Examination of Witnesses (Questions 160-177)|
4 FEBRUARY 2009
Q160 Sir Peter Soulsby: You say that
it has reached about 16% at the moment. How far do you think that
Mr Rowson: It is a difficult one
to answer. Rail is very different to perhaps the air industry
where an airline is probably targeting getting itself 80% or 90%
of sales on-line. We should not forget that in the rail industry
a big part of the value proposition of rail is the ability to
turn up at the station and travel without having to pre-book and
pre-arrange your journey. We have seen 100% growth in on-line
in the past four years. I would hope to see the same again over
the next four years. Obviously it reaches a point where that will
plateau. It is probably, in part, being driven at the moment by
fare increases in the flexible tickets, which is what a lot of
the headline discussion has been about today, and those average
prices, which is encouraging people to plan ahead and hunt out
the £5 Birmingham to London or the £8 Manchester to
Q161 Sir Peter Soulsby: Do you think
compared with the sort of deal that you are able to offer people
that those who just turn up and face either a booking clerk or,
worse, a machine, get a pretty poor deal and do not get the full
range of options that you would offer them on-line?
Mr Rowson: It is not so much a
case of whether it is on-line or face-to-face; it is merely down
to the time when the customer makes the transaction. If the customer
chooses to go to the station the day before they are travelling,
they would get offered exactly the same fares that we can offer
them on-line. What there has been a definite move towards is continuing
to reduce that advance purchase horizon. On some routes it was
up at 48 hours a few years ago. It has largely come down now to
midnight the night before. Some of the train companies are talking
about ten minutes prior to departure still being able to purchase
the best value advance fares.
Q162 Sir Peter Soulsby: Perhaps some
of the other witnesses can comment on whether in fact those who
turn up and try and use the machine get the full range of options
that one gets through either of the other mechanisms?
Ms Grant: Our evidence is that
machines are not always as effective as they might be in giving
people the best value fare. This is one of the reasons why certainly
at the moment we are deluged with complaints about the current
proposals to close ticket offices and increase reliance on machines.
I do not know if Tim might be able to add more detail to that.
Mr Bellenger: I have often said
to friends that in terms of ticket vending machines what the railway
industry has done is they have taken an operating system which
is suitable for a trained booking clerk and they have literally
just dumped it on a machine and said to the public, "Get
on with it, you, the great untrained public, can now access your
tickets in the same way that a trained booking clerk would be
expected to do." For most customers that is actually quite
a daunting prospect. I am amazed when I go to a ticket vending
machine with a group of friends how often I have to physically
teach them how to use a machine, about where they can find rail
card discounts for example, or whether they can get a discount
travelling as a group.
Q163 Chairman: Has any of this improved?
Mr Bellenger: I think the answer
is probably not at the moment.
Ms Grant: There are certainly
some ticket machines that we are aware of where you cannot actually
buy a ticket to all destinations. We have a case in point at the
present time, do we not?
Mr Bellenger: Yes, we do. In the
case of South West Trains, they offer on their ticket vending
machines only a range of what they call the 900 popular destinations.
On the national rail network of course there are over 3,000 destinations.
The interesting thing about what South West Trains do is that
in a number of examples, in fact, another train operator actually
runs trains from a South West Trains station to another station
but that other station is not on that ticket vending machine's
list of acceptable destinations.
Q164 Sir Peter Soulsby: I wonder
if you have any suggestions as to how that can be dealt with,
particularly these machines, which do seem to be the worst possible
deal for the passenger. Either on-line, I think probably being
the preferred one, since you can get all of the options there,
or face-to-face, seems to be the advice to give to any passenger?
Mr Hewitson: Certainly the research
we have done looking at the barriers to using ticket machines
is that for relatively short distance journeys, where there is
no real choice of tickets, you can navigate your way through the
system. It is the more complicated journeys that require face-to-face
contact. You can replicate some of that on the internet but it
can be very confusing working out the times you are going out
and the times you are coming back. That is a difficulty. In terms
of getting round some of the points you mention, the ticket-on-demand
facility, whereby you can use the internet to do the queries,
to work out the journey, purchase it and then pick it up from
the machines, so the machine becomes a retailer, just a vending
machine as opposed to a purchasing means, that can sometimes help.
