TFL Advertising

[Chrisgr31]

Yesterday I saw some poster on the tube advertising how great TFL are. I can't remember which one it was but I know it bugged me because I thought is that actually 100% true.

I do know though that it was not one of the posters that states that TFL doesn't make profits and reinvests all the money it takes in the service which also bugs me. The statement as written might be true but isn't it misleading? It is always trotted out by those campaining for TFL to take over London rail routes so it is obviously believed by many people.

However is t the position of TFL with regard to rail one where there are like the Dept of Transport? They are awarding the contract to run the service? The Dept of Transport doesn't make a profit. It is the operator of the trains that aims to make a profit and that applies whether it is a government awarded franchise / contract or one awarded by TFL

 

[CapitalStar378]

TfL pay LOROL 10% of revenue to run LO, 90% of the revenue is re-invested. With LU any surplus in re-invested. So the poster is accurate in terms of TfL's position. It's very different to a National Rail franchise where the operator keeps all the revenue (and subsidy if there is one) and often charge exorbitant unregulated fares and any profits after operations go to shareholders (or foreign governments!).

 

[infobleep]

TfL pay LOROL 10% of revenue to run LO, 90% of the revenue is re-invested. With LU any surplus in re-invested. So the poster is accurate in terms of TfL's position. It's very different to a National Rail franchise where the operator keeps all the revenue (and subsidy if there is one) and often charge exorbitant unregulated fares and any profits after operations go to shareholders (or foreign governments!).

Surely that isn't the case on a management contract with TOCs?

 

[Chrisgr31]

This begs a further question. What revenue are TFL giving LOROL 10% off? It would seem remarkably unlikely that it only costs 10% off the ticket income from LOROL to provide trains, track, drivers, station staff etc.

So in order to compare apples with apples who is doing what at TFL? After all a traditional TOC is investing money in training staff, is investing money in new track through track access charges etc?

 

[NSEFAN]

I would expect that TfL doesn't make a profit, but that poster doesn't mention LOROL, Network Rail and Angel Trains.

As far as TfL is concerned, the above are just costs to be paid. Any money left over can be used to pay for improvements elsewhere. It's not TfL's concern how much profit the other bodies involved make, and most passengers don't know/care since they just see the TfL brand image.

 

[CapitalStar378]

Surely that isn't the case on a management contract with TOCs?

No, I believe it's much the same with a management contract.

As far as I'm aware LOROL get 10% of all fares collected as their income. This must be enough to cover all costs and make a profit or no-one would want to do it.

 

[Tracked]

It wasn't that was it?

from @WeFixYourAdvert on Twitter
https://twitter.com/WeFixYourAdvert/status/692697725117292544
Warning - bad language on link

 

[matt_world2004]

LOROL get paid a fixed fee based on how much they bid to run the contract. The lowest bidder in the tendering process wins the contract.TfL then withhold money on that contract for performance failings or award bonuses where performance has exceeded expectations. To incentivise stringent revenue enforcement and to minimise the requirement for TfL to pay for ticket acceptance as part of that contract LOROL recieve 10% of all farebox revenue for the services they run.

This outlines the contract for crossrail of which the overgrounds will be similar http://www.londonreconnections.com/2014/purple-reign-crossrail-will-run/

 

[infobleep]

No, I believe it's much the same with a management contract.

As far as I'm aware LOROL get 10% of all fares collected as their income. This must be enough to cover all costs and make a profit or no-one would want to do it.

Which means all TOCs don't make vast profits.

 

[Deepgreen]

It wasn't that was it?

from @WeFixYourAdvert on Twitter
https://twitter.com/WeFixYourAdvert/status/692697725117292544

Probably not - TfL would never call itself "THE TFL"!

 

[Chrisgr31]

I have remembered the other advert that bugs me. Its the one that tells me that using contactless is the same price as a PAYG oyster card as in my case its not true. My PAYG Oyster card has my Network Gold Card loaded on it and therefore I get a discount on off-peak travel. I wouldnt get that using a contactless card.

 

[plcd1]

The TfL Business Plan gives a high level overview of revenues, operating costs and investment spend.

No part of TfL makes a profit in the sense that TfL cannot fund the totality of its investment spend from its own resources and then have a profit afterwards. In terms of earning a surplus of revenue over operating costs then only LU achieves this. The surplus is shown as funding an element of LU's investment spend.

All the other operations are loss making or require a subsidy as revenue does not cover operating costs. Previously this was supported by government as TfL received a revenue grant in addition to investment grant. The former is being phased out and we don't yet know the consequences of this in terms of the numbers.

When the London Assembly investigated TfL bus services it asked TfL to present the surplus / subsidy per passenger km (2012/13 numbers).

Buses had a subsidy of 6p per pass km
Overground had a susbidy of 9p per pass km
DLR had a subsidy of 2p per pass km
Trams had a subsidy of 8p per pass km.
LU was zero.

Clearly the key factor here is volume of pass kms per mode. The absolute levels of susbidy will vary hugely.

The transfer of the Shenfield Line and West Anglia will clearly change the numbers and I haven't seen a full set. The projected numbers for Crossrail in particular are huge as revenue will be enormous and costs relatively low. A surplus has to be earned by Crossrail to pay back an element of project financing. In the short term there will be little investment spend on Crossrail because it's a new / upgraded railway with a lot of new assets. The same will apply on West Anglia once the new rolling stock is in service and stations have had their upgrades.

All eyes on the new Business Plan due at the March Board Meeting.

 

[Mojo]

Probably not - TfL would never call itself "THE TFL"!

It's also TfL not TFL.