04.01.13
Ticket prices
Source: Peter Shearer
Unsurprisingly there has been considerable commuter backlash in the face of them being hit by a 4.2% average fare increase. However, calls for greater capping on future rail prices could potentially do the rail industry, and by virtue commuters, more harm than good.
As highlighted by the recent furore over the West Coast Mainline franchise tender, UK rail operators face huge difficulties when it comes to predicting revenue growth and managing demand, especially when the Government mandates everything from train times to certain ticket prices. If rail operators are to be held more accountable and deliver a better service to commuters, they need to be given greater freedom to set prices.
A step change would be to move towards a less restrictive model, where rail operators are regulated by a basket of prices or against one or more average prices. Clearly rail companies need to ensure these price rises are justified by an improvement in the services they offer customers. For instance, train overcrowding remains a bugbear for many customers.
However, if they are offered a much more flexible range of prices, rail operators can more effectively smooth demand from overcrowded peak services towards underused off-peak ones. This is still undoubtedly the nirvana for rail operators, passengers and the Government.
Peter Shearer, VP Passenger Transportation, JDA.
Re: Regulated fares rise by 4.2%