It has been more than seven years since the U-Money bus card system entered into public use. Specifically, in 2015, the Mongolian public transport sector was reformed by introducing South Korean standard public transport services. Unfortunately, instead of improving this technology and making it more accessible to the citizens, the authorities have taken a step backward by deciding to bring back the outdated -- failed -- solution the public transport sector had before.
Mongolians were not ready for this non-cash payment service at the time and it caused a lot of confusion in the beginning. This is because bus conductors used to collect cash from passengers and issue tickets on buses. Back then, the e-Payment Project for Public Transport Services was implemented and the cash-sealed boxes that were placed on buses were taken away to modernize the system and eliminate corruption. It cannot be denied that it was not easy for citizens to switch to this new and modern service since many services were updated and changed at the same time. Moreover, people had trouble recharging their bus cards due to the limited charging points. Some either lost or forgot their cards in places so often that they stopped using public buses, especially since drivers would shout at them to get off if they couldn’t pay their fare with a card. Drivers did so because they were closely monitored by the authorities through surveillance cameras at first.
Many years have passed since the introduction of the system and the conditions for this e-payment service to be fully implemented have already been created. However, the relevant organizations have not found an optimal solution to effectively promote and facilitate citizens in paying their bus fares by card until now, so they decided to place cash boxes on buses again.
In particular, the Ulaanbaatar City Council passed a resolution on September 7 to enable passengers to pay for public transport buses in cash. In other words, in accordance with the decision, citizens will soon be able to pay their bus fare with either their U-Money card or cash. In this regard, cash boxes will be placed on public transport buses, officials said.
Back in 2015 and 2016, passengers could pay with either their U-Money card or cash at first. However, at the time, there were quite a few cases where some drivers embezzled the money citizens put in the cash boxes. Therefore, starting from April 1, 2017, citizens were allowed to pay for public transport only with U-Money cards. Although citizens had been using the smart bus cards for some time, the number of card users declined and more people were reverting to the use of cash boxes, increasing corruption and lowering the income of the sector. Hence, the authorities removed the cash boxes from all public transport buses. Officials believed that this would allow public transport services to operate without loss.
In fact, a large sum of money was spent on getting people used to using cards only. Specifically, in 2017, public transport inspectors sold cards on buses for 2,500 MNT and monitored passengers for e-payment only. However, now that the authorities are trying to re-implement the ineffective decision, calling it a big step back, most of the citizens, especially young people, are unhappy with it.
It’s safe to say that the latest decision was made on the grounds that the public transport industry has suffered losses because people are using their payment cards less often and giving cash to drivers instead.
In 2015, the revenue of the public transport sector was barely 48.77 million MNT and it dropped to 45 billion MNT in 2016. In 2017, however, it had the highest income of 50 billion MNT. Since 2017, in connection with the decision to use U-Money cards only, its revenue decreased. In specific, according to the results for 2021, the capital’s public transport revenue was 21 billion MNT, a decrease of more than 60 percent compared to 2017. City authorities provide funding to the public transport sector from its budget. In 2015, 21 billion MNT was allocated to the sector. However, last year, 105 billion MNT was given. Due to the sector’s inability to concentrate adequate income, the city has increased its budget for the sector to cover losses, according to Head of Department of Inspection and Evaluation of the Ulaanbaatar Mayor’s Office Kh.Gantulga.
He further explained, “We signed an agreement with the Ulaanbaatar Public Transportation Department to introduce sel-financed and accessible public transport services. However, this work is not being implemented and the public transport sector is in a state of decline.”
More than 980 buses serve citizens in 106 directions in Ulaanbaatar. Following the new decision, cash boxes will be installed in all of them again. Currently, it is not clear whether the old boxes will be installed or new ones. In any case, it will require funding to some extent.
MORE POSSIBILITIES TO CHARGE CARDS ARE NEEDED
Instead of implementing this “setback” decision, netizens say that it is necessary to add dedicated card charging points and increase alternative options for charging cards.
