What can the industry do to decrease the public transport fare in the real term?

[miklcct]

I am comparing the CPI (consumer price index) figures in the UK and Hong Kong to see how they compare in real terms. Using 2025 - 2023 as the time period, the following are the figures from the data:

Hong Kong (2019 - 2020 = 100):

	2015	2023	Change relative to overall CPI
Overall CPI	91.0	105.5
Bus	98.2	100.4	-11.81%
Tram	88.8	108.6	5.49%
Minibus	94.6	98.8	-9.91%
Taxi	90.3	110.6	5.65%
Metro	95.6	99.2	-10.50%
Ferry	95.0	110.2	0.06%
Motor vehicle ownership cost	90.6	108.6	3.39%
Fuel	87.5	122.8	21.05%
Licensing, tolls and parking	88.3	108.8	6.28%

UK (2015 = 100):

	2015	2023	Change relative to overall CPI
Overall CPI	100	130.5
Train	100	133.4	2.22%
Tram & Metro	100	120.6	-7.59%
Bus & Coach	100	163.3	25.13%
Taxi & Minicab	100	133.3	2.15%
Air	100	166.4	27.51%
Sea & Inland Waterway	100	161.2	23.52%
Purchase of vehicles	100	126.4	-3.14%
Operation of personal transport	100	135.1	3.52%

In Hong Kong, nearly all public transport, with the exception of trams and ferries (which only have a minority of market share) and taxis (which is a luxury good), have become more affordable in the past 8 years, with about 10% real-term decrease in fares over time. The MTR (metro) fares in Hong Kong is controlled by a formula which takes productivity increase into the account (currently set at -0.6%), designed to make the fare more affordable over time. Meanwhile, the real cost of motoring has increased a lot. This is something I would like to see, that public transport becomes cheaper and cheaper over time.

However, in the UK, with the exception of tram and metro, the cost of public transport outperforms CPI inflation, and in the case of bus, air and water, by a big margin, although the change in train fares is actually less than the change in cost of personal transport operation. This probably contributes to the decline of bus patronage a lot as people no longer use them because they are too expensive.

What can the UK transport industry do to increase revenue, while decreasing the price level (in real term) over time?

 

[Bald Rick]

As i’m sure you know, the whole city structure, and thus transport network, of Hong Kong is very, very different to the UK. They are not directly comparable in any sense.

 

[Gloster]

Do you really think that the transport companies and organisations are going to make any effort to reduce the amount of money they shovel into their pockets? They may tweak the current arrangements, but only in order to further enrich themselves: that is the British system.

 

[Harpers Tate]

Of course the transport companies want to make as much profit as they can. Where they have progressively failed both themselves and their users is in their approach to that. There are two fundamental and basic ways to increase income:
1) Bigger margins per purchase - meaning higher fares. But that brings with it a decline in demand which is counter productive.
2) Bigger turnover - meaning more purchases (tickets). And that can only be driven by improving value (whether by limiting fare growth or by a better product or both).

One might broadly compare (for example)
- the Lidl/Aldi vs. Tesco/Sainsbury model. It's no surprise that the former are extracting business from the latter. Yet the best the latter can do is moan about it and play games with their customers with misleading "price match" promises and the like. They cannot change their core as-high-as-we-can-get margin per item thinking.
- the Wetherspoon vs. Greene King/M&B/etc model. It's similarly no surprise that when a new 'Spoons opened near here, it runs full most of the time I'm there whereas a nearby Greene King unit has just closed down. Exactly the same pint in 'Spoons costs around 60-70% what it costs in Hungry Horse.

Externally I see an industry that only understands the first of these choices, when what is needed is the right balance between the two. Even when the evidence is right in their own faces. Hereabouts a few years ago we had a Sunday service that ran semi-express to the nearby large mall. It was launched with sensible fares and a 2-for-1 offer. Almost immediately the single decker became a double and ran full - the sort of loadings I guess they'd kill for. The offer ends, fare rises and usage plummets. Service withdrawn.

 

[dosxuk]

I am comparing the CPI (consumer price index) figures in the UK and Hong Kong to see how they compare in real terms.

It is impossible to compare transport costs between a city state and a largely rural country. The operation, infrastructure, investment and strategies needed are so wildly different that the comparison falls over at every level.

We know you think the entire UK public transport network should work exactly the same as your beloved Hong Kong, but it would be impossible to provide at an affordable cost.

 

[Djgr]

As renationalisation (in the broadest sense) kicks in big time in the UK over the next few years, public transport fares/revenue will be essentially determined by government policy (even more than they are now).

 

[whoosh]

Night buses are provided in Hong Kong because it's cheaper to run them all night, than pay for space to garage them.

