The serial failures of Chicago’s new “smart card” public transportation fare collection system isn’t really a Chicago story—any more than the dark, satanic mills of nineteenth-century England were a Manchester story, or impoverished temp workers risking life and limb packaging iPads is a story about California’s Inland Empire. This is a tale about the world taking shape before us now, everywhere: public provision being turned over to private interests, subverting democracy and all economic good sense in the (terrible) bargain.
RFID fare-collection systems implemented by the San Diego–based defense contractor Cubic have caused public outcry wherever they’ve been introduced, across all four corners of the globe. London is Cubic’s biggest customer, accounting for 33 percent of their transportation business. There, “Oyster” smart cards were introduced in 2003 via what is known in England as a Private Finance Initiative. The parties were a consortium including Cubic and EDS (formerly Electronic Data Systems, a subsidiary of Hewlett-Packard), and London’s transport agency TfL; the seventeen-year contract, signed in 1998, was worth £1.1 billion. The system began with a modest range of features and slowly expanded; but according to Wikipedia, in “August 2008, TfL decided to exercise a break option in the contract to terminate it in 2010, five years early, this followed a number of technical failures.” And yet a subsequent contract with Cubic lasting through 2015 was inked nonetheless.
And the failures went on.
There were 190,0000 complaints about overcharging in 2008 (only 46 percent of complainants had their money refunded)—with the pace accelerating month by month. In 2010, with Londoners still baffled by a confusing system that required them to “tap out” their cards upon leaving a station lest they get hit by the maximum fare, TfL responded by blaming the customers. The next year, the maximum fare was increased; overcharges thus added £61.8 million to the consortium’s coffers. This year, a transportation watchdog group reported that of the Oyster machines “almost no one they interviewed understood how they worked.” The Guardian reported that authorities knew the system was overcharging some users. The paper continued, “Transport for London (TfL) has been made aware of the glitch but is not going to fix it until September at the earliest—because it only updates the Oyster system three times a year.” One of the most embarrassing problems in Chicago—machines charging the wrong customer card—is rampant in London, according to a report in the excellent local Chicago news site Gapers Block. Another system glitch reported by Gapers Block was that vendors were able to receive money from customers, then void the transaction and still keep the cash. Meanwhile customers are owed some £53 million in unclaimed refunds; but there is “no easy way to reclaim the funds.”
The system is up for rebid in 2015. Trouble for Cubic stockholders, right? Not so much. Observed a Credit Suisse equity report, “it is a longstanding relationship that is likely to be renewed.” Nice work if you can get it.