Time to scrap season tickets and peak fares?

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MikeWh

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it's naïve to think that companies will let people work from home all the time and that the government would allow that given the economic implications.
Many companies have found that their staff are more productive when working from home. Where this is the case I think the likely end point will be some sort of split with staff in the office 1-2 days a week. While the government may be concerned about the impact on city centre service businesses and office occupancy, I don't see what they can do to force companies to work less productively.
 

35B

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Many companies have found that their staff are more productive when working from home. Where this is the case I think the likely end point will be some sort of split with staff in the office 1-2 days a week. While the government may be concerned about the impact on city centre service businesses and office occupancy, I don't see what they can do to force companies to work less productively.
My view is that 2-3 days is more likely; the short term productivity is now being offset by long run loss of productivity as people used to working in a team environment find themselves unable to.
 

Ianno87

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Consider the fares from my local station which is Stevenage to London. The fares are relatively simple in the grand scheme of things:

Anytime Day Return £23.30
Off Peak Day Return £17.90
Super Off Peak Day Return £12.20

It might seem attractive to abolish the Anytime fare and make the Off Peak Day Return available anytime. As a passenger I'd love it but there would be a number of issues:

- How would you make up the loss of revenue? In reality people travel early in the morning because they have to, they aren't discretionary journeys
- Some passengers might move to an earlier 'anytime' train but this wouldn't gain any more revenue for the railway
- What would you do if demand increased again. A fares increase of around 25% to travel in the peak (£17.90 to £23.30) would not go down well at all and be very damaging for the railway

Completely correct. A bad outcome of this is giving passengers who are always going to travel a cheaper fare, which loses revenue.

We need to understand what future market is not satisfied by the current fares offering, then target fares products at them.

Lots of the usual suspects on Social Media are shouting "we need to reduce fares to get demand back", forgetting that quite a bit may come back anyway without needing to do anything at all (when restrictions disappear). If not, cheap fares now will be a political and financial millstone for the railway for decades.
 

Hadders

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Completely correct. A bad outcome of this is giving passengers who are always going to travel a cheaper fare, which loses revenue.

We need to understand what future market is not satisfied by the current fares offering, then target fares products at them.

Lots of the usual suspects on Social Media are shouting "we need to reduce fares to get demand back", forgetting that quite a bit may come back anyway without needing to do anything at all (when restrictions disappear). If not, cheap fares now will be a political and financial millstone for the railway for decades.

If demand needs to be stimulated then this is best done through promotional activity rather than permanently reducing fares.
 

Deafdoggie

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Businesses that are struggling either increase their income or cut their expenditure or, ideally, both. The railways won’t and will try to carry on regardless knowing it’s ok the government will bail them out. If they tried to reduce staffing or pay, the unions would simply strike. Whilst many things should be happening to stimulate demand, nothing actually will happen.
Personally, I’d say they should announce a temporary relaxing of off-peak restrictions, say for six months. So people know prices will rise for peak again but also giving the chance to see what it does to stimulate demand. It’s fine to halve the price if over twice the number of people travel. Of course, the big problem is knowing how long social distancing will be in place.
 

Hadders

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Businesses that are struggling either increase their income or cut their expenditure or, ideally, both. The railways won’t and will try to carry on regardless knowing it’s ok the government will bail them out. If they tried to reduce staffing or pay, the unions would simply strike. Whilst many things should be happening to stimulate demand, nothing actually will happen.
Personally, I’d say they should announce a temporary relaxing of off-peak restrictions, say for six months. So people know prices will rise for peak again but also giving the chance to see what it does to stimulate demand. It’s fine to halve the price if over twice the number of people travel. Of course, the big problem is knowing how long social distancing will be in place.

Great news for people currently travelling during the peak to pay less, losing £millions in revenue
How many people, intending to travel off peak would simple bring their journey forward an hour or two meaning no additional revenue?

The killer question is how many additional travellers would there be during the peak? My guess is not many as peak travel generally isn't discretionary travel.
 

