Chicago Transit Announces Second Phase Of Open-Loop Fare System

The Chicago Transit Authority has moved into the next phase of launching an open-loop electronic fare-collection system that would accept contactless card and mobile payments, the organization announced Sept. 28.

The agency first announced its plans to revamp its fare collection system last year and had been considering proposals through August (see story).

The authority on Sept. 28 issued a request for proposal “on the design, implementation and operation of an open-fare collection system,” according to a news release. The authority did not respond to a PaymentsSource request for comment.

The first phase of the bid process involved proposals from 12 companies that expressed interest in partnering with the agency on a new system. The authority hopes a new fare system will help reduce expenses as it faces mounting financial troubles. It recently proposed a $1.3 billion budget for 2011 but is receiving less state funding than in previous years–$529.3 million, or $92.5 million less than in 2008.

 “The [authority] will be able to update our fare equipment with an upfront capital cost,” Richard Rodriquez, the agency’s president, said in the release.

Rodriquez revealed a plan that would enable the selected company “to expand their presence in the Chicago market by working with other retailers interested in offering promotions to the million [of commuters] the [authority] serves each day.”

That model appears somewhat similar to those used in London and Hong Kong where commuters use a closed-loop transit card to pay for goods at coffee shops and convenience stores located near train stations. And in New York, three transit agencies are testing contactless credit and debit card fare payments to replace a closed-loop system (see story).

The agency installed its existing fare equipment in 1997. The system now supports a magnetic stripe card, a contactless closed-loop card and cash.

The authority says it would own all of the fare equipment installed by the selected vendor and maintain control over the fare amounts. The current fare is $2.25 for a single ride. The authority offers passes for unlimited use during a certain time period. A 30-day pass costs $86. Some 1.6 million commuters use the authority’s bus and trains daily.

Any new fare system would retain a cash option for commuters, the authority said.