113.The complexity of rail ticketing—the often baffling range of different rail tickets available and the sometimes incomprehensible jargon used to describe them—is a long-standing concern. Our predecessors drew attention to the complexity of rail fares a decade ago. Since then, Transport Committees in previous Parliaments, regulators, consumer bodies, passenger groups and the media have drawn attention to the related problem of passengers finding it difficult to identify and purchase the best value ticket for their journey.
114.Particular bugbears include use of ambiguous terms such as “London Terminals” and “Any Permitted” in relation to destinations and routes; “split-ticketing”, by which cross-country journeys can often be made more cheaply by purchasing a series of tickets between intermediate stations on the journey; and ticket vending machines that do not always offer the full range of ticketing information or the cheapest available fares. Below we assess actions taken to date to address these problems. We also consider progress towards the introduction of “smart” ticketing—to replace the traditional paper rail ticket—and the Government’s manifesto commitment to introduce fairer tickets options for regular part-time commuters.
115.In 2006, the Transport Committee found that the level of complexity in unregulated rail fares was “an insult to the passenger”. It concluded:
The fact that this situation has been allowed to develop unchecked over a number of years demonstrates a lack of commitment from both train operating companies and the Government to the best interests of rail passengers.
It recommended “urgent action to implement a unified fares structure across the entire industry”, with “no more than a handful of different fares” and “identical” names for ticket terms and restrictions (such as permitted time of travel) and equivalent ticket types across all TOCs.
116.By 2009, some progress had been made but in a further report the Committee concluded that the fares system remained too complex, and passengers still had to go to “extraordinary lengths”, often undertaking “complex research”, to secure the cheapest tickets on some cross-country routes.
117.In 2010, research by Transport Focus into the usability of rail ticket vending machines (TVMs) found that while the large majority (72%) of passengers were broadly satisfied with ticket-buying facilities at stations, there remained significant problems with TVMs, including poor screen layout; confusing and onerous screen sequencing; and confusion over validity of ticket-types and restrictions, leading to passengers being unclear about which was the best value ticket for their journey. Transport Focus recommended reducing the volume of information on certain screens; making better use of colour contrasting to improve the identification of key buttons; providing clearer information on ticket restrictions and routes; and using less industry jargon.
118.More recently, the ORR examined the problems of complexity and lack of transparency and found a strong perception amongst passengers that rail ticketing was “unfair”. In 2012, more than half of passengers believed that finding the best value ticket for a journey was “a bit of a lottery”; 45% found the system too difficult to understand; and 41% reported having purchased a rail ticket only to subsequently find they could have made the same journey with a cheaper ticket. Trainline.com Limited, the UK’s largest third party rail ticket retailer, reported that uncertainty over whether they are obtaining the best possible fare is the “single biggest barrier to passengers choosing to travel by rail for a particular journey.”
119.Despite the concerning statistics, the then Chair of the ORR reported in 2012 that she was “extremely pleased” with the progress that the regulator and ATOC had made “to grasp the nettle” of complexity and opacity in the rail ticketing system. She said the ORR:
[ … ] will be encouraging train operating companies to make sure customers have more online information, can access the cheapest fares, are aware of alternative routes, understand the restrictions, and demystify the jargon around their product offer. We will also be asking them to explore how ticket vending machines can become more user-friendly [ … ].
120.In June 2016, the ORR published a follow-up report, identifying incremental progress but concluding that there was “clearly more to do”. The ORR’s main focus was on TVMs. It found that the problems around use of jargon, limited range of available tickets, lack of clear information about ticket restrictions and timing of off-peak tickets sales persisted. TOCs’ responses to the ORR’s 2015 questionnaire on these issues are set out in the table below:
Table 3: Summary of TOC responses to ORR survey on ticketing issues, November 2015
Use of jargon
The use of terms such as “London Terminals” and “Any Permitted” are still widely used without explanation – although some operators have started to provide additional information about the specific London stations to which the ticket applies or, where there is only one relevant London station, using the station name instead.
Provision of information about available products
The majority of ticket vending machines provide a limited range of tickets/products when compared to other points of sale. However, operators have now added signage to their machines, either to the exterior of the machines or on the screen, which tells passengers about these limitations and where to go (e.g. ticket office) if they want to choose from a wider range of tickets, which might include cheaper alternatives.
Provision of information about restrictions and validities
The information that ticket vending machines provide about key restrictions, such as the time at which a ticket is valid or the route on which it is valid, still appears to be limited. However, some of the ‘static’ signage that has been applied to machines does include some of this information.
Timing of Off-Peak sales
The responses we received suggest that Off-Peak tickets go on sale, subject to local conditions, either a few minutes before the last Peak service departs, or very soon after – generally within 5 minutes.
Filtering of results
Ticket vending machines generally appear to list the results of a search by showing the relevant tickets for the journey requested, in order of price (low to high) but they do not have the functionality to allow passengers to subsequently filter – such as by journey duration.
