Archive for the ‘Business’ Category
Oil Spill doesn’t stop Gulf Entrepreneurs (from UPSTART- bizJournals) SAVING GULF SEAFOOD- Wine Enthusiast -History of Southern Accents
Dana Taylor, along with her husband Jason, had plans to open a seafood processing plant before the Deepwater Horizon explosion. The oil spill may have delayed their plans, but today they operate a successful business that depends on the Gulf of Mexico. Jason TaylorSome Southerners work to erase accent as others drawl with pride
NEW YORK — On his first trip to New York, Mississippi Delta native Will McKee was invited to a small party for a performer he had been publicizing in the South. Most of the attendees were show business
insiders from New York and Los Angeles.
Aware that it might draw unwanted attention, McKee tried to tone down his Southern accent.
But after a few bourbons, McKee, a marketing director in Birmingham, says he sounded more like a blend of Rhett Butler and Thurston Howell III from “Gilligan’s Island.”
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A man from Los Angeles took notice of McKee’s Southern roots.
“I just love how many syllables you can put in a little ol’ word like Bur-min-ha-am,” McKee recalled the man saying.
To that, McKee demonstrated how many syllables he needed to insult the man, using what is for most people a monosyllabic word that refers to a donkey.
The tense exchange was an example of a common clash between Southerners and non-Southerners over an accent that connotes a quaint gentility to some and a lack of sophistication to others.
ZIMRIDE Expands EAST (from UPSTART- bizjournals)/ How a N.D. candidate is using the web to Campaign (TechPresident.com) The Coffee Robot (ABJ)
THE BUSINESS JOURNALS (UPSTART)
IN SOCIALLY CONSERVATIVE NORTH DAKOTA, A GAY CANDIDATE USING THE WEB TO WIN
BY Cody Lyon | Friday, August 3 2012
Exclusively for Personal Democracy Plus subscribers: Joshua Boschee is an openly gay candidate for public office in a socially conservative state, but observers say he’s got a real shot at becoming one of Fargo, North Dakota’s next representatives in the state legislature.
Boschee’s home state of North Dakota has, according to one study, the lowest proportion of same-sex couples in the United States. It’s a conservative state, although “conservative” means something different in the only state in the Union with a state-owned bank and a state-owned grain mill and elevator.
LINK TO FULL STORY AT TECH PRESIDENT/ PERSONALDEMOCRACY.COM
Good to the last robotic drop
Startup automates coffee-making kiosk
From left, Kevin Nater, Charles Studor, Patrick Pierce and John Craparo are behind Briggo LLC.
Inside a laboratory at Deaton Engineering Inc.’s workspace in Georgetown sits the world’s first intelligent, robotic coffee kiosk.
At 8 feet tall by 16 feet wide, the prototype’s screens flash customer orders and marketing messages across the top amid the hum of a tiny factory behind them. In a few minutes, behind a tiny door, sits a cup of Austin-roasted, Peruvian bean coffee topped with foamed milk.
The coffee robot is the invention of Briggo LLC, a new company formed by three Austin technology and business veterans and a nationally recognized coffee barista.
They plan to open their first robot-based kiosk at the University of Texas Flawn Academic Center in November. After that, their plans envision a worldwide network of automated kiosks, primarily in universities, airports, hospitals, office buildings and other locations.
They also plan to develop a smaller kiosk that can be mass produced. Briggo plans to own, manage and service the initial units, and later hopes to grow the market through franchising after establishing the brand.
Coffee consumption in the United States remains the eighth-highest in the world, with the average American drinking 3.1 cups of coffee each day and fueling an $18 billion U.S. market, according to the National Coffee Association.
Briggo’s founders hope their robot will tap that thirsty crowd by enabling coffee drinkers to order from a kiosk through mobile phones and online, as well as using the kiosk’s touch screen. Besides the type and quantity of coffee, consumers can specify type of milk, syrup or sweetener. They can also establish and personalize their accounts — including individual payment option — with the network of kiosks, which can send a text message when an order is placed by phone.
