I dont think a company that has margins of less than 5% can be accused of ripping off anyone.
Indeed, well it's one the great myths Bob Crow and the media like to put about, although I think there is a perception problem. There are some strange ticket prices, and some of them are so expensive I do wonder if they are worth having. Nevertheless, standard fares have increased on average 13.6% since 1995.
http://www.rail-reg.gov.uk/upload/pdf/rolling-c5-fares.pdf
80% of users travel on reduced priced tickets, total passenger revenue was £5.5 billion for 1.2 billion passenger journeys.
http://www.rail-reg.gov.uk/upload/pdf/rolling-c1-railusage.pdf
£5.5 billion sounds like a lot of money, and it its, but it's an industry that employs 159,000*, runs 20,000 passenger trains per day carrying an average of 3 million people. But how does that compare to other companies:
British Airways: £9 billion
Tesco: £59.4 billion
Marks and Spencer (UK) £8.1 billion
Vodaphone £35.5 billion
In other words, the whole industry is quite a small part of the economy, certainly over £150 billion is spent on the road transport every year although that carries more passengers, its only more economic with 3 people or more to a car in terms of cost per mile on average. But unless fares are low enough, people will not use the trains, so in many ways, some fares on some routes are kept artificially low. The real problem is now the industry has lost control of unit costs, and the government want tax payers to spend less. You could reduce fares through productivity and efficiency, but all to often the unions want pay rises and shareholders want dividends. You could subsidise fares more, but many would complain. Indeed, if you have overloaded trains, its probably a reflection (in some cases) fares are to low. Having said, that the public would not see it that way, and want to use transport when they want it, not when some official allows them, either in terms of price or capacity. This applies to all transport, indeed some ways more roads where congestion is a problem in and around dense urban areas. Here the public want:
Unlimited road space, where there is none available, they do not like attractive public transport subsidised, such as trams/rail. They do not like bus lanes and perceive buses as low class. They do not like paying high fares, especially if they don't get a seat. And constantly compare petrol prices with PT fares. They also perceive rail time keeping as poor, even though road reliability is less.
I think the perception problem comes from several sources:
Comparisons with petrol price and train fares:
Some of these issues are dealt with in P38
http://www.cfit.gov.uk/docs/2008/cipto/pdf/cipto-tn3.pdf
Some data from the RAC, reproduced in Table 6, demonstrates the difficulties
faced in dealing with issues of perception. In terms of journey time, the
average commuter drives alone in his/her car and their 14-mile journey takes
them about 25 minutes, of which eight could be saved if there were no
congestion. However, if they were to go on public transport, they estimate
that it would have taken them more than three times as long – although a
quarter admitted to not knowing how long it would take.
There is even greater ignorance about cost. Although car drivers think it costs
about £3.20 to commute (around £0.23 per mile) compared with £4.00 for a
public transport journey, nearly half have no idea how much it really costs
either in their car or by public transport.
Typical breakdowns of costs are shown on P36. And if you think buses are any better, the prices have risen even much. There is a comparison on P43.
While these perceptions continue along with very expensive open return tickets, its no wonder the public think its reality - something that Crow tries to capitalise on even though every year he tries to secure above inflation pay rises for his members.
This will be an ongoing problem, as the CIT concludes:
Road user charging has the benefit of reinforcing the true costs of motoring to
the community as a whole and ending the situation where road space is
perceived to be free at the point of use.
Meanwhile, the task of ‘squaring the circle’ between the competing influences
of rail resource requirement, the demand for travel and the ability and
willingness of the Treasury and the taxpayer to provide funding to the
industry, is likely to remain an extremely difficult issue. Ultimately, it is a
political judgement, though experience in the UK suggests that it is rarely a
good idea to pretend that the costs of providing a service are lower than they
really are. On this basis, we may expect divergent trends to continue, pending the
introduction of a different way of paying for the externalities of motoring.
*
http://www.cfit.gov.uk/docs/2008/cipto/pdf/cipto-tn3.pdf
P73
