Fare Payment - How does it get distributed?

[Class73Electro]

Strange question, but wondered what happens. When I pay for my ticket, who does the money go to? Especially when the the station might be run by company x, and the train company y? (Admittedly with the coming of GBR, this is probably going to be irrelevant soon!) - I'm talking here with regards to ticket machines.

For instance, living in Portsmouth, couple of examples.

Example 1: I want to go to Chichester. This would be a Southern Service, but the Station is a SW.

Example 2: Now this is where (for me) it gets more complicated. I want to go to Southampton. I could get a Great Western train to Southampton. Or, get the SW Service. Or, to muddle things further, I might get SW to Fareham, then change to get a Southern service. Ticket isn't operator specific, so wouldn't know what train I got.

Thanks!

 

[zwk500]

There's a system called ORCATs that decides how to distribute the revenue. https://en.wikipedia.org/wiki/ORCATS

Somebody else will have to give more details though!

 

[CyrusWuff]

In layman's terms, the retailer gets paid commission (up to 9%, though only 2% for season tickets) and the remainder is distributed amongst the train companies that are entitled to a share of it.

The exact split will vary, but is essentially linked to capacity.

 

[jfollows]

It’s the reason that obviously sensible restrictions such as pick up/set down restrictions for long distance trains at Stockport, for example, have disappeared so that Avanti and Cross Country and TfW can each claim a proportion of the fares paid for Manchester-Stockport journeys.
The railway operating companies “game” the system to extract as much money as possible. It’s all a bit silly.

 

[Haywain]

In layman's terms, the retailer gets paid commission (up to 9%, though only 2% for season tickets) and the remainder is distributed amongst the train companies that are entitled to a share of it.

The exact split will vary, but is essentially linked to capacity.

And if the ticket has been booked online and is collected the TVM or ticket office operator receives a fee for issuing the ticket.

 

[pokemonsuper9]

long distance trains at Stockport, for example, have disappeared so that Avanti and Cross Country and TfW can each claim a proportion of the fares paid for Manchester-Stockport journeys

And presumably, also for the GM rail ranger, and other ranger tickets within Manchester, although I can't imagine the portions are too large.

 

[Class73Electro]

There's a system called ORCATs that decides how to distribute the revenue. https://en.wikipedia.org/wiki/ORCATS

Somebody else will have to give more details though!

In layman's terms, the retailer gets paid commission (up to 9%, though only 2% for season tickets) and the remainder is distributed amongst the train companies that are entitled to a share of it.

The exact split will vary, but is essentially linked to capacity.

Thanks!

 

[TUC]

It’s the reason that obviously sensible restrictions such as pick up/set down restrictions for long distance trains at Stockport, for example, have disappeared so that Avanti and Cross Country and TfW can each claim a proportion of the fares paid for Manchester-Stockport journeys.
The railway operating companies “game” the system to extract as much money as possible. It’s all a bit silly.

You say that, but precisely the opposite approach and rationale has been taken by LNER at Stevensge.

 

[sprunt]

It’s the reason that obviously sensible restrictions such as pick up/set down restrictions for long distance trains at Stockport, for example, have disappeared so that Avanti and Cross Country and TfW can each claim a proportion of the fares paid for Manchester-Stockport journeys.
The railway operating companies “game” the system to extract as much money as possible. It’s all a bit silly.

Doesn't the fare money all go to the DfT now, with the TOCs just getting a fee for running the trains? If so, what's the incentive to do stuff like this? Do they get a potential bonus dependant on how much of hte fare income is routed through them?

 

[Haywain]

If so, what's the incentive to do stuff like this?

It's more that they are doing such things because they pre-date CoVid and the DfT/Treasury taking control of the finances. Largely a case of 'carry on as you were'.

 

[Fawkes Cat]

It's more that they are doing such things because they pre-date CoVid and the DfT/Treasury taking control of the finances. Largely a case of 'carry on as you were'.

Has there been any evidence post-COVID of any new attempts to maximise the share of revenue going to a particular TOC? In other words, is it now a historic hangover, or a live current issue?

 

[Hadders]

Doesn't the fare money all go to the DfT now, with the TOCs just getting a fee for running the trains? If so, what's the incentive to do stuff like this? Do they get a potential bonus dependant on how much of hte fare income is routed through them?

Individual TOCs still have budgets and revenue targets to meet. The fee they get to run the service is dependent on targets being met.

