The chaos of the fares system

Everyone knows that the fares system is a complete mess. No other product has such a complex pricing structure. Nor indeed, does any other railway in the world have such a maze of fares.

The reason for the complexity is, of course, buried in history and, oddly, has been made worse by the use of new technology. British Rail had a relatively simple set of fares though it began to offer cheaper fares at off-peak times in order to boost load factors on little used services. So we got savers, now called off-peak, fares but also, later, super off peak, whose use was more restricted. Then with privatisation it got really complicated with the addition of many advanced tickets – a boon to many passengers, of course, but adding another major ticket type to an already large range – and deals that were specific to a particular train company.

Add in season tickets, various occasional offers by train companies, and the fact that because fares are set by individual operators, it can often be considerably cheaper to buy two separate tickets for a journey on one train, and you get one hell of a mess. There are other absurdities, too. A friend of mine found that it was much cheaper to buy a ticket from London to Holyhead for a connection onto the ferry to Ireland, than to Bangor which, of course, is nearer the capital.

Under privatisation, too, we got regulated fares – off peak and season tickets – and unregulated fares – the rest. Of course most TSSA members are familiar with this range of tickets and can weave their way round the complexity. But pity the poor passenger.

Organisations like Passenger Focus have long been campaigning for change and simplification. In response, the government has embarked on a fares review – about which little has been heard recently – and now the Office of Rail Regulation, in a report published in early June, has picked up the cudgels on the part of passengers, focussing on the information provided to people buying tickets.

As an aside, this represents a departure for the ORR which has, until now, been mainly focussed on backroom issues such as the costs of Network Rail, rather than passenger-facing matters such as fares. However, this is part of a shift – welcomed by some, but opposed by the Association of Train Operating Companies – towards the ORR take an interest in the behaviour of train operators and responding to passenger complaints. In fact, there is something of a gap left by the abolition of the SRA which had the role of franchising director, created at privatisation, because the oversight of franchises by the Department – which also lets them – has been less than thorough.

The ORR report highlights, amongst other issues, the inadequacy of Ticket Vending Machines in the face of this complexity. The truth is that TVMs are fine if people are buying standard straightforward tickets but they cannot cope with unusual demands. Moreover, even if they were made more sophisticated so that they could cope with a greater range of fares, people purchasing tickets from them would not be assess all the alternatives and therefore would be frustrated. take in all the information. Even an experienced rail traveller like me has found it difficult, at times, to assess what ticket is valid and I therefore overpaid because of the lack of clarity. Moreover, TVMs, cannot cope with advance tickets, season tickets of longer than a week and group tickets.

Nor is new technology the answer as, ironically it has added to the complexity. We now have web only fares as yet another type of ticket, and trying to buy tickets through the train operator websites can be as hard as the Times Crossword.

So there is an irony here. In order to be able to close ticket offices to save money, the operators need to ensure the TVMs are more sophisticated, which requires considerable spending that may not prove worthwhile since, by definition, the more unusual fares are sold infrequently. Therefore, the real answer is that they need to simplify the system which has grown in complexity precisely over their desire to maximise revenue. But they do not really want to do that since they claim that making the system simpler might well reduce the number of good deals for passengers.

While ministers muse about selling tickets in libraries and the train companies try to force everyone to use machines, the complexity of the system is a barrier to change for which there is no easy remedy. Setting out the problem of fares complexity is the easy bit. Solving it is another matter especially as train fares are becoming something of a political hot potato. The annual rate of inflation in July is used as the determinant for the subsequent January fares rises and this will pose a dilemma for Justine Greening who last year reduced the rate to 1 per cent above inflation, which was still a 6 per cent rise. With the July figure likely to be around 3 per cent, a rise again of 6 per cent would deeply unpopular, especially given most people are not getting wage increases.

. The fares review is supposed to be revenue neutral and therefore any attempt at rationalising the system is will lead to both winners and losers. In truth, it would take a courageous and proactive government to rationalise the fares system, on the basis of an overall cut, which is impossible in the present structure of franchises as compensation would have to be paid. There is no silver bullet. The fares review is a waste of time as it is constrained by the present structure.

It would, in fact, be better for the operators to focus on the basics highlighted in the ORR report such as communicating information effectively to passengers and to do away with the punitive attitude towards passengers when they have forgotten their railcard or taken a slightly different train to the one on their ticket.


  • RapidAssistant

    Problem is, ticketing is like the franchise system – everyone accepts that reform is needed, but as always the devil is in the detail and when they get into the nitty gritty there is too much conflict of interest and as soon as one party discovers they are out of pocket, any initiative will grind to a halt.  Fundamental problem in my eyes is that there isn’t enough capacity at peak times, but too much off-peak.  In BR days there was more flexibility to lengthen, shorten, or put more or less trains on as demand dictated, but that isn’t possible in our over-regulated, fragmented system.  Until something is done about that, nothing will change.

    I would love to go to an airline-style ticketless system for example – which has been used on the Scotland-London sleepers for many years now, but that is an isolated case as they are effectively selling a hotel room on wheels on a single route – and that’s the rub – trying to make it work across different operators each with their own agendas and circumstances, and the same is probably true for implementing an Oyster style smartcard system on the “big railway”.

  • Richard

    The fares system is basically designed to charge as much as possible to inflexible travellers (and trying to stop business travellers from trading down to second class). This is monopoly pricing, which is only barely justifiable by saying “they could take the car”. For most operators (those without a significant first-class market), it doesn’t even raise that much money. It probably doesn’t make that much money for the long-distance operators, either, because elasticities tend to be short-term – over time we find ways of avoiding the high fares, and there are huge reputation effects of being perceived to be expensive.

    So – they should reset the peak tickets to be a small premium on the season tickets. These travellers don’t take up any more room than season-ticket holders. And the first class premium should be limited to reflect the space they use (about 50% more than standard).

    But you’re right – ORR needs to lead this. DfT won’t.

  • I have found, on multiple occasions, advance tickets that are more expensive than walk on fares for the exact same train (usually an off peak ticket).  Most of them have been related to journeys involving the west coast mainline but it was totally absurd.  Why even offer a ticket that’s more restrictive than a walk on fare?  It’s totally bonkers!