Transportation/Urban Planning/CRE reporting samples-analysis-long form- from Austin and NYC
Imagine Austin introduces a blueprint for what could be; A plan for one of America’s fastest growing cities- PART ONE
A new comprehensive urban plan for the City of Austin’s growth called Imagine Austin, is slowly making its way through various City committees, commissions and eventually City Council. Considering the number of people reportedly headed this way to work, play and yes, live, some say it’s long past time for a plan with teeth by which to grow this city into the Austin of the future.
But is what’s being called “Imagine Austin” the best blueprint for what is one of America’s fast growing places?
“Density, Livability and sustainability are core goals embedded in the comprehensive plan. We are currently studying what the plans spells out and working to make it a workable plan that is fully implementible,” said Mayor Pro Tem Sheryl Cole, who says she looks forward to hearing the Planning Commission’s input that is coming on April 10 and 11.
If all goes as planned City Council will again be briefed on April 26 and on May 24, whish is the date for the City Hall public hearing.
This is hardly the first time Austin has set out to construct some sort of blueprint for its growth. Despite plans that have come and gone — clearly forgotten — there appears to be a heightened sense of urgency this time. City leaders apparently recognize that in order to remain competitive, especially in the face of other buzz cities that have adopted strict plans by which to develop, Austin is going to have to clearly spell out how it wants to cross over into the next phase of its existence.
Fact is, rapid growth in the Austin metro area has already ranked it as the second fastest growing metro area in the nation according to new data from the US Census Bureau. Of the 67,230 new residents coming to the Austin area over the past 15 months, 38,858 of those came to Travis County. That growth is expected to continue, and it challenges the area’s long stated values about sustainability and community. At some point, as sprawl continues to devour areas surrounding Austin and highway traffic continues to choke and stall, leaders are going to have to decide when to say yes; and why they may need to say no.
“The ability of a city to make the kind of choices that Austin is hopefully laying out with its comprehensive plan will position it to compete in the 21st Century,” said Thomas Murphy, an Urban Land Institute senior fellow in Washington D.C.
Murphy, who was also mayor of Pittsburgh from 1994 to 2006, said a plan like Imagine Austin isn’t done because it’s a nice thing to do, it’s strategic.
“This is being done because the people driving it understand that for Austin to be one of those buzz cities, to remain seen as one of America’s most successful, it needs to be a livable place. It can’t be a city choked by congestion and without great amenities,” said Murphy.
Murphy said there are many people, especially younger Americans, who are making economic and lifestyle choices about where they want to live based on those livability factors. He said a solid development plan for the city’s future also creates a competitive advantage.
“Look at how Europe has developed — in part because of $12 gas. You have big center cities then lots of open space and lots of little villages with town centers, but all are connected by adequate transit,” said Murphy, who added that those who think gas prices will ever fall back to $2.50 a gallon are dreaming.
“As globalization continues, and 1.2 billion Chinese people begin to want to live like we do, I don’t think we can ever have the expectation gas prices will go down or be cheap again,” he said.
And that Murphy said, is what a plan like Austin’s needs to address. You have to think about the cost of infrastructure supporting sprawling development: roads, sewer, gas, all that is the ultimate driver of development. And the biggest demographic bubbles Gen X and Gen Y as well as Boomers, all want to be in places where they don’t have to drive as much.
Imagine Austin is not without critics.
Melissa Nesslund, a land development planner at Bury + Partners stresses that in order for the plan to be effective, change will need to occur in the overall development process.
While Nesslund, a homeowner herself, respects the concerns of neighborhood groups, she said, if developers can’t get leeway in development codes, then Austin will not achieve true density in its future.
“I would have liked to see much bolder policy prescriptions to prevent sprawl,” said downtown resident and citizens task force member Roger Cauvin.
