DfT and TOCs to trial radical fares overhaul

[JaJaWa]

DfT and TOCs to trial radical fares overhaul

Trials represent breakthrough in persuading ministers to consider revising historic regulations which prevent better value, fairer and simpler tickets

The Rail Delivery Group is intending to define a “a whole new territory” for rail fares in a series of pilot projects agreed with the government. Industry sources told Passenger Transport that approval for the trials represents a breakthrough in persuading ministers to consider revising historic regulations which have prevented better value, fairer and simpler tickets being offered since privatisation. The trials are due to start in the first half of this year.

• It is understood that one of the three pilots will test new ways of pricing longer distance journeys to eliminate the need for passengers to buy split tickets to get the best fare.
  [*]A second pilot will revise fare structures which require unsuitable tickets to be sold.
  [*]A third pilot will revise archaic regulations which mean single journeys can cost virtually the same as return trips.

The proposals put forward by the Rail Delivery Group were initially rejected by the DfT due to the overall cost of rolling out simpler fare structures which would reduce the price of many journeys. There was also concern that reform would create losers as well as winners. However, after frank conversations with RDG chief executive Paul Plummer, rail minister Paul Maynard agreed to sanction the trials with the message “get on with it”.

Arguments which persuaded Maynard to act included explanations of how fares regulation is creating “a massive reputation and credibility issue” for the railway by perpetuating complex and irrational pricing.

http://www.passengertransport.co.uk/2017/01/dft-and-tocs-to-trial-radical-fares-overhaul/


Edit: Official Press Release

Rail companies to test radical fare changes for clearer, simpler ticket choices

Radical changes to rail fares that would guarantee customers simpler fares and the best possible deal every time they travel are set to be trialled by train companies.

• Trials could lead to most radical overhaul of fares system for more than 30 years
• Best value through fares to remove need for ‘split ticketing’
• Action plan for more user-friendly ticket machines
• Easy process to get the right ticket online or at stations
• Passengers on trains between London and Sheffield or Scotland will be among the first to benefit from an overhaul of rail fare regulations as part of the tests agreed between train companies and the government.

Extra measures to make ticket machines more user-friendly are set out in an action plan published by the Rail Delivery Group (RDG) – which represents train companies and Network Rail. These will also give customers better information and make it simpler to find the right ticket at the right price.

Trials are due to start in May this year on selected routes of new pricing, simpler routes to give customers clearer choices, and the removal of unnecessary and unwanted fares from the system.

The trials to simplify the complex rail fares system will mean:

• A route will be overhauled to reflect what is actually on offer, ending the existing situation where changes to train services in many cases only allow fares to be added to the system rather than older, less relevant routes which customers do not use being removed from the fares system to make it clearer;
  [*]A best value end-to-end ‘through fare’ will be offered for test journeys where customers change trains, by offering one price combining the cheapest fare for each leg of the journey. Current rules require operators to set and maintain a through price even where there are cheaper deals;
  [*] Easier journey planning by showing customers the best price in each direction on selected routes, allowing customers to mix and match the best fare – like airline bookings.

This requires changes to regulated return fares dating back to the 1980s that can’t be sold easily online, giving customers much more clarity and simplicity.

A ten-point plan and design guidelines for ticket machines include getting rid of jargon, informing customers when a machine will start to sell cheaper off-peak tickets and making clear what types of tickets machines do and do not sell. All the improvements to ticket machines will be in place by the end of this year, several by the summer.

Jacqueline Starr, RDG Managing Director of Customer Experience, said:

“We know customers can find it hard to get the right ticket for their journey due to complex rules and regulations built up by governments over decades. There are more than 16million different train fares, many of which nobody buys. This also makes it more difficult to give passengers the right, simple options on ticket machines.

“Working with government, we’re determined to overhaul the system to cut out red-tape, jargon and complication to make it easier for customers to buy fares they can trust, including from ticket machines.”

The trials will be designed to establish the changes needed to regulation and processes so that train companies can offer customers simpler, easy to use fares. Decades-old government rules covering rail fares, originally intended to protect customers but introduced before the internet and online booking, have prevented train companies from being more flexible in offering tickets that customers want.

The changes will build upon improvements already being made to give customers better information – particularly for those buying online or from ticket machines - and more confidence that the tickets they are buying are right for their journeys, making it clear when and where they are valid.

