Automatic Fare Collection as a tool for Public Transportation Infrastructure Crowdfunding for the Third World

 

The United Nation’s 17 sustainable development goals (SDGs) to transform our world will only be a dream without proper financing strategies.

One of the UN’s 17 Goals, urbanization can be a catalyst for rural development.  A sustainable transportation system is key to success.

Relying on loans and debts from foreign countries cannot be sustained because inherent problems such as shortage of cash notes, driver’s fraud, and fake money for public transportation are not resolved.

 

Automatic Fare Collection (AFC) System as a Crowdfunding tool

The AFC system can bring good cash flow to the public transportation system as there are a deposit and unused value on each passenger card. Every million passengers will contribute over US$ 1 million in cash flows based on our study.

Besides stopping fake money and driver’s fraud, the AFC system will bring in recurrent income from transaction fees. Every million passengers will bring US$ 5 million in income per year if the transaction fee is 5% based on our study.

A sustainable growth in public transportation development can be easily achieved.

Case Study: London Oyster Cards

In London, £400 million unclaimed on Transport for London Oyster cards (source FT.com).

oyster card unclaimed.png

That the amount of unclaimed money on Oyster cards, which enable commuters to travel on public transport in London, has risen steadily to just under £400m over the past six years. Transport for London has published data on Oyster card usage between October 2013 and September 2019.

More specifically, there is currently £190.6m in unclaimed pay as you go balances and £196.7m in unclaimed deposits, according to TfL.

Commuters obtain an Oyster card by paying a £5 “deposit”. However, to pay for travel on London transport, commuters build up their “balance” by adding cash to their cards at a shop, or an Underground or train station. Both the deposit and the unused balance can be claimed back.

According to TfL, the amount of unclaimed deposits rose from £64.2m in June 2014 to £196.7m in June 2019. Unclaimed balances rose from £68.4m in June 2014 to £190.6m in June 2019.

Conclusion

Sustainable growth in public transportation development can be easily achieved with the implementation of an Automatic Fare Collection (AFC) System.

However, most AFC systems are very expensive with comprehensive software for account-based and financial clearance.

A low cost and effective AFC system suitable for the third world have to be used. To learn more, please visit autofare.net

Post Author: Keith Lau

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