Rail 851: The railways lose passengers while I lose my wallet

One can almost hear the tunes of the Peter, Paul and Mary song: ‘Where have all the passengers gone? Long time passing’.  Indeed, suddenly the reduction in passenger numbers seems to be getting serious. What started as a blip, a dent in the curve, now seems to be a trend and the implications for the rail industry, and indeed transport providers as a whole, are very serious.

To understand why the growth, which has been continuous for two decades apart from a couple of brief periods, first because of the meltdown on the railways following the Hatfield train crash and secondly following the financial crash of 2008. The growth has had numerous underlying causes, but also there are various unknown unknowns which have mystified people in the industry, notably because the growth has not followed long term trends when changes in passenger numbers mirrored GDP growth. Instead, the growth has been far greater than would be expected from past trends.

There is little doubt that the key factor behind the growth has been greater affluence, with more people able to afford to travel combined with a growing disillusion with the ‘delights’ of driving. Talking to Professor Chris Nash of Leeds University a few years ago about this, he said that modal transfer to car reached its peak by around 1990 by which he meant that everyone who transfer their journey to driving had done so. Everyone who wanted a car could get one and yet demand for travel continue to grow with the result that many of these extra journeys were undertaken by rail.

Over the early part of this period, there was too a shift in the relative costs of driving and taking trains, thanks to the fuel tax escalator, one of the best ever transport measures, which lasted from 1993 to 1999. Then there are a whole host of rather random factors such as the huge increase in university students who tend to travel between home and college, the development of many old railway sites near stations which inevitably are bought by people who are likely to commute, the ability to use devices on trains (even though the rail companies have been far too slow to ensure that mobile phone communication and internet services are constantly available on journeys) and, probably the most important of these factors, the huge growth of employment in central London which, realistically, is only accessible by rail.

As for endogenous – to use Gordon Brown’s favourite word – factors, i.e. those which are a result of developments within the industry, there is no doubt that the introduction of new trains, increased services and the much easier access to information through the internet have all contributed. It is indisputable, however, that little of the growth has actually been generated directly by the railway companies and that is begs the question of whether there is anything that the industry can do itself to try to reverse the decline.

Even at times of weak economic growth during this long period numbers have still risen inexorably, despite the predictions of Mystic Wolmar who has consistently forecast doom. Well Mystic may belatedly have got it right but the reasons for the decline are unclear. The numbers are certainly worrying. After years of growth averaging around 5 per cent, overall passenger numbers have fallen in four of the past five quarters with much of the decline being in the London commuting market. Part of that has been the ongoing dispute on Southern rail but even without those, the Department for Transport has estimated that rail use would have increased by 1 per cent in that market rather than fallen 1 per cent.

Nevertheless, the Department has recognised that a fundamental shift, particularly in the London commuter market, is taking place. It was brought home to me when a rail manager told me ‘Friday travel has been declining and that Thursday has become the new Friday in terms of peak loadings’. Several other managers have mentioned a similar phenomenon. The main driver, of course, is the machine on which I am writing this and its ability to connect with the outside world. Why go to work every day to sit in an office when everything you do can be undertaken remotely? When I first started writing this column in 1995 (Rail 262!) , I had to fax it over to Rail’s offices I had no email and when I did acquire it, there was quite a palaver about connecting up. When I went on holiday, I would have to write columns in advance or, as I did once, phone over the copy.

The implications of these changes in technology have only just begun to percolate through and, frankly, they have taken longer to have an impact on rail travel than dear old Mystic imagined. Things are changing now, though, as flexible working patterns have become attractive to companies as a way of reducing costs. Young people in particular are no longer prepared to put up with five days per week of what the French disparagingly term Métro, boulot, dodo,  –Tube, work, sleep. So many people are now self-employed or working part time. The high cost of childcare, which is a great deterrent to women working full time, is another factor cited as reducing demand for rail travel. There are genuine widespread fears within the industry that there may a long term decline or, at least, no growth which will play havoc with several franchises.

If the era of a captive market of commuters taking the same train every day and renewing their season ticket annually is over, the train operating companies and, particularly, the government need to react. The operators must push ahead with plans for more flexible arrangements, allowing part time season tickets or creating a carnet system that regular passengers can use. It is, I am told, the government that has been blocking these changes but that is probably because the operators are demanding too much compensation for any potential losses. Herein lies the weakness and inflexibility of the franchising arrangement. The companies must be prepared to take a bit of a hit if it means that in the longer term they are providing a product which passengers want.

There is no doubt, too, that the reversal of the trend of the 1990s, with rail fares now going up higher than fuel prices, is having an impact with people jumping in their cars because it is cheaper for them. The era of above inflation rises must end and, indeed, government must go further by actually encouraging modal shift, something that goes completely against the Tory grain – and to be fair, Labour, with the exception of John Prescott, has refused to do when in office (I remember Alistair Darling, not the worst transport secretary we have had, being rather exasperated when explaining to me at a press conference that he was not in the business of encouraging people to take the train rather than the plane between London and Scotland.)

Writing an article entitled ‘Government must face up to congestion’ in Passenger Transport magazine, Norman Baker, the former LibDem transport minister in the coalition government of 2010 – 15, highlighted the fact that the parallel decline in bus travel is largely down to increased congestion as, for the first time in a decade, traffic is rising steeply. While ministers wring their hands, they refuse to implement bus friendly measures and, in fact, are making cuts which reduce the number of services. Instead, they throw money at the road construction industry even though long established research shows that building more roads simply encourages more people to get in their cars. Yet, as he points out, most politicians recognise that climate change is happening and will bring about disastrous consequences.

