Fare increases - folk don't like them

[DarloRich]

Do you read the daily fail i mean mail by any chance? You really are ill informed aren't you! Go and live in a communist country where the wealth is "shared". You will always have well off people and poorer people. I will not criticise someone who works a 60 hour week running their own business and gets a decent amount of money for it. Especially when a certain party thinks it ok to hand out money to people who cant be bothered to work or turn up at work on time. Anyway enough of politics on a railway forum.

Surely if I read the Daily Mail I would be the one praising the entrepreneur and be the one criticising the poorer in society? I any event I don’t think I attacked decent hard working small businessmen :roll:

I am simply suggesting that IF the government wanted to sort things out they could. They won’t though as it isn’t in their interests or in the interests of their main donors/friends/cub mates to do so. It is this that makes me angry. Why say you want to sort something out when really you don’t?

 

[Starmill]

The thing about Advance tickets is that it isn't necessarily true that those who purchase the cheapest tickets will not be willing to pay more. In many cases, and I class myself as guilty in this respect, then people will simply look for the cheapest ticket they can get which fits their needs.

For instance, if I know I am going to go to Reading in three months, then I might get a ticket for £12.50. However, I would be willing to pay double that, or even more, but I am not going to turn down the cheaper fare!

This idea is known to economists as consumer surplus. The difference between what a consumer is willing to pay and what they actually pay, according to the market price.

Price discrimination (when a firm charges different prices for the same service (in this case a journey) based upon different factors (in this case the time you book and travel)) is supposed to try to appropriate this difference by charging everyone as much as they are willing to pay. By and large, it works. The captive peak time market continues to pay very high fares (or buys season tickets) because they have to get to work at certain times (in jargon, they have low price elasticity of demand). Leisure travellers go at less busy times, spreading demand to match supply - and some are encouraged to travel at the lower price where they would not have done so before, meaning an extra sale.

The point you raise regarding advance tickets is very interesting - they introduce a second discriminatory factor, not only when you travel, but when you buy. In your case, it has not quite worked (in the sense that you have gained some of the firm's producer surplus for yourself, relative to the equilibrium price (the price the ticket would cost if the TOC charged everyone the same for all tickets to Reading))!!! I admit to being guilty of the same, however, although my consumer surplus is a lot lower. I pay for the cheapest advances because I want the best I can get on my budget, and I wouldn't travel otherwise - or I would go somewhere cheaper. The economics of advance tickets are truly fascinating.

 

[EM2]

Can someone answer a simple question?
Do TOCs have the flexibility to not raise prices AT ALL (or even reduce them)? Or do they have to raise them to match the RPI+1% cap overall?

 

[exile]

I think there is an economic explanation as to why people get so angry about these fare rises; there is a difference between a fixed cost and a variable one. The theory normally applies to firms, where variable costs vary directly with output, but fixed costs don't.

Assume output is transport. If you have a car, your fixed costs are large, and in a large proportion of the total costs: buying the car, buying a year's insurance, paying the VED and keeping it maintained when anything goes wrong with it (that last is semi-variable, which means it might go up the more you use it, but there will still be some cost at no output (i.e. servicing)). The only real variable cost is fuel. And people do most certainly complain about that. They can see that the more they drive, the more they use, and as such moan that the rate increases.

The difference with buying a train ticket is, you aren't liable for the fixed costs (the train lease, the track access fees, the staff wages, insurance and other contractors (cleaning, maintenance ect.)) - the TOC is, and they tend to load the majority of their fixed costs onto anytime tickets (and season tickets, to a lesser extent). This means that you don't notice them as fixed costs, because if you refuse to travel, you rightly pay nothing. That is not the case if you own a car but do not use it - you are still paying the fixed costs if you go out to get the train that day.

I hope that makes a little bit more sense... sorry if its a dodgy explanation. Certainly it has been over-simplified. I guess the conclusion is; its better value to get the train if you get rid of your car. The worst thing you can do is run the car and get the train; then you pay two lots of fixed costs. Sadly this is practical reality for most.

If only cars were paid for in the same way as public transport - by some sort of meter which meant you paid for tax, depreciation, finance costs, insurance, and fuel "as you go". As it is, the only cost you see is fuel, and even then you only pay for that when the tank is empty so you don't twig how much a particular journey is costing you.

