Delay Repay is compensation gone mad and ignores how the real world works

[Bantamzen]

Moderator note: split from Refusal of compensation

This thread is rapidly descending into la-la land, from controlling the movement of large birds which often roam over many acres of land, to making indestructible trains that.can not be damaged by large objects whilst travelling at speeds (remembering that similar sized birds can bring down aircraft).

I'm sorry to say it but this is the culture of compensation gone mad. I am in favour of compensation when the industry gets it wrong and causes serious delays. But to demand the industry becomes effectively bullet proof is simply daft, and completely ignores how the real world works. And before anyone accuses me of being anti-customer let's all not forget that all compensation schemes all ultimately funded by us all, either directly through ticket price increases or through taxation to fund subsidies or Network Rail. Expecting compensation every time something goes wrong is a sure-fire way to eventually kill the scheme.

 

[yorkie]

This thread is rapidly descending into la-la land, from controlling the movement of large birds which often roam over many acres of land, to making indestructible trains that.can not be damaged by large objects whilst travelling at speeds (remembering that similar sized birds can bring down aircraft).

I'm sorry to say it but this is the culture of compensation gone mad. I am in favour of compensation when the industry gets it wrong and causes serious delays. But to demand the industry becomes effectively bullet proof is simply daft, and completely ignores how the real world works. And before anyone accuses me of being anti-customer let's all not forget that all compensation schemes all ultimately funded by us all, either directly through ticket price increases or through taxation to fund subsidies or Network Rail. Expecting compensation every time something goes wrong is a sure-fire way to eventually kill the scheme.

GWR are on the old scheme at present but they will move to Delay Repay eventually, whether you like it or not.

Delay Repay doesn't have exclusions, which means it does apply "every time something goes wrong" if the delay is long enough.

That's the entire point of the new scheme. It is not a 'demand to be bullet proof'.

It's not true that Delay Repay schemes increase "taxation to fund subsidies or Network Rail"; the amount of compensation paid by Network Rail to train companies is unaffected by the move by any such operator to a Delay Repay scheme.

You are entitled to dislike Delay Repay schemes but they have been around for a long time; train companies that don't participate are now very much the minority.

 

[Bantamzen]

I have asked for this thread to be removed, as I did not suggest scrapping the scheme.

 

[yorkie]

What are you suggesting?

 

[Bletchleyite]

I have asked for this thread to be removed, as I did not suggest scrapping the scheme.

Why would you ask for a thread to be removed just because the discussion did not go the way you would have liked?

 

[Bantamzen]

Why would you ask for a thread to be removed just because the discussion did not go the way you would have liked?

I am in discussion with an admin about this as I did not create this thread, nor its title. I'm afraid that is all I am prepared to say at this time.

 

[yorkie]

You did create the post, but arguing against the principles of Delay Repay schemes is a whole new topic in its own right. It doesn't belong in a Dispute thread where a customer is seeking advice.

It is reasonable to expect that people will want to disagree with your views about Delay Repay schemes and it's not fair that the discussion about the merits of such schemes consumes a dispute thread when it is a topic in its own right.

If you no longer wish to discuss it, that's your prerogative, no-one is compelling you to make any further posts on the subject

 

[sefton]

This thread is rapidly descending into la-la land, from controlling the movement of large birds which often roam over many acres of land, to making indestructible trains that.can not be damaged by large objects whilst travelling at speeds (remembering that similar sized birds can bring down aircraft).

I'm sorry to say it but this is the culture of compensation gone mad. I am in favour of compensation when the industry gets it wrong and causes serious delays. But to demand the industry becomes effectively bullet proof is simply daft, and completely ignores how the real world works. And before anyone accuses me of being anti-customer let's all not forget that all compensation schemes all ultimately funded by us all, either directly through ticket price increases or through taxation to fund subsidies or Network Rail. Expecting compensation every time something goes wrong is a sure-fire way to eventually kill the scheme.

You are completely missing the point.

The Delay Repay scheme is to compensate customers where the commercial train company who is aiming to make a profit fails to get those customers to their destination at the time they promised when they bought a ticket.