Whilst we should look for ways to improve, statistics from wildly different places may not be comparable places to start looking.

 

[Akela]

It would be better to compare the UK to a country with a similar size and population distribution/density like France or Germany than with a city state smaller than central London.

 

[yorksrob]

It would be better to compare the UK to a country with a similar size and population distribution/density like France or Germany than with a city state smaller than central London.

And our fares would still be overpriced !

 

[Bald Rick]

Night buses are provided in Hong Kong because it's cheaper to run them all night, than pay for space to garage them.

I’m not sure about that. Bus services in Hong Kong rapidly reduce in frequency in mid evening, and there’s loads of bus station / garage space for them.

 

[Railwaysceptic]

Of course the transport companies want to make as much profit as they can. Where they have progressively failed both themselves and their users is in their approach to that. There are two fundamental and basic ways to increase income:
1) Bigger margins per purchase - meaning higher fares. But that brings with it a decline in demand which is counter productive.
2) Bigger turnover - meaning more purchases (tickets). And that can only be driven by improving value (whether by limiting fare growth or by a better product or both).

There's a third option, forever ignored by the railway, civil servants and politicians: increase the number and variety of products. For example, why do Huddersfield and Barnsley not have a direct service to London? Why does Mansfield not have a direct service to Birmingham? Why are so many towns with populations around 100,000 regarded by the railway establishment as having no more commercial potential than a large village?

 

[yorksrob]

There's a third option, forever ignored by the railway, civil servants and politicians: increase the number and variety of products. For example, why do Huddersfield and Barnsley not have a direct service to London? Why does Mansfield not have a direct service to Birmingham? Why are so many towns with populations around 100,000 regarded by the railway establishment as having no more commercial potential than a large village?

More pertinent, why is there no cheap day return between Leeds and Manchester valid on TPE ?

 

[Hadders]

As renationalisation (in the broadest sense) kicks in big time in the UK over the next few years, public transport fares/revenue will be essentially determined by government policy (even more than they are now).

Renationalisation is highly likely to result in substantial fares increases. Just look at nationalised LNER.

 

[Manutd1999]

I think there has to be a stronger focus on modernisation and reducing costs. That's the only way to reduce fares IMO. It's not realistic to expect taxpayers to pay even more in subsidies and I'm not sure there is enough untapped demand to really move the dial.

The two largest cost items are staff and rolling stock leasing, so logically the best way to increase efficiency is to "sweat the assets". Maybe GBR is a good opportunity to implement some timetable reforms to that effect:

• Simplify service patterns wherever possible, moving away from the "1ph to everywhere" type timetable we have at present towards a Swiss-style takt.
• Altering some services to give shorter turnarounds, reducing downtime.
• Prioritising longer (higher capacity), less frequent, long-distance services.
• More agile adapting of the timetable at different times of the day/week. Peak/off-peak is increasingly outdated and it should be possible to better match capacity to demand.

 

[HSTEd]

There's a third option, forever ignored by the railway, civil servants and politicians: increase the number and variety of products. For example, why do Huddersfield and Barnsley not have a direct service to London? Why does Mansfield not have a direct service to Birmingham? Why are so many towns with populations around 100,000 regarded by the railway establishment as having no more commercial potential than a large village?

The railway has learned through long experience that frequency is everything.
Handfuls of trains between randomly selected pairs of destinations are inefficient to operate and not particuarly attractive to customers.

As American transit people say "frequency is freedom".

 

[AM9]

The railway has learned through long experience that frequency is everything.
Handfuls of trains between randomly selected pairs of destinations are inefficient to operate and not particuarly attractive to customers.

As American transit people say "frequency is freedom".

Well if that is the way ahead then "every medium sized town having a direct service to every major city" as suggested by @Railwaysceptic isjust can't happen, and also "Prioritising longer (higher capacity), less frequent, long-distance services" as suggested by @Manutd1999 just won't happen either as all connections would be even more unreliable than at present.

 

[HSTEd]

Well if that is the way ahead then "every medium sized town having a direct service to every major city" as suggested by @Railwaysceptic isjust can't happen, and also "Prioritising longer (higher capacity), less frequent, long-distance services" as suggested by @Manutd1999 just won't happen either as all connections would be even more unreliable than at present.

Well, if we were going to the extreme we could "metro-ise" the timetable with four (or six, or eight) trains per hour on each pair of lines, all using the same stopping pattern to the same destinations.

You might have to change multiple times to reach your destination, but the actual journey time would not be that long because you would never be waiting long at each connection, and a d ropped connection would cost you only a few minutes.

Not that I am literally proposing that.