However, people tend to trust people. Particularly now with revenue
protection increasing, that sense of being caught without a ticket
or the right ticket and as well the huge costs you can sometimes
pay by being on the wrong train with the wrong ticket, that is
a barrier, it is a worry to people.
Q165 Mr Martlew: Just on that point,
very often the cheapest ticket to buy, say for example if I am
coming from Carlisle to Manchester, is a ticket to Preston and
then one from Preston, but the machines do not tell you that,
Mr Hewitson: No.
Q166 Mr Martlew: Very often the booking
clerks will not either because they are instructed not to, very
often that is the case?
Mr Hewitson: It is a classic case
where if you know the system you can sometimes find some good
savings. There are conditions attached to that combining of the
ticket. The train has to stop, et cetera. If you know your way
around the system you can save an awful lot of money at times.
Q167 Sir Peter Soulsby: Obviously
we are very keen that there should be wider knowledge within the
travelling public that there are options, and I just wonder who
you think should take responsibility for making sure that the
public has that awareness, that either doing it with a booking
clerk or doing it on-line is likely to produce options and some
Mr Foxall: It goes back really
to what I was saying earlier that what we are looking for in many
of these systems is greater transparency. There is a duty on the
industry, but I think there is a duty on people like Passenger
Focus to encourage the industry to do that, and we are doing that.
I think there is also a duty on the Government to see that it
gets written into the franchises, and that they use their own
influence to achieve those things. I agree with you that ticket
retailing is going to change, it is going to become more electronic,
but we are in a shoulder period where we have got various systems
in operation and we have to cope with them as they are. The other
remark that I would like to make is that you should understand
that if you go for a majority book-ahead system, you will change
the nature of the railway. A turn-up-and-go railway is still an
important railway and people who book and commit themselves to
a particular train, as my colleague said, find themselves exposed
to no flexibility, very possibly, depending on what sort of ticket
they have bought, and if they end up on the wrong train, for whatever
reason, not necessarily for any malicious reason but simply because
they miss a train and they have got to get the next one, and they
have therefore sometimes thrown away that whole ticket, that is
a penalty, and it is not something people know about, so we have
to think much more openly about how that is managed.
Mr Bellenger: Could I just add
to what Colin has said there in that in answer to your original
question the airlines model has its limits particularly for commuter
railways. Commuters invariably want to have that flexibility,
and that is why they pay the much higher up-front costs. I think
there are limits to the extent to which the airline model can
be applied to local travel particularly.
Q168 Sir Peter Soulsby: Really just
to wind this up, what is your perception of how the changes and
standardisation of names and the simplification of the ticketing
system has been for the passenger?
Mr Foxall: I think we are in a
halfway house. It was never seen, despite the way some represented
it, as the magic solution to everything. The idea was to make
a movement forward. We did a certain amount of research on names,
to help in choosing the names, and they got a better recognition
than the previous names, but it is the first step in a series
of changes that has to be made in the rail industry, dealing with
issues like flexibility, perhaps undertaking always to sell the
cheapest ticket to you when you ask for a journey and so on, which
the industry is working on with our encouragement. There are numerous
things we have to do. There is not a magic bullet to change the
whole fare system overnight; I wish there were.
Q169 Ms Smith: Would you defend the
practice whereby passengers can still jump on trains and buy tickets
on the train? Do you think that at the moment they pay a penalty
for doing that and do you think that is an unfair penalty?
Mr Foxall: In principle, yes I
do. Clearly it is a bit difficult to be absolutely blanket about
it because it depends whether you think people are trying to evade
fare paying. Where we are convinced they are trying to evade we
are very strongly in favour of revenue protection operating. That
is the kind of flexibility that I was really talking about earlier
on that I think ought to be in place. I do not see why train companies
should treat passengers as though they are recalcitrant prisoners
or whatever. They are customers and if they are travelling on
a train and they do not have the right ticket maybe, yes, there
should be an administration fee, or some such, if you want to
upgrade, but it should not be excessive and it should not be unreasonable.