They are criticizing that there are very few designated charging points, and that even the shops and service organizations that recharge U-Money cards don’t recharge cards because they themselves haven’t extended their service or the system is down.
For instance, citizen D.Tsetsegsuren said, “I take the bus every day from Doloon Buudal to Sharga Morit. Now, most people have U-Money cards. It’s much easier to charge bus cards. But the availability of places that recharge cards is poor. I always charge my card around the city center as it’s almost impossible to find a charging point in suburban areas.”
A student criticized, “There are not enough places to recharge bus cards. It is said that it can be recharged by phone or bank card. But it’s so complicated to do that. I think if bank cards are linked to the bus system, fewer people will pay their fare with cash.”
In fact, citizens can only pay for bus fares using the Golomt Bank’s transportation card. In other words, it cannot be uniformly accessible to citizens.
Head of Department of Inspection and Evaluation of the Ulaanbaatar Mayor’s Office Kh.Gantulga also informed us that the system is being upgraded in South Korea. When asked about the development of the system, the Ulaanbaatar Public Transport Department respond, “We will notify the South Korean side and obtain permission and implement it.” The company has already spent 8.6 billion MNT on system development.
He said, “A bold solution should be made in this regard and the updated system should be fully introduced. The Ulaanbaatar Public Transport Department is unable to fully use the system of Ulaanbaatar Smart Card LLC or use its data in policymaking process. Basically, the operation of the company does not meet the requirements. On top of that, there is a lack of information related to card usage. For example, due to citizens’ lost cards, there are 1.3 billion MNT stuck in card accounts that cannot be spent."
He added that a new project has been launched to increase the number of alternative card recharging options, but nothing has been implemented so far.
A working group has been set up to improve public transport operations and develop recommendations. When it inspected the relevant institutions, a violation was discovered from Ulaanbaatar Smart Card LLC.
“The Ulaanbaatar Public Transport Department signed two contracts with Ulaanbaatar Smart Card LLC and Data-Card Company. In accordance with these contacts, an agreement was signed to introduce public transport management and e-system. The system should be fully implemented within 4.8 years. However, the agreement has not yet been fully implemented. The company has not fully completed the investment works and the information technology system has not been completed and handed over to the customer. It is related to Ulaanbaatar Smart Card LLC.”
“This contract was signed in order to create public transport data of Ulaanbaatar using GPS devices, develop the system and make it clear, accessible and fast. However, as of today, the contract has not been completed. For example, the bus station system worth 509,600 USD, card production equipment worth 940,000 USD, network connection work worth 300,000 USD, bus station information board worth 100,00 USD, a total 1.8 million USD worth of works have not been done. Also, some systems were developed but did not meet the requirements of the ordering organization,” Kh.Gantulga noted.
ARE INSPECTIONS BEING FULLY MADE?
As of today, only bus drivers control whether passengers use their cards. Therefore, it is necessary to improve the control system and carry out the electronic transition in its true sense. In fact, the government set a big goal of becoming a “digital nation” some time ago. For example, there is a need to check drivers taking cash with surveillance cameras and hold them accountable.
On the other hand, it is necessary to strengthen the accountability of those who give and receive cash. This is because, according to the Law on Infringements, citizens who travel by paying cash are fined 10,000 MNT and drivers who receive money are fined 25,000 MNT. Of course, this “corruption” will not stop when the amount of cash received from citizens per day is more than the amount of the fine.
Propelled by the growing mobility of today’s contemporary society as a result of increased urban migration, the acceptance of the electronic payment system has been on a tremendous increase in recent years worldwide. In particular, following the outbreak of the COVID-19 pandemic, contactless smart card-based solutions are widely accepted as the modern and safe way to organize fare collection in the public transport industry. In compliance with this development, electronic payment services have increasingly turned into daily activities in human life. Therefore, it is necessary to develop e-services to make them easier for citizens.
