TOC's selling tickets

[Panda]

I have been thinking about this for a while now (actually loads of things around privatisation, but I'll try and stick to a single subject here).

I bought a London travelcard from the SWT desk at Wimbledon and more than a year later, when I bought there again, I got a void day refund. Now, this is a travelcard which they had to manually load onto my Oyster, but I could have also bought it anywhere else (a corner shop, TFL, internet etc). How much of the travelcard does SWT get? I was just thinking about people just using the underground from Wimbledon would also have received the benefit of this, even though they might not even use the line (granted, they use the station which is run by SWT).

Then I started noticing how some of the TOC's all try and push "cheap train tickets" on their websites (obviously for the purposes of search engine optimisation) and it really seems that this must be a big revenue stream for them as they try so hard to get recognised for selling cheap tickets. Other than possibly their own tickets, can one TOC really sell tickets cheaper than another train company? Advertising that you have cheap tickets, says to me that it's "cheaper than usual", otherwise, it's just normal-price tickets?

Therefore it seems to me that TOC's also earn some commission on the value of the tickets they sell? But whenever I look for tickets, unless it's a special type of advance ticket (no expert in this field, so terminology could be wrong), I get the same price wherever I try and get a quote from. Should they really be earning commission for tickets? (Maybe just a sort of handling fee, but nothing of the sort that seems to make them so much money that it's an obvious cash cow?).

Given that ticket prices are generally always the same wherever I look (or am I just unlucky enough to ALWAYS be looking at regulated fares?), doesn't this mean that tickets are held at a ceiling which maybe isn't necessary?

Personally I am a fan of privatisation when done well, but looking at the industry from the outside, due to the heavy regulation, this is nothing more than a public service run by private companies. With the excessive regulation, companies can't really run free enterprise as you would expect. The industry can't compete on fares and even service doesn't seem to be a factor (Virgin vs First).

Just really interested to know if my view of things are skewed? Is the industry more privatised than it seems or are my observations correct? (I haven't lived in the UK long enough to know what pre-privatisation was like and I'm from a country where railways are government run).

 

[maniacmartin]

All TOCs have signed the Ticketing Settlement Agreement, which details how much commission they get on ticket sales, and they use a system called ORCATS to divide the remaining revenue on ticket sales between the relevant TOCs on which the ticket is valid. This is all administered by RSP (Rail Settlement Plan) who are part of ATOC.

Because of this, the prices you pay will be the same at any vendor, excluding "booking fees" etc. TOCs may have special deals on Advances and the like, as these are restricted to a certain TOC, but for most tickets this won't apply. A regulated fare does not mean that the cost of the ticket is the same from every vendor, but that the DfT regulates the fare.

"Cheap train tickets" and other advertising is all a bit of a con, because what they're actually doing when making that statement is comparing the price of a walk-up ticket with an Advance ticket, despite the fact that you can get Advance tickets at some stations anyway!

 

[hairyhandedfool]

"Cheap train tickets" is not the same as "cheaper train tickets" and advertisers use this common misconception (or misunderstanding) to get you to believe they are cheaper than anywhere else when they are almost certainly not.

Another common way to make you think you are going to get a better deal from a particular site is to claim something like the average person "could save upto 43% on train fares*" at their website, and then in much smaller print add something like "*compared to buying at the station on the day of travel". Sometimes they will say that this average saving includes any fees that are applicable.

I recall one train company once advertised on it's stations, that if you bought a yearly season from their station, you would only be charged for 40 weeks. None of these adverts are wrong in what they actually say, but the way they are worded makes some people believe they are cheaper than anyone else.

 

[Panda]

"Cheap train tickets" is not the same as "cheaper train tickets" and advertisers use this common misconception (or misunderstanding) to get you to believe they are cheaper than anywhere else when they are almost certainly not.

I agree that cheap and cheaper isn't the same thing, but, if everyone is selling the same thing for the same price, it's not cheap, it's not expensive, it's just normal-price. That said, I sort of get where the TOC's are coming from, but it's a far stretch.

Starting reading up about RSP and it's another one of those "public services which were privatised" schemes. It's all a bit strange, as ATOC could as well have been called the "Department of Railways". Interesting to see that even their systems are old BR systems that they simply inherited.

Will carry on reading up on it all though...

 

[bb21]

as ATOC could as well have been called the "Department of Railways".

Far from the truth in fact. ATOC do not have any regulatory powers and it cannot compel the TOCs to do anything. They are merely a trade association body.

 

[michael769]

Far from the truth in fact. ATOC do not have any regulatory powers and it cannot compel the TOCs to do anything. They are merely a trade association body.

AIUI, ATOC do have some contractual agreements with ToCs (such as via RSP) and can if necessary compel ToCs to comply with their obligations set out in those contracts.

