Ticketing and Concessionary Travel on Public Transport - United ...

Ev 94 Transport Committee: Evidence
magnetic ticket technology now in use was not designed for national rail revenue control purposes <strong>and</strong> does
not necessarily conduct correct checks on long distance tickets or visually cancel tickets. Manually
controlled gates will be much used <strong>and</strong> come to dominate <strong>and</strong> undermine the whole control principle. This
can already be observed at a number of stations, where the manual gate facility is usually under pressure,
is often a cause of poor customer service <strong>and</strong> provides only a cursory ticket check.
18. As there are no reliable estimates of fare evasion or ticket-less travel, the financial justification for
these schemes is not self-evident. Where a proper survey of the level <strong>and</strong> nature of ticket-less travel has been
undertaken, it will be possible better to assess the case for the implementation of any automatic ticket gate
schemes, as these represent a substantial investment <strong>and</strong> have significant ongoing costs. Evidence that such
equipment is guaranteed to reduce ticket-less travel is open to debate. It is inappropriate to extrapolate any
early trends onto all the station’s revenue to show the assumed benefit from gating. In reality revenue may
not in fact change substantially in the longer term, <strong>and</strong> in a comparison of the revenue trends at gated <strong>and</strong>
un-gated stations it can be diYcult to identify significant diVerences. Much of the revenue generated at these
stations is likely to be the mopping up of local fares that are not being adequately controlled on train, <strong>and</strong>
there is no benefit to the longer distance business. Recent surveys in the London area suggest that gates can
reduce local ticket-less travel by 50% but do not eliminate it. The near fully gated system on the London
Underground still has a residual 3% evasion rate.
19. The successful adaptation of ticket gates to deal eVectively with other ticket media such as mobile
phones or paper bar-code recognition is still unproven at this stage, which is a cause of some concern as
these are seen as essential developments in distribution that existing <strong>and</strong> new gating schemes introduced by
a number of TOCs may not be equipped to deal with. Alternatively the process of upgrades may prove costly
or diYcult to progress. This may inhibit the use of new distribution channels which do not create tickets that
conform to current magnetic (or proposed smartcard) st<strong>and</strong>ards. Any moves towards more yield
management systems that specify which train must be used are not well supported by gate technology or
common access control. Some TOCs may be reluctant to h<strong>and</strong>le more customers through manual gates
because of ticket medium compatibility problems or the ability of gate software to make correct validity
assessments on magnetic tickets. There is likely therefore to be a better case to be made for investment in
people on train <strong>and</strong> improved staV performance than in this sort of equipment. At present there is a tendency
among heavy rail operators to invest quite heavily in enforcement through technology that is not necessarily
appropriate to their business while neglecting to spend money on staV <strong>and</strong> their training <strong>and</strong> development
in revenue protection work. This also results in the not unusual spectacle of expensive ticket gates, which
cannot be used in unattended or unsupervised mode, left open for lack of staV or inadequately manned by
contract personnel.
Richard Malins
March 2007
Supplementary memor<strong>and</strong>um from Transport Investigations Ltd (TPT 12a)
Revenue Protection on the Railway Network
1. A starting point for any discussion on this topic should be an estimate of the extent <strong>and</strong> nature of fare
evasion on the railway business, to define the problem before deciding on the measures relevant to solving it.
2. The reality is that there is very little accurate evidence on this subject <strong>and</strong> the estimates brought before
the Committee were more speculative than real. It is my belief that most of the quoted figures in the public
domain are based on surveys that are statistically flawed, both in the sampling techniques used <strong>and</strong> in any
weighting (or none) applied to the figures. Some are little more than anecdotal or informed guesswork.
Extrapolation of numbers from station based activities can be misleading, while others do not adequately
take into account diVerences in fare values <strong>and</strong> revenue weights for diVerent types of journey. It is generally
recognised for example that short journeys tend to be more prone to non-payment, but such figures are then
applied across the whole business, particularly to longer distance journeys with higher revenue values.
3. The figures being quoted by ATOC <strong>and</strong> Passenger Focus, of 5–8% of revenue or £400 million, are
estimates without qualification as to how much of this is active fare evasion <strong>and</strong> how much is unpaid travel
caused by ticket retailing failures. There is also likely to be some overstatement due to the lack of revenue
value weighting by journey type. My personal estimate, based on such information as is available to me, is
that although there are places where fare evasion reaches these levels, that figure is not typical of the network
as a whole, while the areas of conspicuous retailing failures are on local services where traYc has outgrown
the ability of the ticketing systems to cope. These do not actually account for the bulk of railway revenue.
4. The degree of confusion about the extent of fare evasion is evident from statements by First Group,
with the Chairman claiming losses on its FCC rail franchise of £40 million, which represents 1 passenger in
6 not paying a fare, while the TOC’s MD told the Committee the loss was around 5% or £15 million. Claims