The problem-plagued, overbudget SEPTA Key system is on its way out, to be replaced — about four years from now — by Key 2.0, which will be built by a different company.
The transit authority’s decision to order up a new payment system is the latest of a few significant developments in Philly transit and transport.
Among other news, SEPTA officials say they’ve trimmed their budget a bit, with an eye toward demonstrating fiscal responsibility as they lobby for a permanent state funding hike. The move comes two months after Gov. Josh Shapiro provided emergency funding to prevent major fare increases and service cuts.
The agency says its long-planned project to streamline its bus network, which was suspended during the funding crisis, is tentatively on again, although that could change depending on how state budget talks go. SEPTA is also switching some bus lines from lettered to numbered names as part of a broader wayfinding project.
In other transportation news, a battery-powered train could be coming to a mile-long stretch of the Delaware River waterfront in the area of Spruce Street Harbor Park, and Indego is planning to install another 40 bike-rental stations around the city, with a focus on North and Northwest Philly.
A more adaptable Key 2.0
Cubic Transportation Systems, a division of a large California defense and transportation contractor, will design and run SEPTA Key 2.0. SEPTA’s board approved a $211 million contract last week, plus another $19 million agreement for Cubic to run a customer call center for several years. An additional $12.9 million contract for project management and engineering was awarded to WSP USA.
SEPTA has been looking for a new vendor for more than a year and a half to replace Conduent, the Xerox spinoff that was hired in 2011 to create and run the fare payment system.
Initially budgeted at $129.5 million, Key has so far cost more than $285 million, spokesman Andrew Busch said. It also had a slow rollout, with Key cards not becoming available until 2016, Regional Rail customers getting access in 2019, and contactless payment with credit cards and phone apps only becoming available in 2023.
The system has glitched many times over the years, for example when a spate of freezes plagued card readers for months, starting in August 2018. The machines again failed in July 2023 and passengers were allowed to ride for free. Last August, customers were unable to buy new passes for several hours, and this month a card production error caused some passes to prematurely expire.
In December, Conduent reimbursed SEPTA $610,000 for lost fare revenue during system outages over the past two years, Busch said.
SEPTA officials have described the current Key system as outdated. Transitioning to Cubic will make it “more reliable and easier to use for customers by providing new functionality including virtual Key Cards; supporting equity-focused fare policies; and enhancing the website, mobile app, and call center,” SEPTA said.
Key 2.0’s software will have an open architecture and the system will be able to adapt more easily to emerging technologies, Busch said.
As of 2022, Cubic had developed mobile-based, contactless fare collection systems for eight of the country’s 10 largest public transit networks, including New York, and also had a heavy presence in the U.K. and Australia, the Intercept reported.
Other Cubic Corporation divisions and subsidiaries have won billions of dollars’ worth of U.S. defense contracts since 1992. They provide intelligence, surveillance, communications, training, and other services, including for drones. The company sells video enhancement software to the New York police, U.S. Secret Service, and military criminal investigators.
Cubic’s lenient or vague privacy and data-storage policies, and possible data sharing between its divisions, have drawn concerns from the Electronic Frontier Foundation and other privacy advocacy groups about potential issues, such as the tracking of customers and monetization of their personal information, per the Intercept.
Preparing for a budget crunch, again
SEPTA says it’s whittled down its $240 million structural deficit — that is, the gap between the amount it needs every year to keep running and its revenues from fare payers, the state, Philly and four county governments, the feds, and other sources.
It’s so far narrowed the difference by $27 million, down to $213 million, in part through a pay freeze for most salaried employees, including about 1,300 executives, managers and others, Busch said. The agency is also in a selective hiring freeze, making less use of consultants, and restricting staff travel to conferences and other events.
Additional measures will eventually increase the savings to $30 million in fiscal 2026.
State Republican lawmakers last year declined to take up Gov. Shapiro’s request for a boost in state support for SEPTA, and they’ve said they want to see SEPTA do more to reduce the deficit on its own, whether by raising fares or cutting costs. Shapiro is expected to renew his funding ask in his next budget proposal in February.
“What SEPTA is doing in terms of bringing more dollars to the table through ridership and making sure they’re running efficiently is something we absolutely need to see continue,” Senate majority leader Joe Pittman said in November.
The governor and some lawmakers support a new tax on slot machine-like “skill game” devices to pay for transit and transportation projects, but the concept has been mired in disputes over the tax rate and a bill was never introduced in the Republican-led Senate. The legislature must pass a 2025-26 budget by the end of the current fiscal year, on June 30.
Shapiro’s flexing of highway project funding in December allowed SEPTA to withdraw a 21.5% fare hike proposal and avoid plans to shut down some bus and rail routes. However, it did go ahead with a separate fare increase that averaged 7.5%, the first time it has raised fares across the board since 2017.
