SMART CARD IMPLEMENTATION HOUSTON METRO – Houston, TX LCL has also led development and implementation of the nation’s first comprehensive smart card system for transit applications in Houston, TX.   The firm also developed the agency’s first change in fare policies in fourteen years. During this period, METRO also instituted a Revenue Department – placing all responsibility for revenue management issues within a single place within the organization.  Within 6 weeks of implementing the smart card system, the agency’s fare collection format was converted from 70% of receipts from cash to 70% receipts through the new Q Card smart card system.  Daily revenue grew significantly.    Fare policies - LCL Advisors proposed a method through which METRO could dramatically simplify its fare policies and products – improving revenue without raising fares - with a new smart card instrument being a prime component of the changes.   The new policies were crafted to simplify the fare structure, remove the operators from confrontation on revenue issues, provide equitable discounting and enhance control over all forms of payment.    Under the new rules, patrons are provided free transfers only with a smart card – eliminating all paper transfer instruments and driver involvement with the transactions.  All patrons are provided 5 free trips with every 50 paid trips using the card’s capability of recording all uses.  The agency’s discounting policy was converted to a completely equitable format – providing the same discount to all frequent users, regardless of how much money was expended for transit instruments.    The new technology allows patrons to establish “subscription” accounts through which the card automatically refreshes its value upon the balance reaching a pre-defined level.   Such refresh events are paid through a pre-established credit card transaction, rather than requiring the patron to visit a retail outlet.    In addition, in order to provide convenient add value sites, LCL Advisors devised Bus Banknote Reloading devices for installation on the rear of each Local bus, allowing patrons to insert currency for card add value transactions on the bus.   Revenue Department – LCL Advisors devised an organizational structure that called for all revenue management tasks to be transferred to a single Revenue Department within the Finance Division.   Under this structure, all maintenance, sales, processing and analysis functions are managed by a single management team.   Various segments of responsibility have been transferred from Finance, Operations and Marketing into a single unit.  Smart Card Program Marketing  - The Authority has named and branded the “Smart Card” device as the “Q Card” - Q for Quick and Quality, and a variety of other words to be used in an extensive marketing initiative.    Under direction from LCL Advisors, METRO developed two marketing campaigns related to the new fare policies, as well as to the introduction of the new technology to the patrons.  Marketing efforts were targeted at the “people in the seats,” existing METRO riders who would be directly impacted by the changes.   Marketing materials, such as extensive volumes of seat drops, bus cards and station posters delivered messages regarding “How To” use the system, the conversion of old media to the new Q Card media and the benefits to be delivered through the changes.    Program Results - The new fare policies and the Q Card system were activated in three phases in early 2008.   In phase 1, the Q Card was placed into full sales, the Daypass was removed from service and the sale of all magnetic instruments was terminated.  Phase 2 caused the elimination of all cash transfer instruments.   The final phase eliminated all magnetic stripe instrument transactions and implemented the revisions to cash fare rates. Throughout the three month period of the implementation, patrons were permitted to exchange the value on their magnetic instruments to Q Card.   At the completion of the implementation, such exchanges were ended.   To date, the effort has generated enormous response, with over 400,000 cards having been issued over the initial 10 weeks of service.   The agency is processing over 70% of its daily revenue transactions through the Q Card.   Over 70% of the add-value events are occurring on the BBRs, with the web providing another sizable source of such transactions.   Through continued assistance and support from LCL Advisors, METRO will accomplish its goals to move Houston calmly and effectively from Magnetics to Microprocessors.   It is fully expected that the Q Card will become an indispensable utensil for all Houstonians over the course of the next few months.    This conversion will clearly provide METRO with numerous benefits and a strong platform for future programs in Houston and in other US cities.   VENTEK INTERNATIONAL, Inc.  – Petaluma, CA LCL led the development of the nation’s initial smart card ticket dispending equipment systems for installation at several agencies located throughout California and Western Canada.    The system employed open architecture technologies to allow card usage by patrons in transit and parking applications.    The systems were developed to allow later interface with the Translink smart card system being developed throughout the San Francisco Bay area.   INTERNATIONAL UNION OF RAILROADS – (UIC) – Paris, France Provide advice on the implementation of smart card technology to this international body of railroad managers for transit agencies on a worldwide basis; Served as sole representative from the United States on multi-national panel sessions addressing methods and experience related to smart card implementation.