Memorandum from Association of Train Operating
Companies (ATOC) (TPT 20)
A. INTEGRATED
TICKETING
What train operators are doing today
Integrated Ticketing. Comprehensive through
ticketing is already provided between passenger train operators
on the National Rail network as well as integrated ticketing with
metro and light rail systems, buses, ferries and visitor attractions.
Train Operators are obliged as a condition of their Passenger
Licences, to participate in through ticketing arrangements covering
most station to station journeys in the country.
Integrated ticketing is delivered through the
Rail Settlement Plan, run by ATOC, which produces fares, timetable
data and other sales information for train operators, and handles
the allocation of rail revenue between them. RSP is responsible
overall for the annual allocation of £4.8bn of rail revenue.
Ticketing Systems. The cost to train
operators and agencies of providing information and ticketing
services to passengers nationally is £400 million pa, and
the approach has been to develop systems that provide better facilities
for passengers but also that reduce the costs of the railway through
lower transaction costs.
Train operators have invested heavily in new
ticketing systems and the last of the older BR machines are being
withdrawn this month. The new systems are PC based, with capacity
for handling integrated ticketing using magnetic encoding, while
some are also capable of writing to Oyster cards as well. The
machines have taken advantage of latest developments in the retail
sector, so costs have been contained and the machines are both
reliable and flexible in terms of future ticketing developments.
There has been a significant shift away from
sales at stations to on-line and call centre bookings, with tickets
delivered by post or collected through Ticket on Departure machines
at stations, just like the systems used by airlines. Ticket on
Departure sales are now responsible for £300 million of revenue,
compared with zero five years ago and form a significant method
of distribution for a number of long distance train operators.
Passengers' Views. The National Passenger
Survey (NPS) sample showed 18% of passengers travelling on season
tickets, 35% booking in advance and 31% buying their tickets on
the day of travel at the ticket office. 12% use a ticket machine,
or pay on the train. More than 50% of passengers are already using
tickets purchased before travelling, and this is expected to increase
with a rapid switch to on-line or telephone bookings.
The National Passenger Survey also shows that
65% of passengers were satisfied or very satisfied with ticketing
facilities at stations, while 19% were dissatisfied (16% were
neither). Similar results apply to advance bookings by phone,
with 59% satisfied or very satisfied, and 18% thinking the service
was poor or very poor. The percentage of satisfied long distance
passengers however, was much higher, at 79%, with only 9% dissatisfied.
These figures demonstrate the need for improvement
which is being actively tackled by train operators with investment
in new equipment, systems and training, as described below.
FUTURE DEVELOPMENTS
Drivers of Change. Rail ticketing is
changing rapidly for six principal reasons:
— Passengers' expectations are
rising in line with their experience with other service providers
such as airlines.
— The technical development of
ticket machines, smartcards, on-line ticketing and mobile phone
technology.
— The need to reduce the cost
of selling rail travel.
— The commercial benefits of increasing
sales.
— Growth in passenger numbers
and the limitations of facilities at stations.
— Government e-commerce initiatives.
The result is a virtuous circle in which ATOC
can both make ticketing easier for passengers and cheaper for
operators, so helping to hold down the costs of the railway and
improve service for the customer. Increasingly, passengers are
looking to be able to serve themselves through on-line travel
purchases or mobile phones, rather than queueing at stations.
Paper ticketing will decline, as will the demand for ticket purchase
at stations or on trains.
The pace of change is going to accelerate rapidly
over the next five years, and in particular, more people will
be turning to smartcard ticketing linked to mobile phones, so
that additional travel can be purchased on line, or by text, or
through paypoint outlets such as convenience stores or banks.
Range of Requirements. Smartcards will
have the greatest benefit in urban areas, where the need for integrated
ticketing is highest. Electronic ticketing and ticketing via mobile
phone is a passenger requirement for longer distance or less frequent
journeys. It also means that a better service can be provided
for passengers using smaller stations that are unstaffed, without
needing equipment that is expensive and prone to vandalism.