Train companies have worked with the government and consumer groups to agree an action plan to help passengers choose the best deal on fares.

Ends

Notes to editors

The trials focus on three typical examples of the need to modernise rail fares regulations, where they create confusion and show too many different fares:

• Routeing changes will be tested between London and Sheffield where regulations date back to when the direct service was much less frequent and journeys often needed a change of train via a longer route. This means that tickets are required to be available which are not in step with actual options available now.
• Best-price through fares will be tested with CrossCountry Trains who are obliged currently by regulations to price through tickets for very long connecting journeys even where customers can beat that price by combining different types of ticket (so-called ‘split ticketing’). Train companies want to remove these expensive, obsolete through fares which in many cases nobody buys but are required by regulations which pre-date the internet and online booking.
• Single-leg pricing will be tested on the London-Glasgow and London-Edinburgh routes so that customers would always know the cheapest fare for their chosen journey, out and back. Despite train companies making online booking easier, finding the best price both ways is made harder because the regulated off-peak fare is a return fare, therefore customers are often left to calculate whether two single tickets are cheaper than a return.

Regulations were designed to protect customers’ interests but now actively create confusion on websites and ticket machines. Train companies want to work with the government to discuss how the system can be updated so that consumer protection underpins giving people fares they really need - not just those on sale since 1995.

http://www.raildeliverygroup.com/media-centre/press-releases/2017/469771790-2017-02-01.html

 

[rebmcr]

UK RAIL BOSSES IN COMMON SENSE SHOCKER!

Read more on page 7...

 

[Bletchleyite]

I have a feeling, though I can't think of a reference, that the first one relates to the idea of pricing Advances in segments so if you have A-B-C-D, and the train is busy B-C, the Advance A-D will be made up of Advances A-B and C-D at the cheaper rate plus B-C at a higher rate, thus meaning no gain from splitting (at present if a lower quota is not available for any segment of the journey, even a very short one, the whole fare prices at the higher rate) - so effectively issuing a split as one ticket if cheaper than the fare calculated the old way. It was discussed here a while ago as a concept that was going to be tried.

Not sure what the second is. The third appears to be single-fare pricing which is definitely good (and to me has many benefits beyond reducing anomalies, such as simplification of excesses).

Anyone know which TOC(s)?

 

[JaJaWa]

UK RAIL BOSSES IN COMMON SENSE SHOCKER!

Read more on page 7...

Actually, it was Page 6

 

[DarloRich]

I am sure these changes will benefit the passenger by providing cheaper fares more often. I am sure that will happen.

 

[Gareth Marston]

one can only hope that:

A- presumably something like TrainSplit will be rolled out across all booking offices/ websites.

B- Passengers will not be let loose on websites to choose which type of ticket they want "it says off Peak but im returning at 1700... it must be Anytime I want" but the of Off Peak is a valid ex Saver.....

C- Single leg pricing with singles at 50% of full price would be a monumental move forward.

Trainline will feel the pinch

How about tidying up "Peak" - the crime of leaving a rural area at 0925 on a weekday will this still be penalized?

 

[Bletchleyite]

How about tidying up "Peak" - the crime of leaving a rural area at 0925 on a weekday will this still be penalized?

The problem with walk-up off peak is that there is genuinely no anomaly-free way to do it, particularly the *evening* peak where people may travel across it. I will be interested to read of any proposals.

 

[WelshBluebird]

The problem with walk-up off peak is that there is genuinely no anomaly-free way to do it, particularly the *evening* peak where people may travel across it. I will be interested to read of any proposals.

Could something like changing it so that morning peak is related to arrival time and the evening peak is related to departure time work?
At least that way something travelling across the morning peak but not arriving until after won't have to pay peak fares, and someone travelling across the evening peak but starting beforehand won't have to pay peak fares.

That may make it more confusing though (although atm there is no real "rule" anyway with some restrictions being based on arrival, some on departure, some on other things etc). And would mean less revenue.

 

[Bletchleyite]

I think there are a lot of things that will make it better. Personally, I think the least "anomalous" would be to do something like define a set of city zones around key destinations, and state that an Anytime ticket is required to arrive in or travel wholly within those zones between 0600-1000 and depart from them between 1600-1900 (say), including passing through. But even that will have some anomalies bypassable by way of split tickets.

There is no perfect anomaly free solution to walk-up off-peak tickets other than abolishing them and moving to a system of Anytime or Advance only (perhaps with single fare pricing, no change fee on the Advance, and with purchase available right up to departure that might be borderline acceptable).