Cauvin, owner of Cauvin Inc., a product strategy firm, said he believes Austin should eliminate minimum parking requirements, eliminate limits on floor to area ratios and adopt something akin to a form-based code citywide.
“The prospects of enacting those sorts of bold policy decisions is dependent on how staff and city council act on the ‘modify the land development code’ provision after its adoption,” he said.
Austin Collective Strength CEO Robin Rather, who has worked with the American Planning Association and other groups on issues of sustainability and urban development is more broadly critical.
“It’s vague, a lot of concepts, and what makes that even worse, they aren’t new concepts,” said Rather.
With 750,000 new potential Austin residents coming, forecast by national observers, Rather said, our problems today are not land use and transportation related, “our problems are water and energy.”
“They spend a lot of time doodling around with it, but not nailing it, and I find that unbelievably frustrating,” said Rather. This past summer, one of the dryest and hottest in Austin modern history, led to water supply issues that reminded everyone here how fragile the area’s eco-system truly is. Without a secure supply of water, no city of the future is possible.
“The comprehensive plan is big picture by its nature,” said Matthew Dugan, lead planner at the City of Austin’s Planning Department. “Other city plans are more focused on smaller geographic areas or specific topics such as parks or transportation. Imagine Austin identifies defining issues that are paramount to Austin’s future success, including strong and specific action items for water and energy.”
In the next few weeks we’ll examine the Imagine Austin plan’s six guiding principles.
Dugan and the city planning department said the decisions about what gets funding in the future is an iterative process. He said the city will strive for extensive public participation in the city’s annual budget process and Austin residents and voters will ultimately determine future bond funding for projects spelled out in the plan.
Still, Imagining the Austin of the future is not best left to the, well, imagination. Planning our future city is a tangible and real process that all should participate in.
“I think people generally feel that the way a city grows is just something that happens to them — that they either like it or they don’t, but they don’t really think about things happening today that will determine the city they’ll be living in 10 or 15 years from now,” said John Langmore, Cap Metro board member and long-time Texas transportation consultant. “The fact of the matter, Austin cannot afford not to do this plan said John Langmore.
“It will take the collective strength and energy of our leaders and the Austin community to make the goals of Imagine Austin happen,” said Matthew Dugan.
He said one of the first steps is knowing what kind of community we want to be, and Imagine Austin lays that out.
PART TWO- How we got here.
Imagining Austin, part two: How we became so car-dependent and where we want to go
Before Imagining Austin’s future, we might first imagine Austin in 1839. That was the year this city was founded. It was also around the time when Austin’s first Mayor, Edwin Waller, laid out an orderly and logical geometric plan for a city on a bluff between Shoal and Waller Creek. That 14 block blueprint, still largely intact downtown, is an ancient planning tool common in central cities across Europe and America — a grid.
The grid is genius in its simplicity and its ability to orient the pedestrian to north, south, east and west. Back in the day, the blocks favored density and encouraged walking since there was no such thing as the modern convenience of the automobile.
That was a long time and over a million people ago, and like most American cities, life in Austin has extended far beyond the nucleus. Post-World War II America saw the boom of suburbs. As more Americans subscribed to and could afford the ideal American dream — a home with a yard and good schools for the kids — patterns spread outward. As John Langmore, Cap Metro board member and long-time Texas transportation consultant explains, Austin was no exception.
Right now, Austin is car-dependent. Overall, Austin ranks 31st among the nation’s 50 largest cities for walkability according to walkscore.com. That’s worse than Houston or Dallas.
It varies sharply by neighborhood, with central areas scoring much better on the walkability scale and outward areas ranking dismal at best. The ability to walk and buy a quart of milk is one of those fundamental values that the Imagine Austin initiative hopes to see through to fruition for all residents, north, south, east and central.
So how’d Austin sprawl out beyond the easily walkable grid designed by Mayor Waller? It was actually easy.
