The case for a new ‘Economy Class’ in rail tickets

Come Boxing Day, the media ran the usual tales of shoppers queuing before dawn to take advantage of High Street sales. Queues may have been shorter than in the past and the weather more forgiving, but the discomfort of long waits remained palpable.

Yet from observing the behaviour of such crowds, the government could learn a great deal – Ministers and officials in the Department of Transport in particular. In this instance, they should note the willingness of many consumers to persevere with standing if there is a bargain to be had.

So here is an idea to challenge the problem of train overcrowding (which, in essence, is a manifestation of too low a price charged during the peak period). Make a crowded carriage desirable for some passengers! This apparent paradox is achievable by (formally) offering a lower quality product than current standard class but at a (compensatory) lower price, in the process increasing the number rail ‘products’ passengers can choose from.

Products well differentiated by quality and price, are found throughout the market economy and the airline business (another branch of public transport) provides a prime example. When flying between London and many European cities, air passengers may choose between different airlines offering distinctly different qualities of service at rather different prices. British rail has been slow to follow suit; its departmental overlord has planned for a relatively limited, standardised service quality (as is the want of monopoly providers) at a plethora of generally time-dependent prices. In practice, the quality offering has proved to be unpredictable and random, and the fare structure confusing.

Specifically, commuter trains could have a high-density section, (say a couple of carriages, probably at the front) wherein there are no seats. Commuters choosing to occupy these carriages stand as a matter of course but at a fare priced at a discount, say 20%.

Instead of as now paying a standard class fare for a seat lottery, standing commuters would be compensated for doing so. With an appropriate fare discount (diverting sufficient passengers) there is another bonus; for commuters choosing to pay standard class fares it should be possible to meet their expectation of a seat and a more agreeable journey. They will no longer be hemmed-in by standing passengers (and a catering trolley service might be possible).

But it is not only the passenger who stands to gain, taxpayers too. Faced with the crowding problem the Department’s current strategy is to lengthen trains which also means lengthening or (at Waterloo) adding platforms, increasing depot capacity and often relocating signalling equipment, accomplished at a huge (marginal) cost. Adopting the proposal would at least defer these expenditures and ease the pace at which the nationalised Network Rail organisation accumulates debt (now exceeding £50bn).

There are, potentially, still further advantages. Fewer carriages than currently planned means lower maintenance costs and leasing costs for train companies. Carriages stripped of seating are lighter (by at least one tonne) thus saving on traction costs. There are undoubted costs too associated with the proposal, but probably modest: the price of re-jigging a couple or so carriages, selling a new ticket class and the financial cost to the train operators of the discounted fare, perhaps offset by opportunities for better revenue protection and the additional rail product attracting marginally more passengers.

Learning more about these pluses and minuses would require some experimentation to gauge consumer reaction. Let the Department of Transport be bold enough to trial the approach on one commuter line. Old British Rail was not afraid to experiment, once having tried out one-and-a-half decked carriages on the Dartford – Charing Cross service between 1949 and 1971.

Ultimately, as a nation we should accept the fact that railways are a very expensive mode of transport. We should not complain about increases in real fares and then expect fulfilment of our costly aspiration for all peak commuters to have a seat.

Economy class offers an opportunity to come to terms with this dilemma, to replace the current unpredictable, sometimes chaotic, outcome when purchasing a peak period ticket, for an honest one where the quality of service provided really does match the offer price.

Member of the Advisory Committee

Prof David Starkie is a senior associate at Case Associates, London. His many publications include  Aviation Markets: studies in competition and regulatory reform (Ashgate, 2008). David has advised governments and legislatures across the world on transport policy issues. He was economic advisor to the European Commission’s delegation at ICAO-related proceedings on aviation and the environment, Montreal and Washington DC 1995-97, and was on the Civil Aviation Authority’s expert panel for NATS price cap review 2006 and airport competition framework assessments 2010-11. More recently he was on the Airports Commission’s expert advisory panel. David is the author of the book The Motorway Age: How post-war governments reacted to rapid traffic growth.

3 thoughts on “The case for a new ‘Economy Class’ in rail tickets”

  1. Posted 03/01/2019 at 10:33 | Permalink

    At first sight, this makes sense although it’s probably politically unacceptable: what next, people hanging on the outside, as in India? However, consider my daily commute. I board a train 30 minutes out of Manchester. It usually has three carriages and I get a seat – requires some rudeness on occasion. If there are only two carriages, I don’t bother getting on. If I don’t get a seat, I get off and wait for another train. I refuse to stand for 30 minutes. The train makes just one more stop, 15 minutes out of Manchester. The vast majority of those boarding stand in the aisle. Under your scheme, there would likely be only two seating carriages – for me, a disaster. If there were still three, the net change would be that those standing in the aisle for 15 minutes would still be standing, perhaps more comfortably, and would deservedly be paying 20% less for doing exactly what they had previously.

  2. Posted 04/01/2019 at 10:08 | Permalink

    Interesting and fair point Jonathan. In your situation the solution is really to add carriages (in which case I presume with existing train sets of only two/three carriages, there would be no need to invest in platform lengthening). The blog was focussed on the London problem where most suburban peak-hour services have nine or more carriages.

  3. Posted 04/01/2019 at 20:13 | Permalink

    interestingly, I have only been around Manchester once at commuter time and it struck me as being absolutely abysmal (far worse than London). And the trains were short. I don’t know why that should be except, of course, price control means that a quasi monopolist adjusts quality down also. I must admit, I thought that sort of thing was dealt with in the franchise bidding. Are Manchester local services part of that or are they run by the local authority?

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