The Role of Technology in Public Transport Integration and Governance - Smart Card Use in Istanbul and Mexico City BRT Systems

Abstract

Technological developments in recent times have had a transformational effect in many business sectors and processes. Some conventional methods in production and services have been abandoned, making way for innovations and new collaborations among actors. The public transport sector, which is generally regarded as non-profit, has had its share of these technological advancements. Driverless and electric vehicles, smart applications for passengers, and big data to be used by public transport operators are some examples.

One output of the technological revolution is the smart card payment system, which has achieved widespread use around the world, as it is convenient for passengers and a reliable fare collection method for public transport operators. While technological
advancements change the way services are offered, it also brings out new opportunities and governance structures. The smart card has had this effect within the public transport sector because it facilitates the non-physical integration of different urban transport modes and changes the conventional governance structure by bringing technology providers or finance sector representatives into the picture.

This study examines the relations among different stakeholders in Istanbul and Mexico City bus rapid transit (BRT) systems and then focuses on the effect of prepaid smart cards (the istanbulkart and Tarjeta del Distrito Federal, respectively) on improving the logical integration of BRT routes with other modes in these cities.

Full text

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Introduction: Digitalization, Smart Cards, and
Public Transport
Starting in the 20th century and gaining momentum
in the last decade, digitalization has affected our lives
in many ways and transformed conventional business
methods in all industries. This study focuses on the pub-
lic sector and particularly on public transport.
Public transport’s importance is very much related to the
global urbanization trend. Concepts such as the “smart
city,” “digital city,” and “intelligent transport system”
(ITS) have become popular for local authorities and
among scholars who carry out urban studies. Neverthe-
less, there is not a consensus on the exact denitions of
these terms (Garau, Masala, and Pinna 2016, pg: 35),
and it can be argued that this is due to the high speed
of the development of digitalization processes in cities.
Digitalization has had an impact on cities assets, people,
economy, local governance, environment, and mobility,
to mention a few (Navarro, Ruiz, and Peña 2017, pgs:
272–273; Benevolo, Dameri, and D’auria 2016, pg: 15).
The recent and fast-spreading popularity of the word
“smart” in an urban context is largely due to digitali-
zation’s potential in developing city conditions. Today,
cities face various problems such as trafc congestion,
environmental pollution, and high energy consumption,
and many believe that smart city initiatives can help
eradicate or mitigate these problems. These initiatives
can be benecial in improving mobility with intelligent
trafc systems, decreasing the environmental impact
of transportation via smarter solutions (Garau, Masala,
and Pinna 2016, pg: 35), enhancing participatory gover-
nance through new digital instruments (Yeh 2017, pg:
1), increasing energy consumption efciency by soft-
ware- and hardware-based optimization studies (Navar-
ro, Ruiz, and Peña 2017, pgs: 272–273), and ultimately
creating better living conditions for urban dwellers, who
will constitute 70 percent of the world population in
2050 (Lyons 2016, pgs: 1–3).
Within the scope of this digitalization trend, the public
transport sector and its business processes have also had
their share of digital upgrades, and today improvements
in infrastructure can be seen, vehicles, and connectivi-
ty between assets. An important component of public
transport, payment systems – or in business language,
the “revenue management” aspect of public transport
– have made use of new technologic products such as
The role of technology in public transport integraon
and governance – smart card use in Istanbul and
Mexico City BRT systems
Umut Alkım Tuncer*
Abstract: Technological developments in recent mes have had a transformaonal eect in many business sectors and pro-
cesses. Some convenonal methods in producon and services have been abandoned, making way for innovaons and new
collaboraons among actors. The public transport sector, which is generally regarded as non-prot, has had its share of these
technological advancements. Driverless and electric vehicles, smart applicaons for passengers, and big data to be used by
public transport operators are some examples.
One output of the technological revoluon is the smart card payment system, which has achieved widespread use around the
world, as it is convenient for passengers and a reliable fare collecon method for public transport operators. While techno-
logical advancements change the way services are oered, it also brings out new opportunies and governance structures.
The smart card has had this eect within the public transport sector because it facilitates the non-physical integraon of
dierent urban transport modes and changes the convenonal governance structure by bringing technology providers or
nance sector representaves into the picture.
This study examines the relaons among dierent stakeholders in Istanbul and Mexico City bus rapid transit (BRT) systems
and then focuses on the eect of prepaid smart cards (the istanbulkart and Tarjeta del Distrito Federal, respecvely) on im-
proving the logical integraon of BRT routes with other modes in these cies.
* Umut Alkım Tuncer, IGLUS Program Manager