“Years ago, developers began and continued to buy up land further and further out because it was less expensive. They could build affordable homes on property and the state DOT gladly built roads out to where those people were living. In the early days, the public sector paid scant attention to where growth was occurring and what those trends meant for the future,” John Langmore said.
And while he stressed, there’s nothing innately wrong with that type growth pattern, it had — and continues to have — implications.
Imagine Austin attempts to address the probable tsunami of people headed here in the coming years; however, there are those who have seen comprehensive plans before, and they caution that such plans can be subject to manipulation and must have teeth in order to work.
“This plan is only as good as the next council,” said Ira Jon Yates of Yates Cattle & Conservation and a task force member in the Imagine Austin development group.
Yates remembers the early 80s when his mother wanted to sell around 4,000 acres of land at Circle C Ranch. But because of land plans laid out in what was then the Austin Tomorrow plan, Yates’ mother’s property was de-valued in price due to its designation as a no development zone. No one wanted it — at first that is. But Yates said it allowed speculators the opportunity to come in and buy up property at low prices. Circle C was eventually bought and developed.
The development at Circle C led to controversy over open spaces and the environment, but it was also a shining moment in Austin’s environmental history, when the area was designated as a sensitive aquifer re-charge zone.
“The old plan was wonderful in its direction and intent, but it could be co-opted by the next city council,” said Yates.
“Even though at the time, Area 5 (Circle C) was a no-growth area over the re-charge zone, with the right folks at the city council, you could at that time create anything,” he said.
Meanwhile, growth continued, undeterred and supplied with cheap utilities, and Austin’s outer rings continued to flourish into the 90s. But it was then too that increased growing pain tensions between new residents, developers and West Coast money further clashed with the strong passions to preserve Austin’s inarguably special sense of place, as well as its awe-inspiring environmental gifts.
Austin’s local political system is somewhat archaic. And as a whole, the local voting electorate is disengaged in city elections. Less than 10 percent of eligible voters turned out for the last municipal election. Some say that’s because they feel that the council doesn’t represent their interests.
Unlike most large cities, council members are elected through an at-large voting system. There are no council districts, so local neighborhoods are not directly represented by a local council person. Instead, city council members find themselves beholden to a group of politically engaged local neighborhood groups, primarily in the central areas of town. Those neighborhood groups often help finance campaigns and end up voting in certain members who represent their interests.
While the council and Mayor abide by an unspoken progressive mantra (for example, Austin’s professed goal to be sustainable), acts like theplastic bag ban lose their impact when one drives around areas beyond downtown. In fact, when viewed as a whole, much of Austin offers up yet one more example of an American city that didn’t do its homework. Signs of fractionalized unplanned growth are evident in countless neighborhoods — east, west and north.
Outlying areas appear even further isolated, choked by small, congested and convoluted highways, all even more ill-served by an inadequate public transit system that relies on the bus. Unfortunately, Austin buses are at the mercy of the same single passenger car lanes as everyone else since the idea of High Occupancy Vehicle (HOV) lanes appear to have bypassed Austin.
Turns out, Austin was too small in 1956 to receive a beltway under the interstate highway system. In later years, an anti-freeway movement delayed construction of big highways for decades.
By 2010, Austin ranked 3rd in the entire United States for traffic congestion — once again, worse than Houston or Dallas — according to data compiled by Texas A&M University.
Add to that, Austin’s population density stands at 2,653 people per square mile. Compare that to Seattle, at around 7,500 per square mile. Overall, Austin is one of the least dense cities in the United States. Density reduces sprawl, which in turn reduces environmental and economic impact. For example, over 50 percent of the Austin area’s water consumption goes to the irrigation of landscaping. A huge portion of that is residential lawns. And, there’s simply no telling how much gas Austinites consume driving on the highways.
Terry Mitchell, President of Momark Development and one of the developers of The Austonian downtown, argues the example of a 200 home development on a 226 acre site. There, development might result in 50 acres of impervious cover. Meanwhile, he said the 200-unit Austonian led to one acre of impervious cover.