 

[RT4038]

and also "Prioritising longer (higher capacity), less frequent, long-distance services" as suggested by @Manutd1999 just won't happen either as all connections would be even more unreliable than at present.

That will depend on how much cost pressure there is on train manning?

 

[Manutd1999]

Well if that is the way ahead then "every medium sized town having a direct service to every major city" as suggested by @Railwaysceptic isjust can't happen, and also "Prioritising longer (higher capacity), less frequent, long-distance services" as suggested by @Manutd1999 just won't happen either as all connections would be even more unreliable than at present.

I think there has to be a different approach for long-distance and commuter services.

Frequency is not particularly important for most long-distance services, except for a few key city pairs. With modern ticketing apps there is also a reduced need for a clockface timetable. Essentially InterCity (if such a franchise returrns under GBR) should be run like an airline. Low(er) frequency but high capacity (i.e. long trains), a less rigid timetable and demand-based pricing etc. to match demand to the available capacity. LNER's advance-only trial is a good step towards this kind of model.

The above doesn't really work for shorter/commuter services where people's travel plans are less fixed and a turn-up-and-go operation is valued. A better way to drive down operating costs is probably to "metro-ise" the network wherever possible, simplifying the operation and enabling more efficient use of staff and rolling stock. Devolving this to regional bodies would make a lot of sense, as would a huge simplification of the fares system.

 

[JonathanH]

I think there has to be a stronger focus on modernisation and reducing costs. That's the only way to reduce fares IMO. It's not realistic to expect taxpayers to pay even more in subsidies and I'm not sure there is enough untapped demand to really move the dial.

Even then, should reduced costs be used to reduce subsidy and fares or allow for more investment and the kind of service enhancements people call out for?

I'm not sure it can be both.

 

[Foxhunter]

Even then, should reduced costs be used to reduce subsidy and fares or allow for more investment and the kind of service enhancements people call out for?

I'm not sure it can be both.

Take it far enough and you can do both. Governments of all persuasions spend as little as they can get away with on the rail network. Why finance an expanded railway when the reward is the need to finance a greater operating subsidy?

I did my 40 years in the private sector and experienced a lot. Loss making companies/divisions were lousy to work in, hard grind and people leave, either by choice or otherwise. Profitable companies/divisions are fantastic to work in, the key staff are looked after, and you can have anything you need if it sells more or increases the margin.

If the railway ever succeeded in reducing its costs to below its revenue the transformation would be spectacular.

 

[miklcct]

Well, if we were going to the extreme we could "metro-ise" the timetable with four (or six, or eight) trains per hour on each pair of lines, all using the same stopping pattern to the same destinations.

You might have to change multiple times to reach your destination, but the actual journey time would not be that long because you would never be waiting long at each connection, and a d ropped connection would cost you only a few minutes.

Not that I am literally proposing that.

This is how the heavy rail in Hong Kong operate, even better than the London Underground. Through services between lines are a last resort during disruption to keep the service running.

I think there has to be a different approach for long-distance and commuter services.

Frequency is not particularly important for most long-distance services, except for a few key city pairs. With modern ticketing apps there is also a reduced need for a clockface timetable. Essentially InterCity (if such a franchise returrns under GBR) should be run like an airline. Low(er) frequency but high capacity (i.e. long trains), a less rigid timetable and demand-based pricing etc. to match demand to the available capacity. LNER's advance-only trial is a good step towards this kind of model.

Thanks. I'll stop using intercity service for travel between London and Manchester if I can't commit to a fixed train. Will you make sure that I can make the same journey by using commuter services described below?

The above doesn't really work for shorter/commuter services where people's travel plans are less fixed and a turn-up-and-go operation is valued. A better way to drive down operating costs is probably to "metro-ise" the network wherever possible, simplifying the operation and enabling more efficient use of staff and rolling stock. Devolving this to regional bodies would make a lot of sense, as would a huge simplification of the fares system.

I agree with you.

 

[DJ_K666]

Of course the transport companies want to make as much profit as they can. Where they have progressively failed both themselves and their users is in their approach to that. There are two fundamental and basic ways to increase income:
1) Bigger margins per purchase - meaning higher fares. But that brings with it a decline in demand which is counter productive.
2) Bigger turnover - meaning more purchases (tickets). And that can only be driven by improving value (whether by limiting fare growth or by a better product or both).

One might broadly compare (for example)
- the Lidl/Aldi vs. Tesco/Sainsbury model. It's no surprise that the former are extracting business from the latter. Yet the best the latter can do is moan about it and play games with their customers with misleading "price match" promises and the like. They cannot change their core as-high-as-we-can-get margin per item thinking.
- the Wetherspoon vs. Greene King/M&B/etc model. It's similarly no surprise that when a new 'Spoons opened near here, it runs full most of the time I'm there whereas a nearby Greene King unit has just closed down. Exactly the same pint in 'Spoons costs around 60-70% what it costs in Hungry Horse.