The issues for the future are the pace of change,
the costs involved and the best way of continuing to provide a
good standard of service at a cost that is affordable, for the
reducing number of passengers that will be buying paper tickets
at stations.
ATOC's Commitment. ATOC is committed
to developing more flexible, consumer-led ticketing, making use
of new technology which allows both improvements for passengers
and a reduction in the unit costs of its provision. To support
this, train operators have formed an Integrated Ticketing Group
and produce a regular good practice guide for onward travel. The
driving force is the commercial benefits of making information
and access to the railway easier for potential customers. It is
about providing what the majority of passengers want, rather than
just the development of integrated ticketing.
B. GENERAL QUESTIONS
RAISED BY
THE COMMITTEE
1. Changes in statutory provisions over the
past decade have enabled local authorities and other transport
providers to create integrated ticketing schemes. But is it working?
ATOC has developed integrated ticketing further
and faster than any other transport operator. RSP operates by
far the largest UK Interoperable Fare Management System—ISO
24014-1—and has done so over more than 10 years. Through
tickets from National Rail stations are issued to:
— Plusbus to local bus destinations
in 195 towns and cities throughout Great Britain, from 270 National
Rail stations.
— Other bus/tram links: 410 links,
including light rail systems.
— Airports: Through ticketing
is in place to 29 airports using including bus or metro connections
where necessary.
— London Underground: Tickets
priced on a zonal basis within Greater London, for rail/tube journeys.
Add-on tube/DLR tickets are available from National Rail stations
to Underground stations.
— Leisure attractions: 48 destinations
such as Alton Towers and London Sightseeing tours, as well as
eight heritage railways.
— Shipping Links to: Isle of Wight,
Isle of Man, Channel Islands, Scottish Islands, Northern Ireland,
Ireland, and France and the Netherlands (by sea).
— Rail Rovers: National, regional
and line rover or ranger tickets. Some of these include bus and
heritage rail services. (eg North York Moors Moorslink train/bus
network).
PTEs: Train operators also work with PTEs to
provide multi-mode tickets within their areas.
European Railways: International tickets are
no longer handled at National Rail stations, but, as with airlines,
can be booked at agencies or on line.
Plusbus and other bus/rail through ticketing
already allows multi mode journeys to be made with a single transaction.
Example: Oxford (Banbury Road) to Brighton (Saltdean) can be
made with a ticket covering the bus to Oxford station, train to
Paddington, Underground to Victoria, train to Brighton and bus
from Brighton station to Saltdean. Such tickets are not only
accepted by all the operators concerned, but are encoded to operate
the barriers at main line stations and on the Underground. Plusbus
is run by Journey Solutions, a partnership between bus and rail
operators, including ATOC and the Confederation of Passenger Transport.
It will be extended to a further 21 towns and cities in May, increasing
the total to 216.
85% of rail journeys are made on one train,
and 15% involve a change of train at some stage during the journey.
(In Scotland, only 11% of journeys involve a change of train).
Plusbus ticket sales are running at a level 45% higher than a
year ago, although the total number sold since April 2006 is relatively
low at 60,000 tickets. Given this growth rate, advertising and
extension of the number of destinations covered, further substantial
growth is expected.
Frequent and short notice changes in bus timetables
are a practical constraint in providing supporting travel information
to passengers although they do not normally affect integrated
ticketing. A process more aligned to railway timetable change
dates (which are set by European timetabling considerations) may
help to improve the reliability of information to passengers.
2. The use of smart-card technologies for
ticketing on public transport is closely linked to the creation
of integrated ticketing strategies, and the Government supports
ITSO. Is progress happening quickly enough, and are the best possible
systems being put in place?
ITSO. We do not believe that progress
has been rapid enough to keep pace with technological change.