Impervious cover is any surface in the landscape that cannot absorb or infiltrate rainfall — think driveways, city streets, parking lots and rooftops.
Meanwhile at City Hall, the denser, tax revenue-rich parts of town, continue to fund the necessary infrastructure to build in less dense areas of the city.
“The direct cost — what it costs to lay out the infrastructure such as roads, sewers and water for a sprawling community — is so much more than it is for a denser development,” said former Pittsburgh Mayor Thomas Murphy, now a senior fellow at the Urban Land Institute.
So why is there still such strong opposition to certain density development proposals floated in or near the center city from certain local factions?
Terry Mitchell said he understood objections from residents who raise red flags about the increased traffic that would result from new in-town multifamily developments. But, he said traffic patterns have shown that the new residents would make shorter distance trips.
Anyone who has inched their way home to North Austin on Mopac or I-35 during Austin rush hour traffic is familiar with the caterpillar pace. And, as Mitchell points out, the environmental impact of thousands of idling cars, especially in hot climates like Texas, is devastating.
Even still, Austin leaders pay close attention to the outcry from in-town neighborhood concerns.
“The legacy of Austin’s current development structure now… often times we instead respond to political pressures and we don’t zone land accordingly,” Mitchell said.
And, that’s not even considering the socio-economics of density.
“Higher density, or more compactness (as the Imagine Austin plan calls density) has been attributed to a more sustainable community, not just environmentally but socially and culturally as well,” said Evan Taniguchi, principal at Taniguchi Architects who served on the Imagine Austin’s citizen’s advisory task force.
He compared Austin to Portland, where planners are finishing up a comprehensive plan in a city long considered as a model for urban planning. He said since they already have a successful land-use and transportation vision, they are embarking on a new phase of a plan that primarily focuses on social equity.
“I would say they are at least 25 years ahead of Austin as far as “compact and connected goes,” he said.
The allure of the Texas capital is real; its appeal even to places beyond Texas, even the progressive Northwest coast, is tangible. And despite the rumors, there’s no one at the Austin City Limits sign screaming “Go back home!”
As residents examine Imagine Austin, tough questions about the nitty gritty of the zoning and development code will be debated, arguments will be had over developer response to community or market forces and the larger issues of glaring economic inequity will be lurking in the background. Perhaps the biggest of those is whether Austin will ever get serious about the fundamental necessity of connectivity through viable public transit.
“One of the potential outcomes in the Imagine Austin plan is an overhaul of the land development code,” said Melissa Neslund, land planner and business development specialist at Bury + Partners.
Big picture-wise, Neslund said that the Imagine Austin plan will help planners realize visions that are necessary to grow Austin in a smarter way.
“We have this problem now where people say they want density, but when you get these same people to actually come out and talk about the nuts and bolts of what and how that density comes to be, they say ‘not in my neighborhood,'” said Neslund.
“In other words, the changes to the code might mean, yes, you will have a three or four floor structure next to your single family home,” said Neslund.
Even still, Neslund, who has seen other Imagine Austin-like plans come and go, is optimistic about this current effort saying she believes the new plan keeps the focus on the greater philosophy to create complete and connected communities.
But, driving around Austin, one is reminded of the work to be done to realize that vision.
One recent Sunday afternoon, a local Randall’s cashier was asked if she was going to watch the Oscars later that night. She said she planned to, but that it depended on the bus.
“It takes me about an hour, on a good day,” to make the journey from the store on Lake Austin Blvd. to her home near South 1st and Slaughter Lane.
For her, the concept of a fully complete community was not realized.
“Housing, employment, parks, schools, social services, retail — you ask, do each of these big parts of town, have all these components,” askedFrances Ferguson, board president at Housing Works and an Imagine Austin citizens task force member.
One development in particular, Mueller, has been held up as an example by Austin leaders and developers. At this point, communities like Mueller, still largely in the planning stages, are few and far between. The dearth of good planning in the past has led to these moments of heightened urgency as Austin moves forward.
