Arriva calls for Department for Transport  to review anachronistic regulations and outlines potential option for radical ticketing reform

 

A magnetic stripe ticket

 

Arriva has called for the Department for Transport to revise “anachronistic” requirements for all train operators to provide a common national ticketing technology and sell tickets for every possible rail trip nationwide from station ticket offices.

The Deutsche Bahn-owned transport group said maintaining these ‘network benefits’, along with inflexible pricing and station staffing rules, had limited the introduction of systems such as smartcard, bankcard and barcode ticketing, which are cheaper to run and offer greater customer convenience.

“The current regulatory model entrenches anachronistic solutions and undermines the business cases for new ones that drive important customer benefits,” Arriva told the Office of Rail Regulation’s current ticket retailing review …“Individual TOCs are often unable to develop new systems or innovative solutions by the impossibility of a positive business case in the context that all existing systems need to be retained in parallel.”

The company suggested that one option for a new fares and ticketing model could involve each franchise focusing on developing new, potentially bespoke, ticketing technology appropriate for its own franchise and markets. National network requirements would be revised to take account of online technology that had not been invented when the rules were written 20 years ago.

Key changes could involve train operators only selling tickets for journeys on their network and direct ‘cross boundary’ services from its stations. This would enable operators to introduce new smart ticketing systems without the obligation and expense of continuing to offer nationwide BR-era magnetic stripe tickets in parallel. In addition, operators would be able to vary ticket prices to reflect the cost of selling different types of tickets and to encourage customers to switch to new smart ticketing systems. This would mean operators could charge more for magnetic stripe tickets bought through ticket offices than barcode or smartcard tickets bought online.

Operators would also have the freedom to reduce ticket office staffing hours as customers switch to self-serve tickets in order to reduce costs and redeploy staff to broader customer service roles.

Arriva pointed out that differential pricing between paper and smart tickets had been essential to TfL’s programme to encourage use of Oyster ticketing and that without it “it is unlikely that Oyster would exist in anything like its current form, scale or popularity”.

A national ticketing service, as opposed to a national ticketing technology, could be retained by continuing to sell journeys between all stations online, with fares derived by packaging individual operators’ tickets.

“The technology now exists for different operators to offer different fares and retail platforms, but for these to be packaged and sold as a single transaction,” Arriva said. “The customer does not need to lose the benefits of a single, integrated network and train operators are able to innovate and develop new solutions. DfT can help encourage this by supporting the industry move to this position.”

Arriva acknowledged that dropping the requirement for operators to offer a common ticketing technology would create the likelihood of passengers having to use a combination of tickets for longer journeys, such as barcode for one section of the trip and magnetic stripe for another. However, it argued that customers are increasingly making this decision for themselves to get the best deal – for example by buying a discounted Advance ticket (often barcode or print at home) for travel between cities along with separate tickets for the local networks at either end. Around 60% of long distance rail trips are now made on Advance tickets.

The wasted expense of operators setting fares for every possible journey from every station and training all station staff to sell them was illustrated by research on how often these trips are requested. A study on one Arriva TOC showed that no ticket was sold all year for over half the fares available.

“The more the network can operate as a series of aligned but individual businesses, the faster and more effectively individual franchises will be able to innovate for consumer benefit,” Arriva concluded.

Arriva’s call for the DfT to consider radical change was echoed by the Association of Train Operating Companies which recommended “a review into network benefits” to establish whether the benefits to customers of through journeys and inter-available tickets are outweighed by the disadvantages. It said this should include investigating the potential for a “paradigm shift” similar to the potential option outlined by Arriva as well as less radical options.

 

This article appears inside the latest issue of Passenger Transport.

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