 

[Gareth Marston]

AM peak should be on arrival time and PM on departure time from major cities only.

 

[Bletchleyite]

AM peak should be on arrival time and PM on departure time from major cities only.

Still has anomalies, such as it being cheaper to split at the big city when travelling across it, as it'd be off peak one side of it.

At least it makes the splits more obvious, to the point where it'd be relatively easy for software and TVMs to offer them automatically. Or you could even build the fare into one ticket based on that being the case.

 

[Gareth Marston]

I think there are a lot of things that will make it better. Personally, I think the least "anomalous" would be to do something like define a set of city zones around key destinations, and state that an Anytime ticket is required to arrive in or travel wholly within those zones between 0600-1000 and depart from them between 1600-1900 (say), including passing through. But even that will have some anomalies bypassable by way of split tickets.

If you live west of the West Midlands ie Shropshire and Mid Wales you have no choice but to pass through Birmingham in the peak even though your end destinations will not be arrived to outside it. Unfair to penalise when the passenger has no choice.

 

[Bletchleyite]

If you live west of the West Midlands ie Shropshire and Mid Wales you have no choice but to pass through Birmingham in the peak even though your end destinations will not be arrived to outside it. Unfair to penalise when the passenger has no choice.

Peak/off peak isn't about where your end destination is, it's about pricing people off busy trains and price-gouging business passengers. Therefore that is completely justified, as when travelling towards Birmingham you'd be on a "business train".

 

[Xenophon PCDGS]

Peak/off peak isn't about where your end destination is, it's about pricing people off busy trains and price-gouging business passengers. Therefore that is completely justified, as when travelling towards Birmingham you'd be on a "business train".

Would you then enjoy "business class" ambiance and benefits to match?

 

[Failed Unit]

one can only hope that:



How about tidying up "Peak" - the crime of leaving a rural area at 0925 on a weekday will this still be penalized?

I agree with this one, to me peak should be done on arrival.

I am sure East Coast is after 0930, on tickets they price.

This means that the 0930 Edinburgh - London Kings Cross service is off peak if you board at Edinburgh but peak if you connect into it. (so you end up splitting tickets)

Back in BR days it was arrive in London before X but I guess other cities have peak flows hence why it was changed, but it really hurts long distance travel.

XC is the other one I think which is similar and you need to split to avoid it if you are taking long distance journeys. Leave Dundee heading to Plymouth at 0632 on a very empty train but still pay peak fare.....

Another example. You travel to London from Falkirk Grahamson at 0923 (peak) next stop Polmont 0930 (off-peak). Same train. I don't think this was how the after 0930 restriction was intended as a long distance traveller tax.

 

[Joe Paxton]

I am sure these changes will benefit the passenger by providing cheaper fares more often. I am sure that will happen.

New here. And this is my fear!

The proposals put forward by the Rail Delivery Group were initially rejected by the DfT due to the overall cost of rolling out simpler fare structures which would reduce the price of many journeys. There was also concern that reform would create losers as well as winners. However, after frank conversations with RDG chief executive Paul Plummer, rail minister Paul Maynard agreed to sanction the trials with the message “get on with it”.

Arguments which persuaded Maynard to act included explanations of how fares regulation is creating “a massive reputation and credibility issue” for the railway by perpetuating complex and irrational pricing.

Sounds like this is the industry's long held desire to neuter fares regulation which is getting the go ahead. Virgin Trains West Coast have in particular been quite vocal about how they percieve regulated fares as a millstone. (The problem with any such argument from VTWC is you wonder what they'd do without the restraining influence of fares regulation.)

Also, in terms of "irrational pricing" - what seems irrational in one context is rational in another. Plus I think there are always going to be anomalies when it comes to rail ticketing - though perhaps this is particularly apparent in a system where network wide ticketing exists (and it must continue to exist!), but where there are multiple train companies with differing priorities which set the ticket prices.

Just worried that the industry will take this opportunity to unleash themselves from any restraint.

 

[Gareth Marston]

Peak/off peak isn't about where your end destination is, it's about pricing people off busy trains and price-gouging business passengers. Therefore that is completely justified, as when travelling towards Birmingham you'd be on a "business train".