“We all know a vibrant activity center when we see it. Imagine Austin calls for thriving, connected centers where residents can access healthy foods, their place of work or higher education with or without a car,” said Matthew Dugan, PDR at the City of Austin’s Planning Department.
He said the goal is to connect people of all ages, backgrounds and abilities to homes, jobs, schools, arts and cultural amenities. That’s not just the downtown, but all the disconnected places — throughout the 297 square miles that makes up the City of Austin.
Still, critics of the plan aren’t convinced this is the best way to proceed.
“Our overall quality of life in Austin is very high and that’s made us unrealistically complacent,” said Robin Rather, CEO at Collective Strength.
Rather, who says that Imagine Austin lacks teeth, takes an altogether different tone, saying the reason life in Austin is so great now is because people 20 years ago wanted to make this city a better place. She said that’s the time when people were talking about open space and the unique character of neighborhoods, taking care to protect that special sense of place so many associate with the essence of Austin.
“The last generation of leaders was looking out for the next 20 to 30 years of Austinites. We aren’t. We are not looking out for the next 20 or 30 years,” said Rather.
She said you can survive without cutting edge transportation and compact development.
“You cannot survive without water and energy,” said Rather.
Every time a new mayor or borough president gets elected, the city pays around $350 to update each of the affected signs.
New York’s Eccentric Road Signs
A city with as much gall as ours doesn’t wimp out, even at road signs.
| Friday, May 28, 2010There are Port Authority crossing signs on the George Washington Bridge reminding any doubting commuters that New York is still the Empire State.And – just in case commuters don’t follow local politics – there are signs gently reminding them who’s in charge at City Hall. The names of both Mayor Bloomberg and borough presidents are finely printed there.
Every time a new mayor or borough president gets elected, the city pays around $350 to update each of the affected signs. Those corrections and the entire set up, removal, and replacement of almost all the city-owned sign inventory are orchestrated at a city-owned facility, a sign factory if you will, located in Maspeth Queens.
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MTA Moves Toward a ‘Smart’ Way to Pay Fares
by Cody Lyon
Sep 2010
At around 8 on a hot July night, deep inside the Columbus Circle subway station, frustration was on full display. A small group gathered around a bank of MetroCard vending machines, toes tapping, eyebrows raised and arms across chests. While trains rumbled in and out of the station, three young women chatted as they struggled to insert cash into one of the machines. In front of another machine, obviously flabbergasted by what he saw, a thin bearded man exclaimed, “Can’t you see it doesn’t take bills!”
He continued, “Only one of these damn things does, this one here, I’m waiting for it.”
Indeed the messages ticking across the tops of two of the three machines informed MetroCard buyers, this machine “does not accept bills at this time.” One of the three also advised, no single ride tickets. All three card dispensers did welcome plastic.
New York’s time consuming and often inconvenient fare collection lags far behind that of many other large cities, according to experts. Some might say the dysfunctional MetroCard vending machines reflect deeper systemic problems at the Metropolitan Transportation Authority, one of the world’s largest public transit agencies.
Change, though, might be on the way. Within the next few years, transit riders might be able to simply tap their cards and go, rather than having to swipe — and sometimes swipe again and again. In addition, rather than purchasing a ticket from the transit authority, they could have their fares automatically debited from their bank accounts or charged to their credit cards.
The switchover, though, promises to be lengthy and cumbersome and could present straphangers — and the authority — with a new host of challenges.
Ticket Sales
As it stands now, fare collection and the processing of billions of dollars takes a significant financial toll on the transit budget. In 2010, the MTA said that, for every dollar it takes in from MetroCard sales, it spends 15 cents managing and administering the fare collection system. Shaving just one penny off that 15 cents could save around $55 million a year, according to the transit authority.
A team of 124 employees work around the clock to maintain the system’s 1,650 MetroCard vending machines.
