Research on Demand Impact of Fares Structures
Michele Mazza, Accent MR, Rob Sheldon, Accent MR, Tony Magee, Association of Train Operating Companies
This paper explores the impact on rail passenger demand of fares complexity and potential means of mitigating this impact.
Privatisation of British Railways in 1995 led to competition between train operators and an increase in ticketing complexity.
Train operators created a wide range of ticket types and fares to encourage rail travel, particularly discretionary travel, whilst managing capacity through restrictions (exemplified by the introduction of Advance tickets). In addition, there were an increasingly wide range of low price ‘walk up’ tickets which had restricted usage, including return leg restrictions.
One of the results of this was the development of perceived complexity in the ticketing structure by rail users and their representatives (such as Passenger Focus) and industry stakeholders.
In response to this, the fares structure was simplified in 2008 with the family of fares renamed as Anytime, Off-Peak, Super Off-Peak and Advance. These changes were welcomed and British train operators have continued to be pro-active in making information on fares clearer since. Despite this ongoing work there are still some concerns that there may be too many fares and conditions and that this may be acting, to some extent, as a deterrent to rail use.
To determine the optimal number of fares and conditions for a flow in terms of maximising demand and revenue, at ATOC commissioned research which explored the effect of the complexity of the fares structure on rail demand. This paper presents the outcome of the study.
A multi-method approach was employed, comprising a literature review encompassing a wide range of sectors, qualitative research in the form of depth interviews and co-creation focus groups. Additionally, there was quantitative stated preference research with rail users and potential rail users. The stated preference element was designed to offer trade offs between ticket restrictions, range of ticket costs and information provision.
The research findings show whether the existing fares structure deters rail travel and the role that increased information provision on ticketing options could perform.
This paper explores the impact on rail passenger demand of fares complexity and potential means of mitigating this impact. The research also sheds light on how the rail offer could change in the future to better meet both rail and potential users’ needs.
Association for European Transport