Price competition on South WCML creates fare anomalies

[Starmill]

In the classic fashion, we have yet another case developing here where on-rail competition creates anomalies.

For some time, the cheapest Off Peak Day Return fare between Milton Keynes Central and London has been the Virgin Trains only one. This was the result of a period of so-called 'price war' a few years ago which resulted in London Midland finally putting their own prices up to higher than the VT ones. There has been some increase to the levels all tickets are priced at since then.

However, around one month ago, West Midlands Trains cut the price of their dedicated Off Peak Day Return between London Euston and Milton Keynes Central from £17 to £15, thus making it the cheapest. Of course this has probably won over significant market share for them since then, and had significant marketing benefits as they're able to advertise an appealing, round number.

Unfortunately West Midlands Trains didn't change any of the other fares from nearby stations (they did tweak the single fare down from £16.10 to £14.90 though, to avoid a return being cheaper than a single, which is very good). This means passengers travelling from Bletchley pay £2 more than those travelling further from Milton Keynes Central... unless they're in the know, of course. Disappointingly this also applies at Leighton Buzzard, Tring, Cheddington and Berkhamsted. Those from Tring are only charged £1.90 more and those from Berkhamsted £1.30 more, but all the same.

Those travelling from Wolverton didn't benefit from a reduction either, so it's considerably cheaper for them to split. As almost everyone travelling from these stations will only want to use the direct WMT services, this is of course creating significant new anomalies.

Of course, this is a point of historical contention. Dedicated tickets by the lead operator are not generally permitted to remain for this long, but are in this special case.


Personally I would like to see the ORR tackle the wider issue of TOC dedicated tickets in a market review to gather evidence about how much these tickets benefit customers, and what potential they really have to grow the rail travel market. As I've commented before they are very variable in their benefits.

 

[gray1404]

Clearly a price war hence only reducing the fare from MKC where VT also call. I believe that competition by way of TOC only fares is of benefit to the consumer and is a good thing.

Why should I be forced to have to pay extra to be able to use Intercity type trains on VT when I am happy to go with WMT even if some WCML journeys take longer.

For those who don't want to be bothered to research the options, take the more expensive Any Permitted fare. But those who can be bothered to research and accept restrictions should be able to benefit from cheaper fares. It benefits the TOCs concerned too as they get more of the revenue from the ticket.

 

[Mag_seven]

I believe that competition by way of TOC only fares is of benefit to the consumer and is a good thing.

Only at a station where more that one TOC serve the same destination. I think the point here is that further down the line towards London its WMT or nothing, hence customers from those stations having to pay more to travel on the same TOC and trains than those from MK which is further away!

 

[gray1404]

There are examples of this further up the WCML too, again where VT and WMR service the same stations, but then some of the local stops only sered by WMT you have to pay more for shorter journey as only Any Permitted fares are available. This also occurs between Northern and TPE and others. There were also some comments made about changes overall to TOC only tickets towards the end of the post, hence my comments.

 

[Hadders]

Places like Northampton suffer considerably because of this.

 

[kieron]

Only at a station where more that one TOC serve the same destination. I think the point here is that further down the line towards London its WMT or nothing, hence customers from those stations having to pay more to travel on the same TOC and trains than those from MK which is further away!

The issue is that they don't have to pay more. They just have to know what to do to get a cheaper ticket for their journeys, and to know that what they believe is actually correct. That can be quite difficult when there are staff around who would rather give the wrong answer than to say they don't know something.

 

[Starmill]

I wonder how many Bletchley passengers know that it's cheaper to ask for a ticket from Milton Keynes C if they're going to London (unless they want to use Southern, obviously, but how many passengers asking for tickets to London would do that, except in error)? I wonder if the ticket office get asked for it, and if the people next in the queue after someone who does ask for it wonder why they've been charged more? I expect this will be temporary only.

I also wonder how much, exactly, this behaviour grows the market. How many additional journeys does the £15 rate create, and how many does it just poach from the others?

This situation, of course, does not bother me. As someone who is in the know about this kind of thing I can use it to my benefit. The problem arises because most people are not in the know, and will naturally feel either cheated to have paid more, or bamboozled to have to 'buy long'. It's this feeling that creates the headlines - and provokes things like the Easier Fares Consultation.

