Great British Railways: opportunities for fares reform?

[Purple Orange]

Hopefully there will be a revenue element, even if its such things as 0.5% commission for the operator, anyway, im speculating and will probably get told off now lol.

Cant be having that now! The vast majority of posts on this thread (and probably the forum) are speculative.

 

[jimm]

The cynic in me would also suggest that there's no incentive for the individual TOC'S to collect fares either, though the individual concessions may specify certain revenue/ticketless travel targets (hopefully for me!)

How about reading the report and seeing what it says?

From page 55

Contracts will require operators to meet demanding standards for key passenger priorities such as punctuality, reliability, passenger satisfaction, capacity, staff availability and helpfulness, customer information, vandalism repair, passenger satisfaction, revenue protection and cleanliness.

Revenue incentives will be built into contracts to grow passenger numbers, foster a culture of innovation and introduce effciencies that deliver real benefts for passengers.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/987752/gbr-williams-shapps-plan-for-rail.pdf

 

[AdamWW]

Simplification. Provided the walk-up fare is reasonable (and if it isn't, why not?), get rid of all this undercutting by 50p-£1 here and there.

Yield managed fares for long distance travel do make sense, but this is a full range of Advances, not just ones aimed at slight undercutting.

To me, counted places serve no purpose - Advances (a full range of prices) only really make sense on services where proper reservations are available, those being the main long distance services.

I appreciate that the competitive aspect won't be there, but I believe that a large aspect of advance fares is to smooth demand and fill seats that would otherwise have been empty, and why would that change?

 

[Bletchleyite]

I appreciate that the competitive aspect won't be there, but I believe that a large aspect of advance fares is to smooth demand and fill seats that would otherwise have been empty, and why would that change?

I would say it is on long-distance services. On local services it really isn't, because local services tend to carry people with far less time-flexibility on their journeys. Most people plan long-distance journeys in advance even if they don't actually book in advance. But most people, unless the service is very infrequent, just rock up to the station for the next train if making a short-distance journey. And for commuters there will be a train that makes sense - they won't want to get up or get home any earlier/later than strictly necessary.

There also should not be any Advances sold on any train where there is expected to be a standing load, because that negates the point you make.

I think you can get a decent idea by the difference between the price of two Advances and a walk-up return. If it's 50p or £1, it's predatory and just confuses people. If it's a very large discount - maybe at least 20% or a minimum of say £5 - then it probably does have value of moving people onto different trains or market segmentation.

 

[AdamWW]

I would say it is on long-distance services. On local services it really isn't, because local services tend to carry people with far less time-flexibility on their journeys. Most people plan long-distance journeys in advance even if they don't actually book in advance. But most people, unless the service is very infrequent, just rock up to the station for the next train if making a short-distance journey. And for commuters there will be a train that makes sense - they won't want to get up or get home any earlier/later than strictly necessary.

There also should not be any Advances sold on any train where there is expected to be a standing load, because that negates the point you make.

I think you can get a decent idea by the difference between the price of two Advances and a walk-up return. If it's 50p or £1, it's predatory and just confuses people. If it's a very large discount - maybe at least 20% or a minimum of say £5 - then it probably does have value of moving people onto different trains or market segmentation.

I can't argue with any of that.

And don't know who does buy Advances that lock them into a train for a tiny saving.

 

[Bletchleyite]

I can't argue with any of that.

And don't know who does buy Advances that lock them into a train for a tiny saving.

I suspect plenty do simply by them coming up as the cheapest option on the planner. Those same people will be the ones getting miffed when they want to take the train after and can't - that's the sort of confusion I'm referring to.

I'd consider myself an expert and I have made the error of buying a TOC specific ticket (not an Advance) because I was doing it quickly and the planner threw it up. The outcome was standing on an overcrowded short TPE rather than being able to wait for the quieter LNER once I had seen the TPE was overcrowded.

 

[40129]

In terms of fares/tickets, one thing I hope will happen is the end of TOC specific fares for short journeys.

For example, during the off peak period there are currently three different single and return fares between Runcorn / Lime Street and Wolverhampton / New Street / Birmingham International, i.e Avanti only, Transport for Wales (TFW) only and Any Permitted. In both cases there is hardly any journey time difference - IIRC London North Western (LNW) and Cross Country expresses are c.2 minutes quicker from Wolverhampton - New Street and Avanti are around 5 minutes quicker than TFW and LNW from Runcorn - Lime Street. However, in both cases buying a cheaper TOC specific fare will restrict you to an hourly service and if you do get the wrong train, almost double* the amount you have to pay.

