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Welcome steps forward on fares and ticketing, but we must accelerate delivery

Welcome steps forward on fares and ticketing, but we must accelerate delivery

Rail Partners - Welcome steps forward on fares and ticketing, but we must accelerate delivery
23 February 2023
Andy Bagnall, chief executive

This week I spoke at an event organised by Trainline on how we unlock the puzzle of attracting people back to the railway as a sustainable form of travel. Transforming the customer experience is one of the keys – as the themes of fares and ticketing reform surfaced again and again.

In this year’s George Bradshaw Address, Transport Secretary Mark Harper set out his vision for the future of Britain’s railways. On fares and ticketing specifically, Harper offered new momentum and outlined further steps on the reform journey needed to overhaul the current system, like extending the single-leg ticketing pilot on LNER. To deliver a railway that meets the needs of all customers, these reforms need extending to the wider sector as rapidly as possible.

Fares and ticketing reform is long overdue. In 2019, the ‘Easier Fares for All’ proposals by the Rail Delivery Group on behalf of the industry recognised that the current system needed an overhaul, with customers wanting confidence they are being offered fares that are easy to understand and are the best value for money available to meet their requirements. And, as Rail Partners launched in May last year, we outlined three key actions that are vital to transforming fares and ticketing – an expansion of Pay-As-You-Go and dynamic-led pricing, a modern approach to ticketing that puts digital first, and a competitive retail market to drive innovation.

The pandemic has had a huge impact on industry finances, making fares reform even more pressing and essential. While the leisure market has recovered, commuting has yet to reach pre-pandemic levels – which represents a substantial part of the industry’s income. Commuting patterns have shifted post-pandemic with an increase in working from home. Railways were facing a cumulative £20bn shortfall in revenue by 2025. Simply put, the railway needs to re-grow passenger numbers in order to address the shortfall in revenue – and fares reform is an important driver.

Creating a modernised customer experience in fares, ticketing and retailing will enhance the customer experience by making the railway more adaptable to their changing needs. The tangible commitment by Harper to expand Pay-As-You-Go ticketing to 52 stations across the south-east this year is welcome. We need to see that built on, fully utilising the previous Spending Review commitment of £360m from the Treasury for its expansion to the Midlands and North.

Innovation is happening on the railways, with Govia Thameslink’s introduction of differential pricing on Fridays and LNER’s pilot of single-leg pricing and dynamically priced fares. But Harper’s announcement to expand LNER’s trial must be rapidly evaluated and then rolled out to include other DfT-contracted operators if we are to fully harness the commercial abilities of private sector operators to encourage passengers back to the railway. This benefits both customers through better value fares and taxpayers through increased revenue by reducing the government subsidy to the railway.

Reform must also come with a competitive rail market. The Plan for Rail set a goal to create a single retail website, but there was no reference to that proposal in Harper’s speech, and clarity is needed. If the plan is still to proceed with GBR superseding operator retail platforms, it must also establish a level playing field for third party retailers. This would ensure that healthy and fair competition thrives and private sector retail innovation is injected to improve the offering for customers.

Fares, ticketing and retail reform is an idea whose time has come and now we must move to delivery. Britain needs and deserves a simpler, better railway that meets the needs and expectations of customers – one that is easy to navigate, is flexible, with fares that are value for money and are easy to understand, and can be trusted.

In doing so, we can help set the entire railway industry on the path to the long-term financial stability.

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