Whilst good work has been done by ITSO in setting standards, the
organization is small and has been slow to define standards. Whilst
ITSO has addressed the question of technical standards, it has
not proved to be an effective forum for managing the delivery
of integrated ticketing, dealing with its commercial implications
or for sustaining the systems against the background of rapidly
changing technology.
ATOC (Rail Settlement Plan) has taken the lead
in delivering ITSO obligations on the National Rail network and
is ready to provide central "back office" functions
to reduce the costs of its roll-out. As a result of this, ATOC
would be well placed to be the customer for a properly resourced
national integrated ticketing system. Once ITSO compliance has
been established, we would expect the spread of smartcard ticketing
to be very rapid, primarily in metropolitan areas.
Oyster. Train operators already accept
travelcards on Oyster on National Rail services. 70 of the 330
stations within Greater London already have gates capable of reading
Oyster. Additional ticket issuing machines have been procured
to support the sale of Oyster. 15% of National Rail journeys within
London are already on Oyster.
Train operators are committed to making Oyster
Pay as you Go tickets available to their customers as well, and
ATOC has accepted the Mayor's offer to fund the capital cost of
ticket validators at stations. In preparation for accepting Pay
as you Go on the rail network, TOCs introduced zonalised rail
fares in January. Oyster Pay as you Go will be extended to Silverlink
Metro services from November this year, to Chiltern and c2c services
as soon as possible, and to First Capital Connect and South West
Trains from 2009.
Moving beyond that to accepting Oyster Pay as
you Go tickets throughout Greater London requires heavy investment
in additional equipment and measures to deal with ticketless travel
on a network that operates more stations in London than the Underground.
National Rail covers a wide variety of services,
interurban, commuter and local, and customers' ticketing needs
are different. Many are single-mode journeys and many would not
benefit from smartcard ticketing. Separating the transaction and
the ticket will allow passengers to chose the combination that
suits them best. They may chose to buy the ticket on line, via
telesales, or by text, and then print their own ticket, use a
Ticket on Delivery machine or a smartcard top-up, for example.
3. The Committee will look at the commitment
of transport providers to collect due revenue, and will also examine
the balance between the rights of passengers and the duties of
ticket inspection teams
No data is collected nationally on loss of revenue,
but it is assessed as representing some £400 million, or
about 8% of revenue, of which about 60% represents ticketless
travel (the rest representing travel with a ticket that is not
valid for the train or class of travel).
Revenue protection is relatively straightforward
and generally well managed on long distance services.
On local and commuter services, revenue collection
is affected by three key factors:
— The time between frequent stops
which may restrict the Conductor's ability to collect fares.
— The cost of ticket inspection
and fare collection.
— The risk of assaults on staff
engaged in revenue protection, which has led to the deployment
of Rail Enforcement Officers at stations and on trains.
The move towards e-ticketing and smartcard will
clearly help to overcome the first two of these issues. The level
of revenue protection is variable on local and commuter services
but the revenue risk of adequate fare collection is with train
operators, in whose commercial interest it is to collect the money.
100% checks are not attainable so the deterrent value of penalty
fares and the risk of prosecution are important incentives to
ticket purchase.
There sometimes appears to be a reluctance to
prosecute for ticket fraud, and where prosecutions are made, it
sometimes appears that sentences given reflect a view that ticket
fraud is not a serious crime. Guidelines could be given on both
prosecution and on sentencing which better reflected the serious
nature of the offence.
7,397 ticket fraud offences were recorded by
British Transport Police in 2005/06, of which 4,415 (60%) were
detected. The number of offences recorded represents less than
1% of the 1.075bn journeys made on the National Rail network.
C. SPECIFIC QUESTIONS
RAISED BY
THE COMMITTEE
Integrated ticketing
1. Is ticketing sufficiently integrated across
different modes of transport and between different geographical
areas?
A high level of integration has been established
by train operators, as set out above. Integration is particularly
needed in urban areas, and requires proper contractual relationships
and a sound legal basis, consolidating the block exemption by
the Office of Fair Trading which underpins bus/rail ticketing.