* Based on your ticket being checked by a Conductor / Train Manager and not a Revenue Protection Inspector - both areas are covered by Penalty Fare schemes

 

[squizzler]

I don't understand the treasury concerns with "revenue neutral" fare reform. It implies that the current system is the optimal for revenue yield, which is extremely unlikely.

It seems pretty self evident that a clean sheet system, based on single leg pricing, fixed seat allocations for intercity trains, and using whizz-bang technology such as machine learning, should destroy the current fares structure in terms of income by maximising the value of every seat mile.

There may be a bit of a drop of revenue for a few months as the system teaches itself how much it can charge for trips and prices are deliberately set to stimulate demand, but then when the trains begin getting back to decent load factors, the revenue should be much greater.

 

[JonathanH]

There may be a bit of a drop of revenue for a few months as the system teaches itself how much it can charge for trips and prices are deliberately set to stimulate demand, but then when the trains begin getting back to decent load factors, the revenue should be much greater.

Truly dymanic pricing which resets itself according to demand is a very interesting concept but one I suspect people aren't ready for yet. Surge pricing would be quite a complexity.

 

[Bletchleyite]

Truly dymanic pricing which resets itself according to demand is a very interesting concept but one I suspect people aren't ready for yet. Surge pricing would be quite a complexity.

Loadings are very predictable (and you can feed other predictions in like big events at the Manchester Arena, say) and so you don't need it to be Uber-style dynamic, you just need it to be yield-managed like airlines do.

 

[JonathanH]

Loadings are very predictable (and you can feed other predictions in like big events at the Manchester Arena, say) and so you don't need it to be Uber-style dynamic, you just need it to be yield-managed like airlines do.

Yes, but I note that if you increased train fares on days when there was a big concert at the Manchester Arena and football matches, the railway would stand accused of 'profiteering'.

To some extent, I think the operators have done this in the past, charging higher prices when there is a football match (as they make a play of encouraging people to travel on days when there aren't football matches for lower fares).

 

[Wolfie]

In terms of fares/tickets, one thing I hope will happen is the end of TOC specific fares for short journeys.

For example, during the off peak period there are currently three different single and return fares between Runcorn / Lime Street and Wolverhampton / New Street / Birmingham International, i.e Avanti only, Transport for Wales (TFW) only and Any Permitted. In both cases there is hardly any journey time difference - IIRC London North Western (LNW) and Cross Country expresses are c.2 minutes quicker from Wolverhampton - New Street and Avanti are around 5 minutes quicker than TFW and LNW from Runcorn - Lime Street. However, in both cases buying a cheaper TOC specific fare will restrict you to an hourly service and if you do get the wrong train, almost double* the amount you have to pay.

* Based on your ticket being checked by a Conductor / Train Manager and not a Revenue Protection Inspector - both areas are covered by Penalty Fare schemes

What is the cost margin? If it is small no one will likely mind. If the consequence is a big increase in fares though....

 

[Wolfie]

I don't understand the treasury concerns with "revenue neutral" fare reform. It implies that the current system is the optimal for revenue yield, which is extremely unlikely.

It seems pretty self evident that a clean sheet system, based on single leg pricing, fixed seat allocations for intercity trains, and using whizz-bang technology such as machine learning, should destroy the current fares structure in terms of income by maximising the value of every seat mile.

There may be a bit of a drop of revenue for a few months as the system teaches itself how much it can charge for trips and prices are deliberately set to stimulate demand, but then when the trains begin getting back to decent load factors, the revenue should be much greater.

What HMT undoubtedly means by a "revenue neutral" fare system is that across the whole system at least as much fares income is taken as is currently the case.

 

[Bletchleyite]

What HMT undoubtedly means by a "revenue neutral" fare system is that across the whole system at least as much fares income is taken as is currently the case.

Yes, that's the premise I started the thread on - they won't approve a change that involves more subsidy, so the question is how we can get improvements without that.

 

[squizzler]

What HMT undoubtedly means by a "revenue neutral" fare system is that across the whole system at least as much fares income is taken as is currently the case.

I understand that. However it makes the assumption that the present system is optimal, or close to optimal. That is very unlikely. With modern yield management it can almost be taken as a given that we can do better than now, In fact the railways have the opportunity to leapfrog the fares structure used by so-called low cost airlines by using the recent developments in machine learning and so-forth to ensure the most value is harvested from every seat/mile.