 

[Bletchleyite]

FWIW this was the case for years under Silverlink and LM sorted it out by reducing the CDR from Bletchley and Leighton to the price of the dedicated fare from MKC. I guess it's crept back up again.

 

[Starmill]

FWIW this was the case for years under Silverlink and LM sorted it out by reducing the CDR from Bletchley and Leighton to the price of the dedicated fare from MKC. I guess it's crept back up again.

The CDR fares were all £17, from lots of stations (Certainly Leighton Buzzard, Bletchley and Milton Keynes C). The MKC one has just been dropped while none of the others changed.

The ridiculous premium for interavailable tickets, of course, remains. The 'Any Permitted' CDR ticket from Wolverton to London continues to be about £3 cheaper than the one from Milton Keynes C.

 

[gray1404]

Yes, but could we really expect WMT to apply the same price as their WMT Only ticket from MKC to that from other stations further South - these would be Any Permitted tickets. Therefore, subject to revenue sharing. With their own fares they get all of the revenue (save for any sales commission if not purchased from them).

Southern and London Overground would have to get some of the revenue and possibly Virgin, although it's not possible to travel with them as far as Watford Junction to/from Euston I don't think they would get any in fact.

 

[Starmill]

Yes, but could we really expect WMT to apply the same price as their WMT Only ticket from MKC to that from other stations further South - these would be Any Permitted tickets.

This is precisely what happened last time yes... The validity is not really any different, for any practical purpose.

London Overground won't get any of the revenue. Unless someone can find an itinerary where using them is quicker?

 

[Lrd]

Fare evasion is pretty rife on the south WCML. It's only very recently that the likes of Milton Keynes, Bletchley and Hemel will have the barriers manned from first train to last train. But Kings Langley, Apsley, Berko, Tring, Chedders, Leighton all don't have barriers and there's very few active guards who are willing to sell tickets and I've never seen an RPI in the two years of commuting on this line.

 

[Bletchleyite]

Yes, but could we really expect WMT to apply the same price as their WMT Only ticket from MKC to that from other stations further South - these would be Any Permitted tickets.

LM did exactly that...

 

[RJ]

The problem arises because most people are not in the know, and will naturally feel either cheated to have paid more, or bamboozled to have to 'buy long'. It's this feeling that creates the headlines - and provokes things like the Easier Fares Consultation.

This is a problem for who? A large percentage of the population are only interested in the headline price and have a "take it or leave it" approach. They may complain about the price, but feel they shouldn't have to do any research to get a better deal so won't.

Those who are prepared to put effort into paying less have a deal hunting/value taking personality trait to varying degrees. The railways allow for this by making all the prices and information they need publically available - and give rights to buy from a remote location on request, start/stop short, take various routes and split tickets etc. And also releasing data to allow for apps and websites to flourish to make finding savings easier.

I'm not sure it's a problem to be honest.

 

[Starmill]

The people of this country do an immense amount of complaining about train fares. It's in the media and it comes from pressure groups and politicians. It has become so bad recently that there was an insistence on change. The Easier Fares Consultation was part of the result.

I don't have a problem with it, but it seems rather a lot of people consider this to be disreputable behaviour. It's exactly the sort of thing that generates complaints. It also serves to show that train companies generate these price differences deliberately, themselves, and that they don't come about just through happenstance or bad luck, as some people claim. This also gives the lie to the constant claim by RDG that they want things to be simpler, or to make it easier for the customer to be sure they're getting the best deal. The actual answer is the opposite, because it suits them.

 

[gray1404]

This is precisely what happened last time yes... The validity is not really any different, for any practical purpose.

London Overground won't get any of the revenue. Unless someone can find an itinerary where using them is quicker?

But it is possible to use their services between Euston and Watford Junction so they would get some revenue allocation right?

Likewise if I buy a Crewe to Euston Any Permitted ticket. WMT would get some of the revenue, even though their trains are slower then the Virgin ones between the 2 points listed on the ticket.

 

[Starmill]

But it is possible to use their services between Euston and Watford Junction so they would get some revenue allocation right?

Likewise if I buy a Crewe to Euston Any Permitted ticket. WMT would get some of the revenue, even though their trains are slower then the Virgin ones between the 2 points listed on the ticket.

