The reason for this is simple enough: plain ordinary supply and demand. Normally prices adjust so that supply and demand are in balance. But when fares are artificially held down by the government - as they are in London - supply falls and demand increases. In this case it means less space and more passengers and thus, overcrowding.
[As an aside. I always find it funny how the same people who condemn high fares also condemn overcrowding which is a direct result of low fares.]
There is also an issue with investment. Even if the incentives lined up there would be a problem. Train operating companies (last time I looked) typically have a government-mandated franchise period of about 7 years. But trains take 20 years to justify the investment so it makes no sense for operators to buy longer trains - let alone build the longer platforms needed to accommodate them. [Not that they could given that these are owned by Network Rail.]
Now the overcrowding situation in Tokyo is far from perfect but if I had to be overcrowded I would be overcrowded in Tokyo. There is more standing room so you are more likely to be able to stand up straight and there are more doors per carriage so it’s easier to get out. And if you are extraordinarily lucky and manage to get a seat it is at least comfortable. I can’t help but think that this is due to Japan’s rather more sensible private railway system in which operators own both the trains and the track and can do more or less what the like with them. [Except, incidentally, when it comes to fares which like London are held down. Hence the overcrowding.]
Isn’t all this just a case for state ownership?
We tried that. It was called British Rail and there was plenty of overcrowding there too.
Why was overcrowding so bad on British Rail?
Because politicians liked keeping fares down but disliked shelling out for new rolling stock.
But if fares were free wouldn’t the train companies put them up sky high?
I don’t know what would happen initially. When markets are introduced overnight all sorts of funny things happen because the price signals aren’t in place. It takes a while for things to adjust and (in this case) for train companies to work out just what their customers really want. What you have is a choice between short-term pain and long-term gain or short-term gain and long-term pain. There is no short-term gain, long-term gain option to my knowledge. [Writing this I am reminded of Brian Micklethwait’s quest for examples of where freedom makes things better overnight. Not here I’m afraid, Brian.]
It is worth remembering that in the days when fares were freer (before nationalisation) although people grumbled (particularly about freight rates - but that’s another story) it wasn’t that big an issue.
Isn’t it pretty obvious what people want? What they want is a seat.
Is that true? Sure they want a seat but how much do they want it? Let’s face it on many lines in London you can get a seat if you are prepared to pay the First Class fare. But how many people are prepared to do that? The truth is that people are prepared to forgo the comfort if it means saving some money.
For what it’s worth, my guess is that given enough freedom and enough time things will work out for the better for just about everybody. Some companies will change their working hours for some staff encouraging them to travel outside the peak. Train companies will have a variety of classes ranging from luxury to standing-only depending on what people are prepared to pay. And standing will be nicer. One of the worst aspects of standing in London is that you can never stand up straight. You’re always standing at a slightly contorted angle. Usually because you are bang next to a seat.
But I think you would also find that train companies would invest heavily on routes people wanted to use. They would lengthen trains and platforms and improve headways and remove bottlenecks.