In the past fifty years, virtually every aspect of mass transit fare collection has changed. We have seen magnetic ticketing, chip card-based ticketing, credit and ATM card payment options for high value tickets and passes and on the bus we have seen several generations of on-board "farebox" products. The one aspect of bus-based fare collection that has not changed is the processing of revenue after it is taken from the bus. A new development in this area is taking place and this paper will cover the economic, security, and operational aspects of moving in a new direction.

From the point at which buses (and trolleys/streetcars) began operation in North America, payment was in the form of coins. In the early years of public transport using motorized vehicles, fares were typically in the range of a few cents to a nickel. For many years, for example, subway fares and bus fares in large cities were pegged at five cents—the nickel doubling as a token. As costs of operation increased and ridership increased, fares were increased and the volume of coins collected began to increase.

Mass Transit ridership peaked in the fifties with fares typically in the range of ten cents to twenty cents. Due to many factors, ridership began a long decline which only in the past few years has begun to be reversed in some cities.

Typical practice was the use of simple "drop boxes" on board buses which employed a transparent top area where the bus driver could visually verify passengers’ payments. A driver-actuated "dump" lever was used to drop the money into a locked cashbox. Any accounting for different types of riders was done through the use of mechanical push buttons depressed for each type of rider.

When the bus returned to the garage, the cashbox was emptied into a collection vault of some type, or in some instances vacuumed into a central holding vault. At some appropriate time of the day, the collection vault was opened and the coins separated using mechanical devices which shaked the coins through sorting holes or used some form of centrifugal force to separate coins by weight or size.

Due to the then-prevalent fare levels, currency was rarely accepted and, because of the configuration of the fareboxes, frequently not accepted at all.

At the conclusion of the counting process, the transit agency would have a deposit assembled for a day’s operations. No detail was available for purposes of determining which routes, or times of day were busy or slack and because the cash was not balanced to a known number of riders, always open was the possibility of internal theft which could not easily be detected or proven.

In the 1970’s, several attempts were made to develop fareboxes which counted coins (and in some instances even separated them!) and accepted currency. Derivatives of these early "registering" fareboxes are the predominant form of on-board fare collection used today.

In the current versions of the "registering" farebox, coins are measured through mechanical or optical means. These measurements are translated into denominations. Bills are inserted into a motorized capture slot and then if their length falls within a preset minimum/maximum range, they are registered as $1 Bills.

After acceptance, coins and bills are dropped into separate compartments of a locked cashbox. Revenue service at the garage level consists of removing the cashbox from the bus daily or after every shift and dumping its contents into a common collection vault retaining the separation of coins and bills. At the same time the farebox is "probed" for revenue and ridership information using one of several data transmission technologies.

After the cash is removed from the bus, revenue processing is conducted in much the same way it was done fifty years ago. The large collection vaults are opened and their contents are counted. Coins are typically processed using sorting equipment, sometimes verified using counting equipment, and then bagged for deposit. Bills are taken out of the vaults and stacked and faced by hand and then counted/verified using table top currency counters or in some instances counted and separated by more automated equipment (again after being hand stacked and faced).

In the late eighties and early nineties, as base fares increased into the range of seventy five cents (due to inflation and rising operating costs), the volume of dollar bills accepted in fareboxes increased rapidly.

Fareboxes, designed primarily to accept coins and equipped with relatively simple bill transports, began to fill their bill compartments quickly when in service on busy routes. This problem was solved with larger cashboxes with more volume for bills, but the larger problem became the processing of this increased volume of bills in the money room.

To this date, no automated solution has been found to the problem of processing of large numbers of unstacked bills as removed from a cash storage vault. Current practices include arranging several employees around a large quantity of bills who then manually stack and face them. A large North American transit agency can employ up to a dozen or more full time employees who do nothing but hand stack and face currency. Obviously this is not cost effective and is a constant source of temptation for internal theft.

Another problem which transit managers have faced is inaccuracy of coin recognition in "registering" fareboxes. Although genuine coins can be identified with a high level of accuracy, anything else with the same diameter of a genuine coin is frequently identified as a genuine coin. The safeguard against usage of incorrect coins and bills has been the use of an "inspection plate" for the driver to visually verify inserted money. It is impossible, however, for a bus driver to prohibit the use of all slugs, foreign coins, and counterfeit bills.

The average transit property shows on a daily basis a difference of from 2 to 5 percent between "registered" revenue and actual counted money as deposited. The fact that revenue does not balance is typically "common knowledge" within an agency. The several publicized cases of embezzlement in mass transit agencies could not have been possible for any length of time if fare collection systems would have been auditable and balanced on a daily basis.

A further source of inefficiency in a typical mass transit operation is the revenue servicing of the bus at the end of the shift or at the end of the day. Each bus must pause for several minutes as the farebox is "probed" for data and the cashbox is removed, dumped, and replaced. During heavy periods of operation, many buses sometimes return to the garage location simultaneously and must wait their turn for revenue service.