Delay Repay exists as it is seen as a Good Thing which encourages people to use the train rather than drive.

Of course the train company cannot prevent any delay but the scheme is not intended to do that as it holds the train company responsible for any delay.

The scheme does incentivise train companies to run on time trains, but if they cannot, well that is simply unfortunate and their franchise agreement still requires them to pay.

Don't like it, then don't bid for the franchise and don't take the profits.

 

[Bantamzen]

You are completely missing the point.

The Delay Repay scheme is to compensate customers where the commercial train company who is aiming to make a profit fails to get those customers to their destination at the time they promised when they bought a ticket.

Delay Repay exists as it is seen as a Good Thing which encourages people to use the train rather than drive.

Of course the train company cannot prevent any delay but the scheme is not intended to do that as it holds the train company responsible for any delay.

The scheme does incentivise train companies to run on time trains, but if they cannot, well that is simply unfortunate and their franchise agreement still requires them to pay.

Don't like it, then don't bid for the franchise and don't take the profits.

I am not against delay repay where long delays are due to industry errors. However where delays occur purely outside of the control of the industry, enforcing delay repay scheme is something that the industry is unlikely to shoulder. When a train is delayed due to operational problems, they can take measures to prevent it in future. Where it cannot be prevented and they are still penalised they will pass the cost back to the customer, whether they were affected or not. If they do not, they will lose money and eventually pull the plug.

I wasn't aware that the delay repay scheme also covered these sorts of incidents (although GWR are not part of this). But the bottom line is costs that are forced onto any company that they cannot take steps to avoid will be passed onto the customer.

 

[kristiang85]

I'm pretty sure Delay Repay is saving TOCs/govt money, or at least not affecting them, given that the onus is on the passengers to claim, and given most claims are for silly small money, then most don't bother.

(Personally, I do. If I'm entitled to that 87p I'm darn well filling out the form and getting it)

 

[ForTheLoveOf]

I'm pretty sure Delay Repay is saving TOCs/govt money, or at least not affecting them, given that the onus is on the passengers to claim, and given most claims are for silly small money, then most don't bother.

(Personally, I do. If I'm entitled to that 87p I'm darn well filling out the form and getting it)

I particularly like making claims for small amounts of compensation, as I know that the administration of the claim (especially when I request a posted RTV!) is costing the TOC more than the claim is worth

 

[Starmill]

It's absoultely right that 'Delay Repay' ignores the way the real world works. It's so common that the Delay Repay scheme doesn't really make up in proportion of disruption that affects them customer. Imagine a Woking to London commuter with an Annual season ticket at £3,248. One morning their normal train is cancelled so they can't board the next one - it's too full. They take the next available train but it's a slow train and they get to London 33 minutes later than scheduled. It's almost an insult to that person to have them spend 5 minutes filling in the form online so that they can claim just £3.50. Their lost time in their working day is worth a lot more than that.

I know someone who was travelling from Scotland to Surrey in First Class, and they were delayed at Grantham for several hours. They finally arrived at London Kings Cross at around 0200 and faced a queue of hundreds for a taxi. They had to endure crush loaded conditions on long-distance trains and waiting outside in low temperatures late at night In the end their total delay was around 5 hours but LNER wouldn't pay anything more than the ticket price (around £35) despite that obviously not representing the significant disruption caused.

I agree very much that it is also 'mad' that some companies won't pay Delay Repay and there's little the typical customer can do about that. At a forum meet this summer a group of us travelled from Woking to Warminster with Advance tickets, but our train was cancelled. We were delayed en route and had to change trains unexpectedly at Salisbury. The company refused to pay three of the four claims. When pressed they still refused. In one case they then paid as a 'gesture of goodwill' and in another the case had to be escalated further, wasting the customer's time again and again over tickets costing about £10. It's 'mad' that they think they don't have to pay if delays are caused by industrial action.

Of course, sometimes, they get it right. Southeastern declared a number of days last year as 'double delay repay' in compensation for significant disruption due to low temperatures causing ice on the rails. I was also able to claim £130 in additional compensation from Northern for the May timetable disaster, under the dedicated shceme they set up to facilitate this.