I think there should be some reasonable presumption of innocence
instead of the huge presumption of guilt before we start. It is
up to the train companies and all of us to work in trying to prevent
fraud and so on.
Q170 Ms Smith: I ask this question
partly because, in Sheffield, East Midlands Trains are wanting
to put barriers up so that nobody can get on a train without a
ticket. I am one of those who unfortunately regularly jumps on
a train because I have decided at the last minute that that is
a particular train I want to London; I do not have time. Barriers
would work against what is at the current moment a public access
from communities in the Park Hill area of the city into the city
centre. There is a huge dispute about this and I just wonder about
Passenger Focus's view on that kind of impediment to public access
to stations and platforms.
Mr Foxall: I think in general,
as a piece of policy, we are in favour of gating simply because
it ensures revenue protection. What has to go along with that
is proper, quick, reasonable and simple access to tickets. Dealing
with your point, I think what needs to go along with it is reasonable
flexibility, and having bought the ticket, if it turns out not
to be absolutely the right one, you can change it on the train
or change it when you get off the train without there being a
penalty, so a more customer-focused kind of approach to dealing
with the problem. I think it is difficult to argue against gating
because it has big revenue protection improvements. Answering
earlier points about who pays, that ensures the passengers do
pay their share, and that is an important thing.
Q171 Ms Smith: Gates at platforms
perhaps rather than whole stations?
Mr Foxall: Possibly so.
Mr Hewitson: We have general support
for the concept of gates but it has to be on a "horses for
courses" basis. It has to suit the station in question. That
is an important caveat; it has to suit public access to a station,
and in many places railway stations are cut across the line and
they are as much about getting through the station rather than
using the trains, and that has to be factored in. Can I go back
to one point where we talked about ticket queues as well. I think
ticket queues are a particular issue, being penalised for having
to stay five, ten, 15 minutes in a ticket queue and then if you
jump on the train you are punished by way of penalty fare or higher
fare. That is one aspect where, yes, you should be able to board
a train and buy a ticket with no penalty. If ticket gates are
being introduced, then there needs to be a very active and very
carefully managed programme of monitoring the ticket queues. I
think that is an area that the Department in its franchise monitoring
should really focus on in that sense, and be a condition almost
of the gates.
Q172 Ms Smith: Just one further question,
you have said previously that we need to look closelythis
is a different issueat establishing a fairer link between
fares, investment and satisfactory performance. How do you think
that a fairer link would actually work? I think this is a really
interesting issue and one I was exploring earlier with the operators.
How do you think this would work?
Mr Hewitson: We used to have one.
There used to be a link between performance and fares. There was
a long gap between, again, this July point and December, so a
good performance in July would lead to high increases in fares
in January. Meantime between July and January the performance
had dived and you had this disconnect again, so I think there
is always a risk. What we would say is that it is more than just
punctuality. There is a whole other range of service quality issues
that somehow need to be factored into the assessment of which
line get a 5% increase, which line gets a 10% increase, and which
line gets nothing at all. We had some examples in the previous
January with First Great Western whereby some routes had nought,
some had five, some had ten. The 10% increases were going in on
the routes that were triggering compensation for poor performance
and some of the 0% increases went in on routes that were performing
reasonably well. It is harnessing that type of disconnect. I do
not have a formula, I am afraid, but I think there needs to be
one, that factors passengers' experiences in to what they then
Q173 Chairman: What types of tickets
are being affected by the downturn? Mr Rowson, can you help us?
Mr Rowson: Perhaps I am best placed
on this. I suppose the summary of what we have seen over the past
three to six months has not been a noticeable drop in volume of
tickets but certainly some shifts within those figures. One of
the key areas has been a noticeable step down in the number of
customers buying flexible first-class tickets and, at the same
time, an increase in the number of customers buying, as you describe,
the airline-style first-class tickets. The actual total proportion
of first class versus standard class has stayed pretty neutral.
There has been a shift certainly within the first-class sector
from flexible tickets to the airline-style, train-specific tickets.
A couple of other figures that come to mind: the average price
a customer is paying this year with us, this January, is 0.3%
higher than they were paying with us last January. That would
suggest that at the same time train companies are increasing their
prices 5% to 6%, there is an element of downshifting between the
types of products people are buying, and we are coming out at
a fairly neutral overall position.