Multiple bus lanes for revenue service can be installed at a high cost, but the real problem is the fact that in the vast majority of cases, there is no physical need to have cash removed as frequently as is the current practice. With increasing use of monthly passes of various types, the amount of cash in fareboxes has actually decreased in many cities.

In 1998, Agent Systems, Inc. of Dallas, Texas introduced The Smart Box^TM Validating Farebox which included several innovative systems. Among these innovations were:

• A small, light and inexpensive cashbox which could be exchanged at the point of revenue service and transported to the money counting location with banknotes retained in a tightly stacked condition.
• Highly accurate electronic validation of both bills and coins and rejection of slugs, counterfeits, and foreign coins.
• High speed standards-based infrared probing technology.
• A feature called "revenue thresholds" which enables users to determine if a bus will have a cashbox exchanged based upon contents of the cashbox, predetermined day of the week, or number of days since last revenue service.
• Standards-based interfaces to enable communications with other on-board devices such as magnetic card reader/encoders, smart card units, head signs, passenger counter, AVL systems, and radio systems.

The following is a summary of some of the features which were introduced with this product and their impacts upon common mass transit fare collection revenue processing practices.

The use of a built-in bill stacking mechanism in the cashbox enabled the overall size to be minimized. Further, the use of high-strength polycarbonate resin enabled the cashbox to be lighter and stronger than if constructed of metal. The small size of the cashbox enabled the farebox itself to be significantly smaller than traditional fareboxes.

Revenue service consists of exchanging a full cashbox for an empty one after the farebox has been probed for data. At the conclusion of the probing operation, the farebox door will open to enable the cashbox exchange.

Some agencies will transport these cashboxes to a remote location for counting, others will use some form of a "through-wall" system to pass full cashboxes into a secure vault room.

The probing technology is a standards-based IrDA-compliant process that can be conducted from up to two feet away from the farebox. A complete update of all farebox software can be accomplished in as little as thirty seconds and a normal probe for revenue data is handled typically in ten seconds or less.

Acknowledging the reality that cash collections have been reduced in recent years due to an increased penetration of monthly and multiple ride tickets, The Smart Box^TM System enables the operator to determine the frequency of revenue servicing of buses. The frequency of servicing can be based upon pre-determined days of the week, minimum or maximum cash contents or maximum number of days since last revenue servicing.

In some instances, management of revenue thresholds can reduce by half or two thirds the numbers of buses serviced on a daily basis. In all cases, the farebox is still probed daily for all revenue and ridership data and all needed reports are generated on a daily basis.

The source of a major cost element of money processing as well as continuing personnel issues is the high labor requirement for hand sorting and facing of banknotes. Ever since base fares rose near the dollar level, transit agencies have been inundated with banknotes from fareboxes.

The Smart Box^TM System has presented the first solution to this problem with an integrated system encompassing a compact cashbox with integral bill stacking and a revenue auditing system in the money room consisting of integrated coin and bill processing equipment. Further, because relatively small volumes of coins and bills are counted at a time, low cost, off-the-shelf counting equipment can be used.

The cashbox is equipped with a machine readable identification number, which is read by the money room operator before unlocking. The coins are dropped into the automated coin counter/sorter and the bills are removed and placed into an electronic bill verifier. At the conclusion of these operations, the data is sent to the central host computer to be verified against the data for the same cashbox, which was polled at the time of revenue service. Each cashbox can be processed in a few seconds. A well-trained operator can handle hundreds of cashboxes in a normal workday.

When compared against some larger transit properties which employ up to a dozen or more full time money handling personnel, the procedures introduced in The Smart Box^TM System can represent significant savings.

The Smart BoxTM System represents a dramatic shift in the availability of tools to the mass transit revenue manager such as a true daily bus-by-bus auditable system. Normal operating conditions should show a systemwide balance on a day-by-day basis.

Variances of any type will be easily isolated to the garage, the bus, and the driver. Further, the maintenance of transaction-based data from the farebox will enable passengers dispute resolution in the event that questions arise regarding insertion of high value bills, for example.

The current practice of resolving persistent cash variances with the use of third party software which attempts to allot cash overages or shortages among fare categories and ridership numbers will not be needed in a system which will balance on a daily basis.

The existence of a daily audited system with reliable and balanced revenue is the most important aspect in the controlling of the cash collections of a mass transit agency. Everyone in the agency will quickly become cognizant of the reliability of the data and future internal theft—large or small—will become less attractive and less prevalent.

We have come a long way since the days of three-cent and nickel streetcar fares and simple drop boxes. Regardless of which way the mass transit industry turns with respect to electronic fare media technology or how large a proportion of passengers will hold period passes or multiple journey passes, cash in the form of coins and bills will continue to be accepted. This cash must be properly identified, counted, transported, and most importantly, accounted for.

The innovations outlined in this paper go a long way towards solving decades-old problems in mass transit fare collection. As operators of mass transit agencies, revenue managers, and producers of fare collection equipment, we all owe it to the public to provide better service at a lower cost in tax dollars and we should all look forward to implementation of these types of systems.