I'm pretty sure Delay Repay is saving TOCs/govt money, or at least not affecting them, given that the onus is on the passengers to claim, and given most claims are for silly small money, then most don't bother.

Indeed, this is true. The old scheme required void days or 5% discounts to be given automatically to season ticket holders. The new scheme does not offer this. We also know that a singificant number of people still aren't claiming even when they are entitled.

 

[Bantamzen]

I particularly like making claims for small amounts of compensation, as I know that the administration of the claim (especially when I request a posted RTV!) is costing the TOC more than the claim is worth

Thank you for making my point . Do please remember this at the next thread about fare increases, and how they are not justified.

 

[35B]

I am not against delay repay where long delays are due to industry errors. However where delays occur purely outside of the control of the industry, enforcing delay repay scheme is something that the industry is unlikely to shoulder. When a train is delayed due to operational problems, they can take measures to prevent it in future. Where it cannot be prevented and they are still penalised they will pass the cost back to the customer, whether they were affected or not. If they do not, they will lose money and eventually pull the plug.

I wasn't aware that the delay repay scheme also covered these sorts of incidents (although GWR are not part of this). But the bottom line is costs that are forced onto any company that they cannot take steps to avoid will be passed onto the customer.

I work for a company that provides a service to corporate customers. We are subject to service level agreements, and they typically require us to take responsibility for things that are not wholly within our control. That does not absolve us from paying out if we don’t meet those service levels.

I take a similar view of railway companies. They sell me a ticket, and offer to do so based on their timetable. That’s the contract i agree with them. I don’t think it unreasonable for them to bear the consequences if they don’t fulfil that contract.

 

[snail]

I take a similar view of railway companies. They sell me a ticket, and offer to do so based on their timetable. That’s the contract i agree with them. I don’t think it unreasonable for them to bear the consequences if they don’t fulfil that contract.

I agree, but what is reasonable? Delay Repay is a skewed solution. If I am 1/2 hour late on a 2 hour journey from London I get 25% of the fare for 25% of the journey time. The same time delay from Manchester gets me around 20% of the compensation (because the fare per mile is lower) for an extra 50% on my journey time. In terms of inconvenience the delay on the shorter journey affects me more than on the longer one.

 

[Bantamzen]

I work for a company that provides a service to corporate customers. We are subject to service level agreements, and they typically require us to take responsibility for things that are not wholly within our control. That does not absolve us from paying out if we don’t meet those service levels.

I take a similar view of railway companies. They sell me a ticket, and offer to do so based on their timetable. That’s the contract i agree with them. I don’t think it unreasonable for them to bear the consequences if they don’t fulfil that contract.

Does your company's costs reflect this requirement? And if say there were regular occasions where disruption to the contracted services beyond their incurred additional costs to your company, would they absorb these costs without considering changing their pricing or services?

I'll wager the answers in order are yes, and no. No private business can operate in the long term where it is forced to compensate for events beyond it's control unless it mitigates for it by adding the potential cost of the risk to its prices. Or as in the case with the TOCs they can be compensated by a third party, in this case Network Rail, who as we know are funded by the taxpayers, aka the passengers.

Again I'll state, I am not against TOCs being effectively fined when they get it wrong. But fine them when things are beyond their control, and watch the cost work its way back.

 

[najaB]

Again I'll state, I am not against TOCs being effectively fined when they get it wrong. But fine them when things are beyond their control, and watch the cost work its way back.

You're pushing a rope here, there are some posters in whose minds TOCs can do no right. You're trying to use reason against near-religious fervour.

 

[sheff1]

I fail to see how Delay Repay is "compensation gone mad". I enter into a contract with a TOC/TOCs to convey me from A to B within a particular timeframe (either up front with an Advacnce or at scheduled departure time of my chosen train with a walk up). If the TOC fail to deliver their side of the contract (and not just by a couple of minutes) compensation seems perfectly appropriate. The reason for their failure does not in any way alter the inconvenience caused by a late arrival.