IGLUS Quarterly | Vol 4 | Issue 3 | October 2018 8
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Abandoning conventional methods and adopting smart
card systems for revenue management in public trans-
port systems can bring several advantages. As shown by
the related literature, the most discussed advantages are
the data generated by smart card use, its convenience
(a customer-oriented look), fare collection efciency (a
transport agency–oriented look), and transport integra-
tion.
Regarding data, smart card data has good potential to
improve transport services. Agencies can learn about
the travel behaviour of passengers and do demand
forecasting by origin and destination data and the fre-
quency of passengers’ use of a given mode of trans-
port (Lovrić, Li, and Vervest 2013, pg: 1590; Alsger et al.
2016, pg: 490). This data can provide hints to agencies
about the reliability of the service provided, the modal
transfer behaviour of passengers, and the variability in
demand for the transport options (Kim, Corcoran, and
Papamanolis 2017, pg: 147; Cho et al. 2015, pg: 708).
Consequently, this data can help agencies enhance their
capacity in terms of service planning.
Smart cards eliminate the use of cash payments, and
even if there is an adaptation period it has been proven
to be more convenient from the user perspective. No
cash transactions occur between users and bus drivers
or agency representatives at stations because tapping the
card on a reader causes payment (Pelletier, Trépanier,
and Morency 2011, pg: 558). Public transport therefore
becomes more self-operative, and the operational risks
arising from the human element can be reduced. More-
over, without the cash transaction, overall trip time for
passengers decreases, making public transport more ap-
pealing. Agencies began by implementing a pre-board-
ing smart ticketing infrastructure in rail-based systems;
the success of this method is evident, as agencies are
now implementing it in other modes of travel, such as
bus rapid transit (BRT; BRTData 2017).
From a public transport agency’s perspective, smart card
use guarantees more secure and accurate fare collection
because there are no longer human intermediaries in
the collection system. The agency collects fares directly
from customers without drivers or ticket ofcers han-
dling a cash transaction. Thus, smart cards are more re-
liable and also decrease labor costs related to collection
(Shield and Blythe 1997, pg: 258). This argument be-
comes more signicant when it is taken into consider-
ation that, without smart cards, transport agencies gen-
erally spend 5 to 15 percent of their revenues on fare
collection and fare processing (Pelletier, Trépanier, and
smart cards and the related infrastructure such as turn-
stiles and in-vehicle validators among others. The study
examines smart cards’ origin and their advantages for
public transport, and then analyze their implementation
in our case studies by using the alignment framework.
Smart Cards
Although the smart card is a popular topic in the public
transport literature, it is not a new technology, as it orig-
inated in 1968, became widespread after the 1990s, and
was adopted by the French postal, telephone, and tele-
graph services and the German healthcare sector as early
as 1982 and 1992, respectively (Pelletier, Trépanier, and
Morency 2011, pg: 557). In terms of technology, these
cards are divided into two broad categories: closed-loop
and open-loop cards. Whereas open-loop cards can be
processed through a bank network and used in credit
card schemes such as Visa and MasterCard, closed-loop
cards do not have this option, and closed-loop card us-
ers have a formal relationship only with the agency that
issues the card (Smart Card Alliance 2011, pg: 6). The
smart card is perceived as a secure payment method by
agencies (Pelletier, Trépanier, and Morency 2011, pg:
558), and consumers perceive the cards as convenient to
use because they can be obtained through various chan-
nels such as websites, self-service kiosks, retail stores,
and the ofces of issuing companies or institutions
(Smart Card Alliance, pgs: 7–17).
Smart Cards and Public Transport
Since their introduction to the market, smart cards
have evolved, and now there are different types, such
as payroll cards, gift cards, general purpose cards, and
exible spending account (FSA) cards, not to mention
closed-loop travel cards (Smart Card Alliance, pg: 10).
Travel cards which replaces cash payments in vehicles
have been in use for some time now and allow trans-
portation agencies to replace paper tickets, the conven-
tional method of payment in public transport (Lovrić,
Li, and Vervest 2013, pg: 1590). In an academic sense,
this technology, its use, and its effects on urban trans-
port have generally been studied within the recent con-
cept of smart mobility, which is regarded as a sub-topic
of smart cities. Smart mobility discussions very much
center on notions such as the safety, sustainability, ef-
ciency, effectiveness, and environment friendliness of
transport systems (Benevolo, Dameri, and D’auria 2016,
pg: 16), and the smart card system is often regarded as
an application associated with smart mobility within the
context of urban transport systems (Garau, Masala, and
Pinna 2016, pg: 37).