It is possible that you can use GWR and TfL Rail on your Crewe to London Terminals ticket. They are not going to be getting any revenue unless there is somehow a journey opportunity with them which is faster.

 

[John @ home]

But it is possible to use their services between Euston and Watford Junction so they would get some revenue allocation right?

I seem to remember that Barry Doe explained in RAIL magazine that direct services between origin and destination attract a proportion of the revenue allocation unless they are overtaken, but that journeys which require a change do not normally attract any allocation if direct services are available. I can't remember how the system handles journeys which require a change but still provide the fastest journey opportunity available at the time of departure.

 

[Hadders]

But it is possible to use their services between Euston and Watford Junction so they would get some revenue allocation right?

Likewise if I buy a Crewe to Euston Any Permitted ticket. WMT would get some of the revenue, even though their trains are slower then the Virgin ones between the 2 points listed on the ticket.

Virgin is pick up/set down only at Watford (possibly with an odd exception) so I doubt there'll be any revenue shared with Virgin from stations south of MKC.

 

[Puffing Devil]

Same issue in Northern land on the Crewe - Manchester line; advances now only available at stations with competition.

 

[gray1404]

Thanks guys for your explanations about revenue allocation. Very interesting that there are a lot of journeys I make on slower operators stopping at different stations en route and different less obvious routes yet these operators are not getting a single penny in revenue from my Any Permitted ticket - yet are still liable for delay repay if I am delayed. I didn't realise it was only the fastest journey opportunities between the points stated on the ticket that attracted revenue.

 

[mikeg]

Similar issues in TPEland too:

LNER price Northallerton to York. TPE have under cut this massively with TPE only tickets, which are cheaper than Thirsk to York any permitted (priced by TPE). TPE have continued to hike the Thirsk to York fare above inflation, often in two out of the three fare setting rounds since their introduction. To add salt to the wound, they've instructed staff at Thirsk station not to mention the Northallerton fares to passengers, only to sell them if specifically asked for them. If that's not abusing significant marketing power, I don't know what is.

 

[PermitToTravel]

Harrow-and-Wealdstone to Bletchley is £20.10
Euston to Bletchley is £17.00
Euston to Milton Keynes is £15.00

 

[Nippy]

So can us Tring people ask for a WMT CDR from MK to Euston and start/stop short?

 

[yorkie]

So can us Tring people ask for a WMT CDR from MK to Euston and start/stop short?

Yes you can.

 

[Andy Pacer]

Yes you can.

I’m assuming there aren’t barrier at Tring, but if there were would you be able to get through using a Milton Keynes ticket?

 

[Merseysider]

I’m assuming there aren’t barrier at Tring, but if there were would you be able to get through using a Milton Keynes ticket?

Yep!

 

[sammyg901]

Fare evasion is pretty rife on the south WCML. It's only very recently that the likes of Milton Keynes, Bletchley and Hemel will have the barriers manned from first train to last train. But Kings Langley, Apsley, Berko, Tring, Chedders, Leighton all don't have barriers and there's very few active guards who are willing to sell tickets and I've never seen an RPI in the two years of commuting on this line.

This! I was absolutely shocked on my last trip on WMT - barriers at Euston open in the middle of the peak - guard comes through after Leighton Buzzard - one guy in front who had been on from Euston asks for a single from L.B. to Bletchley and the guard sold it without question. The next lady had an off-peak return and he just told her it'd be a problem with the barriers ("but if you wait it'll be off-peak soon") - of course they were open so she just walked out. Very annoying when you have bothered to buy the correct (ridiculously priced) peak tickets

 

[Hadders]

I’m assuming there aren’t barrier at Tring, but if there were would you be able to get through using a Milton Keynes ticket?

It probably wouldn't work the barriers so you'd need to be let through manually.

 

[Hadders]

The next lady had an off-peak return and he just told her it'd be a problem with the barriers ("but if you wait it'll be off-peak soon") - of course they were open so she just walked out. Very annoying when you have bothered to buy the correct (ridiculously priced) peak tickets

The Off Peak ticket might well have been valid. I regularly travel from Euston to Northampton in the evening peak using a (totally valid) Off Peak ticket. Never works the barriers but doesn't mean it isn't valid. Far cheaper than the price the railway want me to pay.