121.The report identified industry-wide barriers preventing further progress, including:
It reported that ATOC was working with TOCs and ticket machine suppliers on an industry-wide Product Management System, which it was hoped would facilitate improvements in areas such as standardisation of route descriptions and peak travel restrictions. Additionally, ATOC was developing a “10-point improvement plan”, including:
These and other changes were expected to be implemented over the following three to six months (i.e. by the end of 2016).
122.Numerous witnesses raised the issue of split-ticketing, noting that it is often possible, for those passengers who are “in the know” and have the time to undertake onerous research to save considerable sums of money by buying separate tickets for different portions of the same journey. Concerns have also recently been raised in the media. A recent investigation by The Times, for example, examined the ticketing options on 50 cross-country rail journeys. It found that in relation to 33 of these, it was possible to save money through split-ticketing but that many passengers were unaware of this option. It concluded that passengers were paying as much as £85 more than was necessary for some journeys.
123.The ORR has powers in consumer law to take legal enforcement action against TOCs where there is sufficient evidence of collective harm to consumers. We challenged the ORR over why it had taken so long for the regulator to get a grip on the very long-standing concerns about rail ticketing, and why there had been no enforcement action taken to date. Joanna Whittington, the ORR’s Chief Executive, emphasised that incremental progress had been made and that broadly it favoured ongoing engagement with TOCs over formal enforcement. She subsequently said, however, in response to the investigation by The Times:
The question is whether we think more could and should be done. There is the potential that we will need to take action if the speed of change together with the detriment [to passengers] [ … ] suggests that that’s necessary. Of course, we wouldn’t hesitate.
The Minister told The Times that “passengers deserve better”, and that he would be pushing the train companies to make improvements, “as a priority”.
124.Transport Focus emphasised the “complicated nature” of regulation in this area, with potential overlaps between the ORR’s powers in the licensing of rail operators, and in consumer law, and the DfT’s role in franchising and the regulation of some fares. While it did not believe that improved regulation would necessarily be brought about by “shoe-horning” all protections into the responsibilities of a single body, it argued that where overlaps exist it is necessary for the approaches to be “aligned” in a “shared vision/set of aspirations”.
125.Unfairness, complexity and a lack of transparency in the rail ticketing system have been apparent for at least a decade. The incremental progress towards addressing these problems has been far too slow. We agree with the Minister that “passengers deserve better”. The time has come for a more rigorous and coordinated approach, to ensure change across the network. The Department and the Office of Rail and Road must more rigorously use their respective franchising and regulatory powers, and work together to address:
We recommend that the Department and the ORR publish a joint strategy to address each of these problems, or take enforcement action against TOCs who fail to comply with relevant codes of practice, rail licence conditions, franchise agreements or consumer law. We recommend that the joint strategy be published by April 2017, and that it include a clear timetable for full implementation across the rail network.
126.The 2015 Conservative Party Manifesto contained commitments to introduce “smart” ticketing and part-time season tickets. Smart ticketing is generally taken to mean technological replacements for the traditional orange, magnetic strip paper ticket: smartcards, similar to TfL’s Oyster cards, or contactless smartphone payment/tickets downloadable to smartphones. The DfT told us that:
The tangerine magstripe paper ticket has served rail passengers for thirty years, a job that it has done well in the past, but one that it is no longer suited for. It’s difficult to use, easy to lose, and most importantly, hinders travel using multiple modes. Simply put, it has not kept up with our changing lives. This is why the Government is committed to introducing smart ticketing.
127.There was wide-ranging support for a move away from the paper ticket. Significant steps have been taken, but the Department acknowledged that progress towards smart-ticketing across the network has been slow.
128.The key challenge to the more widespread introduction of smart systems appeared to be lack of coordination and integration between TOCs. Numerous TOCs had introduced smart-ticketing—including, Abellio Greater Anglia, Arriva Trains Wales, C2C, Chiltern Railways, East Midlands Trains, Govia Thameslink Railway, Grand Central, Hull Trains, London Midland, Merseyrail, ScotRail, South West Trains, and Virgin Trains—but there did not appear to be a great deal of coordination, and there was no industry-wide preferred solution. In oral evidence, Jacqueline Starr, ATOC/RDG’s newly-appointed Managing Director, Customer Experience, revealed that:
[ … ] within the last few weeks we have gained agreement across the RDG and all our board members for a smart ticketing plan with a very clear timeline, very clear deliverables and clear sponsorship from the TOC community. We have approval and have received an allocation of the initial funding to deliver the first phase [ … ].
129.There has been progress on smart-ticketing, with a number of TOCs introducing their own systems, but we are concerned at the lack to date of a coordinated, industry-wide solution. We therefore welcome the Rail Delivery Group’s (RDG) announcement of a network-wide smart-ticketing plan. We recommend the RDG immediately publish details of its smart-ticketing plan, including a clear timetable for delivery. This must not be further postponed; we expect to see an implementation timetable for which TOCs can be held publicly to account.
