This week’s contactless fares deal between Cubic and Transport for London to license is undoubtably good news for London taxpayers but is the capital set to profit at New York’s expense?
The US city is looking for a new fares system to drag its Metro into the modern era, with the Metropolitan Transportation Authority keen to accommodate those who want to tap in with contactless bank cards and smartphone-based methods such as Apple Pay.
London’s system was of course built from the ground up to allow customers to do exactly that.
As a bespoke, custom-built platform it has inherent advantages over the modified stock payment systems which commercial software providers offered to TfL and hawk around to other cities.
So it stands to reason that any bid based around the TfL system would look especially attractive to overseas cities seeking to modernise their fares systems.
This is probably even more the case in New York where the MTA hasn’t always managed to complete projects on time and where decision makers may be especially keen in a proven platform tailor made for the task rather than waiting for a software vendor to modify existing retail payment solutions to work on its network.
Cubic already provides fares and IT solutions to the New York MTA and its deal with TfL appears to put it in a good place to extend that tie-up because, as a condition of the contract, TfL has agreed to not licence the platform to any rival in the New York tender.
The contract states that TfL’s subsidiary, Transport Trading Limited,
“will not (and will ensure that no member of the TfL Group will) offer a licence or any rights to the Licensed Materials, engage with, support or provide consultancy services to any person or entity (other than a Cubic Group Company) who is bidding in relation to the New York Project until after a contract is awarded by the Metropolitan Transportation Authority / New York City Transit Authority to the winning bidder for the New York Project.”
And in the definitions of key terms, ‘the New York Project’ is clearly defined as tender reference number 0000131308 which the MTA has helpfully published here.
This perfectly legitimate exclusivity provision surely makes Cubic the best placed of all possible bidders to win the New York gig?
Those wondering how TfL was able to secure a whopping £15m for code they initially said had cost them around £11m to develop now seem to have their answer.
This is undoubtably a great deal for London which helps safeguard investment in our transport network.
Yet with no rival bidder in New York able to match the proven success and bespoke nature of the London contactless system, TfL seem to have dented their counterparts’ ability to secure best value for their tax and fare payers.
But, as a city looking to absorb the impact of funding cuts and a yet to be fully funded fares freeze, should we care?