SEPTA interim general manager Scott Sauer and other executives were in Harrisburg on Monday to discuss funding with state officials, Busch said. The agency plans to release an austerity budget in mid-March, earlier than usual, with deep service cuts and another 21.5% fare hike across all modes, on the assumption that additional state funding is not forthcoming.
“We have to go out based on what we know we’ll have available to us,” Busch said.
The Revolution revives
In November, SEPTA said it was postponing its Bus Revolution initiative because officials weren’t sure they would have money to train bus drivers and make other preparations in the coming year. Even after Shapiro announced the funding flex, the plan remained on hold.
However, the authority now does expect to implement the changes in the fall — although that still could change, depending on how things go with the state funding debate.
“We will have to make a go/no-go decision by mid-spring to put us on track to have new schedules, signage and other materials ready for service changes that would go into effect in late August,” Busch said.
That’s when SEPTA makes regular seasonal schedule changes, and when it would make service cuts if necessary, he said.
He noted that SEPTA is now calling the initiative the “New Bus Network,” for the time being.
The revamp was approved last May after three years of research and input, including more than 200 public meetings and delays to tweak it in response to rider complaints. It will trim the number of bus routes from 125 to 106, make them faster and more direct, and increase the number of routes with frequent buses.
In a separate move, SEPTA says it’s changing the names of six bus lines from letters to numbers. The G is becoming the 63, the H the 71, the J the 41, the L the 51, the R the 82 and the XH the 81. (The K will remain a lettered service.)
When bus lines were first introduced in 1923, they were given letter names to differentiate them from the trolleys, which were numbered. But when many trolley routes were subsequently converted to buses, they kept their numbers.
The current changes are being phased in on SEPTA’s website and other places, including new schedules that will go into effect February 23 and 24, the agency says.
The conversions are part of the Metro Transition, the agency’s comprehensive program to simplify route names and signage. The Market-Frankford Line is becoming the L, the Broad Street Line the B, most trolleys the T (T1, T2, etc.), and the Norristown High Speed Line the M. For a full list of changes, visit SEPTA’s website.
Trolleys along the Delaware?
Would you ride a battery-powered trolley for about a mile up and down the middle of Columbus Boulevard, between the Race Street pier and Reed Street?
The Delaware River Waterfront Corporation wants to know what you think of the idea. It’s running an online survey through Feb. 10.
The survey is in large part informational. One slide says, “Did you know? There are train tracks that run down the median of Columbus Blvd! (If you don’t, now you will!),” and has photos with big arrows pointing at the tracks.
If it happens, the new Waterfront Rail Line would be the first active battery-electric, zero emission passenger train in the U.S., according to DRWC.
The nonprofit organization, which oversees Spruce Street Harbor Park and other uses of the waterfront, has wanted to reactivate the old tracks for years, but has been stymied by the potential high cost and complexity of the project. They were last used for a trolley service in 1996, PhillyMag reported.
The battery trains, run by the Pittsburgh-based Pop-Up Metro company, could provide a substantially more affordable alternative in a shorter timeframe.
Local train enthusiasts on Reddit were intrigued by the idea, but many said the trolleys would have to run for a longer distance to be useful.
“I would ride it for fun occasionally just to get between Spruce St and Race St pier, but if it went up to Frankford and down to Columbus shops I could walk to Fishtown and to do my shopping, which would actually be great,” one commenter wrote.
Bikeshare plans expansion
Moving from trains to bikes, we wanted to note the ongoing growth of Indego, Philly’s city-owned bikeshare program.
In 2025, the program plans to add 40 new stations and 400 electric bikes, it announced Friday. Stations will be installed in the Cobbs Creek, Tioga/Rising Sun, and Manayunk/Roxborough areas, and expanded on City Avenue and in Kensington/Richmond, Mill Creek/Parkside, and Kingsessing.
Currently Indego has more than 2,000 manual and pedal-assist (electric) bicycles at 250-plus stations, 16 of which were installed in 2024.
Indego launched in 2015 and has seen steady growth over the past four years. It exceeded a million annual rides for the first time in 2023, and last June posted a record 5,621 rides in one day.
In addition to adding more bikes and stations, last year it sought to further boost ridership by reintroducing single-ride passes, which had been eliminated in April 2018. A 30-minute ride costs $4.50 on a classic bike, with an additional 30-cent-per-minute fee for electric bikes.
This story is a part of Every Voice, Every Vote, a collaborative project managed by The Lenfest Institute for Journalism. The William Penn Foundation provides lead support for Every Voice, Every Vote in 2024 and 2025 with additional funding from The Lenfest Institute for Journalism, Comcast NBC Universal, The John S. and James L. Knight Foundation, Henry L. Kimelman Family Foundation, Judy and Peter Leone, Arctos Foundation, Wyncote Foundation, 25th Century Foundation, and Dolfinger-McMahon Foundation.To learn more about the project and view a full list of supporters, visit www.everyvoice-everyvote.org. Editorial content is created independently of the project’s donors.