Q174 Mr Martlew: Does that mean people
are travelling in standard class instead of first class?
Mr Rowson: No, there has not been
a noticeable change in it. What we have seen in our passenger
base has been a steady increase over the past five years from
about 8% first-class bookings to around 16% to 17% first-class
bookings, and that has stayed pretty static for the past six months.
The shift has been inside that 16% where people have traded down
from fully flexible tickets to specific train only tickets or
Q175 Chairman: The train operating
companies this afternoon have assured us that they are not making
cuts; they referred to "sensible economies". The written
evidence that we have had from all of you suggests something rather
different. I take it that you stand by the written evidence that
you have submitted? Is there anything additional you would like
to say? Ms Grant, you did refer to the closure of booking offices
earlier on in your comments.
Ms Grant: Certainly we and Passenger
Focus talk to the TOCs regularly and we have meetings on a fairly
confidential basis. It is in everyone's interests that there is
a degree of confidentiality, but I think if the impression was
given that there is not concern about ridership and revenue and
all those issues, I do not think that is the right impression.
Certainly the impression I have got is that there is a concern.
They are watching very carefully, for example, the number of people
who are buying the annual season ticket this year. A lot of people
clearly may not be because they might be worried that they will
not have a job for the next 12 months, so they will be buying
a monthly or whatever. I think certainly the impression that I
have is that there really is concern about the effect of the recession,
the revenue, and there is concern to cut costs on their part.
I do not think there is any other explanation for some of the
things that we are now seeing.
Q176 Sammy Wilson: How do you marry
that with the evidence that you have given and the companies gave
that there are rising levels of customer satisfaction in all the
Mr Foxall: First of all, we have
to bear in mind that the latest survey was the autumn survey,
which has just been published by us, so some of this has not really
hit yet. It is not always very clear that fare rises necessarily
follow directly through to performance. Performance is the key
driverdoes a train turn up on time, do I get a seat, et
ceterathose are the big things that hit the performance
headline and that is what passengers go for. Clearly there is
a low level of discontentnot so low if you see the postbagwith
the changes to ticket office opening hours. South West Trains
has been mentioned and there are two others in the pipeline at
the present time for various kinds of changes. We may see some
of this come through in the next wave of research in relation
to fares and a bit further on maybe in relation to ticket offices.
It is difficult for us because I think we have to take a slightly
difficult position here. If the companies have to make sensible
economies (those are ones that do not directly impact on passengers,
or do not overly impact on passengers) perhaps that is not unreasonable
given the recession, because there are things happening everywhere.
What we have to make a judgment about is do they cross a particular
line and do you start to seriously affect services and seriously
hurt passengersis it more difficult to get tickets, do
the ticket queues lengthen, are the services really not being
carried out properly, or are their maintenance issues, or not.
Those are things that I think we have to pay a lot of attention
to and we will pay attention to in the coming period. At the same
time if we have got to accept train companies may have to make
some changes, if ridership falls for example, it will be quite
hard to argue that perhaps they should not reduce train lengths
for a variety of reasons including environmental ones, but we
will want to watch that that does not mean people are being crowded
and unable to get on trains or that there are unacceptable levels
of overcrowding throughout the country.
Q177 Chairman: This afternoon the
companies also denied that they had been to the Government with
a begging bowl or with a request to reduce service standards.
If circumstances arose where some of the TOCs did go to the Government
with either a begging bowl or a request to reduce service standards,
what do you think the Government should do? Would anybody like
to give a view?
Mr Foxall: One of the easier questions
to tackle! I think the answer is that we have experienced situations
before where the franchisers have been in difficulty and have
in some measure or other been taken over or been taken into some
form of care. That on the whole has not wholly worked against
passengers' interests, so provided it actually looked as if it
was going to work in passengers' interests I think we would encourage
the Government to take a positive attitude. In terms of reducing
services I think we would be much more sceptical and want to look
much harder at that whole issue.
Chairman: Thank you and, on that note,
I think we will conclude, and thank you very much for answering