A very interesting development for public transport in Auckland happened today, with the announcement that Infratil are going to roll-out their Snapper Card onto all NZ Bus bus services. Here’s the press release:

Snapper to enter Auckland market in 2010, targets Rugby World Cup for comprehensive integrated ticketing.

Snapper – New Zealand’s leading contactless ticketing and payment system – today announced it will be widely available in the Auckland market in 2010, offering its small value payments platform across the retail sector and for most public transport journeys.

From mid 2010 some Auckland buses will progressively begin accepting Snapper cards, and the technology can readily be extended to other public transport modes before the Rugby World Cup.

This means that more than half of all Auckland commuters will be able to pay for their journey by using a Snapper card, and the company will be working to extend its coverage further.

Snapper says it would be possible to have integrated ticketing on 90% of Auckland public transport in time for the Rugby World Cup, and is willing to work closely with the Auckland Regional Transport Authority to help achieve this goal.

Snapper is extending its system that has been widely successful in the Wellington and Hutt Valley region where it is used to pay for every day items such as bus fares, train tickets (from the ticket booth), coffee, lunch, dry cleaning and movies.

Miki Szikszai, CEO of Snapper says, “Snapper is a proven world class smartcard solution that has been localised for the New Zealand market. We’ve brought together the best technology in the world and New Zealand’s electronic payments and public transport systems. Aucklanders are overdue the benefits of Snapper, something that Wellingtonians have been enjoying for over a year.”

World Class Technology.

The company has worked with its key partners, including Korean Smart Card Corporation (KSCC), ANZ National and EFTPOS NZ, to deliver an integrated ticketing and payments platform to suit New Zealanders.

“KSCC is our core technology provider. The same system processes 30 million transactions every day in Seoul, South Korea, across enormous public transport and retail networks. We know it can cope with whatever the New Zealand market requires.”

Snapper has also been integrated into New Zealand’s existing electronic payment system through EFTPOS NZ. The success to date from leveraging the EFTPOS infrastructure that retailers rely on every day, provides confidence that Snapper has combined KSCC’s international best practice in card and systems security with the surety and reliability of NZ’s EFTPOS system.

Peter McLeod, MD of EFTPOS NZ says “Snapper is an exciting step towards a full cashless payment suite for New Zealanders. EFTPOS NZ has worked closely with Snapper since early 2008 getting the system up and running in Wellington. It’s great to now be able to offer this to the Auckland region and the rest of New Zealand.”

Auckland Launch Details.

Snapper’s launch in Auckland will initially involve a range of bus services including NZ Bus’s extensive fleet. These services account for most buses in the Auckland region and more than half of all public transport trips. Snapper offers the ability to provide discounted and integrated fares which operators can then implement as they choose, and use the same smartcard for small value everyday retail purchases.

“The existing ticketing system in our fleet is nearing the end of its life,” says Bruce Emson, CEO NZ Bus. “We will be in a position to deliver an electronic ticketing solution in time for the World Cup 2011.

“The existing ticketing system is 17 years old. We can wait no longer. This is about business continuity – if we do nothing, we face the risk of our system failing.

“There are obvious benefits from introducing a product we have been working with in the Wellington market. We are assured by our supplier that our ticketing system will be able to comply with NZTA’s national standard for integrated ticketing when this standard is determined,” says Mr Emson.

Miki Szikszai says, “Snapper has been a great success in Wellington and we’re truly the only open contactless payments platform operating in the New Zealand market. Entering the Auckland market now is critical to having a well-established nationwide system in time for Rugby World Cup 2011.

“We are working to a plan that will make Snapper available to all New Zealanders and visitors to New Zealand well before Rugby World Cup 2011. Snapper is the quickest and most cost effective way for Aucklanders to get a world class integrated ticketing system across buses, taxis, ferries and trains without ratepayers and taxpayers needing to pay for any of the system that supports it.

“Snapper continues to work closely with regional and central government to make sure that this happens. We are committed to developing a nationwide specification for New Zealand, and we are heavily engaged with NZTA to deliver an open national standard for Integrated Ticketing. We have no doubt that the industry can achieve this.

“As a New Zealand company we’re proud to be delivering a world class product, quickly and efficiently across the country without involving substantial ratepayer or taxpayer funding or risk.”

Basically, this is Infratil/Snapper throwing a big spanner in the works of ARTA’s integrated ticketing project – which is currently being negotiated between ARTA and French company Thales. In some respects, this is really annoying, as it potentially puts the whole idea of a single integrated ticket at risk – after all it’s unlikely that we would rip out all the Snapper machines to replace them with Thales machines after just a couple of years. So, it’s likely that we’ll be stuck with Snapper in some shape or form forever now (at least the machines, it’s possible the cards could be phased out).

