Season Ticket Pricing by Distance
Dr I. D. Macbriar, QV Associates
An analysis of the way in which the price of season tickets varies with distance on commuter railways into London, and the likely policy consequences.
On the railways of Great Britain, season tickets allow any number of journeys to be made between two stations over a fixed period of time, typically one week, one month, several months or even one year. Such tickets form a huge proportion of the revenue on the services that feed commuters into London. Increases in the prices of these tickets are subject to tight controls by central government. The distances over which passengers are prepared to commute have increased markedly over the last 50 years – and so it is important to get the right policy for the pricing of these tickets.
The investigation to be described was prompted by a fares study for one of the London commuter Train Operating Companies, using price data from a number of these companies (and from the long-distance InterCity routes). The pattern of pricing by distance between these companies is fairly consistent (mainly as a result of the government controls), but the price per kilometre declines very markedly with the length of the journey. However, the question arises as to whether this is logical – how can this be reconciled against the cost of providing the service.
At the same time, the price of ordinary return fares tends to be linear with respect to distance. This means that, at longer distances, the differential between the price of a season ticket and the price of an ordinary return is much reduced.
The consequences of this scheme of things are probably considerable, even though the political cost would make any major change extremely difficult. Nevertheless, it would to be sensible to at least discuss why this should be and whether it is appropriate.
Association for European Transport