Haywain

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Businesses that are struggling either increase their income or cut their expenditure or, ideally, both. The railways won’t and will try to carry on regardless knowing it’s ok the government will bail them out. If they tried to reduce staffing or pay, the unions would simply strike. Whilst many things should be happening to stimulate demand, nothing actually will happen.
This is completely wrong. Firstly, the government will not continue to 'bail out' the railway and has been controlling spending for several months - how this progresses will depend on how the CoVid situation pans out. Clearly, reducing pay would be unacceptable in any industry but saving through staff reductions certainly can't be ruled out and the unions are in no strong position to object. As for stimulating demand, industry working groups are already being formed with this specific aim in mind but it would be silly to think that this will be done at the expense of income.
 

tbtc

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I think that the OP is conflating two very different things here.

I have no problems with season tickets - there are always going to be some people working a traditional "five days a week", whatever kind of "new normal" we end up in - they may well be significantly fewer than before but they will still exist and the railway benefits from that dependable revenue just as those people can benefit from a direct debit purchase. It's nothing to do with peak fares - e.g. I can effectively buy a "season ticket" on the bus into my nearest city, even though there are no peak fares on the bus services any more - getting rid of season tickets would be a real turn off for the people who will still need them in future - I like the idea of "smart cards" but I can't see it happening nationwide any time soon - it's fine in London but we'd need a lot more in the way of ticket checks/barriers etc to make it work nationwide.

For me, the two questions could be as follows:

Should we have some kind of flexible tickets to reward semi-frequent travellers, something in between a "five days a week" traveller who pays by direct debit and the occasional traveller who is happy to buy tickets every time they travel? Yes, I like the idea - I used to buy ten journey tickets when I commuted by National Express coaches between Sheffield and Leeds and that meant I wasn't penalised if I had a day off work/ holiday / ill/ elsewhere - so I was getting a good price for my journeys (rather than being caught out having to buy a month's worth but not being in the office every day, e.g. some with a monthly train season ticket may feel like they are paying to travel on bank holidays when they aren't at work anyway, given the way that April can have eighteen working days whilst October can have twenty three). Given the way that flexible working will be different for different people, it may be hard to find a product that fits everyone - there are clear issues (e.g. with a season ticket the railway gets the revenue even if nobody checks the tickets on board the train, how do you stop people getting away without paying), but it feels like there should be some kind of bulk purchasing option that is cheaper than buying individual tickets without being as cheap as the twenty return journeys that a season ticket effectively buys you in a month). But getting rid of Season Tickets because they are going to appeal to a smaller number of people than they used to would be a bit like Primark getting rid of "Small" clothes because many people are getting fatter.

Should we scrap peak fares? I'm instinctively against this, because demand in the morning/evening rush hours will still be higher than at any hour during the rest of the day (once we have a vaccine and more people are returning to work). I don't think it'll go back to what it was in 2019 but maybe back to the levels in 2014 or 2009 or 2004 - if there's no premium to travel in the morning/evening rush hours then what do you do if demand exceeds supply? What incentive is there for the railway to provide rush hour capacity? If there's less demand generally at that time of day then will slashing fares really make much difference (since the fewer people travelling are presumably doing well paid jobs and can therefore afford the prices)? What happens to the lost revenue, are you expecting off peak passengers to pay more so that the people still doing well paid 9-5 commutes can have cheaper fares? Maybe a solution would be to have a fare freeze on peak fares, to reduce the difference between peak and off-peak?
 

FenMan

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I would agree entirely. Whilst office based workers will be unlikely to return to 5 days a week commuting, there are still a number of workers who will need to continue to do so. Eliminating season tickets could make their commute much more expensive.

In the long run, if you could have a contactless based ticketing system throughout the country, it could retrospectively work out what the most appropriate fare to charge was. That might involve weekly caps, as well as pseudo-carnet caps for when you do a certain number of trips (say 10) over a given period (say, a month).

Of course that is all rather pie in the sky thinking. Any such changes will be long in the tooth.

I don't buy this line that "office workers will be unlikely to return to 5 days a week commuting".

Yes, they will, once they realise that person who diligently goes into the office every day (and networks effectively) is going to get that promotion you thought would be yours. Out of sight (or should that be site?), out of mind.

The other elephant in the room is that if all believe that working remotely in virtual teams is just as effective as working in the same geographic location, then they should steel themselves for management coming to the same conclusion and offshoring the work to lower wage economies. There are many well-educated, ambitious, and English-speaking workers in eastern Europe, the Indian sub-continent and SE Asia who will shed few tears at taking jobs previously done in the UK.

A classic case of be careful what you wish for.