If I fail to arrive at the station in time to catch my booked train on an Advance ticket (other than due to a late running/cancelled connecting train) the TOC will not be at all concerned as whether my late arrival was due to matters within my control or not - they will want me to pay for a new ticket if I still wish to travel.

 

[Bantamzen]

You're pushing a rope here, there are some posters in whose minds TOCs can do no right. You're trying to use reason against near-religious fervour.

Thanks @najaB, I am sadly all too aware that my views are not popular. Unfortunately I suffer from a condition that makes me assess actions versus consequences. What some people fail to understand is that the railway network is run for profit. That means that the companies franchised to run our services expect to make a profit. And if their costs go up, ultimately so do those of their customers.

I actually don't agree with public transport being privately run, I've seen the consequences of this when companies are expected to cover costs beyond their control on my local bus network (spoiler, they get cut). But until a future government grows enough to change how we run our transport network we are stuck with the direct correlation between running costs and prices. I wish more people would make this connection.

I fail to see how Delay Repay is "compensation gone mad". I enter into a contract with a TOC/TOCs to convey me from A to B within a particular timeframe (either up front with an Advacnce or at scheduled departure time of my chosen train with a walk up). If the TOC fail to deliver their side of the contract (and not just by a couple of minutes) compensation seems perfectly appropriate. The reason for their failure does not in any way alter the inconvenience caused by a late arrival.

If I fail to arrive at the station in time to catch my booked train on an Advance ticket (other than due to a late running/cancelled connecting train) the TOC will not be at all concerned as whether my late arrival was due to matters within my control or not - they will want me to pay for a new ticket if I still wish to travel.

May I refer you to my post, numbered 6 on this thread. I did not create this post, nor did I title it as it was a post split from another thread.

 

[maniacmartin]

When running a business, often you make a profit on transactions, but sometimes you don't. That is the risk of running a business. When a business doesn't deliver on their promises, they are expected to make good. Sensible businesses factor this into the price, take out insurance, or have contractual agreements with their upstream suppliers to cover eventualities.

I see no reason why the railway should be any different, whether its run in the public or private sector. If the railway took your view, and washed its hands of any responsibility when things go wrong, then I for one would be making far fewer rail journeys and thus less revenue would go to the railway. The reputational damage from a few high-profile media cases would severely dent discretionary rail travel.

 

[RT4038]

Maybe delay reply needs to be looked at from a slightly different angle - yes it (ultimately) pushes fares for passengers up. So passengers with punctual journeys end up paying more than passengers with delayed journeys. The overall level of fares remains roughly the same. It is a bit pot luck what you actually pay (as you can't choose to travel punctually or late) but after a few journeys you'll have a mix of punctual and late. Sort of fair I suppose!

 

[sheff1]

May I refer you to my post, numbered 6 on this thread. I did not create this post, nor did I title it as it was a post split from another thread.

I never said you did and didn't quote you in my post.

 

[Bantamzen]

When running a business, often you make a profit on transactions, but sometimes you don't. That is the risk of running a business. When a business doesn't deliver on their promises, they are expected to make good. Sensible businesses factor this into the price, take out insurance, or have contractual agreements with their upstream suppliers to cover eventualities.

I see no reason why the railway should be any different, whether its run in the public or private sector. If the railway took your view, and washed its hands of any responsibility when things go wrong, then I for one would be making far fewer rail journeys and thus less revenue would go to the railway. The reputational damage from a few high-profile media cases would severely dent discretionary rail travel.

And I agree. But as you say, businesses will factor cost into their prices. The Delay Repay scheme as is relatively new, and as it grows and becomes more widely used TOCs will more and more want this factored into their pricing structures. This in turn will reflect in ticket prices and/or government subsidises, especially where TOCs pay out for delays beyond their control.

 

[Bantamzen]

I never said you did and didn't quote you in my post.

My apologies, I wrongly assumed your post was in response directly to me.

 

[sheff1]

The Delay Repay scheme as is relatively new, and as it grows and becomes more widely used TOCs will more and more want this factored into their pricing structures. This in turn will reflect in ticket prices and/or government subsidises, especially where TOCs pay out for delays beyond their control.

