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Strategic Analysis of the US Automated Fare Collection Market in Rail and Urban Transit Systems : Open Payment Systems Rapidly Increasing Adoption Rate

  • January 2015
  • 67 pages
  • Frost & Sullivan
Report ID: 2657751

Summary

Table of Contents

Key Findings

The increased proliferation of connected devices and increased costs of fare management are strong drivers for growth of the automatic fare collection (AFC) market.
The AFC market in United States is expected to experience strong growth driven by the government’s push to improve public transportation across the country.
The three primary drivers for AFC are infrastructure projects, technology development, and the need for secure convergent transportation solutions.
This is primarily a city-driven market. New York, Washington D.C., Chicago, Los Angeles, and San Francisco are some of the key US markets with participants such as Cubic Transportation Systems (Cubic) having a major presence.
Cubic and ACS are some of the key participants in the global and US AFC market with turnkey capabilities and a wide geographical footprint in the global AFC market.
Open payment is to become the standard AFC system type and is expected to dominate the market by 2020.

Current Outlook (2014)
This is a large market with a lot of potential for expansion. There are over x transit agencies, of which, the top x do not have complete implementation of AFC systems.
The US AFC market is concentrated heavily between 7 primary participants. Cubic dominates the market with over x % of market share.
The be-in/be-out principle (BiBo) is overtaking the check-in/check-out (CiCo) principle because BiBo eliminates physically tapping the card on the reader.
The lack of funding amongst public transit agencies is delaying the implementation of AFC.

Future Outlook (2021)
Increased ridership, patronage, municipal efforts, and regulatory framework to promote the implementation of AFC. Almost all top-50 transit operators to have AFC.
Open payment systems and commercial off-the-shelf components are expected to increase the number of participants competing in the market.
Contactless smart cards and NFC systems are showing high levels of interest. Smart cards will gradually be replaced with NFC technology using chips, which can be integrated in credit cards or smartphones.
The number of AFC systems to increase through new federal funding programs and public private partnerships.

Aim
The aim of this study is to evaluate the revenue growth opportunities available for rail operators and automated fare collection (AFC) system providers. The study offers strategic market sizing and forecasts for AFC and eTicketing technologies including near-field communication (NFC), smart cards, and mobile ticketing.

Objectives
•To provide a strategic overview of the rail AFC market in the United States, including key technology trends and market drivers and restraints for AFC systems.
•To provide market sizes and forecasts AFC technologies and breakdowns by type for the period from 2014 to 2021.
•To analyse competitive factors and capabilities

Key Questions this Study will Answer

How is the public transit AFC value chain structured in the United States?
What is the US AFC market size?
What market dynamics are influencing each of the market segments?
What are the main competitors’ business models and their competitive advantages?

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