Playing it fair with train commuters

John thinks that Public satisfaction and quality of service should be taken into account when giving out these contracts, not just price.

John thinks that Public satisfaction and quality of service should be taken into account when giving out these contracts, not just price.

This morning, the Transport Select Committee of which I am a member has published a report. You can find it here.

The reports accepts that investment needs to be made on the railways, and that commuters need to be contributing their fare share.

It also makes the following points.

1) After 10 straight years of rises, Rail fairs cannot keep rising indefinitely.

2) Finding savings and efficiencies cannot be done by compromising safety.

Of course, if you spend half your life commuting on overcrowded trains, you are never going to be happy with any price rises. The balance that needs to be struck is to improve capacity and the quality of services. That is best done by having an open, transparent franchise system and not best done by using price to dampen down demand.

2 responses to “Playing it fair with train commuters

  1. John I have several issues with the way prices rises are allowed on the train fares.

    Firstly I don’t think an RPI+/-x baseline is a decent way of calculating how much train fares need to rise or fall by, as RPI is a very crude measure and not specific enough to reflect the running costs of a train franchise for example (and of course as transport costs increase due to RPI, then RPI increases). However this is a wider issue with how we calculate and inflation and arbitrarily apply it to everything from transport to benefits, from utility prices to wages.

    Secondly if using an RPI baseline then surely it should be RPI-x not RPI+x, as the argument for privatising the train services is that they’d become more efficient, yet an RPI+x allowance gives them a year on year remit to become less efficient.

    I expect there are other measures around which they’re judged however, in terms of quality of service, safety and so on, and they’d argue that in order to improve on these measures they need to increase prices, which I’d be happy with but I don’t trust the ability of the regulators to set the right incentives. For example 48% of seats on the west coast mainline during peak times are empty, because it’s more profitable for the companies to sell half the tickets at £150 each than all of them at say £65 each. So one of the measures in place should incentivise them to fully utilise the services and ensure they fill a many seats as possible as we do with planes which doesn’t seem to happen on the trains.

    Finally and correct me if I’m wrong but it seems to me that they are given a limit on how much average ticket prices can rise, rather than individual ticket prices or average journey prices. If they had a 4% limit across the board say then everyone would get hit by 4%, but if they’re given a 4% average limit then what I’d expect to see is the fares that hardly anyone pays generally stay the same, and the fares that are most in demand i.e. that most people are subject to increase by up to 8%. There seems to be some form of control around this to prevent this occurring wholesale, but why not restrict all individual fares to the same maximum increase of RPI+x rather than applying an average which can be manipulated?

    Of course all these problems stem from the need to regulate prices which is what occurs when you privatise a monopoly, but that’s a far broader argument.

  2. The other trick you’ve missed is that the train companies have significantly increased the timeslots which they regard as ‘peak’ hours. Who else would define Peak as being 3.01pm to 7pm? In all seriousness the train fares are beginning to cause a problem for people like myself who are mobile contractors. Some employers (e.g. big 4 accounting firms) are beginning to insist that staff are located in the South East for these roles as they think (incorrectly in fact) that it will reduce transport costs. I would say a 20% reduction in off peak fares and a 60% reduction in peak on day travel would be about the correct level of fares on the West Coast Mainline which you’d expect to pay.

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