Revenue Division amongst companies

[district]

If train operating company 1 runs a railway service from A to F and train operating company 2 runs a railway service from C to D and a customer buys a ticket from A to F routed 'Any Route Permitted' then how would Rail Settlement Plan Ltd. divide up the revenue?

District

 

[island]

Confidentially

TOC 2 would get a portion of the revenue, but likely very small.

 

[AlterEgo]

There is a system called ORCATS which essentially divides up the fares based on the percentage of passengers using each service. It's an automatic system which has been around since the dawn of privatisation.

 

[yorkie]

See Orcats.

However, it's worth bearing in mind that revenue allocation does not in any way determine validity (despite some people - not on this forum - claiming it does).

 

[wintonian]

One thing we can assume though is that if it is a TOC specific fare i.e. LM only then LM would receive 100% of the revenue.

 

[Simon11]

One thing we can assume though is that if it is a TOC specific fare i.e. LM only then LM would receive 100% of the revenue.

Well nit picking, not if it was sold by another toc as they would receive commission.

 

[blacknight]

I was told that was reason why GNER used hand written excess fares ticket books instead of portable ticket issuing machines, as GNER could then keep all of the pie to themselves.

 

[marks87]

Is there some sense of probability used when allocating monies?

For instance, Dundee-Glasgow "Any Permitted" is valid via Haymarket, which means East Coast and CrossCountry as well as ScotRail come in on the act. But I'm pretty sure the vast, vast majority of people go via Perth, i.e. it's possible that there will be passengers for Glasgow on an EC/XC service, but not probable.

 

[Urban Gateline]

How does revenue get divided up in the Oyster system?

Say if a route was clearly only run by one TOC, for arguments sake, Surbiton to London Waterloo, with SWT running this route. The Oyster single is £3.20 (or £5.20 at Oyster Peak times).
Does SWT get 100% of this revenue, or does TFL get a certain percentage, or even do other TOC's get a split of the revenue too?

It's something that's been in my mind for a while so it'd be great to find out what the case is!

 

[swt_passenger]

Oyster PAYG really ought to allow more accurate fare apportionment, because if used correctly it records the exact end points of the route.

The paper equivalent single or return would be sold to London Terminals and would have to be shared with at least SN, for people heading to Waterloo or Victoria

Travelcard seasons on paper must still need to be divvied up subject to survey results, but as they move towards 100% barriers within the zones I expect they'll end up with far more accurate information on Oyster loaded travelcards as well.

 

[johnnyp_360]

This may seem like a silly question to you guys, I'm just interested how this works.
If I travel from Ely to Cambridge, I have a choice of three TOCs. First Capital Connect, National Express East Anglia or Cross Country.
Another example, if I travelled a slightly longer distance like Ely to Norwich, I can use NXEA of East Midlands Trains.
Just out of curiosity, how is decided which TOC gets the money from my ticket?

 

[yorkie]

Just out of curiosity, how is decided which TOC gets the money from my ticket?

Through a system called ORCATS.

There is usually a section on ORCATS at the back of the annual stations usage report, because they need to use it to determine one of the usage stats, which is interchanges. Appendix 1 here: http://www.rail-reg.gov.uk/upload/pdf/stn_usage_report_0910.pdf

Appendix 1 – Overview of the ORCATS Allocation Process
This section gives an outline of the Central Allocations File (CAF), which is used in producing the interchange figures, and the ORCATS process which is used to create the CAF.
Most of the train tickets that are sold are inter-available – the customer has a choice of routes and operators. For example, when a customer buys a ticket to travel from Leicester to Leeds, that customer may travel on various combinations of East Midlands Trains, East Coast, CrossCountry Trains and Northern, and may interchange at Doncaster, Sheffield, Derby or Nottingham. LENNON captures the sale of the ticket, but unless the ticket has stringent route restrictions, the route actually taken by the customer is not recorded.
The route taken by any particular customer may never be known, but some route options are more attractive than others. The customer is more likely to choose a faster, more frequent service than a slower, less frequent one. This likelihood can be translated into the proportions of customers choosing each route option, on a particular flow. (A ‘flow’ represents all journeys from a given origin station to a given destination station, irrespective of the route taken.) The revenue received from all customers on that flow should be split between different operators to reflect the proportion of customers which each operator carried. ORCATS was developed to model the choice made by the customers, and to allow revenue to be split between operators. It applies passenger choice modelling to the train timetable, to determine the relative attractiveness of different route alternatives. It then weights the results by journey mileage.
For any given timetable, ORCATS works out the possible routes between each origin and destination, and calculates the percentage of the passengers that are expected to choose each route based on the services in that timetable. The output from ORCATS is the Central Allocations File (CAF). This lists the proportion of journeys on each flow (or origin-destination pair) estimated to be made by each route alternative. For journeys involving interchanges, each leg of the journey is listed. By combining this information with LENNON data, which contains actual ticket sales figures for all flows, the number of interchanges occurring at individual stations has been estimated.

The actual figures are considered 'commercially sensitive information', so we can only guess unfortunately.

 

[Kier]

How is it split between different operators?

For example, my regular journey from Beeston to Leeds could see me travelling with XC via Derby all the way, EM via Derby then Northern from Sheffield or EM then Northern via Nottingham and there are probably more combinations.

Who gets the fare? How is it split as there is no way of telling which route I will be using as I think I have used all the combinations at some point!

 

[tony_mac]

This should probably help!

http://www.railforums.co.uk/showthread.php?t=51377
www.google.co.uk/search?q=orcats+site%3Arailforums.co.uk

 

[thedbdiboy]

Interavailable tickets are allocated using a computer modelling program called ORCATS that was originally developed by BR. It's the reason why the words 'Rail Settlement Plan' are printed in the background of your ticket - the money from ticket sales goes to them (they are part of ATOC) and it is they that allocate the money to operators.

 

[LNW-GW Joint]

The split is said to be in proportion to the predicted number of passengers on each route, based on computer modelling of passenger psychology.
For instance if you buy an Any Permitted ticket from Birmingham to London, most of the money will go to Virgin even if you travel via Chiltern or London Midland, or even XC/FGW, because Virgin have the fastest trains and highest capacity.
On the same line of route (say Crewe-Manchester with VT, AW, NT and the odd XC) I assume there is a split based on seats provided or number of trains.
I assume the ORCATS formula is revised periodically to take account of service changes, or there would be no incentive to improve them.

You can see why TOCs are not keen on interavailable tickets, and yet they give the passenger valuable flexibility and choice.
Rovers and Rangers are another nightmare, as apart from the area and place of purchase, the TOCs have no idea where you have been or which routes you have taken. Maybe the local TOC takes all the money.