Externally I see an industry that only understands the first of these choices, when what is needed is the right balance between the two. Even when the evidence is right in their own faces. Hereabouts a few years ago we had a Sunday service that ran semi-express to the nearby large mall. It was launched with sensible fares and a 2-for-1 offer. Almost immediately the single decker became a double and ran full - the sort of loadings I guess they'd kill for. The offer ends, fare rises and usage plummets. Service withdrawn.

What you've hit there is the Law of Diminishing Returns. The theory being that the more you try and increase the price the lower the demand, and so to cover that loss of income you push the price up further and thus demand decreases further. Not always that cut and dried, of course but there you go.

 

[Bald Rick]

The two largest cost items are staff and rolling stock leasing,

For train operations, yes, but not for the cost of operating the whole rail system.

Simplify service patterns wherever possible, moving away from the "1ph to everywhere" type timetable we have at present towards a Swiss-style takt.

Agreed, but the politicians really don’t like that.

Altering some services to give shorter turnarounds, reducing downtime.

That is not good for perfromance, which is the stated number 1 priority of the Secretary of State (and rightly so)

Prioritising longer (higher capacity), less frequent, long-distance services.

Are you suggesting that, as an example, peak EMR services in to St Pancras (carrying an average of 300 people) should always be prioritised over Thameslink services (carryign on average 1200 people) ?

More agile adapting of the timetable at different times of the day/week. Peak/off-peak is increasingly outdated and it should be possible to better match capacity to demand.

This isnt consistent with a takt style timetable. Besides, Peak / off peak is not outdated, it is still highly relevant as passenger numbers show.

 

[Manutd1999]

Altering some services to give shorter turnarounds, reducing downtime.

That is not good for perfromance, which is the stated number 1 priority of the Secretary of State (and rightly so)

Not if it's combined with a simpler timetable, which should be more resiliant by design anyway so doesn't needed the long turnarounds to compensate.

Prioritising longer (higher capacity), less frequent, long-distance services.

Are you suggesting that, as an example, peak EMR services in to St Pancras (carrying an average of 300 people) should always be prioritised over Thameslink services (carryign on average 1200 people) ?

I meant that we should be running fewer, longer, long-distance services and prioritising that over multiple 4/5 car services to everywhere (I'm looking at you XC....)

More agile adapting of the timetable at different times of the day/week. Peak/off-peak is increasingly outdated and it should be possible to better match capacity to demand.

This isnt consistent with a takt style timetable. Besides, Peak / off peak is not outdated, it is still highly relevant as passenger numbers show.

Not sure about this. Aside from a few peak-hour variations, a lot of the Intercity services essentially run a fixed 1-2 hourly pattern. Demand is clearly not constant, so how could we improve it? In rough order of difficulty:

- More advance tickets and dynamic pricing to move passengers to emptier services
- Adapting the timetable for different times of year. So increasing weekend summer specials, reducing business-focused routes during school holidays etc.
- Moving away from the standard hourly pattern and removing ad-hoc services at times where there is much less demand (early-afternoon etc.)
- Adding more trains for one-off, high-demand scenarios (football games etc.). I've seen this done neatly in Europe, where an extra train is squeezed in immediately behind the 'normal' service.

Of course it would be operationally difficult, but worth it if we could reduce costs.

 

[JonathanH]

Not sure about this. Aside from a few peak-hour variations, a lot of the Intercity services essentially run a fixed 1-2 hourly pattern. Demand is clearly not constant, so how could we improve it? In rough order of difficulty:

- More advance tickets and dynamic pricing to move passengers to emptier services
- Adapting the timetable for different times of year. So increasing weekend summer specials, reducing business-focused routes during school holidays etc.
- Moving away from the standard hourly pattern and removing ad-hoc services at times where there is much less demand (early-afternoon etc.)
- Adding more trains for one-off, high-demand scenarios (football games etc.). I've seen this done neatly in Europe, where an extra train is squeezed in immediately behind the 'normal' service.

Of course it would be operationally difficult, but worth it if we could reduce costs.

I think you are suggesting that by having a worse service, it may be possible to reduce fares to compensate.

 

[Starmill]

I think you are suggesting that by having a worse service, it may be possible to reduce fares to compensate.

A lower quality service might be desirable if it carries more people of course. Ouigo Classique and Avlo are examples of this, and I'd argue most domestic trains in the Netherlands are pretty basic. The thing they all share is some market-beating rates and lots and lots of capacity.