DISCLAIMER: I worked remotely for a multinational for 11 years and saw vast tracts of work exported from the UK to eastern Europe and beyond during that period, including developers, architects, support, legal, finance, operations, marketing, telephone sales and HR. Fortunately, due to having a fairly unusual but valuable skill set I was able to dodge the bullets until I was ready to leave anyway, but I won't pretend it wasn't stressful.
 

35B

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I don't buy this line that "office workers will be unlikely to return to 5 days a week commuting".

Yes, they will, once they realise that person who diligently goes into the office every day (and networks effectively) is going to get that promotion you thought would be yours. Out of sight (or should that be site?), out of mind.

The other elephant in the room is that if all believe that working remotely in virtual teams is just as effective as working in the same geographic location, then they should steel themselves for management coming to the same conclusion and offshoring the work to lower wage economies. There are many well-educated, ambitious, and English-speaking workers in eastern Europe, the Indian sub-continent and SE Asia who will shed few tears at taking jobs previously done in the UK.

A classic case of be careful what you wish for.

DISCLAIMER: I worked remotely for a multinational for 11 years and saw vast tracts of work exported from the UK to eastern Europe and beyond during that period, including developers, architects, support, legal, finance, operations, marketing, telephone sales and HR. Fortunately, due to having a fairly unusual but valuable skill set I was able to dodge the bullets until I was ready to leave anyway, but I won't pretend it wasn't stressful.
Respecting your experience, my observation working for a multinational that does a lot of work from offshore, is that the economics of it aren't favourable as favourable as all that when you factor in the non-wage costs. It takes very little extra involvement from a senior UK person, perhaps having to fly to (say) India, to erase a lot of margin from that "low cost" workforce.
 

CrispyUK

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These work out as equivalent to 46.4 weeks, 24 weeks, 12 weeks, 4 weeks and 1 week respectively, assuming 10 journeys per month. I used to have 33 days annual leave each year, plus 10 bank holidays; this equates to commuting for 218 days per year, whereas an annual season assumes 232 days per year. Deduct any sick leave, and the perceived value / attraction of season tickets starts to evaporate.
46.4 weeks is 1 year, minus 5.6 weeks statutory annual leave (28 days for a Mon-Fri worker). I would imagine a higher proportion of passengers are on this figure or something close to it, than those lucky enough to have 43 days to play with! :)
 

Ianno87

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Why scarp something like a season ticket? Even if it saved money for one person per flow wouldn't it be worth having?

Right now it would be an unpopular move (even if it made commercial sense) seen to exploit those that cannot work from home *unless* normal single / return fares were reduced so much that season tickets were no longer "worthwhile" against daily fares.
 

TUC

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Agreed, but maybe the season ticket could be revised so as not to give unlimited travel on the route, just one return journey per day
Isn't that pretty much what tickets like Northern's flexi seasons do?
 

Watershed

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Isn't that pretty much what tickets like Northern's flexi seasons do?
Yes, in essence. The only problem being that virtually all of these "flexi" products have offered such risible discounts as to be worthless. We ultimately need the DfT to accept that creating a useful flexi system will necessarily involve offering substantial discounts over Anytime prices.
 

philthetube

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I do think that contra flow journeys could be looked at, unless you are visiting Brighton or Southend a visit to the sea for a day out is virtually impossible from London due to the peak fares, and you really don't want to book in advance for a day in Clacton or Skegness.
 

Haywain

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unless visiting Brighton or Southend a visit to the sea for a day out is virtually impossible from London due to the peak fares,
Really? Arriving in a seaside resort not much after 10:30 is hardly preventing a day out. The only one where you make any sort of case is Skegness but that is further away and has a poor train service, so is less suited to a day out by train anyway.
 
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JonathanH

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Yes, in essence. The only problem being that virtually all of these "flexi" products have offered such risible discounts as to be worthless. We ultimately need the DfT to accept that creating a useful flexi system will necessarily involve offering substantial discounts over Anytime prices.
Why do the products need to offer 'substantial discounts'? What is the economic cost of doing so? There must be a reason that the 'flexi' products already available only offer 'risible discounts'.
 

Watershed

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Why do the products need to offer 'substantial discounts'?
On most commuter flows, season tickets are priced at between 3 and 4 times the Anytime Return. Thus a 5 day a week commuter pays the equivalent of 3/5 to 4/5 of an Anytime Return for their daily journey, and a monthly season ticket holder pays 3.84 times that much for approximately 4.4 times the validity, i.e. say 60% of an Anytime Return. Let's put annual seasons to one side, as most carnets are intended for use over one or two months.

