Milwaukee Transit Agency Announces More Details of New Fare-Collection Project Using Cubic’s Umo Platform

The Milwaukee County Transit System today announced its plans to launch its new fare-collection system using the Umo Mobility platform from Cubic Transportation Systems in the fall. The system will support mobile fare payments and closed-loop contactless cards, as well as open-loop payments, though it’s not clear when the open-loop service will actually launch.

As Mobility Payments reported last month, Cubic beat out nine other vendors that bid on the Milwaukee contract, Bytemark, Flowbird, INIT, Genfare, Kontron, Masabi, Modeshift, Scheidt & Bachmann and Vix Technology, to win the project for its Umo software-as-a-service platform, according to tender documents obtained by Mobility Payments. Transit officials didn’t release price bids for the unsuccessful bids.

Milwaukee County Transit System, or MCTS, is a mid-tier agency in the U.S. state of Wisconsin with just under 370 fixed-route buses. It represents one of the largest clients for Umo, which Cubic launched a year ago mainly to target small to mid-tier agencies. The agency said it delivers an average of about 100,000 rides per day.

Cubic late last month announced a larger contract win for Umo with BC Transit, which will equip 900 buses to accept fare payments across 30 mainly small transit “systems” in the Canadian province of British Columbia. The systems include small towns with only a handful of bus routes. BC Transit would only say that the Cubic contract includes $23.2 million in “project costs.” The first BC Transit system won’t go live until the fall.

At present, Cubic has a little over 30 transit systems in the U.S. that are live with Umo. Nearly all are small agencies.

According to the Milwaukee transit agency, the Umo platform will enable customers to load their accounts online and at more than 200 local outlets that are part of the InComm Payments retail network. Customers can load with credit and debit cards online and at the retail locations, and they also can recharge the accounts with cash at the InComm locations.

The customers can then pay for fares by tapping their reloadable Umo contactless cards or by scanning 2D bar codes that display in the Umo app. The system will support weekly and monthly fare capping.

The readers in the validators being supplied by Cubic will also be certified to accept contactless EMV credit and debit cards and open-loop credentials in NFC wallets supporting Apple Pay, Google Pay and Samsung Pay. But it’s unclear whether open-loop payments will launch at the same time as the service begins for closed-loop payments, this fall. An MCTS spokeswoman said she could only tell Mobility Payments that, “Now that contracts are signed, we are working on timelines and are not able to provide dates.”  

Customers will continue to be able to pay with cash on board buses, with no apparent plans by the agency to eliminate cash acceptance on its transit vehicles. The new fare system will replace MCTS’ closed-loop M-Card and its Ride MCTS app from local mobile-ticketing firm Tixora.

As with other implementations, the Umo app for Milwaukee will also include a trip-planning feature from Israel-based Moovit, as well as real-time arrival information.

Transaction Fees and Validator Costs
Cubic charges transaction fees for transit agencies to use the Umo SaaS ticketing platform. Unlike rival SaaS platforms, such as those from Masabi and Bytemark, which charge fees based on a percentage of monthly transaction revenue, Cubic charges a fee per transaction.

According to Cubic’s contract with Milwaukee Transportation Services, the operator of MCTS and the agency’s procurement arm, Cubic plans to charge the agency $0.035 per transaction for the first 600,000 transactions in a given month, then $0.025 for transaction numbers between 600,001 and 1.5 million and $0.02 for transactions above 1.5 million.

All transactions falling within a given pricing tier during a month are billed at that tier price. So, for example, if MCTS had 1.75 million billable transactions in a given month, applying the transaction fees across the various tiers would add up to $48,500 for the month, according to the contract, which was obtained by Mobility Payments.

The fee amounts per transaction for MCTS and presumably other mid-tier agencies are lower on a per-transaction basis than what Cubic has charged smaller agencies. The latter rates have ranged from $0.10 to $0.03 per transaction.

Cubic said it would also charge $0.01 per open-loop payments tap. That’s in addition to transaction fees, including interchange, that the agency would pay to its acquirer.

As Mobility Payments reported last week, bids showed that MCTS would pay InComm 5% of the amount users load in their Umo accounts and $1 per card that they buy and activate.

In addition, the Milwaukee agency will pay a little more than $1.5 million in capital costs to Cubic for the project. About two-thirds of that will be for validators, including those on board the 368 fixed-route buses at just under $1,800 per validator. Cubic also will charge $1.70 each for the first batch of 200,000 Umo reloadable closed-loop cards.

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