 

[radamfi]

If only cars were paid for in the same way as public transport - by some sort of meter which meant you paid for tax, depreciation, finance costs, insurance, and fuel "as you go". As it is, the only cost you see is fuel, and even then you only pay for that when the tank is empty so you don't twig how much a particular journey is costing you.

That's why we have national railcards. The SBB Half Fare Card and DB BahnCard 50 give 50% off fares at all times, so making extra trips 'feels' cheap. From what I understand, something like 50% of the population have the SBB Half Fare Card.

Smartcards such as Oyster and the OV-Chipkaart mean that you don't actually have to make the effort to pay for your travel ever if you have auto-topup, so all trips 'feel' free of charge.

 

[Dave1987]

Can someone answer a simple question?
Do TOCs have the flexibility to not raise prices AT ALL (or even reduce them)? Or do they have to raise them to match the RPI+1% cap overall?

Do you realise something? A season ticket from Colchester to London Liv St costs about £5492 a year. That is £105.61 a week, which is £15 a day. Tell me how you could possibly drive to and from London and park for that much?? Answer is you CAN'T, so stop shouting that rail fares are excessive because they aren't!

 

[PR1Berske]

Do you realise something? A season ticket from Colchester to London Liv St costs about £5492 a year. That is £105.61 a week, which is £15 a day. Tell me how you could possibly drive to and from London and park for that much?? Answer is you CAN'T, so stop shouting that rail fares are excessive because they aren't!

Hahahah! Oh please tell me you're a parody account? Or work for a TOC?

Tell a hard working family that £105 a week is within budget these days, because it's not. Unless - as so often happens on this forum, I notice - you're working on the basis of economics as seen down south, which is very different to the reality up here.

 

[EM2]

Do you realise something? A season ticket from Colchester to London Liv St costs about £5492 a year. That is £105.61 a week, which is £15 a day. Tell me how you could possibly drive to and from London and park for that much?? Answer is you CAN'T, so stop shouting that rail fares are excessive because they aren't!

Woah there! hock:
Where have I said fares are expensive? I work in the industry, I commute every day, I know how fares compare with the costs of running a car.
I'm asking whether there is an option of a TOC not to raise fares if they wish.
Now calm down, answer the question if you want or ignore it if you don't.

 

[NSEFAN]

Can someone answer a simple question?
Do TOCs have the flexibility to not raise prices AT ALL (or even reduce them)? Or do they have to raise them to match the RPI+1% cap overall?

AFAIK all changes made to season tickets and walk-up fares have to be approved by the DfT. This is presumably to ensure the TOC can afford to meet the premiums to be paid to the treasury.

I'm not sure about advance fares, though.

 

[Roverman]

It has been limited to a maximum 1% increase this year as set out in the pre budget report. But anyone on benefits must be earning 50k a year eh! Don’t believe everything the Daily Mail tells you. :roll:

BTW - have you experience of claiming benefits? I have.

I don’t have a problem with the rise in fares if it communicated to people clearly. Coupled with this there has to be clearly visible outputs and improvements from the investment.

The real issue is that people don’t understand how the railway works, and why should they if we don’t or can’t explain it in a simple manner. However it also it has to be acknowledged that there has been a shortage of investment in the physical railway infrastructure that we are just starting to address.

I would like to see the train companies be forced to reinvest more of their money into the railway network, facilities and rolling stock rather than paying shareholder dividends

To answer your question, I have experience of helping my mother claim whilst she was off work having cancer treatment. No allowances were made at all for her condition, and one rather nasty 'person' at the DWP threatened to cancel her entitlements if she chose to attend an oncologist appt rather than sign on (I ended up getting a solicitor friend to write a firm letter to sort that out)

I also have experience of helping my sister avoid prison when her erreneous claim for Housing Benefit was viewed as Benefit Fraud, the claim was made because some numpty at Chichester Council told her she was entitled to it!

I consider myself lucky to have not needed to claim for myself as I have always managed to find employment since leaving school.

As for investment in the infrastructure I totally agree with you that a minimum amount of profit should be used to improve the service, its all very well other people saying 'they only make 3%' but 3% of what? If its a billion quid then thats not exactly chump change!