Continuing referrals of train operators to the Competition Commission
where short-listed bidders also operate buses in the area do not
help to build confidence.
2. Does the Government have an adequate strategy
for developing the integration of ticketing systems?
Government has been the driving force behind
Transport Direct, the key to providing information about integrated
journeys, and has supported ITSO, but the strategy on integrated
ticketing has so far been led by train operators through ATOC,
and in the case of Plusbus, in partnership with bus operators
through Journey Solutions.
The railway has been criticized over the complexity
of its fares structure and is working hard to simplify it. From
the beginning of March, the National Rail Enquiry Service web
journey planner has simplified displays to give passengers much
better information on the cheapest tickets available for the journey
they want to make. However, integrated ticketing adds to that
complexity, and this is being addressed through simple add-on
fares such as Plusbus and the use of smartcard technology.
The use of smartcard technologies
3. Is the industry taking up modern smartcard
technologies adequately and appropriately?
Yes. Commercial pressures are driving a rapid
take-up of new ticketing technologies. Train operators have devoted
substantial resources to accepting Oyster travelcards in London
(and are now moving to accept Pay as you Go as well). TOCs have
been in the forefront of the development of e-ticketing and permission
to travel by mobile phone. ATOC has been part of ITSO from the
outset.
4. Does the ITSO system cater for the needs
of all passengers and travel providers?
Yes, ITSO is comprehensive, but in practice
is likely to be more widely used for frequently made local journeys
than for long distance travel or infrequent trips.
5. What can be learned from the experiences
of areas such as London and Scotland where smartcard technology
is already in place?
The lessons learned from London are that of
the need for a national standard, and that when specified it should
be capable of use by all operators involved, rather than requiring
the retrofitting a system designed for a different purpose. The
second lesson is that smartcards require simple fare structures.
Revenue protection and the powers of ticket inspectors
6. Is the legal framework within which ticket
inspectors function appropriate?
Yes. They work within the Penalty Fares Rules
2002, established by the Department for Transport under the Penalty
Fares Regulations, 1994 and s.130 of the Railways Act, 1993. They
are applied to:
— Southeastern (inner suburban
area only).
— Southern (inner suburban area
only).
— South West Trains (inner suburban
area only).
— First Capital Connect (Bedford
to Redhill only).
— One (most routes other than
paytrain lines).
— First Great Western (West Drayton
to Paddington and branches only).
— Central Trains (Birmingham area
only).
— Chiltern Railways (all routes).
— Northern (Leeds area only).
7. What appeal mechanisms exist for passengers,
and are they adequate?
Appeals against penalty fares notices can be
made to the Independent Penalty Fares Advisory Service. Further
appeals are possible to Passenger Focus or London Travelwatch
and the Department for Transport which approves and regulates
penalty fares schemes.
8. Are the rights of passengers and the powers
of ticket inspectors well-balanced?
They are strictly controlled through the Penalty
Fares Rules with appeals to IPFAS as described above.
9. Do operators of public transport take
adequate measures to protect fares revenue?
In general, yes, but there is room for improvement.
(See 3 above).
Concessionary fares—the right strategy?
10. Is the Government's concessionary fares
strategy, including the proposed scheme for concessionary bus
travel, adequate?
It looks only at one mode and does not consider
rail services. However, we have no evidence that concessionary
bus fares have had any effect on the rising demand for rail services.
11. Are concessionary fares schemes sufficiently
integrated across different modes of transport and different geographical
areas?
No. Bus and rail concessions are not considered
together by central or local Government. Most rail concessionary
fares schemes are "commercial" and designed to improve
net revenue by segmenting the market and encouraging travel at
off peak times. Most local authority concessionary schemes are
based on social need, but are provided on bus only, and the minimum
standard under the Transport Act, 2000 does not apply to rail.
If extended to rail services, a national concessionary or free
fare scheme would need careful thought, as it would erode or replace
the current commercial schemes, and this would affect the costs
of introduction.
March 2007
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