4 thoughts on “Why rail fares should be deregulated”

  1. Posted 11/02/2015 at 17:24 | Permalink

    There are many things that lead to the cost to the taxpayer being the scale it is. Fares regulation, whilst it may have some effect, is by no means a genuinely dominant factor in the costs of operating the railway. The matter of Health & Safety for example increased industry costs considerably (in some cases by a factor of three or more for aspects of infrastructure delivery and maintenance) following the Hatfield crash. And there are many inter-company interface inefficiencies that have been highlighted by many commentators from both inside and outside the industry.

    That the author has chosen the subject of regulated fares suggests more a digruntled rail customer than an informed researcher. If he thinks that dergulation of season ticket prices would result in prices falling (thus benefitting customers), he is wholly mistaken. Customer demand at peak times is pretty inelastic and operating costs of providing extra peak time capacity on commuter railways is high (and often not recouped). Season ticket prices would almost certainly rise considerably more than inflation if pricing were left to the market.

    Government interference in other aspects of train operation has a much more detrimental effect on operators – for example by not allowing enough flexibility in operating agreements to let operators respond to potential new markets. Why not have a good look at that and see how the so-called “franchises” are really just operating agreements for fixed service patterns. That’s one area where consumer benefit could really be exploited. Look at the number of train operators that didn’t run on Boxing Day (again) because it’s not covered in their operating agreements, for example.

    It’s a shame that such a learned and respected research body should be let down by inadequate understanding of what’s really going on in the industry and how it could really be improved.

  2. Posted 12/02/2015 at 01:08 | Permalink

    Stupid idea.

    The trains used to be able to help people get to work. Now they are all a profiteering business. You think charging more on overcrowded trains is a good idea? Well people don’t get on trains for fun! Overcrowding happens during “rush hour” times – people are using the trains because they need to! Making them pay more just gives the train operators more money for doing a c$%p job, running insufficient services for the passengers.

    We pay so much money for our rail travel in this country. Our rail service is broken and people are forced to use it, despite the ridiculous fares. Instead of building HS2, Why not improve our current rail network and unprivatise the network so that money from tax payers goes to the rail network and not to profiteering rail operating companies?

  3. Posted 14/02/2015 at 14:54 | Permalink

    I think most people will accept that the peak / off peak binary is very limiting, I don’t think that making it trinary by adding super peak or whatever is a solution though. What about setting the average cost per passenger km on an annual basis and allow train companies to flex their pricing accordingly?

    I accept the point from other commenters that demand around peak times is very inelastic, however, because a large percentage of people commute during peak times, an average limit would force off peak to become much cheaper, incentivising flexible working by exaggerating price differences.

  4. Posted 18/08/2015 at 13:14 | Permalink

    The problem of regulation of fares might affect things at the margin a little bit but it does not address the problem of foreign state runned railway companies (eg. in Germany/France) buying up parts of British rail and using it as a cash cow by overcharging British commuters to subsidise fares to their commuters back home. German politicians have even boasted about screwing over English commuters to their electorates.

    The truth is privatisation has not led to the efficiencies that were predicted and in some cases has just been a smash and grab raid by foreign owned private entities.The East Coast Railway demonstates this well where the line did so well whilst being run by the state and had to be bailed out by the state when private franchises failed spectacularly. Its very strange that the Governments response to this is to re-privatise it!

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