IGLUS Quarterly | Vol 4 | Issue 3 | October 2018 9
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Morency 2011, pg: 562). Agencies can also benet from
being part of a bigger public sector payment network
(if there is an existing smart card mechanism in the city
they serve), which may increase their revenues (Meyer
and Shaheen 2017, pg: 129).
Another advantage discussed in the smart card literature
is transport integration. Generally, transport integration
is regarded as a tool for promoting a mode shift from
unsustainable transport options such as private cars and
motorcycles to public transport, because it makes the
whole public transport network in a city more acces-
sible and convenient to use by decreasing travel times
(Preston 2010, pg: 332). Transport integration is a broad
subject, as it may refer to integration of transport infra-
structure, integration of transport authorities, integra-
tion of policies, modal integration, social integration,
etc. (Potter and Skinner 2000, pg: 282; Preston 2010,
pg: 330). In this study, the integration of fares and fare
collection infrastructure is the relevant point.
In theory, smart cards can integrate the payment pro-
cedure in public transport modes and other elements
in terms of mobility, such as bike sharing, parking, toll
roads, bridges, and tunnels (Meyer and Shaheen 2017,
pg: 122). This integration can bring exibility for pas-
sengers and encourage public transport use by increas-
ing its competitiveness among other options (Turner
and Wilson 2010, pg: 170; Solecka and Żak 2014, pg:
260). Today, there are examples of such integration on
the local and even national level. Whereas “Carte Or-
ange” in Paris and “Oyster Card” in London are local
integrated smart ticketing applications, “OV-chipkaart”
in the Netherlands and “Octopus Card” in Hong Kong
are national-level applications (Potter and Skinner 2000,
pg: 282; Turner and Wilson 2010, pg: 173).
The literature shows, this payment system can be an
instrument for improving existing transport systems.
Most studies examine smart card data, its convenience
for users and agencies, and its role in transport inte-
gration, but not much has been reported on how this
system develops in cities. Therefore, this research fo-
cuses on; what are the underlying processes that lead
to smart card payment system development in cities?
To answer this question, the study focuses on the smart
card used in the city of Istanbul, istanbulkart, and on
Mexico City’s Tarjeta del Distrito Federal. Information
on BRT systems in these cities will be provided to aid
in understanding smart card system development. Both
of these cities are in developing countries and can be re-
garded as “megacities” due to their scale of population
(Britannica Encyclopedia 2017; ICVB 2017). Moreover,
they have similar public transport options for passen-
gers (Britannica Encyclopedia 2017).
Istanbul
Istanbul has a population of 14.8 million people and
is the economic center of the Republic of Turkey, a
country with a unitary form of government (TSI, 2017).
Municipalities are the authority responsible for urban
public transport, and the corresponding body for the
city of Istanbul is the Istanbul Metropolitan Municipal-
ity (IMM; Tuncer 2016, pg: 30). IMM fulls its public
transport responsibility through afliate companies and
authorities working under it, such as IETT, Metroİstan-
bul, Şehir Hatları A.Ş., and Otobüs A.Ş. In addition, it
licenses private operators that provide public transport
service (Tuncer 2017, pg: 38). Historically, paratransit
modes such as dolmuş (minibuses), taxis, and shuttles
have dominated Istanbul public transport, but with gov-
ernment investments in railways and buses, these para-
transit modes’ overall share has decreased (Tuncer 2016,
pg: 29).
The smart card used in Istanbul’s public transport sys-
tem is called “istanbulkart”; this smart card system was
developed in 2009 (IETT 2014). However, in Istanbul,
integrated ticketing was already in place with coin shaped
“Akbil,” a touch on memory (TOM) button; this system
had been taken into service in 1995 (IETT 2014). The
Akbil system was developed by the tech company BEL-
BİM, one of IMM’s 30 subsidiary companies, estab-
lished in 1987 (IMM 2017; Webcitation 2017). A lack of
coordination among different transport agencies, their
inability to gather transport data, and costs related to
paper tickets and coins are credited as the cause for the
development of the Akbil system (Webcitation 2017).
Moreover, studies argue that, in addition to integrating
the fare system, Akbil was implemented to eradicate fare
evasion, which affected up to 5.8 percent of all public
transport trips in the city (İskei 2009, pg: 67). After ini-
tiation, Akbil integrated 17 different payment media of
11 different agencies, and its successor, the istanbulkart,
can be used at 17,000 points in Istanbul, including bus-
es, underground metro, BRT, maritime modes, cable
cars, trams, toilets, parking, and municipal restaurants
(istanbulkart 2017).
Istanbul has a 52 km long BRT route. This fully dedi-
cated BRT route (except the section on the 15th of July
Martyrs’ Bridge) is called Metrobüs, has 44 stations, and
is operated by IETT, a public institution working under