 

[DarloRich]

Do you realise something? A season ticket from Colchester to London Liv St costs about £5492 a year. That is £105.61 a week, which is £15 a day. Tell me how you could possibly drive to and from London and park for that much?? Answer is you CAN'T, so stop shouting that rail fares are excessive because they aren't!

The problem is the perception that they are excessive. It is also a lot of money to find out of your own pocket as there is no way to set up a monthly direct debit or other method of cost spreading.


If you went to buy a car for a similar sum you might be able to spread the cost through some form of credit agreement. You can’t do that with a season ticket short of taking a personal loan for the full sum and paying that back over the life of the ticket.

It is also a lot to find when you have to meet the rest of life’s expenses. I am not talking about luxury items but simple things like keeping the lights on, food in your belly and obtaining affordable accommodation. People also don’t think they get value for money as the perception of the service is that it is poor.

 

[Greenback]

The problem is the perception that they are excessive. It is also a lot of money to find out of your own pocket as there is no way to set up a monthly direct debit or other method of cost spreading.

Some do buy a ticke ton a specially obtained 0% credit card, and pay off the valance monthly. Some will be able to take advantage of a 0% season ticket loan from their employer. But I suspect that for the majority of commuters, it is as you say.

It is also a lot to find when you have to meet the rest of life’s expenses. I am not talking about luxury items but simple things like keeping the lights on, food in your belly and obtaining affordable accommodation. People also don’t think they get value for money as the perception of the service is that it is poor.

You are right. It's a staggering sum when presented to someone in black and white terms. And it is little point quoting the price in terms of a per day rate, as very, very few people (if anyone at all) will use a season ticket every day of the year.

If I lived in Colchester and worked in London, I would be looking for a more local job, knowing I could take a pay cut of £4000 and still be up on the deal!

 

[EM2]

The problem is the perception that they are excessive. It is also a lot of money to find out of your own pocket as there is no way to set up a monthly direct debit or other method of cost spreading.

Credit card with 0% offer. Pay it off over the year and get the next year's ticket on a new card. Friend of mine has done that for a few years.

 

[DarloRich]

Credit card with 0% offer. Pay it off over the year and get the next year's ticket on a new card. Friend of mine has done that for a few years.

not everyone can obtain a credit card. Is a direct debit arrangement beyond us?

 

[GNER 91128]

I see that advance fare are being mentioned quite a bit as being unfair, well I wouldn't be able to afford trips from Peterborough to Edinburgh and back if it weren't for the advance ticket and if these fares weren't available I certainly wouldn't go! so East Coast would lose out a little there!

Also atm I have the benefit of a 16-25 railcard for the next few years but when I lose that I will probably travel much less than I do now.

 

[DarloRich]

@Greenback - The season ticket loan is becoming more and more common as companies realise they have to do something to help employees get to work.

Moving jobs is an option IF you live somewhere where you could find work and develop your career.

 

[Dave1987]

Sorry I apologise if my post seemed a little aggressive. But for some reason people expect the railways to transport them long distances and expect the price to be pitance. And some dont even bother paying at all! You can pick up some very cheap advanced fares as everyone knows, but if you want flexibilty you have to pay for it like you have to pay for a car. Incidentally how much to people who say the cost of rail travel is excessive think it should cost for a season ticket?

E.g Colchester to London - around 60 miles - £5492 for a season ticket

How much would you consider reasonable for this season ticket?

 

[radamfi]

The most you can pay for a 2nd class annual season ticket in Germany is £3,325 and that gives unlimited travel in the entire country.

 

[Ferret]

The most you can pay for a 2nd class annual season ticket in Germany is £3,325 and that gives unlimited travel in the entire country.

Very thought provoking, when I consider that I view Germany's railway system to be better than ours.......

 

[Goatboy]

Sorry I apologise if my post seemed a little aggressive. But for some reason people expect the railways to transport them long distances and expect the price to be pitance.

Whereas most of us just expect the railway to transport us long distances and the price to be sufficiently less than the cost of using a large private car with a single occupant in it in order to justify not using the car (Except for London where a car is more trouble than its worth and I'd happily pay the same as it would cost by car and still use the train).

Which is fairly reasonable, really, for normal people. After all, you'd think it would be cheaper to sit on public transport than to drive yourself in a private large car (Let alone a more efficient model).

