The MBTA’s plan to overhaul its fare collection system with a more – but not entirely – cashless system is intended to provide riders with a more efficient, accessible transit system that speeds up bus and train commutes.
But as the MBTA prepares for the conversion, officials are faced with a vexing question: How to ensure that riders using only cash, who may not have a bank account, a credit card or a smartphone, do not get left behind?
The MBTA on Nov. 20 awarded a $753 million contract to a joint venture led by California-based Cubic Corp., aiming to implement the new system in 2020.
Among many changes, the new fare collection system will ditch the current CharlieCard system, allow riders to tap a credit card or smartphone to a fare reader on a bus or train to pay for a ride, and prohibit riders from paying with cash on board.
Riders who solely use cash will be able to purchase a new type of CharlieCard at fare vending machines, which will be in stations throughout the system and on the street at key bus stops. Additionally, the MBTA plans to partner with retail stores from CVS to local bodegas to let riders add value to their cards.
“It’s not just in transit; cashless systems are popping up in all sectors,” Stacy Thompson, executive director of the LivableStreets Alliance, told Banker & Tradesman. “It’s a global mega trend. We are riding this wave, and we need to bring everyone along for ride.”
According to MBTA Spokesperson Joe Pesaturo, 7 percent of bus and Green Line passengers pay with cash onboard. System wide, 4 percent of passengers don’t have a debit or credit card or a smartphone; of just bus riders that number is 7.5 percent, said Pesaturo.
As the MBTA looks to increase ridership, it may find more people without bank accounts or credit cards.
According to a 2015 survey by the FDIC, 16 percent of Massachusetts households were underbanked, meaning people who use alternative financial services such as payday loans and pawn shops, and 5.7 percent were unbanked, people with neither a checking nor savings account.
In Boston, that number is even higher, with roughly 10 percent of households unbanked and roughly 20 percent of households underbanked, according to Mayor Martin Walsh’s Office of Financial Empowerment.
Not Fully Cashless, But Still Problematic
Officials at the MBTA’s Fiscal & Management Control Board Meeting on Nov. 20 expressed confidence that the new fare collection system would provide equitable access for riders reliant on cash.
“This is not a cashless system; this is a system in which cash is not used on board the vehicles anymore,” said Stephanie Pollack, secretary and CEO of the state’s Department of Transportation.
The new system will theoretically improve performance and limit its impact on the environment. The on-street fare vending machines will have a smaller footprint, and the retail network will be much more robust, said David Block-Schachter, chief technology officer at the MBTA.
And the new system does provide some leniency to cash-only riders, according to Angela Johnson, a transportation justice organizer at Transportation for Massachusetts.
If the new CharlieCard balance is lower than the amount of the ride, the rider will be allowed to board and the balance will dip into the negative. However, once the rider has a negative amount, they will not be allowed to board until they reload the card.
“That is very helpful,” Johnson said.
Still, Johnson is concerned about those cash-only riders living paycheck-to-paycheck, who may not be able to save enough money to put larger quantities on the new CharlieCard at one time. Then there’s the new card itself, which will cost $5 to purchase.
The MBTA has said it will work to distribute free cards to low-income residents, but Rep. Russell Holmes, a Democrat from Mattapan, sees issues with this system because the cash-only option is more expensive.
Those with credit cards or smartphones will not have to pay the $5 charge, he said, and if someone loses their credit card, they can most likely get a new one for free, whereas a cash rider would have to purchase a new one.
“Too many folks in our communities are still living on cash,” said Holmes. “I am going to be as loud as possible to say that this is not a burden the poor should have to absorb. … We cannot build a system that is bigger than the people we serve.”
Transit advocates agree that the new fare collection system has the potential to be equitable for everyone, but that will depend on the effectiveness of the MBTA’s public outreach.
Thompson and Johnson both said the MBTA should start piloting the new system as soon as possible, and work with cash-only riders such as those in the elderly and immigrant communities.
The new system has the potential to benefit both banked and un-banked riders, but the devil is ultimately in the details, Jesse Mermell, president of the Alliance for Business Leadership, wrote in an email to Banker & Tradesman.
She said the MBTA must keep the community in the loop throughout the entire process, be transparent and do everything possible to make the system “genuinely convenient” for cash-only riders.
“As exciting as the prospect of an efficient and unified payment system is, it has to be rolled out in a way that doesn’t further perpetuate inequalities that already exist around access to transportation,” Mermell wrote. “Like I said, the devil is in the details!”