IGLUS Quarterly | Vol 4 | Issue 3 | October 2018 10
ARTICLE
IMM. The system has a peak frequency of 156 buses in
an hour (BRTData 2017). This BRT project was com-
pleted in four phases, and the rst part of the route was
put into service in 2007. Passengers paid their fares with
Akbil at rst, and after the istanbulkart was developed,
Metrobüs was integrated with this payment scheme.
In contrast to the at fare approach of other pub-
lic transport modes in the city, Metrobüs has a dis-
tance-based fare. Passengers tap their cards at turnstiles
while entering the system, and the full amount is de-
ducted from their cards; if they do not travel the whole
route, they tap their cards again at their exit stations to
get their remaining amount. The minimum fare is 1.80
TL ($0.29 USD; for travel from 1 to 3 stations), and the
maximum is 3.55 TL ($0.58 USD; for travel past 40+
stations). In addition to istanbulkart, passengers can buy
electronic, paper-based tickets for single, two, three, ve,
and ten public transport trips, but this costs more, as a
single trip ticket is 4 TL ($0.65 USD; Metrobüs 2017;
Tuncer 2016, pg: 35).
Mexico City
Mexico City is the capital of Mexico and has a metro-
politan population of nearly 21 million (indexmundi
2017). Mexico has a federal form of government, and
there are 31 states. Mexico City, however, is not part of a
state; the area where the city is located is called the Fed-
eral District or Distrito Federal (Tuncer 2016, pg: 36).
Public transport is the responsibility of the Mexico City
Municipality (the authority tier after the Distrito Feder-
al) and also of other neighboring local authorities with-
in this wide urban area. The Mexico City Municipality
either provides the service itself or licenses private op-
erators to do so. The Municipality has a division called
Secretaria de Movilidad (SM), and this secretariat has
public transport departments called Sistema de Trans-
porte Colectivo (STC), Servicio de Transportes Eléctri-
cos del Distrito Federal (STE), and Red de Transporte
de Pasajeros del Distrito Federal (RTP) for the manage-
ment of different modes of urban transport (Tuncer
2016, pgs: 39–40). Mexico City, as with Istanbul, has
had more paratransit options than higher-capacity sys-
tems, but initiatives to reverse this trend have occurred
in recent decades due to increasing trafc congestion
and decreasing air quality (Tuncer 2016, pg: 38).
The public transport smart card used in Mexico City
is called Tarjeta CDMX or Tarjeta del Distrito Feder-
al (TDF). Developed by the Municipality, it came into
operation in 2012 and was intended to integrate the dif-
ferent payment methods in the metro, BRT, and light
rail (CDMX 2017). Today, TDF integrates the under-
ground metro, light rail, trolleybuses, buses, BRT, and
the bike-sharing program called Ecobici (Milenio 2014).
Before this smart card, there had been other attempts
to develop a fare collection system. Historically, pa-
per-based magnetic stripes and e-tickets were also used
(Universidad Iberoamericana 2015, pg: 27).
As for BRT, Mexico City has a network of 125 km with
six lines, and there are 1.1 million daily passenger trips
on average (BRTData 2017). The system has a peak fre-
quency of 77 buses in an hour (BRTData 2017), and
BRT lines are managed by RTP and the “Metrobus”
public company set up for this specic purpose. Exist-
ing private companies provide most of the service in-
side the routes and receive kilometer-based remunera-
tion; these companies provided public transport service
before the BRT, and they consolidated to form the new
system (Tuncer 2016, pg: 42). The rst line of BRT be-
gan in 2005, and other lines were put into service in 2009,
2011, 2012, 2013, and 2016 (BRTData 2017). After the
TDF smart card was released in 2012, the BRT network
was integrated into this payment scheme through a re-
newal process in the fare collection infrastructure. Pas-
sengers can still use the previous payment card, called
Metrobus. Similarly, on the metro, passengers can use
TDF or the Metro card that was developed before the
integrated TDF method was devised (CDMX 2017).
Analysis
The previous section presented an overview of the de-
velopment process of the public transport smart card
systems and their function within the BRT systems in
Istanbul and Mexico City. This study analyses these cas-
es using an alignment framework, or, as it is sometimes
called, a coherence framework. This framework has its
place in the co-evolution between institutions and the
technology literature, and in a broader sense, it has its
roots in New Institutional Economics. Co-evolution in
our context is dened as “the two-way and long-term
interaction patterns between companies and their envi-
ronment, capturing both adaptations to, and more active
inuencing of, institutions” (Dieleman and Sachs 2008,
pg: 1274).
Elaborating on the co-evolution literature, the alignment
framework puts forward that institutions co-evolve with
technology, and this, in turn, affects the technical, so-
cial, and economic performance of infrastructure sys-
tems (Finger et al. 2010, pg: 7). In addition, “innovations