 

[wibble]

I bought a London travelcard from the SWT desk at Wimbledon and more than a year later, when I bought there again, I got a void day refund. Now, this is a travelcard which they had to manually load onto my Oyster, but I could have also bought it anywhere else (a corner shop, TFL, internet etc). How much of the travelcard does SWT get? I was just thinking about people just using the underground from Wimbledon would also have received the benefit of this, even though they might not even use the line (granted, they use the station which is run by SWT).

If you buy your Travelcard at Wimbledon (e.g. Zone 1-3), you'd be treated as an SWT customer and be able to claim SWT's void days. If you were to buy it at an Underground station or another TOC's station within Zones 1-6, you would receive their compensation - e.g. delay repay.

The amount a TOC earns from a Travelcard sale varies but is ultimately based on the Travelcard Diary Survey which is updated every quarter (where customers record the journeys they make on their Travelcard); and also by Travelcard sales by each TOC. Different allocations apply to Season tickets, Off Peak and Anytime tickets, for both wholly inboundary (e.g. Zones 1-3) and outboundary tickets (e.g. Woking -Zones 1-6).

Money will be allocated irrespective of the actual mode a customer uses - e.g. you might only use National Rail and buses, but London Underground would still receive an allocation.

 

[johnb]

Some TOCs, notably East Coast, offer a discount on Advance tickets on their own services bought through their own website (I think 10%), which does make them genuinely cheaper than anywhere else.

AIUI, EC does this by waiving its ticket seller's commission on these tickets, which is still financially worthwhile for it to do because it gets nearly all of the actual travel revenue for these tickets.

 

[wintonian]

There are various types of tickets:

• Absurdly expensive normal tickets with no restrictions
• Cheap(ish - relativelyy in most cases) normal tickets with some restrictions
• Cheaper (most of the time) normal tickets fixed to 1 particular service

It is these cheaper, fixed to one service (aka advance) tickets that companies like 'The Train Line' try and sell to you as cheaper tickets with a missive saving - this saving occurs when compared to the unrestricted absurdly expensive anytime fares. When people see phrases like "save x%" or "we sell cheap train tickets" most will assume that this translates to "save x% compared to y retailer" or "we sell cheaper train tickets then other retailers", of course it doesn't help when they push those message in such a way as to play on and maximise those false assumptions.

To add weight to that I think a lot of people assume that if you go to a train station and ask for a ticket from a - b the price will be a fixed value not price c if you want to go at this time or price e if you don't mind having to travel on this service. Then there are those people who think that you cannot buy tickets (long distance ones at least) from the station on the day and have to book in advance and the various companies buy up seats in the same way that other companies buy up hotel rooms and sell them on at what ever they then set the price at.

It's become more and more common for companies to rely on their customer ignorance to make money rather than by providing a good quality product with excellent customer service. Why go through the hassle and expense when you can just make people believe in something that isn't true?

 

[DaveNewcastle]

I'm not persuaded that the industry suffers from "excessive" or "heavy regulation"; it's arguable that there is inadequate and ineffective regulation over the manipulation of fares, while there is inflexible and inappropriate regulation over levels of service and dead hand regulation-by-tradition in some procedures.

One of the muddles that the industry has suffered from is an inconsistent relationship with government.
Perhaps it began with a Prime Minister ordering "never mention the Railways again" and then a pluralist study of a raft of possible models of railway privatisation constrained by government's assumption that what worked for British Telecom would work for British Rail, and an industry which knew it wouldn't. Privatisation followed with a regulator poorly informed of the chaos that could have ensued and subjected to inconsistent, even whimsical, Ministerial interference.
In 1997 the regulator signed a 'concordat' with government setting out a framework for communication and co-operation, and again in 2003 a Memorandum of Understanding between the regulator and SRA agreeing to work constructively together and to share roles. Now you couldn't have dreamt up a more confused structure, but if that wasn't confusing enough, consider that the model of Privatisation actually chosen relied on the concept of "Moderation of Competition" which the ORR promptly decided could be relaxed so that the effects of a lighter touch would become regulated by inter-company cooperation, which in turn, companies could participate in; or not; as they chose.

Turning to the question of fares revenue being distributed across Companies, the ORR has declared (in desperation, I thought) that "there is limited case law" regarding competition for inter-available revenue to assist in clarifying procedures and practice. The inheritance of British Rail's fares structure is evident today in the concept of "regulated fares", a concept almost impossible to validate in practice, and used and abused creatively to avoid regulation.
ATOC is in the sorry position of being stuck in the middle of all this, with negligible statutory authority, a mandate from its commercial members, a structure based on a commercial infrastructure operator, and a meddling Department but little clarity over the complex web of interwoven roles and responsibilities. To this day, the Department is inconsistent and undecided how regulation should operate and by whom, but certainly believes that it is its decision to make, but can't.

I think it's a mess.
Other opinions will be available.

 

[Deerfold]

I think it's a mess.
Other opinions will be available.

Though this is a common one for anyone who's looked into how it works (as opposed to those who haven't and just assume their local TOC is crap).