Original URL: http://www.theregister.co.uk/2010/04/14/oyster/

Transport for London gobbles up Oyster

How shellfish, etc etc

By Bill Ray

Posted in Applications, 14th April 2010 08:02 GMT

London's Oyster Card system is now owned by Transport for London, which stumped up £1m for the brand as well as considerably more for the associated infrastructure.

TranSys, which has been running the Oyster system since 1998 under a Private Finance Initiative, took on £190m of debt at the start. That debt was due to be paid off over 17 years, but Transport for London (TfL) has now repaid the money five years early and thus saved itself £4m in interest payments, leaving enough change to snap up the brand itself for a mere £1m.

The original Private Finance Initiative was scheduled to run until 2015, but in 2008 Transport for London took advantage of an opt-out clause winding up the existing deal in August this year. Paying off the debt, and buying the brand, wasn't necessary before then, but it makes the transition a lot easier.

Come August TranSys will be handing over the Oyster system to Cubic Transportation Systems and HP Enterprise Services. Fortunately Cubic (UK) is part-owner of TranSys, so will already know its way around.

Transport for London has been hoping to do something more interesting with Oyster for years - trying to interest local shops into accepting Oyster cards as a payment mechanism, not to mention getting the technology built into mobile phones. Hong Kong's Octopus system can be used to buy papers and confectionery, but we understand that TfL's insistence on making money from such an arrangement has so far proved an insurmountable barrier.

With the entire infrastructure in TfL's hands we expect to see local businesses again courted in the hope of changing Oyster into a pre-paid proximity-payment system. "Now that the Oyster brand and ticketing equipment is under TfL's ownership we can further investigate the potential for Oyster to be extended to new and existing technologies and the commercial opportunities that provides," said Shashi Verma, director of ticketing at TfL, in a canned statement.

Oyster may be "the world's most successful transport smartcard", but that's not because Londoners love it. Londoners have to use public transport; there is no other option, and that transport is priced in such a way that one has to have an Oyster card. It's hard to see how a TfL-owned Oyster Card will have any more luck getting into shops, or telephones, than a TranSys-owned one.

But at least the capital's transport system now owns its own ticketing, and that's got to be a good thing, even if TranSys will continue to own the advertising spaces on the tickets and gates until the end of the original contract - March 2015. ®