 

[Roverman]

not everyone can obtain a credit card. Is a direct debit arrangement beyond us?

Centro West Midlands offer that for the Bus tickets.

 

[GNER 91128]

Centro West Midlands offer that for the Bus tickets.

Yep and I pay Stagecoach a DD each month for their bus "service"

 

[brompton rail]

Centro West Midlands offer that for the Bus tickets.

SYPTE do that for Annual Travelmasters

 

[DarloRich]

@Roverman/GNER91128/Brompton_Rail

Are these "smart card" type tickets? I wonder if they are easier to revoke in the event of non payment

 

[Greenback]

Greenback - The season ticket loan is becoming more and more common as companies realise they have to do something to help employees get to work.

That is good. I remember going to an interview a couple of years back ad asking if there was such a scheme. There wasn't, but they said they would look at introducing one. I hope it does become more widespread as time goes on. I agree more TOC's could offer DD payments as well.

Moving jobs is an option IF you live somewhere where you could find work and develop your career.

Ah, I never think in terms of a career! I merely think about what is best in the here and now! Maybe this is why I haven't got anywhere!!!

Sorry I apologise if my post seemed a little aggressive. But for some reason people expect the railways to transport them long distances and expect the price to be pitance. And some dont even bother paying at all! You can pick up some very cheap advanced fares as everyone knows, but if you want flexibilty you have to pay for it like you have to pay for a car. Incidentally how much to people who say the cost of rail travel is excessive think it should cost for a season ticket?

E.g Colchester to London - around 60 miles - £5492 for a season ticket

How much would you consider reasonable for this season ticket?

Actually, I don't think that the amount is too excessive, though I would prefer such a cost to icnlude travel all over the system as in Germany.

For many years long distance commuting has been subisidised by other passengers, the cost per day (even allowing for leave has been way under the cost of a walk up return on most flows.

That said, it probably more of a reflection of the structure of the industry and government policy that wlak up fares are so high. I feel that this is more of an issue than season tickets. I certainly don;t think that a one way fare of £150 between Newcastle and Llanelli is reasonable. For an off peak return, £100 seems better, with a single at £70.

 

[GNER 91128]

@Roverman/GNER91128/Brompton_Rail

Are these "smart card" type tickets? I wonder if they are easier to revoke in the event of non payment

Yeah the stagecoach one is a smartcard, I guess with mine it just wouldn't work until they'd recieved the funds again, but I'm not too sure.

 

[Roverman]

@Roverman/GNER91128/Brompton_Rail

Are these "smart card" type tickets? I wonder if they are easier to revoke in the event of non payment

Not sure I will ask the holder and send you a PM.

 

[Dave1987]

Actually, I don't think that the amount is too excessive, though I would prefer such a cost to icnlude travel all over the system as in Germany.

For many years long distance commuting has been subisidised by other passengers, the cost per day (even allowing for leave has been way under the cost of a walk up return on most flows.

That said, it probably more of a reflection of the structure of the industry and government policy that wlak up fares are so high. I feel that this is more of an issue than season tickets. I certainly don;t think that a one way fare of £150 between Newcastle and Llanelli is reasonable. For an off peak return, £100 seems better, with a single at £70.

Yes walk up peak fare are very expensive but I think this is designed to discourage leisure travellers from travelling during the peak as most comutters buy weekly, monthly, or season tickets.

 

[SWTCommuter]

Do you realise something? A season ticket from Colchester to London Liv St costs about £5492 a year. That is £105.61 a week, which is £15 a day. Tell me how you could possibly drive to and from London and park for that much?? Answer is you CAN'T, so stop shouting that rail fares are excessive because they aren't!

How many people commute seven days a week and never take any holiday? For a more typical person working a five-day week and taking the statutory minimum 28 days holiday, the daily rate is £23.67

 

[radamfi]

Southern do DD payments for monthly seasons, and they give you a free month if you buy 11 in a row. However, that's not as good as an annual season as that gives you 2 free months.

I think British trains are missing a trick in not providing many early bird season tickets. The Dutch give you unlimited travel off-peak for £80 per month. It is better than it sounds as you can get away with leaving before 0630 but arriving, say, at 0800, and you only have to wait until 1830 to leave in the evening. That is a great option for long distance commuters who are willing to stagger their journey to save money.