Yet a number of posters on here are insistent that Delay Repay payments are "trivial" and a "non-issue". If they are correct, there should not be any noticeable change in government subsidy or ticket prices. If they are wrong, then I would tend to agree more with you.

 

[Starmill]

I can only say I'm mystified by the attitude of some people that they are worried they're too entitled to compensation when they're inconvenienced by delays. A compensation payment for delays incentivises reliable performance and sets railway travel above its competitors. Any impact from delay compensation on the bottom line of the TOC is likely to be very limited.

 

[Bantamzen]

Yet a number of posters on here are insistent that Delay Repay payments are "trivial" and a "non-issue". If they are correct, there should not be any noticeable change in government subsidy or ticket prices. If they are wrong, then I would tend to agree more with you.

Well we are often told that TOC profit margins are not great, so any additional costs would then impact prices (of course profit margins is a whole other debate). And as delay repay becomes more extensive its impact will grow. So as a passenger seeing annual price increases at or above inflation for many years, I can't help but wonder if delay repay will help keep prices rising at inflation levels and above.

I can only say I'm mystified by the attitude of some people that they are worried they're too entitled to compensation when they're inconvenienced by delays. A compensation payment for delays incentivises reliable performance and sets railway travel above its competitors. Any impact from delay compensation on the bottom line of the TOC is likely to be very limited.

And I would agree if compensation was always only linked to poor operator performance. But when incidents beyond their control occur, say a train being damaged after striking something on the line, then they cannot effectively mitigate against these incidents, and will therefore look to recoup compensation costs.

 

[swaldman]

I'm in favour of delay repay existing, and for it paying out regardless of the cause of the delay.

It should exist, because it puts a cost on what is otherwise an "externality": A TOC can have a horrible punctuality record and it doesn't cost them much (eventually it will cost them ticket sales, but that's fairly inelastic - and if they operate a London commuter route where people don't have a choice, it's almost totally inelastic). With Delay Repay, there's a cost associated with being late, so there's an incentive for the TOC to avoid being late. Yes, this will cost them, and yes, this will be passed on to fares; ultimately it's a policy choice that it's better to be on time than to be as cheap as possible.

It should pay out regardless, because that keeps things simple and avoids endless rows over what is and isn't the TOC's fault, with the associated need for ombudsmen, court cases, etc. For an example of what happens when this approach isn't taken, see airlines claims of a few years ago that planes breaking down was a "cause outside their control".
It's analogous to buying faulty goods at a shop: The fault may be down to the manufacturer, or the courier, rather than the retailer, but my contract is with the retailer and it is them that must refund me.

 

[yorkie]

Well we are often told that TOC profit margins are not great, so any additional costs would then impact prices (of course profit margins is a whole other debate). And as delay repay becomes more extensive its impact will grow. So as a passenger seeing annual price increases at or above inflation for many years, I can't help but wonder if delay repay will help keep prices rising at inflation levels and above.

Your posts are based on ideas and guesswork, but it is a fact that from a purely financial perspective (ignoring any reputational problem that may result), many delays boost TOC profit margins, as the money they get from Network Rail outweighs the company's additional costs (which include delay compensation liabilities)

One of the factors that caused the demise of GNER (not the only one, but the impact was sufficient to warrant mention and demonstrate my point) was stated to be...

... better-than-expected performance from Network Rail, owner and operator of the UK rail network. Network Rail has to pay train operators if problems with track or signalling delay their trains, but there have been far fewer delays recently than anticipated when GNER signed the franchise contract.

Source: https://www.ft.com/content/7a74e824-2962-11db-9dcc-0000779e2340

 

[najaB]

Yet a number of posters on here are insistent that Delay Repay payments are "trivial" and a "non-issue".

As long as they're limited to no more than the ticket price, and the conditions for claiming remain more or less the same as they are now, then they won't affect TOCs' bottom lines too much. If, as some on this thread have suggested, they were to be increased substantially then that cost would end up being passed on to the end user.