‘Inactivity Fee’

Chicago’s transit system turns over fare cards to private company because AWESOME:

For many riders whom your Getting Around reporter has heard from, the Ventra system seems complicated and confusing. The odd Ventra brand name itself, dreamed up for Chicago based on the Latin term for “wind,” doesn’t yet roll off a Chi-Town tongue with the hometown familiarity of the long-popular Chicago Card.

But CTA officials report increased cases of the aging Chicago Card technology failing. The Chicago Card chip manufacturer will stop production next year, the CTA said. Meanwhile, radio-frequency identification cards are taking hold of the credit/debit card marketplace and being integrated into transit fare-collection systems worldwide.

The switch to Ventra marks the first time that third-party businesses will control the sale and management of Chicago-area transit fare card systems, relieving the CTA and Pace of those banking functions and allowing transit officials to sharpen their focus on delivering safe, on-time, high-quality service.

Wow! That sounds AMAZING! But how will it make money?

In addition, under the Cubic contract, the CTA is guaranteed a minimum half-million dollars a year in nonfarebox revenue. Some of it will be paid by Ventra debit account customers who are assessed fees. For instance, the CTA will receive a portion of the $2 monthly inactivity fee that Ventra MasterCard customers will be charged if they don’t use their retail card at least once over an 18-month period. The prepaid debit account program will be administered by First Data Corp.

Given howthe last public assetgiveaway turned out, you’ll pardon me if I’m less than excited about the CTA being “relieved of those banking functions.”

A.

3 thoughts on “‘Inactivity Fee’

  1. MapleStreet says:

    Interesting that store debit cards are under attack for charging inactivity fees or a limited time period for use.
    On the idea of privatizing profit while socializing risk, sounds like Ventra gets a guaranteed profit margin – without risk (as long as Chicago exists). But they still get to look for ways to get even more profit.
    What about some more ways of invalidating old cards? (Hey, if you can purge the voter roles, purging the Ventra cards should be a cake walk). A special fee for those who wear sandals on Tuesdays? From the brief time I was in downtown Chicago, what about extra 50 cents for using your card within 30 minutes of a baseball game?

  2. MapleStreet says:

    And of course, the ultimate irony. You want to encourage people to use Mass Transit (pollution, relative lack of enough roads or parking garages downtown – especially since you want to use that downtown space for something “good.” Not another parking garage).
    Aggravating customers by imposing arbitrary fees isn’t exactly a great way to attract customers.
    Then throw in that for people who have bought their cards in the past, you’re unilaterally re-writing the contract without even proof that you’ve notified these prior purchasers.

  3. Kaleberg says:

    This is the kind of garbage that destroyed the French monarchy. They privatized everything. Lavoisier, the chemist, was a tax farmer, that is, he made money as a private tax collector turning over a cut the royal government, but keeping the rest. No wonder they cut his head off, chemistry be damned.

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