Utah Transit Authority Hires Masabi to Fill Mobile-Ticketing Gap from Passport’s Planned Exit

The Utah Transit Authority, or UTA, has hired a new mobile-ticketing vendor to replace its current supplier, Passport Labs, which is exiting the ticketing market at the end of the year.

The transit agency board last week approved a one-year contract with UK-based Masabi, with an option to extend it for another year. Neither UTA nor Masabi has yet announced the deal.

The interim contract is designed to carry UTA through to the launch of its new account-based ticketing system, which is now in the tendering process.

Masabi, which is a software-as-a-service platform provider, could submit a bid for this larger project. The new fare-collection system will cover closed-loop, mobile ticketing and also open-loop payments, though UTA likely will not introduce the latter service when the new fare-collection system launches.

The interim mobile-ticketing contract is mainly concerned with continuity of UTA’s GoRide mobile app, which the agency launched on the Passport platform in 2017, said a UTA staffer.

As Mobility Payments reported in May, U.S.-based Passport decided to shut down its SaaS ticketing platform at the end of 2022 to focus on its parking mobile-payments business. It gave UTA only 14 months to get a replacement mobile-ticketing app up and running and forced the agency to issue two requests for proposals–one for the mobile-ticketing service and one for the larger account-based ticketing system.

So for at least the next year or two, Masabi will be offering a similar service as Passport, including selling mobile tickets and passes to riders of local buses, trams, streetcars and commuter trains. Users now pay with a stored credit or debit card in the app and show their phones to bus drivers or other agency personnel to validate the tickets and passes.

“We expect the new app to work just like the old one when we do the cutover later this year, including visual validation,” Jerry Van Wie, fare systems program manager, told Mobility Payments. “We would like to eventually move to electronic validation, but we don’t have any concrete plans in place for that yet.” 

U.S.-based Clevor Consulting Group, UTA’s fare-collection system consultant, estimated last year that a new mobile-ticketing service would cost the agency $3.3 million to operate over 10 years, most of it–$2 million–to be paid to the vendor. Capital costs, presumably for scanners and integration with validators to enable contactless ticketing, would cost $2.1 million.

But the capital costs are unlikely to happen in the next year or two, and UTA’s Van Wie could not say when the new validators for the planned ABT system will be installed.

UTA has more than 700 buses and more than 100 light-rail vehicles, the latter serving 50 stations. The agency also runs 18 commuter trains, with 15 stations. The new validators will go on board buses and on station platforms.

Costs for Mobile-Ticketing Service
Meanwhile, in the interim, UTA estimated it would cost just under $531,000 over two years for Masabi’s Justride ticketing service–$253,000 for the first year and $278,000 for the second–all for operating costs.

The costs will include Masabi’s 2% service fee on all mobile-ticketing transaction revenue its platform handles. The agency estimated that would amount to $54,000 in fees it would pay to the vendor Masabi the first year, based on a projected $2.7 million in mobile transaction revenue.

UTA projects that to increase to $3 million transaction revenue handled through the Masabi platform, the following year, meaning it would cost the agency $60,000 in year 2, assuming UTA retains Masabi for the optional year.

The contract also includes payment processing costs, estimated at 5% of the transaction amount when customers purchase their tickets in the app using credit or debit cards. That would amount to just under $123,000 the first year and $138,000 in the second, optional year. The fees will cover interchange and network assessment fees paid to card issuers and payments networks. Masabi may serve as the merchant of record for these transactions and so would pay the interchange and network assessments to the acquirer.

There would be an additional acquirer fee of $0.06 per transaction, estimated to cost UTA around $32,000 over two years.

The agency also estimated costs for enabling customers to reload their mobile accounts with cash at retail networks run by InComm Payments and T-CETRA. Only 7% of riders are projected to use the InComm network, which charges the agency 3.5% of the load amount. T-CETRA, which charges 4.5%, would account for only 2% of riders.

Masabi would also charge UTA a monthly transit ticketing integration fee amounting to $3,500, totaling $42,000 per year, according to the contract.

Growing Footprint
UTA’s Van Wie declined to release the names or number of bidders that responded to the agency’s mobile-ticketing RFP. One source placed the number of bidders at eight, though that is not confirmed.

In total, Masabi says it has 150 agency clients since launching its Justride SaaS ticketing platform around 10 years ago, mostly in the U.S., but also in Canada, Japan, the UK and a handful of other countries. The clients mainly serve mid-tier and small cities, but there are some large cities.

Masabi and competing SaaS ticketing vendors are believed  to be seeing greater demand from agencies wanting to quickly launch more touch-fee payments because of the pandemic. But since the providers make their revenue from charging a percentage or fixed fee of transaction revenue or individual transactions, the reduction in ridership following the Covid outbreak hit the vendors hard.

Venture-capital funded Masabi last year said it had revenue in 2020 of $4.6 million in North America, down from 6.6 million in 2019. Revenue from 2021 was not available

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