Jump aboard the 0830 Aberystwyth to Shrewsbury and then tell me you need to price people off it! I'm sure other forum members can find plenty other examples of trains from the sticks that this one size fits all restriction doesn't fit local circumstances.

You have an appointment in Leicester at 1030 how do you travel there apart from via Birmingham?

 

[LNW-GW Joint]

Jump aboard the 0830 Aberystwyth to Shrewsbury and then tell me you need to price people off it! I'm sure other forum members can find plenty other examples of trains from the sticks that this one size fits all restriction doesn't fit local circumstances.

You have an appointment in Leicester at 1030 how do you travel there apart from via Birmingham?

I know the connections are abysmal but via Crewe/Nuneaton wouldn't take you through a "big city".

Peak fares for concentric zones in the north are stymied by the three big cities ( Liverpool, Manchester, Leeds) all wanting their own zones.

 

[Gareth Marston]

I know the connections are abysmal but via Crewe/Nuneaton wouldn't take you through a "big city".

Peak fares for concentric zones in the north are stymied by the three big cities ( Liverpool, Manchester, Leeds) all wanting their own zones.

No use for business travel only rail enthusiast would take that route. Point is not everything is a straightforward black/white choice. Flint to Harrogate is the same and countless others.

 

[hairyhandedfool]

DfT and TOCs to trial radical fares overhaul

Trials represent breakthrough in persuading ministers to consider revising historic regulations which prevent better value, fairer and simpler tickets

The Rail Delivery Group is intending to define a “a whole new territory” for rail fares in a series of pilot projects agreed with the government. Industry sources told Passenger Transport that approval for the trials represents a breakthrough in persuading ministers to consider revising historic regulations which have prevented better value, fairer and simpler tickets being offered since privatisation. The trials are due to start in the first half of this year.

It is understood that one of the three pilots will test new ways of pricing longer distance journeys to eliminate the need for passengers to buy split tickets to get the best fare.
A second pilot will revise fare structures which require unsuitable tickets to be sold.
A third pilot will revise archaic regulations which mean single journeys can cost virtually the same as return trips.

The proposals put forward by the Rail Delivery Group were initially rejected by the DfT due to the overall cost of rolling out simpler fare structures which would reduce the price of many journeys. There was also concern that reform would create losers as well as winners. However, after frank conversations with RDG chief executive Paul Plummer, rail minister Paul Maynard agreed to sanction the trials with the message “get on with it”.

Arguments which persuaded Maynard to act included explanations of how fares regulation is creating “a massive reputation and credibility issue” for the railway by perpetuating complex and irrational pricing.

http://www.passengertransport.co.uk/2017/01/dft-and-tocs-to-trial-radical-fares-overhaul/

I've got a bad feeling about this.........

 

[yorksrob]

I notice that the phrases "revenue neutral" and "price neutral" don't seem to have been mentioned.

 

[Greenback]

I've got a bad feeling about this.........

I have a similar feeling, unfortunately.

 

[Failed Unit]

You mean like simplification. Didn't make the fare structure more simple but was used by TOCs to put the prices up.

 

[HH]

UK RAIL BOSSES IN COMMON SENSE SHOCKER!

I remember proposing some common sense on pricing to the SRA many moons ago and having it rejected. Don't blame the TOCs here, it's the nervous rabbits at the DfT that have prevented fares reform.

 

[Richard_B]

C- Single leg pricing with singles at 50% of full price would be a monumental move forward.

I'm not quite so sure, depends how it is achieved.
If we rule out all singles having their price cut all the way to 50% of the current return price - we can hope but I doubt it - then that means the return prices will be more expensive.
For people who currently buy returns for their flexibility, despite considering going for a cheaper option of advances (like me for my major regular trip) as the price of a return goes up more will switch to trying to buy advances as the relative prices get more different. If the price of a return has to go up *by a lot* to achieve 50% for a single, then I believe that the pressure to find advances will be much higher, so for many journeys a passenger who previously could buy an advance for their one way trip (presumably the passenger type who this is meant to help) will now have to buy a single instead which will increase their costs - even if it still helps on-the-day single buyers.

I would be very interested in seeing the TOCs workings out to determine what is revenue neutral, and what % of journeys aren't "returned" by rail to the origin within a month.

 

[Deerfold]

Peak/off peak isn't about where your end destination is, it's about pricing people off busy trains and price-gouging business passengers. Therefore that is completely justified, as when travelling towards Birmingham you'd be on a "business train".