130.The affordability of train travel for part-time workers was a very strong theme in the evidence. Many submissions were from part-time commuters who are currently either paying for a full-time annual season ticket, as there is no cheaper alternative, or having to buy combinations of tickets, which can be cheaper, but which, as noted above, are often not advertised.
131.There was therefore strong support for the Government’s manifesto commitment, but disappointment at an apparent lack of progress. In 2013, the Coalition Government announced its intention to trial part-time season tickets with a view to rolling them out across the rail network. The trial became known as SEFT (South East Flexible Ticketing), which started to test smartcard technology and flexible ticketing in 2014 in a number of small-scale trails on London commuter routes. The DfT allocated £80 million to the project. By February 2015, £39.11 million of this funding had been spent towards developing “a central back office for the entire rail industry to use and towards the costs to train operators of new infrastructure and upgrades.” In March 2015, the DfT revealed that there were four members of DfT staff and one ATOC staff member working on SEFT. The Campaign for Better Transport, a strong supporter of part-time season tickets, assumed that SEFT had effectively been “abandoned”.
132.The Government made a renewed commitment to smart-ticketing and part-time season tickets in the 2015 combined Spending Review and Autumn Statement. The Department informed us that from 2018 it intends to invest £132 million into the introduction of flexible multi-buy discount tickets. It also, however, acknowledged that to date “train operators have been slow to recognise the commercial value in innovating in this area.” All future franchise agreements would therefore include a requirement to offer “new, more flexible products that meet the needs of passengers who work or commute fewer than 5 days a week.”
133.The Campaign for Better Transport believed that the potential revenue effects were the root cause of inaction in this area; rail companies had been “less than helpful in implementing initiatives which they think will cost them money”. Its view was that the Government had not been “sufficiently firm in compelling them to take action”.
134.In many cases, part-time rail commuters are paying the same fare as those travelling to work by rail five days a week; they deserve a fairer deal. We support the Government’s manifesto commitment to the introduction of part-time season tickets, but are concerned that progress towards implementation across the rail network has been slow.
135.Given the relatively small operating margins in the sector, and the likely revenue effects of the introduction of part-time season tickets on some parts of the network, the Government’s proposed investment of £138 million from 2018 is unlikely to be sufficient to incentivise all TOCs to introduce part-time season tickets before the end of this Parliament. Requiring TOCs to introduce fairer, flexible ticketing as part of their franchising agreements is likely to be more effective, but cannot be fully implemented until all current agreements are re-let—this will not be before the mid-2020s. We recommend that the DfT produce an analysis of the likely revenue effects of the introduction of part-time season tickets across the English the rail network, broken down by each franchise area. It should do this before spring 2017. Drawing on this work, it should proceed to focus available funding on franchises where the effects will be greatest and expediting progress in this important area.
136.The rail sector’s apparent inability to get its house in order in relation to rail ticketing raises fundamental questions around the governance and financing of the railway. It is not clear that the right structures are in place to facilitate the integration between TOCs that will be required to implement network-wide smart-ticketing. The longstanding problems of opacity and unfairness in ticketing raise questions around the adequacy of governance and regulatory structures, and consumer protections. We intend to return to these questions in a forthcoming inquiry into the governance and financing of the railway, as part of our continuing “future of rail” series.
126 See, for example, Transport Committee, Eighth Report of Session 2008–09, Rail fares and franchising, HC 233; “”, The Guardian, 20 September 2011; Office of Rail Regulation, Fares and ticketing—information and complexity, June 2012; “”, The Telegraph, 20 December 2015; “Crackdown on rail firms for hiding cheap fares”, The Times, 26 July 2016 [subscription required]
127 , p 15
130 Passenger Focus, Ticket Vending Machine Usability: Qualitative Research, July 2010
131 Trainline.com Limited ()
134 See, for example, Dr. Neil Walkinshaw (); Martin Green (); David Robson (); Wincenty Dulkowski (); Dawn Robinson-Walsh (); Paul Hollinghurst (); London TravelWatch ()
135 “Crackdown on rail firms for hiding cheap fares”, The Times, 26 July 2016 [subscription required]
136 See Office of Fair Trading, Enforcement of Consumer Protection Legislation: Guidance on Part 8 of the Enterprise Act 2002, June 2003
137 “Crackdown on rail firms for hiding cheap fares”, The Times, 26 July 2016 [subscription required]
138 “Crackdown on rail firms for hiding cheap fares”, The Times, 26 July 2016 [subscription required]
139 “Crackdown on rail firms for hiding cheap fares”, The Times, 26 July 2016 [subscription required]
140 Transport Focus ()
141 , p 15
142 DfT ()
143 Sarah Clifford (); Carol Major (); Nick Lester-Davis (); Trainline.com Limited (); London TravelWatch ()
144 DfT ()
146 See, for example, Susan Mowbray (); Ian Taylor (); Lindsay Smith (); Steve Scott ()
147 “”, The Guardian, 16 September 2013
148 Written answer , 26 February 2015
149 Written answer , 3 March 2015
150 Campaign for Better Transport ()
152 DfT ()
153 Campaign for Better Transport ()
13 October 2016