Which London transport ticket is best for business travellers?
1 September 2016
Travel and procurement managers often focus on ‘big ticket’ opportunities to save money on business travel. But what about the less-talked-about travel costs, such as public transport?
Here, we look at the benefits and drawbacks of different ways to pay for public transport in the ever-popular destination of London.
What ticket choices are available?
We compared three key ticket types for Transport for London (TfL) journeys – Travelcards, Oyster cards and contactless payment:
Still available as paper tickets (or an add-on to your train ticket), one-day Travelcards are valid on all TfL public transport within London. They can be booked through the same booking platform as National Rail tickets. This means you should also be able to book them through most travel-management companies, including Capita Travel and Events.
Last year, the one-day Travelcard pricing structure changed. It’s no longer possible to buy a one-day Travelcard for use in travel zones one and two only. Travellers now have to pay for a Travelcard ticket that also includes outer zones three and four, even if they only wish to travel within central London.
This change has led to a significant increase in cost. It was made with the long-term plan of encouraging all travellers to switch to Oyster card or contactless payment.
Introduced by TfL in 2003, these offer a pay-as-you-go option for travellers to London. Topping up your card with funds can be done online, at stations or at Oyster ticket stops. Using an Oyster card to pay for journeys on the London Underground, buses, the London Overground, DLR trains and most National Rail trains within London can work out significantly cheaper than paying by cash or buying a one-off Travelcard ticket.
The main advantage of Oyster cards is fare capping (see more on this below). This ensures you won’t pay any more on your pay-as-you-go Oyster than you would for the equivalent Travelcard. And for longer stays in London, Oyster also allows you to add seven-day, monthly or season Travelcards to your card.
Contactless payments are a relatively new concept, introduced in September 2015. With contactless, you can use your bank credit or debit card, or mobile payment app, to pay as you go for travel.
If you have a UK credit or debit card with Visa, MasterCard, Maestro or American Express that shows the contactless payment symbol, you should be able to use it on the network. And you can also pay with Android Pay, Apple Pay, Barclaycard and Barclays Contactless Mobile, bPay, EE Cash on Tap or Vodafone SmartPass apps.
Contactless travellers benefit from the same rates as Oyster card users, and the same daily fare caps. And because the payment is linked directly to your debit or credit card account, there’s no need to top up as you would with an Oyster card.
Contactless is especially useful if you live outside London and are travelling in occasionally. You’ll enjoy the same cheaper rates as Oyster users, but’ll no longer need to pay a deposit for the Oyster card itself.
What is fare capping?
TfL adds up the cost of all the journeys you make each day or week to make sure you don’t pay more than the current fare cap for the zones you’ve travelled in.
Daily capping is based on how much you spend in a 24-hour period between 4.30am and 4.29am the next day. When the total cost of a day’s journeys reaches a pre-determined limit, based on the zones you’ve covered, a cap is applied. This means you won’t be charged for further journeys in those zones for the rest of the day.
Daily capping is available with both Oyster or contactless. With contactless, you also get weekly capping from Monday to Sunday, too. This means you won’t ever pay more than you would for an equivalent seven-day Travelcard. To benefit, you need to use the same contactless payment method throughout the week. TfL works out your running total as the week progresses, and applies a cap.
If you make irregular journeys, and are not sure you’re spending enough to warrant buying a weekly Travelcard, then contactless is a good way to pay. If you don’t hit the cap, you’ll pay less – and if you do, you won’t pay more than you would for a Travelcard. So essentially, you get the price benefit of a weekly Travelcard, without having to buy one.
However, there is a caveat! The weekly contactless cap automatically runs from Monday to Sunday, rather than starting on the first day you travel. So if you’re planning to do a lot of travel in London over a week-long period that starts midweek, for example, then a seven-day Oyster Travelcard could be a better option.
Are Travelcards becoming redundant?
With contactless payments becoming increasingly popular, demand for paper Travelcards is already decreasing.
Previously, the cards were seen as a good option. But that was when the cost of a one-day card wasn’t too dissimilar to the Oyster daily cap rate. Now, the opposite is true. A one-day Travelcard ticket will set you back £12.10, since the option of buying a cheaper Travelcard, for zones one and two only, no longer exists.
The Oyster and contactless daily capping rate for travel in zones one and two is currently £6.50. That’s a 46% saving on the paper Travelcard. What’s more, travel further out of central London is also more cost effective with Oyster and contactless. The current day rate for zones one to four is £9.30 with Oyster and contactless, saving you 23% on a paper ticket.
Why do some business travellers still choose Travelcards?
As we’ve seen, buying individual Travelcards significantly increases the cost of London journeys. Savings of nearly 50% are available when switching to Oyster or contactless. So business travellers still buying one-day Travelcards might not understand the full range of options available.
However, one benefit of booking these Travelcard tickets is that it can often be done through your usual business travel booking portal or reservations team. This means they can usually be billed straight to an employer if your travel management company (TMC) has a ‘billback’ option set up. As a result, travellers can book their rail and Travelcard tickets for London at the same time, through their TMC – and don’t need to claim any of it back on expenses.
This is an interesting area for businesses to look at closely. It’s worth remembering that TfL offers an online account where you can review all transactions made, which should be adequate information for expense systems.
Which is best: Oyster card or contactless payment?
On a pay-as-you go basis, using an Oyster card is little different to using contactless payments. But contactless may suit business travellers who don’t want to concern themselves with buying or topping up an Oyster card. They can simply turn up and travel.
However, with Oyster you can also enjoy the discounts that come with national Railcards, such as the 16-25 Railcard. Unfortunately it isn’t possible to claim Railcard discounts when you use contactless payment methods.
The good thing about both Oyster and contactless is that capping technology should ensure that travellers don’t overpay for travel. And here, contactless has a slight edge for pay-as-you-go customers. While the same daily fares apply to both contactless and Oyster, to enjoy a weekly rate cap Oyster customers must add a seven-day Travelcard to their card. But with contactless, the weekly cap is automated, at least from Monday to Sunday.
Which London travel ticket is right for you?
Looking at overall costs, if you’re travelling in London on a fairly infrequent basis then contactless is the best way to pay. And as you don’t need to top up, as with Oyster card, there’s also a clear benefit in terms of ease of use.
However, if you’re going to be travelling around London for several days – and your period of travel doesn’t start on a Monday – it works out better to choose Oyster. That’s because with Oyster, a seven-day Travelcard can be loaded onto your card.
We’d recommend making a sensible choice between Oyster and contactless based on how often you’re travelling in and around London.
As we’ve seen, traditional Travelcards aren’t as cost-effective on a daily basis. But before you ditch them, check what your company travel policy has to say. For example, your policy may ask you to book your Travelcard at the same time as your rail ticket through the company booking portal.
For businesses, today’s alternatives to paper tickets offer an opportunity to review the cost effectiveness of their travel policy, and help their travellers make informed choices.
Interested? Let’s have a chat about your company’s travel, meetings and events objectives - from the stuff that keeps you awake at night, to the everyday experiences of your employees! Call us on 0330 390 0340, or submit the details below, with an idea of the times that suit you for a call.