He recommends increasing fuel duty and stopping the rail fare rises, something one wished he had pushed for harder when in office. However, Baker is right. We need politicians to understand that congestion doesn’t just happen, it is a result of a series of mistaken transport policies. The car lobby, however, still rules supreme. If only the rail industry had the wit and the leadership to highlight Baker’s arguments and ensure that politicians of both main parties get on board, then the trend might be reversed. But it will take a lot of effort.

 

  • James

    This is troubling, but very much what I would have expected. When there were postal strikes in the 1970s, people began to think about new approaches to communication and in the years that followed, business leaked away.

    I was on the wrong end of the Southern malarkey and it left me with little time for any of the parties involved.

    Unfortunately disputes like this merely compound other long term problems: for example, it’s hardly a secret here that the railways have a dysfunctional structure and their cost base is far too high. It’s nice for drivers to get £50k+ basic, but is that salary really justified? Just look what a London bus driver gets – or a junior manager in virtually any private company.

    To make matters worse, the railways are forced by the state to operate an uneconomic model in many areas of their business; this does much the same kind of damage that the old “common carrier” laws did to the old “big four” in the 1930s.

    Unfortunately, no one seems prepared to tackle any of this, most likely because it would involve taking on some very well-entrenched vested interests.

    In due course another recession will put all of this under further increased strain, with hospitals, welfare and schools etc well ahead of railways in the queue for taxpayers’ money.

    I fear the result will be severe cuts to the network.

    Don’t expect to see a Beeching-style plan from the government any time soon; that would be far to much of a hot potato. The likely mode of action will be to reduce many lightly used lines to some kind of parliamentary service, possibly with buses replacing some services.

    The map will look much the same as it does now, but just try actually finding a train! Don’t think this could happen? Just take a look at SNCF.

  • Ian Raymond

    This is too simplistic an analysis and one that a journalist of Christian Wolmar’s calibre should be ashamed of. Having read almost all of his books (which are very good) he is capable of much more incisive analysis. Some of the above points are undoubtedly true but hide a number of factors.

    Firstly, the London-centric view is perpetuated – take a look at what is happening by operator (or by station, in the ORR data) and it quickly becomes evident that growth in the regions is by and large very strong. So, are we really being sensible as a country in investing for so much growth in London?
    Second, there are changes in working patterns, which are undoubtedly affecting rail travel, but an investigation of the National Travel Survey data seems to suggest this is across all modes, not just rail.
    Thirdly, it seems to be that leisure travel is particularly buoyant, whether from domestic or international travellers, with all sorts of implications for policy. (Just compare the levels of cars in Betws-y-coed every Sunday with the levels of rail service…)
    Forthly, is any decline *really* just about fares and working patterns (well, ok, probably that forms a large component, but is it everything)? The question that should make a lot of operators and DfT squirm is ‘Is the journey still attractive’? In an era where seats are designed without a thought for comfort, inadequate luggage space is the norm, travellers are inconvenienced by more and more stations becoming ‘gated’ (how to get through with a briefcase in one hand and coffee in the other?), and on-board catering is – with the exception of Transpennine’s coffee – becoming ever more spartan, is this really a product people making ‘optional’ journeys really want to buy into?

    Come on Christian, you can do a more professional investigation than that above!

  • oooh, that’s a bit harsh but I do see your point. This is one of those mysteries, just as the growth of passenger numbers almost constantly for 20 years had people scratching their heads. As I wrote in my piece, I think the key conjunction is the fares increases – and the perception of them since they are in the news all the time – together with changing work patters. Suddenly a point has been reached where this has created what definitely seems like a turning point. But remember, we are looking at the individual decisions of millions of people so it is hard to generaliise.
    To emphasise that point. 20 or so years ago, I used a car to go to the supermarket, often parked it at the local Tube station to go into town and drove to play cricket and watch QPR. Now I never go to the supermarket or cricket or football matches by car and would not dream of driving to the local Tube station. My bicycle has become the dominant mode, and others are used only when it is not possible to cycle. I have consequently changed my behaviour radically for reasons of convenience, environmental considerations, health and economics. Others, too, have gone on similar routes but trying to draw macro conclusions about this sort of thing is fiendishly difficult.

  • DL

    All interesting points – as are the contribs here. Obv one of the logics of privatisation would be that a response TOC would do things to encourage ridership where it made sense to do so – better comfort, customer service, ticket initiatives etc. But it seems like the subsidy junkie TOCs may be more interested in simply getting DfT to pay up instead….

    That may be unfair but it is a perception.

    Of course boring old BR came up with things like the NSE Network Card as a response back int he day – a card that some TOCS have undermined the value of…

    Given the choice, it is hard to imagine that most people would be keen to get up early, get on an overcrowded peak train and pay a heck of a lot up front for a season ticket if the boss was happy to let them work at home and see them on skype – and if that is true then a bigger shift is perhaps just starting?

  • Keith

    Interesting discussion! There has been a lot of wailing about TFL revenues being down (e.g. https://theconversation.com/why-fewer-londoners-are-taking-the-tube-a-transport-researcher-explains-94754 ), but it is really a bad thing? If it means we don’t need to do an expensive upgrade project or two, this could free up cash to spend more usefully than just moving people around an overcrowded city.

  • Paul Holt

    CW has missed the target, which is to simply ask those former rail passengers why they no longer take the train. Then he might have a greater idea how the strikes on Southern (and now Northern) are affecting passenger numbers. For brownie points, he might then suggest the solution to Sadiq Khan.