“We had 28,456 service calls” for machines in July alone, said Antonio Suarez, chief officer of fare collection equipment maintenance at New York City Transit. The machines, manufactured by Cubic Transportation Systems, a unit of the Cubic Corp. have been in operation since 1994.
Meanwhile, a separate revenue office picks up the cash that all the machines hold. The revenue collectors go into the system at various times of day, equipped with gun toting special officers. But the MTA says that budget constraints have “impacted” the frequency of those cash pickups as well as the actual restocking of new MetroCards.
Even though many machines only accept credit or debit card payment, cash accounts for 64 percent of all MTA transactions — at machine and at ticket booths. The cash transactions are smaller, though, so account for only a third of the fare revenue.
Changing the System
MTA’s current fare collection is “a generation behind places like Chicago, Atlanta and London,” said Randy Vanderhoof, executive director for the Smart Card Alliance, a multi-industry association.
As riders know, New York City Transit has been slow to embrace many technological advances that could enhance the efficiency and speed of the system . “The MTA has expertise at building and maintaining, they have a poor record at implementing technology,” Said Neysa Pranger of theRegional Plan Association.
The current executive director of the transportation authority hopes to change that.
Jay Walder previously served as managing director for finance and planning at Transport For London. While there, he was widely credited for spearheading that system’s wildly popular fare collection system known as the Oyster Card.
The Oyster Card The smart chip uses a secure micro controller, or equivalent device with internal memory, and a small antenna to communicate with an electronic reader through a contactless radio frequency. In London, as well as a bevy of other cities including Chicago, a rider simply taps a pre-paid, agency-issued card or key fob with a smart chip on a specially equipped terminal, like those seen in New York City cabs or at drug stores and fast food restaurants. The cost of the ride then is automatically deducted, as it is from a MetroCard today
Getting ‘Smart’ in New York
In June, New York’s MTA, in partnership with the , New Jersey Transit and credit card issuer Mastercard, re-launched an earlier tap and go smart card pilot program. Plans are to phase in pay systems, first in on city buses and then subways.
In addition to making it easier to pay and collect fares, the plan also would make fare payment between agencies in the tristate area more seamless, helping customers who, for example, take the PATH into the city and then hop on a subway.
In London the transit agency issues a hard plastic prepaid smart card. But signs indicate that New York’s MTA would like to get out of the fare card selling business and farm out most of those duties perhaps to the credit card or banking industry. This would happen under what gets referred to as an “open loop” system.
The MTA pilot project is testing whether bank and credit cards embedded with smart chips can be used to make direct payments into the transit system.
Essentially, a rider would no longer have to buy a MetroCard but would simply tap a debit or credit card at the turnstile. The MTA has said it will provide alternatives for cash paying customers but has not devised exactly what they will be.
If New York adopts an open loop system such as that, it “will leap frog other cities” that still issue all tickets themselves,” said Vanderhoof.
The “open loop” appeals to public transit agencies, he said, because selling tickets is expensive. “Transit industries across the country are finding it costs them a lot of money, in machines and service, and collecting cash out of them, to be able to operate the transit ticketing and fare payment services they offer,” Vanderhoof noted.
No Tickets Please
“Anything transit agencies can do to reduce the number of tickets they have to sell, and the number of machines they have to supply in the stations, will allow them to save money,” he said, adding that after all, “people have the ability to pay already in their wallets.”
Both London and Chicago are looking at potential open payment options.
The idea has obvious appeal for credit card companies as well. In a case study of the original MTA 2006 pilot program, Mastercard, which had partnered with Citibank, said “Citibank wanted to expand cardholder usage to a desirable everyday category like mass transit, part of the daily routines of million of people.”
Columbia University Professor of Law Ronald J. Mann said the incentives for banks and issuers of credit cards to become involved in transit are even greater today.
“They will earn revenues of some sort from transactions on the cards,” he said, “and in New York City, there would be a powerful incentive for individual consumers to obtain cards of the type that give them MTA access without having to buy a fare card.”
