There is lots of talk of fares reform, but the detail, other than headline items like "Pay as You Go" and "Single Leg" pricing is missing. An appearance before the House of Lords Built Environment Committee gave us a great opportunity to set out our thoughts on improvements needed to fares and ticketing: we advocate both specific tactical improvements and some principles for fundamental reform. Thameslink train at Blackfriars - own image
We were asked by the House of Lords Built Environment Committee to give oral evidence for their inquiry into Williams Shapps and Rail fares. We are grateful for the opportunity to do this.
Following our appearance we submitted 3 supplementary papers to expand upon our comments:
- On the future of rail fares generally
- On tactical improvements to the Flexi-Season
- On ticketing
Our papers included 6 key observations:
- That there are considerable risks with remaining with the status quo on fares – headline high prices, cliff edge pricing and uncertainty all act as significant disincentives to travellers selecting the railway as their chosen transport option by creating a low trust view, resulting in lost revenue.
- A good first step to show intent would be to move away from the traditional RPI (+ X) inflationary rise for 2022 and future years.
- Fares & ticketing reform is not just about a better arrangement, it is key to encouraging the return to the railway and addressing the current gap between revenue and costs by focusing on revenue increase, not just cost reduction; thus a multi-stage reform is required, with short term activity to improve the current fares structure, followed by the more fundamental restructure. It will also help the Government with wider initiatives such as addressing climate change through carbon reduction across the totality of the transport sector, delivering growth and levelling up.
- To date, there has been considerable focus on ticketing improvements, and not enough on fares reform.
- Whilst the longer term fare concepts articulated to date are sensible, there is not yet enough detail and, whilst “Simplification” is needed, too much “Simplification” will reduce choice (eg the cheapest fares, flexibility on choice of train routes) and benefits of matching supply and demand. We have prepared an “approximately right” proposal for pricing tickets in the new single leg pricing world.
- Society would benefit from greater disclosure of ticketing sales.
We supplemented that with 19 areas for tactical improvement to the current fares structure and 7 principles for a fundamentally new approach to fares.
included in our 19 areas for tactical improvement are 7 quick wins:
- Split tickets: Reduce prices for Anytime and Off-Peak through tickets to less than the sum of the parts (eg Birmingham to York: Split tickets save £19.50 (27%) for a day trip on a Saturday) [separately: Improve the selling process for remaining situations].
- The multitude of ticket restrictions: Better explain them (eg “Super Off-Peak” is vague and validity is not the same nationally).
- Operator only fares: Eliminate single operator fares where there is just a small difference in price (eg 10p cheaper on Avanti WC Coventry to Birmingham).
- The Flexi Season – Make some tactical improvements – most notably a small extension in the validity period – eg from 28 days to 31 or 35 days.
- Start extending PAYG payment by Smartcard by extending systems – eg GTR’s system to Southeastern routes (we recognise that fully delivery is an extended programme of activity)
- Increase visibility of different Contactless and National Rail prices: Provide a single source of the truth so intending passengers can identify best value by understanding which is cheaper
- Railcards: Simplify conditions: eg the multiple definitions of when the morning peak ends
And, in summary, our 7 principles for a fundamental restructure are:
- It is essential to retain the “Turn up and go” Railway for all types of journeys and route
- The start point for pricing single legs needs to be 50% of the applicable return fare (Anytime, Day Return, Off-Peak etc), not the existing single fare.
- If there is any move away from the rule described above it is monitored for adverse impacts – eg on day return prices.
- Consideration is needed for tickets that start at a time of high price, but the majority of the journey time is off-peak.
- The traditional season ticket is still needed by many: they should not be disadvantaged by new arrangements.
- The approach to rewarding regular travel – such as for travel to work should be reviewed. Comments on the Flexi-Season show how this design is sub-optimal. Options including capping, loyalty bonuses, reducing prices, free days etc.
- Consideration needs to be given as to how to reward very regular travel that doesn’t qualify for travel to work like rewards – eg someone who travels once a week to a long distance destination.
- Our one page summary: view or download
- House of Lords Built Environment Committee Williams Shapps: inquiry pages (includes a transcript ~ see 13 July 2021 session)
- Our submissions to the Committee