Similar to a supermarket. The manager of my local Sainsbury’s has their own sales targets and costs budget to meet, even though the money all goes to a ‘Sainsbury’s central pot’.

 

[Sonic1234]

Does anyone know if Oyster goes through the same ORCATS system or is a different system used for this?

 

[Mattplans]

If I board the once-a-day direct Southeastern service from Sidcup to London Blackfriars, does TL receive any revenue?

Usually to do this journey I would need to change somewhere for a Thameslink train to Blackfriars.

 

[Haywain]

If I board the once-a-day direct Southeastern service from Sidcup to London Blackfriars, does TL receive any revenue?

The distribution is based on the ticket, not the journey, so Thameslink probably does receive revenue.

 

[swt_passenger]

Doesn't the fare money all go to the DfT now, with the TOCs just getting a fee for running the trains? If so, what's the incentive to do stuff like this? Do they get a potential bonus dependant on how much of hte fare income is routed through them?

ORCATS was a BR thing, so clearly it was thought necessary to allocate fares to particular routes and services long before privatisation, and I think most recent discussions here have come to the conclusion that the same purpose will still exist after nationalisation.

 

[Sonic1234]

If I board the once-a-day direct Southeastern service from Sidcup to London Blackfriars, does TL receive any revenue?

I'd imagine TL would receive most of the revenue, as most of the time that journey would involve them. On the other hand, SE would receive a small percentage from everyone else doing that journey because of the small probability they used that service.

If you're using Oyster, it relies on default routes set in the system or if you have passed through gates/pink readers, it doesn't work out exactly the service you used (that's why sometimes you can travel through extra zones and not pay for them).

 

[zwk500]

ORCATS was a BR thing, so clearly it was thought necessary to allocate fares to particular routes and services long before privatisation, and I think most recent discussions here have come to the conclusion that the same purpose will still exist after nationalisation.

Indeed. The DfT & GBR will still want to know how the revenue breaks down across services and routes. What might reduce is the ORCATS 'raids' with stops or individual services being run to get TOCs 'on the board' for the ORCATs split.

Similar thing with delay attribution, but that's had enough threads.

 

[Lewisham2221]

It’s the reason that obviously sensible restrictions such as pick up/set down restrictions for long distance trains at Stockport, for example, have disappeared so that Avanti and Cross Country and TfW can each claim a proportion of the fares paid for Manchester-Stockport journeys.
The railway operating companies “game” the system to extract as much money as possible. It’s all a bit silly.

On the subject of MAN-SPT in particular, I'm really not sure that Northern services alone would have anywhere near sufficient capacity if you prevented people making Manchester to Stockport (and vice versa) journeys on the other TOCs.

 

[SargeNpton]

There's a system called ORCATs that decides how to distribute the revenue. https://en.wikipedia.org/wiki/ORCATS

Somebody else will have to give more details though!

ORCATS takes a snapshot of each timetable period, and the fares available, and then determines the share of each ticket flow that should go to each operator (or third-party in the case of through tickets).

The actual system that distributes the revenue is called LENNON (Latest Earning Networked Nationally Overnight).

 

[CharlieSpotted]

I believe there's another related system called MCCARTNEY

Monetary Control Centre Allocating Railway Tariffs Nationally (Excluding Yorkshire)

(With thanks to Google Gemini for finessing this for me, I was almost there, but needed that last little push...)

 

[pdeaves]

Doesn't the fare money all go to the DfT now, with the TOCs just getting a fee for running the trains? If so, what's the incentive to do stuff like this?

Incentive or not, revenue to open access and other non-DfT companies (e.g. London Overground, TfW) needs to be allocated appropriately.

 

[sprunt]

Incentive or not, revenue to open access and other non-DfT companies (e.g. London Overground, TfW) needs to be allocated appropriately.

True, but I don't think whether the money goes to DfT or TfW would bother Avanti in the absence of an incentive.

 

[OscarH]

I believe there's another related system called MCCARTNEY

Monetary Control Centre Allocating Railway Tariffs Nationally (Excluding Yorkshire)

(With thanks to Google Gemini for finessing this for me, I was almost there, but needed that last little push...)

Worrying this was almost believable for a minute

 

[Trainman40083]

You can see how a specific advance fare, sold by a TOC for a journey where there are multiple operators can actually give a TOC a greater financial share.