Mann explained that the credit card “market is saturated, the overwhelming majority of people in this country that have any income or assets who want a credit card, have a credit card,” so the card companies are looking for new places they can use those cards — such as transit.
In New York City alone, around 7 million people ride the subway daily, and that could translate into a lot of transaction volume.
Customer Convenience
Vanderhoof of the Smart Card Association said the open loop system could offer added convenience for customers, even those from other cities. For example, he said, someone from San Francisco would be able jump on an New York City subway or bus by just tapping a card she already has in her purse — “without having to deal with a MTA vending machine.”
Mann predicted that “every large credit and debit card issuer will want to be allowed to issue smart cards in New York City.
“Because of the convenience that the ability to use smart debit or credit cards will offer MTA commuters,” Mann added, “no one in New York City is going to want to be using plastic that they can’t use on the subway. … You’re going to have to figure out which of the banks will give you a smart card, and you are going to go and get it.”
Customer Inconvenience
But what about those customers who do not have debit or credit cards? According to the New York City Department of Consumer Affairs, 13 percent of all city households do not have bank accounts — the largest percentage of adults in any community in the United States.
Mann wondered how people without bank accounts would obtain cards to give them convenient access to MTA services. Will the cards have higher fees than the cards more well-heeled consumers already have in their wallets? And, if MTA completely migrates to the open loop system “will the transit agency move to make it less and less convenient to use cash or buy MTA fare cards?” he asked.
MTA figures for 2009 indicate the average cash purchase was $6.87 per transaction while credit and debit transactions averaged $19.71. That could indicate that some less affluent New Yorkers — many of whom do not have bank accounts — simply cannot afford to buy subway or bus rides in bulk.
Amy Linden, senior director of the MTA’s New Payment Systems said that eventually, customers without bank accounts might be able to purchase and use pre-paid cards, as many do now for phones, although, she said the authority is not yet testing any of those methods. She said the authority would continue to accept cash on buses.
At some point, riders also many be able to use phones with Near Field Communication, or NFC, technology which might b able to connect to a pre paid account. With that, a transit rider could simply tap the phone on the reader and enter the system. This might help some people without credit cards because, according to Linden, more individuals own mobile phones than have bank accounts.
Even people with bank accounts could face increased risk of stiff customer fees from their banks or card issuer under a smart cart system. For example, customers who overdraw their bank accounts and have overdraft coverage, could be charged a stiff fee when they tap their bank cards to enter the subway.
Further, the plan raises questions about the MTA’s fare structure and how the this new payment system might affect unlimited ride plans or volume discounts. For now, the MTA says packages will continue to be available.
Linden said the MTA will deal with all this but first needs to go first to an open payment system since the authority must reduce costs and make travel in the region more seamless.
Making the Change
Whether it can make that vision a reality remain in question. The man who would oversee it all, Executive Director Walder, has an extensive urban planning public sector resume and, as someone who worked for the MTA from 1985 through 1993, knows its complex culture . But, as the Regional Plan Association’s Hope Cohen has written, Walder still will confront “interagency rivalries and contradictory union contracts and work rules.”
How those pressures, along with public concerns and strained budgets will affect the move to a smart card — and what the system might look like in the end, is still anyone’s guess.
Already, though, the agency’s plans appear to be encountering delays. Last year, news reports said a smart card plan would be in place by 2014, but now the agency is not sure when that might happen.
This month MTA spokesman Aaron Donovan would say only that “the new smart card program will see full subway and train implementation in the coming years.” He did not provide any more specific information.
Wishing New York the best of luck in its new endeavor, Peter MacLennon of Transport For London said that city’s of “tap and go” fare payment system, “has transformed the way passengers pay for journeys on London’s transit network.”
New Yorkers will have to wait and see if any similar transformations take place here.
codylyonreporter (Cody Lyon's clip samples) 