If you offer a 10% discount for a flexi product, you are in essence charging 50% more per day of travel than with a season ticket. This is in spite of the often similar amounts of cash being handed over upon each purchase. It's not hard to see how that makes the already expensive railway an even less attractive proposition.

What is the economic cost of doing so?
Most people will switch to their car, thus the railway will get no revenue at all from a lot of these potential customers. This will increase the pressure to increase fares, cut costs and thus cut services - a self-perpetuating cycle. In doing so you put to waste the most sustainable way of handling commuter traffic, and increase the negative societal externalities of motoring (which can be economically measured if so desired).

There must be a reason that the 'flexi' products already available only offer 'risible discounts'.
Because they are no more than a token, box-ticking exercise that the DfT et al can use to proclaim that they have "introduced flexible ticketing" when, for 95% of potential customers, there's nothing of any interest. The DfT is not willing to put at risk what they consider the "golden goose" of fares revenue by trying it out.
 

Wallsendmag

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In an article in RAIL a few years ago Barry Doe stated that the railcard discount was traditionally advertised as one third off, but behind the scenes set to 34.0% rather than 33.3% (the data feed allows discount precision to a tenth of a percent) so that, after rounding, the discount would never be less than the advertised one third off.

The traditional rounding was, to the best of my knowledge (and I'm sure I read this in an old fares manual from the 1980s but unfortunately don't have it to hand to check), first round up to the next penny, then round to the nearest 5p. So the rounded price could be up to 2.9p more than the exact amount. And for a low value fare (up to £2-3) the discount could indeed sometimes work out at marginally less than 33.3%. So maybe Barry Doe was wrong?

In this case what I'm calling the "traditional" calculation is £78.30 X 0.66 = £51.678, rounded to £51.70.

I'm aware of an attempt to change the rounding rules a few years ago but most systems (including IPTIS which, to the best of my knowledge, powers NRE) continued to use the old rules at least until very recently. Now it seems NRE is saying the fare is £51.65 (see attached screenshot). This is really confusing me because the Southern Rail site (which also, to the best of my knowledge, uses IPTIS) is showing £51.70 as alistairlees mentions above!

Are NRE and Southern using different versions of IPTIS with different discount rounding? Or has NRE quietly moved away from IPTIS to another journey planner? Very confusing!

On most commuter flows, season tickets are priced at between 3 and 4 times the Anytime Return. Thus a 5 day a week commuter pays the equivalent of 3/5 to 4/5 of an Anytime Return for their daily journey, and a monthly season ticket holder pays 3.84 times that much for approximately 4.4 times the validity, i.e. say 60% of an Anytime Return. Let's put annual seasons to one side, as most carnets are intended for use over one or two months.

If you offer a 10% discount for a flexi product, you are in essence charging 50% more per day of travel than with a season ticket. This is in spite of the often similar amounts of cash being handed over upon each purchase. It's not hard to see how that makes the already expensive railway an even less attractive proposition.


Most people will switch to their car, thus the railway will get no revenue at all from a lot of these potential customers. This will increase the pressure to increase fares, cut costs and thus cut services - a self-perpetuating cycle. In doing so you put to waste the most sustainable way of handling commuter traffic, and increase the negative societal externalities of motoring (which can be economically measured if so desired).


Because they are no more than a token, box-ticking exercise that the DfT et al can use to proclaim that they have "introduced flexible ticketing" when, for 95% of potential customers, there's nothing of any interest. The DfT is not willing to put at risk what they consider the "golden goose" of fares revenue by trying it out.
I believe some seaons(look at Peterborough to Kings Cross) are substantially less than 3-4 times the anytime return. A flixible product at less than the season price would be very hard to justify in these cases.
 

swt_passenger

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I believe some seaons(look at Peterborough to Kings Cross) are substantially less than 3-4 times the anytime return. A flixible product at less than the season price would be very hard to justify in these cases.
Southampton to Waterloo weekly, (and see post #13 for a relevant comment), is round about the same price as 2 Anytime fares. 60% discount. So if people seriously expect a pro-rata flexible season for a two or three day week they’ll probably be waiting a long time...
 