Perhaps the same machine learning fares system could also be trained to use the resources at its disposal to minimise carbon emissions by aggressively going after customers who might try motoring or buy a plane ticket instead?

 

[Mikey C]

It'll be good to have a unified e-ticket App, as it's a bit ridiculous at the moment that each franchise has its own App

 

[Bletchleyite]

It'll be good to have a unified e-ticket App, as it's a bit ridiculous at the moment that each franchise has its own App

I agree, each TOC having its own app and website contract plus NRE is a classic example of waste in the railway.

Of course you don't need to download them all, you can just use one of them, I use the LNR one at present.

 

[Starmill]

Yes, but I note that if you increased train fares on days when there was a big concert at the Manchester Arena and football matches, the railway would stand accused of 'profiteering'.

This effectively happens already with Advance tickets. Back before March 2020 you would often find that a train which had always gone on sale with cheap tickets would suddenly have only very expensive advance tickets on and go looking around to find it football related.

== Doublepost prevention - post automatically merged: 21 May 2021 ==

Yes, that's the premise I started the thread on - they won't approve a change that involves more subsidy, so the question is how we can get improvements without that.

I think the issue is that the Treasury is averse to taking on any more commercial risk.

However, they've basically been forced into it now regardless. The commercial prospects of the industry remain very weak even now as numbers grow, because average revenue is down significantly, so a desperate attempt to cling on to what you've already got is probably less useful than actually attempting ambitious change.

To put it another way, they'll have no choice but to keep paying greater subsidy when the financial crisis truly bites.

 

[Tazi Hupefi]

Hopefully there will be a revenue element, even if its such things as 0.5% commission for the operator, anyway, im speculating and will probably get told off now lol.

Would it not be sensible for a new organisation or department to handle revenue protection / prosecution matters?

Basically one big national revenue protection force, all trained to a consistent syllabus with consistent outcomes and policies? The joined up intelligence and resources could be pretty impressive.

Surely that would have to happen anyway (or at least a standardisation of practices). Does London Overground have it's own team or does it simply use a larger TfL one?

 

[SteveT]

What presence will TOCs have if all ticket purchases are centralised? This is from p58 of the white paper:

25. Operators will have greater commercial freedom on some parts of the network, with revenue sharing arrangements where appropriate. New open access services will also be explored where spare capacity exists. As passenger numbers recover, contracts will be flexible and include the possibility for operators to act more commercially on some services...

This implies some independence of activity. For instance, will online ticket purchases be made on TOC websites or will they divert the purchase to the national website, the reverse of what happens now?

 

[zwk500]

What presence will TOCs have if all ticket purchases are centralised? This is from p58 of the white paper:

25. Operators will have greater commercial freedom on some parts of the network, with revenue sharing arrangements where appropriate. New open access services will also be explored where spare capacity exists. As passenger numbers recover, contracts will be flexible and include the possibility for operators to act more commercially on some services...

This implies some independence of activity. For instance, will online ticket purchases be made on TOC websites or will they divert the purchase to the national website, the reverse of what happens now?

That's some very vague language. I think any discussion of what it actually means is more for the speculative section than this thread. (yes, I'm aware of the irony of me trying to stop a thread go speculative)

 

[Wolfie]

I understand that. However it makes the assumption that the present system is optimal, or close to optimal. That is very unlikely. With modern yield management it can almost be taken as a given that we can do better than now, In fact the railways have the opportunity to leapfrog the fares structure used by so-called low cost airlines by using the recent developments in machine learning and so-forth to ensure the most value is harvested from every seat/mile.

Perhaps the same machine learning fares system could also be trained to use the resources at its disposal to minimise carbon emissions by aggressively going after customers who might try motoring or buy a plane ticket instead?

I would not demur from that. What HMG's level of ambition is of course and how resistant they would be to howls from the undoubted losers (there are bound to be some).....

 

[ABB125]

In terms of fares/tickets, one thing I hope will happen is the end of TOC specific fares for short journeys.

For example, during the off peak period there are currently three different single and return fares between Runcorn / Lime Street and Wolverhampton / New Street / Birmingham International, i.e Avanti only, Transport for Wales (TFW) only and Any Permitted. In both cases there is hardly any journey time difference - IIRC London North Western (LNW) and Cross Country expresses are c.2 minutes quicker from Wolverhampton - New Street and Avanti are around 5 minutes quicker than TFW and LNW from Runcorn - Lime Street. However, in both cases buying a cheaper TOC specific fare will restrict you to an hourly service and if you do get the wrong train, almost double* the amount you have to pay.

