I think that the price of a ticket is an absolutely reasonable basis for the payment - it is a percentage of the amount paid. If I pay £50 for a ticket, then I get £12.50, £25 or £50 based on how long I've been delayed for. Nice, straightforward, and both I and the operator know what the outcome should be. The question then is what the thresholds should be, and how those in an extreme situation should be treated.I know that you disagree, but I fail to see any logic behind your disagreement.
We currently have a scheme where the amount of compensation received is based on how long you have been delayed for. It is therefore illogical to say that someone who has been delayed three hours should receive no more compensation than someone who has been delayed one hour. And insulting to say that someone who has been delayed by three hours should receive no compensation whatsoever.
If you don't think that people who have been delayed for a long time should receive extra compensation, then why not just have a flat rate compensation scheme. Anybody who has been delayed over the threshold (be that 15 minutes or whatever), just receives a set percentage refund regardless of how long they have been delayed?
You do seem to be fixated on how much someone has paid for their ticket. If you base it on that, someone who had been lucky enough to get a very cheap advance might find it almost impossible to redeem their equivalent value free ticket. I would base it on an equivalent journey, based on the full single fares.
The advantage of the free tickets is that they can seem valuable to the passenger, but are cost neutral for the railway. Trying to be miserly with them would defeat the objective. A bit like Club Avanti, that just leaves you feeling short-changed rather than appreciated.
My experience of Delay Repay claims (and I know this isn't universally shared) is that they have been dealt with quickly and promptly, with minimum fuss. Start to add in extraneous factors (distance, cause, an arbitrary baseline fare, etc.), and you invite the railway to try to challenge claims rather than pay them
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It's still only an opportunity cost - £100 that they might otherwise have got. Cash payments are money out of the door.How are they cost neutral? I make a journey costing £100 each week. I get a free ticket due a delay this week, and use it instead of paying out £100 next week. Net cost to railway = £100. It is only cost neutral if I make a journey with the free ticket that I wouldn't otherwise have made - I suspect this would only be a minority of free ticket redemptions.
Personally, I prefer cash and have no time for arguments that "the money should stay in the industry" - if the industry doesn't provide the service it offers, then IMHO it forfeits the right to retain the cash.