Unsurprisingly, ARTA are pretty hacked off:

The Auckland Regional Transport Authority (ARTA) said today that Snapper’s announcement of an integrated ticketing system for Auckland was ‘premature’.

ARTA’s Chief Executive, Fergus Gammie, said, “ARTA is currently negotiating a contract for a full multi-modal integrated ticketing system for bus, rail and ferry services in Auckland”.

Mr Gammie said, “Snapper was an unsuccessful bidder in the public tender for the Auckland ticketing system. There will be opportunities for other suppliers to be involved in Auckland’s system, these will be developed in conjunction with NZTA and the industry.

Mr Gammie stated that “All Auckland public transport operators will be required to participate in ARTA’s ticketing system. ARTA is working with all of its operators, including NZ Bus, on this matter”.

Mr Gammie said more details of the timing for Auckland’s integrated ticket would be made available shortly.

On the other hand, NZTA’s commitment to a nationwide integrated ticketing system with common standards allowing different cards to be used with different machines (much the same as how EFTPOS operates) means that the Thales system should be able to work with the Snapper system – and each user will be able to use either card for all their needs – bus, train or ferry. In that respect, this step by Snapper could actually be a good thing – in that effectively it will get the ball rolling and save ARTA/NZTA quite a bit of money that would need to be spent on putting the machines onto NZ Bus buses – as they’ll already be on them.

I am still a bit suspicious though, in that Snapper are probably designing their system so that it’s basically just a form of “e-cash”, which isn’t necessarily the best public transport solution (though it might be, I quite like the simplicity of the idea in some respects) – whereas ARTA’s plan was to work out the best system for public transport and then anything on top of that would be a bonus.

So overall for now I’m going to sit on the fence. I do think this has been a pretty smart strategic move by Snapper/Infratil, and I also think that ARTA almost deserve to have their plans stuffed up – they’ve messed around on integrated ticketing for so long it kind of serves them right. However, my concern is that Auckland gets the best ticketing system for public transport possible – and I’m not sure whether today’s developments aid that in the long-term. However, I am looking forward to faster boarding times on my bus from next year onwards.

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  1. I have feeling where ever NZ Bus goes, Snapper will follow. They appear to be linked rather closely to say the least. All part of Infratil/NZ Bus strategy to get their hoped for 20% return they have stated.

  2. It is not related to their moves to consider selling NZBus. That decision has not yet been taken as they continue to juggle the books. The process to buy Shell NZ is a long and complex one. The immediate move is to head off Thales and get a foothold in Auckland.

  3. Yeah I agree that this seems to have been done separately to any potential sale of NZ Bus. As I said above, if Infratil were to sell NZ Bus then this latest move seems really strange.

    I’m still trying to work out exactly why Snapper have made this move. One of the following two reasons I suspect (or perhaps both):

    1) To throw a big spanner in the works of the ARTA/Thales deal.
    2) To get Snapper into Auckland, get people used to it, which will hopefully make ARTA/NZTA change their mind and go with them instead of Thales.

    I guess it will mean that Snapper will be “part of the mix” in Auckland, which is probably quite good for them.

  4. As if Auckland’s public transport wasn’t fractured enough, now there might be two separate ‘integrated tickets’. Man those neo-liberals are right, this commercial competition business really leads to the most efficient outcomes.

  5. nononono, I was really hoping for Auckland to have its own version of ‘Oyster’ , and now you might get ‘snapper’ forced upon you??
    is snapper a genuine smartcard or is it just another version of a cash card, except for transport?

  6. AC, well apparently Snapper is based on the T-Money card in South Korea that is used for millions of trips per day. I don’t think that Oyster does anything that Snapper can’t potentially do.

    I think it’s important to note that Snapper is NOT integrated though. You still can’t use it on Wellington’s trains.

  7. You mentioned that, “they’ve (ARTA) messed around on integrated ticketing for so long it kind of serves them right.”

    Surely the only reason ARTA have “messed” around is due to Snapper trying every trick in the book to hijack the deal, that they quite clearly lost to Thales in the first place.

  8. ” think it’s important to note that Snapper is NOT integrated though. You still can’t use it on Wellington’s trains.”

    That’s a meaningless statement. You can’t use it on Mana buses either. The reason there isn’t an integrated ticketing system in Wellington is that the regional council hasn’t got around to it yet. Snapper uses exactly the same technology as Oyster (both based on the south korean system), and its perfectly capable of integrating across modes from what I understand. Its an issue with policy in Wellington, not with the technology.