* Based on your ticket being checked by a Conductor / Train Manager and not a Revenue Protection Inspector - both areas are covered by Penalty Fare schemes

Another ridiculous example (again from the West Midlands) is University to Worcestershire Parkway. There are 8 different flexible return fares (in descending price order): Anytime, Off Peak, Anytime Day and Off Peak Day, each of which has two routes available: Any Permitted (set by WMR) or Not via Birmingham (set by XC). Guess what? the fares are exactly the same for both routes*, rendering the Not via Birmingham route pointless. For single journeys, there's only an Anytime Day Single, again with two routes, and again at the same price.

*Except, bizarrely, for the Off Peak Return: here, the Not via Birmingham route undercuts the Any Permitted by 60p

 

[DerekC]

I would say it is on long-distance services. On local services it really isn't, because local services tend to carry people with far less time-flexibility on their journeys. Most people plan long-distance journeys in advance even if they don't actually book in advance. But most people, unless the service is very infrequent, just rock up to the station for the next train if making a short-distance journey. And for commuters there will be a train that makes sense - they won't want to get up or get home any earlier/later than strictly necessary.

There also should not be any Advances sold on any train where there is expected to be a standing load, because that negates the point you make.

I think you can get a decent idea by the difference between the price of two Advances and a walk-up return. If it's 50p or £1, it's predatory and just confuses people. If it's a very large discount - maybe at least 20% or a minimum of say £5 - then it probably does have value of moving people onto different trains or market segmentation.

The problem with some services - and I am thinking about XC via Birmingham as I have lots of experience of that - is that it's a long distance service that's also used by locals in the West Midlands. So you can join an early afternoon train at York and it will be half full most of the way to Birmingham, packed from New Street to about Leamington and progressively empties out after that, so by the time it gets south of Reading it's less than half full again. Do you sell Advances for that, or not? I very much fear that if I can't buy an Advance or save £££ by splitting the journey I am going to be tempted to drive.

 

[Bletchleyite]

The problem with some services - and I am thinking about XC via Birmingham as I have lots of experience of that - is that it's a long distance service that's also used by locals in the West Midlands. So you can join an early afternoon train at York and it will be half full most of the way to Birmingham, packed from New Street to about Leamington and progressively empties out after that, so by the time it gets south of Reading it's less than half full again. Do you sell Advances for that, or not? I very much fear that if I can't buy an Advance or save £££ by splitting the journey I am going to be tempted to drive.

You sell them for the parts of the journey where it's not full and standing, or you run a proper local service for that local demand! For instance it would strike me that Birmingham to Leamington local traffic is something that Chiltern would usefully cover with all the capacity they're dragging round half-empty for when it gets busy south of Bicester.

This would indeed be much better use of Chiltern's capacity than trying to poach passengers from Avanti who with their 3 x 260+ metre trains an hour have tons of capacity, and then when HS2 is going a further 140m.

 

[Fawkes Cat]

Do we have a GBR/Impact on fares thread yet?

It turns out that we do. Thanks to whoever moved this to its proper place.

 

[ashkeba]

It'll be good to have a unified e-ticket App, as it's a bit ridiculous at the moment that each franchise has its own App

Please no! I want to use my current eticket wallet app that accepts all standard etickets (passbk files) not just from UK rail journeys and not some awful GBR app which will probably force mtickets on us in future.

 

[Bletchleyite]

Please no! I want to use my current eticket wallet app that accepts all standard etickets (passbk files) not just from UK rail journeys and not some awful GBR app which will probably force mtickets on us in future.

E-tickets are PDFs and so you can load them into anything that can take a PDF, and doing them as .pkpass too is not going to be hard.

I can't see any reason we would ever go back to m-tickets. They were an interim tech (and a bad one at that) before it was really ready.

 

[Cdd89]

One overdue change would be dealing with the unfairness of the mixed mode National Rail and London Underground fare when travelling within Zone 1. This currently applies to some TOCs but not others, so the policy should be consistent (ideally by removing it for all carriers!). If that has to be done by slightly increasing other London fares to avoid losing revenue that would be fine by me.

 

[Wolfie]

One overdue change would be dealing with the unfairness of the mixed mode National Rail and London Underground fare when travelling within Zone 1. This currently applies to some TOCs but not others, so the policy should be consistent (ideally by removing it for all carriers!). If that has to be done by slightly increasing other London fares to avoid losing revenue that would be fine by me.

Re your last sentence, l assume that the change benefits you and you are happy for others to pay....