There is a range of differing views surrounding fares simplification and the difficulties of achieving it. Of course, different stakeholders will highlight their particular bugbear. Some will have their preferred solution, such as single-leg pricing; others define it around a specific manifestation of a complicated fares structure such as split ticketing, which they would in fact like to get rid of! What is not clear is the extent to which there is any agreement on what fares simplification actually means to different stakeholders.
To help us achieve a simpler fares structure, we must firstly agree ‘the problem’ that we are trying to fix, then de-scope the parts of the current fares structure that are likely to remain. Many would agree that removing fares that are no longer used is a good idea. But in a system that cannot provide infinite capacity, Advance fares that best match demand with available capacity are a necessity.
It seems to me that there are at least four dimensions to fares simplification:
Simplifying passengers’ choice - decreasing the number of ticket options, perhaps after aggregating the range of Advance fares typically made available by revenue management systems as one ticket type, would probably simplify the choice process… but may result in higher fares.
Presentation - a related issue to the above is how the alternative fares, and their associated terms and conditions (for example - time/date of travel), are presented online and on ticket vending machines.
Fairness - some consider it unfair for the Single fare to not be priced at half the Return fare, because it is not logical and because it limits passengers’ ability to mix and match ticket types for their return journeys. Related to this is a passenger’s right to know the cheapest fare for their journey, without needing to check split ticketing websites.
Market segmentation - it is important to recognise that different market segments have different needs, and different approaches will be needed to address the needs of commuters and long-distance passengers.
We need to agree what we want to achieve, and be more informed of passengers’ needs. For example, recent research established that passengers prefer a more complex fares structure to a simpler one, if the complex structure offers them cheaper fares. This suggests that a very simple distance-based fares structure is not the answer.
Once we can agree on the ‘end game’, it will be far easier to suggest solutions. To this end, we can then identify the technological, commercial, procurement and regulatory constraints that need to be resolved. We can then work towards a transition plan that would address how we get to our desired fares structure through introducing new products and phasing out old ones. This plan will consider how the franchising system can accommodate such changes and how we mitigate any negative impacts.
The trials starting in May are clearly important for increasing the industry’s understanding of this incredibly thorny issue.
