August 17, 2003

Bitch?

Patrick Crozier | Fares and Ticketing

Which? (the magazine of the Communists Consumers' Association) is having its annual bitch over the National Rail Inquiry Service:

Rail customers are being quoted nearly double the true fare for many journeys because train companies are providing the wrong information, a survey has revealed.

Only four out of every 10 queries made by rail passengers received correct answers from the National Rail Inquiry Service, the official organisation jointly owned by Britain's train companies. Some were quoted fares as much as 300 per cent higher than the correct figure.

Well, just a minute. Let's at least begin by reminding ourselves where we started from. Before privatisation (incorporating new, improved state regulation, remember) you'd be lucky enough to find a number and to get an answer (even a wrong one) would be regarded as very heaven. We've come a long way.

But there's a bigger point: fares and ticketing are difficult.

To illustrate the point let's start with the simplest possible structure: no fares at all. But that way you go bust. So, you have to have some form of fares. OK, next simplest form: a flat fare. Excellent if you want to travel long distance - but not so good if you just want to travel a couple of stops.

OK, have a flat per mile charge. £1 per mile (say). But that makes no allowance for time preferences (err, I'm not sure that is the correct term but the idea is that travel at peak hours is more popular than off peak). This is a big issue for train companies. One answer might to be to buy more rolling stock and hire more staff and build longer platforms etc just for the peak times. But this is a frighteningly expensive business. Far better to use price to deter some from travelling at peak times. So, we need peak rates.

Add in season tickets and this is just fine for a commuter system. But what about long distance? There the peaks and lows are less regular. They occur on a weekly and seasonable basis rather than on a daily basis...

Uh oh. You know what I've done. I've boxed myself into an intellectual corner. When I started writing this piece it was my earnest belief that rail fares were so complicated that people like NRES were bound to make mistakes. I was also going to add that the National Conditions of Carriage and protected fares (that's the state's contribution, boys and girls) just added extra layers of complexity.

By the way, I still believe it to be true ie that rail fares are difficult. I just need to do some more work on my argument.

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Comments

Many train systems in the world have a fare system which is about as complicated as the one you describe (with the one usual feature you don't mention being discounts for young/old/disabled people). The fare system which applies in Britain (where there are something like fifty different types of adult ticket) is by the standards of most railway systems unbelievably complicated. I think it has evolved something like the tax code. The system starts out relatively simple, but gets more and more complicated as people close loopholes, introduce deductions, and the like. I think it could be simplified considerably without huge losses of revenue, and I think a new system designed from scratch would be quite a bit simpler.

Posted by Michael Jennings on August 18, 2003

Quite. We have Savers, Travelcards and Cheap Day Returns both of which (I think) are "protected" ie. the franchisees can't change them. In addition, many franchisees have felt obliged to introduce cheaper tickets that can only be used on their own trains. This is due to what are known as ORCATS raids. Don't ask me what ORCATS stands for but it is a system for redistributing fare revenue when one route is served by more than one operator (another state requirement). An ORCATS raid is where an operator puts through a service at an unpopular time but is able to claim a share of the revenue equal to the share of the services it runs. It's another layer of complexity and yet another thing to get wrong.

Actually, the point you make makes me think that maybe rail fares aren't as complicated as I thought they were. It's the state that confuses things.

Having said that there are a few extra complications unique to railways. Firstly, whereas on commuter routes it is acceptable for people to stand it is not acceptable on long distance routes - not that this stops people. So, there is an extra complication here.

Secondly, while planes (normally) go A to B, trains go A to Z through B, C etc. Goodness knows how you resolve this when you are trying to maximise revenue.

Thirdly, when flying you are usually only dealing with one operator but on a train journey you are often dealing with two or more. This is true almost everywhere and presents all sorts of problems for through ticketing.

Posted by Patrick Crozier on August 18, 2003

ORCATS stands for Operational Research Computer Allocation of Ticket Sales - this model was built by BR Operational Research

Posted by Charles Wild on March 30, 2004

Gosh wasn't railway privatisation a roaring success..... :P

Tim

Posted by Tim Butler qx on April 17, 2004

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