I don't like those ideas and I'd far rather some basic standards are upheld. Basic first class is offered on most Dutch intercity trains, and basic catering of drinks and snacks is offered on Lumo and Ouigo España. Maybe a hybrid of all of the above would be a strong contender, if it had enough capacity. Of course, lots of these ideas play badly into the UK market. Ouigo Classique would never be possible without the new InOui trains taking over the business and express market. Ouigo Grande Vitesse has been much-criticised for pushing out TGV InOui services. SNCF have been strongly criticised for trying to get out of compensation payments, and for refusing to allow staff discounts or interrail passes on any Ouigo brands. Avlo in Spain and Ouigo Grande Vitesse in France are sometimes priced at premia, because they're run by the incumbent who is seeking to extract higher yields from their top-flight services before and after the bargain brand ones, so even though they're extremely basic, they might sometimes cost more than the alternatives. This "decoy price" effect doesn't happen with actual independents like Westbahn, Flixtrain and Iryo. The reverse is true when we look at Northern and TPE, who are both state operators but who compete with one another for custom anyway. Lumo have been much-criticised for failing to provide any meaningful spaces to store luggage beyond a backpack or small suitcase.

Generallly if you can run a double-deck train with 385-400m of platform to play with you can operate efficiently if you can sell out regardless of how well or badly managed everything else is. In the UK we've only got a tiny bit of infrastructure where that'd be possible and the rest where it could be that's currently under construction won't do a lot to change that situation.

 

[miklcct]

I think you are suggesting that by having a worse service, it may be possible to reduce fares to compensate.

A lower quality service might be desirable if it carries more people of course. Ouigo Classique and Avlo are examples of this, and I'd argue most domestic trains in the Netherlands are pretty basic. The thing they all share is some market-beating rates and lots and lots of capacity.

I don't like those ideas and I'd far rather some basic standards are upheld. Basic first class is offered on most Dutch intercity trains, and basic catering of drinks and snacks is offered on Lumo and Ouigo España. Maybe a hybrid of all of the above would be a strong contender, if it had enough capacity. Of course, lots of these ideas play badly into the UK market. Ouigo Classique would never be possible without the new InOui trains taking over the business and express market. Ouigo Grande Vitesse has been much-criticised for pushing out TGV InOui services. SNCF have been strongly criticised for trying to get out of compensation payments, and for refusing to allow staff discounts or interrail passes on any Ouigo brands. Avlo in Spain and Ouigo Grande Vitesse in France are sometimes priced at premia, because they're run by the incumbent who is seeking to extract higher yields from their top-flight services before and after the bargain brand ones, so even though they're extremely basic, they might sometimes cost more than the alternatives. This "decoy price" effect doesn't happen with actual independents like Westbahn, Flixtrain and Iryo. The reverse is true when we look at Northern and TPE, who are both state operators but who compete with one another for custom anyway. Lumo have been much-criticised for failing to provide any meaningful spaces to store luggage beyond a backpack or small suitcase.

I like these ideas and the Dutch system is what I'm aspiring for. Clock face scheduling, turn up and go, lots of capacity, good value fare. It's like travelling on a commuter train even on their Intercity service.

Getting thousands of people on a train with each paying a fraction of the fuel cost compared to driving.

 

[Meerkat]

Frequency is not particularly important for most long-distance services, except for a few key city pairs.

It is important though.
If you need to be somewhere at 10am and there is an hourly service you might have to arrive before 9am to make sure its not tight. If its every two hours then you might have so much time wasted that its definitely time to get the car out instead of just probably.

 

[HSTEd]

Frequency is not particularly important for most long-distance services, except for a few key city pairs. With modern ticketing apps there is also a reduced need for a clockface timetable. Essentially InterCity (if such a franchise returrns under GBR) should be run like an airline. Low(er) frequency but high capacity (i.e. long trains), a less rigid timetable and demand-based pricing etc. to match demand to the available capacity. LNER's advance-only trial is a good step towards this kind of model.

The above doesn't really work for shorter/commuter services where people's travel plans are less fixed and a turn-up-and-go operation is valued. A better way to drive down operating costs is probably to "metro-ise" the network wherever possible, simplifying the operation and enabling more efficient use of staff and rolling stock. Devolving this to regional bodies would make a lot of sense, as would a huge simplification of the fares system.

I'm not convinced there is much left in the "long distance" category.

Ofcourse a major problem with a non clock face timetable is that it is very difficult to utilise the enormously expensive infrastructure efficiently like that.

Id prefer to metroise everything, at least in operational terms.