-board cash holding makes public transport vehicles particularly vulnerable. The aim of this paper is to explore the potential of various cashless fare collection (CFC) systems to mitigate these problems, and to review the technology alternatives that are available. The paper presents the results of a review of alternative approaches to CFC, and a qualitative multi-criteria evaluation of these technological alternatives. The criteria include: user and operator acceptability; payment and physical infrastructure; information technology requirements; financial and human resources; and transaction and technology complexity. The three CFC systems that achieved the highest scores in the multi-criteria evaluation were all mobile phone-/mobile network-based systems. Of the three lowest scoring CFC systems, two relied on the passenger having a bank account and one on creating a free-standing fare management and payment system. A key recommendation is that CFC systems are implemented collaboratively and incrementally in order to achieve the requisite stakeholder support.