  9. Given it’s taken an eternity to get ANY movement around the integrated ticketing, any movement forward should be welcomed. If there are competing integated tickets then great, maybe it will drive prices down!

  10. Anon, ARTA have existed for around 5 years now. We have only seen real progress on integrated ticketing in the last few years. Heck, the Regional Land Transport Strategy still refers to having it done “by 2020”. I understand that the Public Transport Management Act’s changes were probably necessary to make it happen, but I don’t think it is unreasonable to say ARTA could have done better.

    LawGeek, yes the GWRC are definitely to blame for the lack of integrated ticketing. My point was simply to point out that Snapper is not an integrated ticket. Smart-
    card: yes, integrated: no. I have seen Snapper sneakily claim they are integrated on numerous occasions.

    Vitamin, yes in some respects this does get the ball rolling. However, the creation of multiple duplicate systems doesn’t seem that efficient to me. Especially as apparently most of the cost is in “back-office” IT.

  11. i don’t mind which ticketing system ultimately is implemented if it can be properly used across all modes of transport and has good flexibility and payment options, day passes, weekly passes, monthly paseses, various zones, etc. if snapper can ultimately do that then i guess it will be OK.
    i dont know that two competing ticket systems would be so great……..

  12. This is blackmail, pure and simple. The transport agencies should fight back accordingly.

    They control the contracts. The sooner infratil is dumped as bus provider the better.

  13. So when is ARTA actually going to use its powers under the Public Transport Management Act to slap this subterfuge down instead of just whingeing? They better be quick before Joycey and his Infratil mates disembowel the Act.

  14. Uroskin, ARTA could always refuse to contract (or, before Joyce changes the PTMA, outright prohibit) any services that don’t use Thales’s ticketing system.

    That would put Snapper/NZ Bus in a rather sticky situation.

  15. I get two messages out of this;

    1) Infratil are sore lossers,

    2) Infratil are earning to much money off our bus subsidies

    It’s not cheap to install a smart card system, however that is all it is, so once thales system comes into the market, it will just be a waste of money. Not complaining though, Thales and ARTA should seaze the oportunity as it could now work out more economical to install their system at an earlier date by utilizing snappers hard work.

  16. It worries me, they must be pretty confident going forward that ARTA won’t have the authority to order them to remove the Snapper system and install the Thales one if they aren’t compatible as NZTA requires…

    Why would they be this confident..? What exactly is planned for the PTMA..? Admin, I think a few questions to you-know-who are in order…

  17. As mentioned up thread, integrated ticketing is not the same thing as having an electronic fare paying mechanism. It’s perfectly possible to have a paper ticket that is valid on many different services. Why isn’t integrated ticketing introduced with paper tickets? Which makes me think… is Infratil against integrated ticketing or is it against another company’s smart-card, or both?

  18. Interesting link LawGeek – I wonder if that press release was issued before or after Snapper’s announcement?

    Richard, yes they are two different things. What I think Infratil wants is the integrated smart-card ticketing contract for Auckland. Even though they got rejected they’re not giving up.

  19. “If there are competing integ(r)ated tickets then great, maybe it will drive prices down!”

    One would hope so, as NZBus has a reputation for fair play:)
    Was in Wellington yesterday and a bus ride which was $0.80 28 months ago is now $3.20.
    I wonder where all the subsidies go.

  20. I still don’t quite understand quite why Infratil might want this contract so much. Apart from the upfront cost of developing the system (for which Infratil would probably make a tidy profit), is there a more strategic benefit for Infratil? Would they take a slice off every ticket forever? If the scheme is extended nation-wide does it make it hard/impossible for another company to run? Another reason?

  21. They get a cut every time there is a top up, they get the fare in commercial services, they get subsidies on commercial fares…

    It’s stupid though they are pushing their system to try and get a bigger piece of the existing pie rather than growing the pie…

    Dumb, dumb, dumb…

  22. “is there a more strategic benefit for Infratil?”
    1. The analogy would be of eftpos being run by just one bank with its competitors forced to participate and pay. All their commercial transactions (i.e. fares, transport patterns) of their clients/paseengers would be visible to their competitor.
    2. Passengers uploading their snapper cards for future use also give Infratil their money for a considerable period, which would make it rather like a bank savings account. Infratil makes money by pocketing the interest on those deposits instead of passing it on to their customers, of course. (A bit like Google collecting your blog AdSense money until it reaches $100 and pay you out. This can take years to accumulate and guess where all that interest generating money goes to in the meantime – a not inconsiderable business for Google when it has 50 million blogs – and growing daily – with on average $95 sitting in their accounts constantly). If a million Aucklanders have a snapper card with $100 pre-loaded, that is a tidy investment to play with.

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