How cashless bus fare payment system has helped public transport companies cut costs

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A passenger swipes his Tap & Go card upon boarding a bus.

Rwanda is promoting use of different technology-based tools and facilities as it moves to achieve its cashless economy target in the medium-term. The push toward digital has seen a number of service providers, including the public transport sector, embrace e-payment and e-commerce tools.

The move by city public transport bus firms to adopt the e-bus fare payment system has been, for instance, touted to cut costs, promote road safety and boost operators’ revenues, among others.

Unveiled about two years ago, e-payment of public transport fares is part of the Smart Kigali initiative.

The Tap&Go cashless bus fare payment system is operated by AC Group, a local tech start-up, in partnership with three bus firms that provide public transport services and the City of Kigali.

The facility has already enabled bus companies to cut costs and improve service delivery, bus operators and AC Group officials say.

Patrick Bucyana, the chief executive of AC Group, the firm that operates the smart card payment system, told Business Times that the system looks at increasing customer base by 60 per cent in 2018 through upcoming projects.

“The Tap & Go payment system for public transport has helped reduce the inconvenience of carrying change (in terms of coins) for the bus fare on the part of commutters. It has also helped the sector to become more efficient as well as improve cleanliness of buses by elimination of paper tickets,” he said.

The official adds that system has been focused on improving passenger experience not only in terms of paying the fare, but also the “whole trip from the moment they board the bus to when they reach their destination.”

“We are also continuously working with the bus companies to ensure that their fleet is organised in a manner that ensures that the vehicles are available more frequently on the routes to reduce the time spent by passengers waiting, as well as the time spent to reach their destination,” he added.

Buchana said the number of commuters using Tap&Go cards has grown significantly from 300,000 in 2016 to 1.2 million subscribers as of the end of 2017.

Boosting revenue collection

The common problem that all operators faced, Buchana said, was loss of revenue due to money passing through a lot of hands namely from conductor, to bus drivers, to the person collecting it among others.

1515446370Patrick-Buchana
Buchana is one of the brains behind the Tap&Go service. / File

Sector players and operators say that up to 25 per cent was being lost in the hands of conductors, drivers and accountants under the old fare payment system.

With the Tap & Go system, the bus operators have now recovered such bus revenues,” he said.

Nille Muneza, the Royal Express boss, said the e-fare payment has improved service delivery and helped to reduce the cost of operations.

Muneza said the system has also enabled service providers to address many challenges, including disputes that could usually occur between passengers and conductors over fares.

He added that the system has improved road safety.

“It also helped eliminate the challenges of fake notes and loss of revenues as conductors, drivers and accountants would connive and swindle some of the day’s earnings,” he said.

He was, however, non-committal on the revenue gains resulting from using electronic means of collecting transport fares, saying the firm is still working on the figures that they expect to release in March.

“We are still compiling the figures and we will able to the benefits of the system by the end of this first quarter of the year,” Muneza said.

New jobs created

When the new system was rolled out across all city routes, all the conductors lost their jobs. However, Buchana said the firm and bus companies collaborated to bring some on board, especially those that were up to the task in the increasingly ICT-driven industry.

“The new system has created over 170 jobs directly and indirectly. Currently, there are over 126 Tap&Go agents working on different routes around Kigali city,” he said.

He revealled many of these agents are former conductors. Other people with skills were taken on as “ground technicians”.

“We shall continue retraining those that are trustworthy and ready to work,” he added in an interview with this newspaper last week.

“We have already trained a number of former conductors on the e-bus fare payment system, who are currently working in different positions. They are leveraging their previous knowledge in the transport sector to continuously improve the quality of services to stakeholders - passengers and the bus companies,” Bucyana added.

He encouraged conductors who lost jobs to join them in different endeavours geared toward revamping the public transport system in Kigali.

Figures show that the three companies namely KBS, Royal Express and RFTC were employing about 1,000 conductors, but Bucyana said that in recovering the jobs. Most still say the jobs that were created by the new system are not enough to absorb all them.

Personalised cards in the offing

For passengers that mistakenly tap on buses going to a different route than their own and then are not refunded by the bus firms, worry no more. Buchana said the tech start-up is working to revise and improve the cards.

“Currently, whenever such a case occurs, the process is that the passenger reports the incident to the nearest agent and our technical team follows up so that the money is refunded,” he said.

He, however, added that a new mobile application will now help retrieve such ‘mistakenly’ lost money.

“Our future projects, include producing cards that have the personal details of owners. This will be done by registering the cards using national IDs.

“This way, we will be able to quickly review and help passengers get their refund through the Tap&Go mobile app and other mediums we are working on.”

He added the firm is looking to roll out the service on up-country routes.

“We are planning to introduce the service on a number of upcountry routes following many requests from customers in Kigali, who regularly travel to the provinces, as well as passengers who commute from upcountry,” he explained.

Handling complaints about access to cards

A mini survey conducted by Business Times along different city routes, including the Nyabugogo-Kimironoko; city centre-Kimironko, city centre-Kimironoko or Remera, found commuters complaining of Tap&Go cards, while at some stages there are no agents.

Emmanuel Nizeyimana, a commuter interviewed at Nyabugogo Bus Park last week, couldn’t find a card. AC Group agents told this newspaper that the cards were out of stock for two consecutive days.

However, the firm said the issue is being handled in various ways.

“Our agent locations are based on agent profitability meeting customer satisfaction. During peak hours in the evenings and mornings, agent sales can increase dramatically due to growth in passengers movements are well over expectations.

“However, measures have been taken to address the situation and now cards are stored at the nearest point of every agent to ensure fast intervention in such emergency cases,” he said.

According to statistics from Rwanda Utilities Regulatory Agency (RURA), more than 3,300 vehicles operating in public transport across the country, owned by 41 companies are licensed to provide public transport services across the country.