If only. It's always annoying not being able to use an off-peak ticket on a Keighley to Leeds train at 1800 along with the other 3 people in my carriage.

It makes perfect sense in the other direction.

 

[Bletchleyite]

No use for business travel only rail enthusiast would take that route. Point is not everything is a straightforward black/white choice. Flint to Harrogate is the same and countless others.

But if it isn't black and white, there are anomalies, break of journey restrictions etc. You can't have it both ways - it is physically impossible.

The only way I can think of that would work without creating anomalies would be to exempt specific trains - but it would have to be to all passengers throughout that train's journey - or along come more anomalies.

Better might actually be to cap out fares on routes like that, so the Anytime Returns from the entire of the Cambrian lines that pass Shrewsbury equal those from Shrewsbury, say (and, as another example, an Anytime Return from Euston to Wick would be the same as one to Preston). But make them cheaper and along comes another anomaly.
--- old post above --- --- new post below ---

If only. It's always annoying not being able to use an off-peak ticket on a Keighley to Leeds train at 1800 along with the other 3 people in my carriage.

It makes perfect sense in the other direction.

That's why I'd propose arriving at the city zones in the morning peak and departing in the evening peak. Your journey would be off peak provided it didn't cross the city during the peak - if it did you'll be on busy trains and peak fares apply.

 

[Hadders]

Let's be very clear. This will result in fare increases for the majority, loss of flexibility etc.

The DfT/TOCs cannot be trusted.

 

[Gareth Marston]

The magic target of 75% passenger 25% government will probably be attained this year. It would be another broken promise to try and extract even more from the passenger. It all depends on what DfT thinking is and how much the Treasury are still sulking about the cost of the railways (which they are partly to blame for).

Any exercise is not going to effect season ticket prices or the majority of local journeys - its the long distance market that is the most screwed up. I wonder how much the thinking will be influenced by the overcrowding on long distance services in the off peak and demands to do something and the fact that most TOC's into/out of London have spare capacity on peak services?

The railways have become very toxic for this Government and the mud is sticking to a flagship policy of the Conservatives - namely rail privatization. They are woefully out of touch with public opinion and don't like the criticism. They may want to do something that takes the sting out of this - we've seen it before when DfT officials were happy for Northern to continue with Pacers and gave Shooter the nod to develop the D Train but politicians got cold feet and let Northern get new stock.

 

[DynamicSpirit]

I'm not quite so sure, depends how it is achieved.
If we rule out all singles having their price cut all the way to 50% of the current return price - we can hope but I doubt it - then that means the return prices will be more expensive.
For people who currently buy returns for their flexibility, despite considering going for a cheaper option of advances (like me for my major regular trip) as the price of a return goes up more will switch to trying to buy advances as the relative prices get more different. If the price of a return has to go up *by a lot* to achieve 50% for a single, then I believe that the pressure to find advances will be much higher, so for many journeys a passenger who previously could buy an advance for their one way trip (presumably the passenger type who this is meant to help) will now have to buy a single instead which will increase their costs - even if it still helps on-the-day single buyers.

I think that's being unduly pessimistic. Firstly, I doubt that singles would be reduced to 50% of a return. I suspect something like 60% is more likely - but that itself would be a massive improvement on the current situation.

But more importantly, most people who travel at peak hours are going to work and so will need returns or season tickets. The people who want to use singles are people who are not making out-and-back journeys. These are more likely to be leisure journeys and so relatively few will be rush hour journeys. Further, many of those would currently drive or seek alternative transport because singles are so expensive. Right now, if you only want to go one way, the expensive price of singles means that rail is almost never worth it unless you have no other option.

Putting that together, you can expect that making singles cheaper will boost passenger numbers on off-peak trains, thereby increasing revenue and balancing out train loadings between peak and off-peak slightly better. Set against that will be a small loss of income from people who currently buy singles paying less. I don't have any figure for how many singles are currently sold, but I'd expect those numbers to be relatively small. That would suggest that you would only need a relatively small increase in return fares to make the scheme revenue-neutral. Maybe even no increase at all if cheaper singles attracts a sufficient number of new off-peak passengers.

And of course, for long-distance journeys, you could also possibly achieve revenue-neutrality by reducing the numbers of advance tickets (which may well be a very logical thing to do if people travelling one-way can get cheaper fares without needing to book in advance - so fewer people arguably need advance tickets).