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Netherlands leads contactless ticket ?revolution? ? Part Two

<span class="" id="parent-fieldname-description"> The Netherlands is leading a world first in its current nationwide implementation of smartcard ticketing. </span> <p><strong>To read Part One of this story <a href="">click here</a><br /></strong><br />Passengers can use the new contactless card, called the OV-chipkaart, to pay for travel on any mode of public transport throughout the Netherlands, including between cities, all on a single card.<br /><strong>Customer Perspective</strong><br />Trans Link Systems (TLS) represents the four biggest public transport operators in the Netherlands. Its mission: to implement the OV-chipkaart, the world’s first nationwide smartcard ticketing system. With roll out now entering the final stage, Trans Link Systems chief executive Jeroen Kok talks about the background to the scheme and why a good governance model is the key to success.</p><p><strong>Why did the Netherlands choose nationwide e-ticketing?</strong><br />For three reasons. First, there was a need from a safety point of view to start gating the subways and commuter rail systems. If you gate them, you need an e-ticketing system. So the need for a safer system was one reason.<br />Second, we needed one ticket for all modes of transport: rail, buses, subways – everything. In the past, you had to have separate cards for one, paper tickets for another. What was needed was a single ticket for all, offering ease of use.<br />Thirdly, especially for city and regional operators, there was very little accurate information about what was really going on – they had no way of knowing how busy their buses were and the revenues were very unclear.</p><p><strong>Is it fair to say that until you had e-ticketing, there was a degree of guesswork involved in revenue distribution?</strong><br />Absolutely. They had quite an elaborate system of estimates: if cards were bought in a certain area, the assumption was that those cards were being used in that area as well. And based on those estimates, they would then distribute money from ticket sales. It was not a very consistent statistic.<br />With the chipkaart, the data comes in at 4 o’clock in the morning and operators get it on their account at 4 o’clock the next day. The data that flows back has become very accurate. An operator can have a promotion on a Saturday on Sunday, they can see whether that promotion has been successful or not. They can see flows per line and they can see whether a new bus service has been successful. You can really start managing your business with information like that.<br />Smartcard systems generate accurate journey information as a by-product of ticketing. How valuable is this information for long-term planning?<br />It’s crucial for a professional relationship with the public authorities. Take the question of subsidies for routes that need extra money. If you have accurate data, you can have a very transparent discussion. You can verify whether a line is successful or not. You could provide special products for senior citizens and then you can see if they start using those services more often or not. So there’s a feedback loop, and I think this will change that debate.</p><p><strong>Will this alter the way transport operators work together, for example, in terms of the products they are able to offer passengers?</strong><br />It’s too early to say, but I am quite sure it will. Because what usually keeps you from having this kind of arrangement is that you don’t know who has the benefit of a mutual agreement. With this system, you know. And if you know, it becomes more predictable. I think from a management point of view, as it becomes more predictable, it becomes something you’re more interested in.</p><p><strong>How will things start to change once the system is fully rolled out?</strong><br />I think it will change the customer interface. I think there will be parties that can offer more integrated packages, as you’ve seen with the airlines. There’s a whole world that opens up with integrated ticketing – for example, with concert halls and with operators that have agreements with other intermediates that start to do the ticketing for them.</p><p><strong>To what extent is e-ticketing a mobility enabler?</strong><br />It’s a major reduction to the barriers to public transport, especially for those that are not regular public transport users. And I think that’s a trend nobody’s looking at, because public transport operators are usually focused on the regular user. But with the chipkaart system, what it really does is to reduce the threshold. Once you have a card, it’s so easy to travel. Nobody actually realises how difficult it sometimes is to buy a ticket, to know where to go. If you’ve taken away those barriers, then new passengers might come in.</p><p><strong>The Netherlands has a number of different public transport operators. How did you convince them all to come on board?</strong><br />I think the important thing is to treat everyone exactly the same way. So there’s never been a difference from Trans Link’s point of view between shareholders and non-shareholders. All my customers have exactly the same conditions to their contracts and exactly the same pricing.</p><p><strong>How important was it to get the five major public transport operators on board when Trans Link was formed?</strong><br />The Dutch are renowned for telling people how to do things, so I’m always a bit careful! But I think if you look at any of the other successful projects, they all have a good governance model. The governance model might be different – it might be that public authorities have more of a stake than the companies. But you need a Trans Link-type of organisation to start to run it, and to push it. You have to make sure that there’s always a level playing field for all transport operators that are out there – and that it’s perceived as a level playing field as well, which is a very different thing.<br />I think the model where you start small and try and hook in the others has proven to be very difficult. So I was very happy to start with a nationwide architecture, with a nationwide vision, and an open architecture for different vendors, that could then be presented to operators as a totally level playing field.</p><p><strong>Why did you choose Thales for this project?<br /></strong>Thales won the tender. And part of the winning was that we were very keen on a good reference – a working reference – and Thales was in the consortium that used the Hong Kong public transport smartcard system as a working reference.<br />What I think distinguishes Thales is that they don’t walk away. Whatever happens, whatever problem there is, they try to solve it. And I think that is an attitude you need, because these projects always take longer and come up with new things that you never anticipated.</p><p>This article was an extract from <em>On the move,</em> Thales’ quarterly Ground Transportation newsletter: <a target="_blank" href=""></a></p>