Expert Insights

RDG announce pilot to bring change to UK rail pricing

1 February 2017

Rail Delivery Group (RDG) shares plans to launch May'17 trial for easier purchase of cheapest possible tickets...

What’s the story?

Change is afoot within the world of UK rail pricing. RDG has announced this pilot in order to better understand what changes they can make to the UK’s faring systems. The organisation is specifically focussing on some of the key challenges the industry faces due to legacy infrastructure and outdated systems;

  • EMT will be piloting the removal of outdated fares and the ongoing streamlining of available options on the Sheffield to London route. This will focus on the actual timetables and services that exist on this route today. The current scenario exists because the number and frequency of services on this route have increased significantly post privatisation.

  • Cross Country Trains is piloting pricing models that will give the cheapest available fare to consumers on the train operating company’s (TOC) long distance routings. The current price anomalies are created due to Cross Country being regulated to maintain a price for a through ticket on long, connecting journeys, even where customers can beat that price by combining different types of ticket. In a direct challenge to the practice of split ticketing, this trial should see price reductions for a large number of the journeys with Cross Country.

  • Virgin Trains East and West Coast will be piloting pricing models based on single-leg pricing, similar to that seen in the airline marketplace. At the moment, it’s not possible as the regulated off-peak fare is a return fare, meaning you cannot compare an apple with an apple. The trial should mean that the TOCs’ customers are always able to see the best value fare for a route.

Clarity needed

Many of the rules and regulations on rail fares are outdated and relate to a pre-privatisation world. As an output of this pilot, RDG hopes to establish which of them can be amended in order to allow greater flexibility in the tickets TOCs sell. Whilst this is a welcome announcement, and we are very pleased to see a drive to change, an under performing part of the rail system, there are some questions that remain unanswered.

Firstly it is unclear which fares will rise, fall and stay the same. We hope that with systems being improved, this does not over time lead to a scenario in which the TOCs have more scope to increase prices or continue their aggressive management of yields and fare availability.

Additionally, removing split ticket options in order to reduce the ticket price for all today is welcome, but only so long as the new fares available are set at a level commensurate with those they replace. What would be unacceptable would be the removal of lower value tickets enabling a split and their replacement with higher fares overall.

Finally, some rationale for how the pilot members were chosen would be welcome; GWR, with one of the main intercity routes into London and key split points, is notable by its absence.

Positive steps from RDG

In practical terms, this trial sounds like it could really drive better value. As always however, the detail behind these plans will be key to understanding exactly how they will affect our customers, enabling them to navigate and take advantage of the changes appropriately. We are sure that in due course more detail will emerge that fills in the gaps.

At the very least this is a good first step in the right direction by RDG and a positive early indicator of the path it is taking since becoming a more unified organisation.

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