IGLUS Quarterly | Vol 4 | Issue 3 | October 2018 11
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cy of public transport systems and reduce high para-
transit use by citizens. Ultimately, smart cards extended
their reach to larger masses. Proper use of technology
can be a requirement for infrastructure systems such as
BRT, rather than a service improvement option, because
use of technology (such as pre-boarding payment and
the check-in and check-out method for distance-based
pricing) can be crucial in securing operational speed, a
prominent feature of these systems.
As stated often in the smart city’s literature, technology
transforms the way services are offered to citizens, but
it also requires new governance mechanisms, special co-
ordination methods, or special business models (Díaz-
Díaz, Muñoz, and Pérez-González 2017, pg: 198; Wal-
ravens 2015, pg: 223). The alignment framework that
is used in our analysis also supports this idea, as do the
cases studied here, as IMM set up a company to devel-
op technologies, and Mexico City established a separate
company to run BRT operations.
Local institutions in the cases studied here are now
integrating other city services to the smart card pay-
ment scheme; istanbulkart can now be used at munic-
ipal restaurants, and TDF is accepted at a bike sharing
program called Ecobici. When the related literature is
considered, studies on the relation between smart cards
and the promotion of public transport use are limited;
although it might require an in-depth analysis of relat-
ed data, better examination of this correlation might be
benecial.
are acknowledged to happen as a result of interaction
between institutional, technological and market actors,
when institutions and technology are misaligned” or in-
coherent (Audouin and Finger 2017, pg: 7). So, to have
infrastructure systems (including BRT) that perform
well, institutions and technology need to have some sort
of coherence.
Looking from a coherence perspective, it can be noted
that institutions (IMM and CDMX) and technology (the
public transport smart card) are aligned in both cases,
because the istanbulkart and TDF systems were devel-
oped by the institutions themselves. Also, IMM setting
up a tech company (BELBİM) for this kind of project
implies technology’s inuence on institutions. Moreover,
the technology has become a tool for these institutions
in their attempts to decrease the dominance of existing
paratransit modes. Istanbul attempted to integrate the
fragmented payment system, gather transport data, and
decrease fare evasion with Akbil TOMs as early as 1995,
and Mexico City already used e-tickets and not integrat-
ed smart cards before unifying the payment system with
TDF in 2012.
The two cities had similar experiences, to some extent,
with BRT systems. Istanbul had already applied an in-
tegrated payment system before the BRT, and istan-
bulkart was integrated into this scheme. Mexico City,
on the other hand, issued a smart card to be used at
BRT at rst, and when the TDF project was complet-
ed, the BRT was integrated as well. The institutions be-
came more active, and the smart card technology en-
joyed more widespread use with the enlargement of the
public transport systems with BRTs. And, without the
smart card technology and pre-paid payment systems,
these BRT systems would not be able to achieve the
operational performance they now have (156 buses an
hour in Istanbul’s BRT system, for example). Without
the technology, passengers would need to pay their fares
or tap their cards inside vehicles, which would increase
the dwelling times of buses at stations. In addition, the
distance-based payment scheme in Istanbul’s BRT sys-
tem (the tap in and tap out method) and Mexico City
BRT’s fare collection, where operations are mostly pri-
vate, would be problematic without the technology.
Conclusion
Technology and institutions can have a relationship that
results in a win-win situation, as seen by the institutions
studied here, which made use of smart card technology
to support their local policies to improve the efcien-

IGLUS Quarterly | Vol 4 | Issue 3 | October 2018 12
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