35B

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Southampton to Waterloo weekly, (and see post #13 for a relevant comment), is round about the same price as 2 Anytime fares. 60% discount. So if people seriously expect a pro-rata flexible season for a two or three day week they’ll probably be waiting a long time...
But if the pricing is clearly sold as (say) 10 return journeys for the price of 7 anytimes, people will be able to make that decision for themselves. Where seasons are "underpriced", there will be less usage; where they conform to the norm, there will be a case for them.

And you shouldn't assume that it's a straight choice. A lot of my season usage was borderline, and justified for flexibility - meaning I also tried to leave gaps between tickets. A flexible season offering might well be worthwhile even where it doesn't automatically make sense, especially if not so tightly coupled to duration.
 

Watershed

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I believe some seaons(look at Peterborough to Kings Cross) are substantially less than 3-4 times the anytime return. A flixible product at less than the season price would be very hard to justify in these cases.
The Peterborough to London Anytime fare is set at an unregulated "market based" rate, which is intended to maximise business revenue. It is entirely unreasonable - and unrealistic - to expect commuters to pay 90% of that rate for a part-time commute. This is reflected in the fact that a weekly season costs "just" 1.7× an Anytime Return.

If there is anything that would be very hard to justify in the "new normal", it would be charging carnet passengers £53 (70p a mile) to travel on the likely deserted 09:08, but only a third of that for day trippers on the much busier 10:10.

Of course these are two examples of extremes, but they still don't undermine the principle that a fairly-priced carnet/capping system would attract a lot of part time commuters back to the railway.

Southampton to Waterloo weekly, (and see post #13 for a relevant comment), is round about the same price as 2 Anytime fares. 60% discount. So if people seriously expect a pro-rata flexible season for a two or three day week they’ll probably be waiting a long time...
Sadly, you are likely correct. But when the commuter numbers fail to rebound, the DfT won't have far to look in finding the biggest culprit.
 
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packermac

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Respecting your experience, my observation working for a multinational that does a lot of work from offshore, is that the economics of it aren't favourable as favourable as all that when you factor in the non-wage costs. It takes very little extra involvement from a senior UK person, perhaps having to fly to (say) India, to erase a lot of margin from that "low cost" workforce.
Although only one company but there was an interview with the MD of an award winning gaming developer in Guildford (never knew that was the UK hub of the industry) who said he never sees a time when his staff will be in the office 5 days a week again. Just one or two days if they want brainstorming, but this has shown more work is done at home.
 

Hadders

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I believe some seaons(look at Peterborough to Kings Cross) are substantially less than 3-4 times the anytime return. A flixible product at less than the season price would be very hard to justify in these cases.

On the other hand Stevenage to London season tickets are very poor value. A weekly is 4.25 times the daily price.

Although only one company but there was an interview with the MD of an award winning gaming developer in Guildford (never knew that was the UK hub of the industry) who said he never sees a time when his staff will be in the office 5 days a week again. Just one or two days if they want brainstorming, but this has shown more work is done at home.
That is similar to my employer where we are in the process of having Home added as an additional base location to our contracts. It looks as though office capacity will be around 40% of headcount, meaning an average of 2 days a week in the office. The idea is you will visit the office for collaboration, creativity and meetings.

To be fair the company I work for has been heading in this direction for a few years, it's long been the norm for most people to work at least one day a week at home. Our tech is pretty good and has helped to support this.
 

Dr Day

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A further factor in the 'discount' for bulk buying travel (whether in the form of a carnet or season ticket) is the reduction in transaction costs, some of which are a flat 'per transaction' cost rather than a percentage of the value. For relatively low value daily single or return fares, certain fulfillment costs (for the seller) can make up a substantial proportion of the ticket price. For the passenger, the hassle as well as value of time purchasing one-off tickets can come into play.
 

deltic

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Aventi have now scraped Friday morning peak time restrictions, ie can now use off-peak tickets on early morning trains
 

bkhtele

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Peak fares will need reviewing in 12 months when hopefully things will have settled downfor now:
1. Promote more advanced tickets during the peak & for more shorter journey flows to improve utilisation.
2. Introduce more 1/2 online singles for return portion - fixed train out flexible/semi flexible to get you home.
3. Extend Network rail card to all uk for a 6/12 month trial to encourage rail travel, perhaps allow travel from 9am as well as current no evening peak. 34% off from 9am for an individual/family would be attractive.
You could even have special offers for a fixed period on lightly loaded flows during the peak e.g. London to Southend
 

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