GM 03 113 Mail Order and Internet Pass Sales FB

BRIEFING ITEM AC TRANSIT DISTRICT GM Memo No. 03-113 Board of Directors Executive Summary Meeting Date: April 3, 20...

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BRIEFING ITEM

AC TRANSIT DISTRICT

GM Memo No. 03-113

Board of Directors

Executive Summary

Meeting Date: April 3, 2003

Committees: Executive Committee



Finance Committee



External Affairs Committee Operations Committee

M □

Paratransit Committee Planning Committee

□ □

Board of Directors



SUBJECT:

Exploration and recommendation regarding mail order and internet pass sales RECOMMENDED ACTION:

D Information Only

IE] Briefing Item

□ Recommended Motion

Fiscal Impact: None

Background/Discussion:

The purpose of this document is to explore current and potential alternatives for fare instrument sales. Those alternatives include mail order and electronic commerce alternatives. The goal is to inform what is being done today and identify a direction for the future.

BOARD ACTION:

Approved as Recommended

[X]

Other

[ ]

Approved with Modification(s) [ ]

MOTION: PEEPLES/WALLACE to approve staff recommendation to continue the current mail order and fax order programs that are in place for the short term and allow MTC's Translink program to provide the true e-commerce solution as part of that project (7-0-0-0). Ayes:

Director Peeples, Vice president Wallace, Directors Harper, Jaquez, Bischofberger, Kaplan, President Piras - 7

Noes:

None - 0

Absent:

None - 0

Abstain:

None - 0

The above order was passed and adopted on April 17,2003. Rose Martinez, District Secretary

By

GM Memo No. 03-113 Subject: Exploration and recommendation regarding mail order and internet pass sales Date: March 21, 2003 Page 2 of 3 Current State: Fare instruments are currently sold through two AC Transit Customer Services offices, one in Downtown Oakland at the General Offices and the other at the San Francisco TransBay Terminal. In addition, fare instruments are available at 255 locations throughout the service area at vendors and through a Regional Transit Connection program that delivers fare instruments to employers. A list

of vendors is on the AC Transit web site, searchable by zip code. In addition, the Customer Services department has two processes that allow customers to order tickets from remote locations. The first is a mail order process where we provide a mail order form and envelope for customers to use to send in orders. The second is an order form on the AC Transit web site that can be either faxed or mailed to the Customer Services ticket office. The current mail order form generates less than 100 orders per month. The order form on the web site was activated on March 14, 2003, as of this date we have received no orders from that form. E-commerce options:

There are two viable ways of implementing e-commerce ordering of passes. The first is to contract with a vendor to build the required functionality and add this directly to the AC Transit web site. The second is to work with an outsource agency that will set up and fulfill orders for a fee. Initial estimates from our current vendor to add the functionality to the AC

Transit web site is $12,000 to $15,000. There would also be ongoing cost for credit card processing and secure commerce fees. This option would require the set-up of internal processes for fulfillment and could impact staffing, if the order volume grows significantly. The expected duration of the project to implement would be three to five months. For a hosted application, we looked at the vendor that handles BART sales. This vendor would set up a commerce site at no charge, charges a 3% commission on each sale as well as postage and credit card fees (2.6%). These charges can be absorbed by the agency or passed on to the client. The

vendor also targets a "lost in mail" charge up to 5% as part of the contract. This option could be set up quickly, taking only a few weeks to implement. The commission fees for this vendor are three times those of our current vendor program and the credit card fees are an incremental cost regardless of whether the Customer or AC Transit pays the fee.

s

On-line order volumes: Other area transit agencies have had some success with on-line ordering. BART estimates that they have about 13 thousand dollars per month in orders.

GM Memo No. 03-113 Subject: Exploration and recommendation regarding mail order and internet pass sales Date: March 21, 2003

Page 3 of 3

The average transaction is about $100.00 or approximately 130 customer orders per month. Their site has been active for three years. CalTrain sells about 200 fare instruments through the internet a month, these are 10 ride passes and done through an email program. The Translink Factor:

As MTC moves forward with the Translink program, an e-commerce order process is part of the project. Discussions with MTC target a mid year 2004 implementation of an e-commerce order process. Summary: •

AC Transit currently has two cost effective options available for customers to order passes. These methods do not carry fees above the price of the ticket.



Based on the small volume of BART and CalTrain sales volumes and a likely move to Translink, it would be difficult to cost-justify the implementation and ongoing costs of an in-house solution.



It is not likely that e-commerce pass sales would increase overall sales, but instead would move sales from other lower cost channels. It would simply be a convenience for the customer.



The hosted solution used by BART is a viable option, but for every pass sold through that medium, there would be increased cost for the consumer and/or



The recommended direction is to continue the current mail order and fax order programs that are in place for the short term and allow MTC's Translink program to provide the true e-commerce solution as part of that project.

decreased revenue for the district.

Prior Relevant Board Actions/Policies: None

Attachments:

Order form Mail Order Form Approved by:

Rick Fernandez, General Manager

Jim Gleich, Deputy General Manager Jaimie Levin, Director of Marketing and Communication

Prepared by:

Kenneth Rhodes, Customer Services Manager

Date Prepared:

March 21, 2003

GM Memo No. 03-113 Attachment 1

Pass/Ticket Order Form

Orders will be processed within 3 days of receipt by AC Transit. Please allow lor mailing time.

Print this order form.

Complete and include your name, mailing address and phone number.

Mail order form with check or money order made out to NAME

AC Transit, for the exact amount of order (or complete

(PIEASE PRINT)

credit card information), and mail to address below. No cash please. Or, fax order with credit card information to

ADDRESS

fax number below.

CITY

STATE

Orders for more than S200 must be shipped by an express carrier at recipient's expense. Please provide

ZIP

your carrier and account number.

Carrier:

TCIEWIONE

Account Number:

CHARGE YOUR ORDER

Mail this completed form along with cheek,

Copy account number from your Visa or MasterCard charge card and write your phone number in telephone area above.

mm

irrm

rm MY CARD

SIGNATURE REQUIRED

EXPIRES: L

money order, or credit card information to:

AC Transit Customer Service Pass Sales 1600 Franklin Street Oakland, CA 94612-2806 Or Fax with credit card information to:

(510)891-4717