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

Integration Nationally
Transport Committee: Evidence Ev 125
1.12 Nationally, there are significant structural, legal <strong>and</strong> commercial barriers to ticketing integration.
1.13 Barriers on the rail network include:
(a) The fact that the TOCs carry the revenue risk within the franchise agreement <strong>and</strong> therefore any
change to ticketing or fares policy (whosoever makes it) is seen as a potential risk to their business.
(b) An integrated ticketing system requires a level of cooperation <strong>and</strong> sharing that is culturally diYcult
for a competition-based industry focused on short to medium term profit maximising, particularly
if it requires any significant capital investment with a longer payback period than the duration of
the franchise.
(c) As a consequence of the value of the franchise agreements they are caught by the European
mergers <strong>and</strong> competition rules. Since the TOC owning groups are mostly also major UK bus
operators, they can be reluctant to integrate fully national rail <strong>and</strong> local bus services in order to
avoid the possibility of being regarded as having exploited a dominant position.
(d) The diVering characteristics of each TOC (traditionally characterised as London <strong>and</strong> South East
(LSE), Intercity, <strong>and</strong> Regional) is a barrier to integration. There is a strong <strong>and</strong> positive business
case for those franchisees for LSE TOCs, where there is heavy usage <strong>and</strong> where overcrowding is
an issue. But “pay-as-you-go” from a stored value on the card has little benefit from a passenger’s
perspective for Intercity services where the average fare value is over £20. Passengers will not want
to tie up cash to pay Intercity fare levels from a stored value. Conversely, in regional TOCs the
fare paid by the passenger is only c25% of the real cost of providing the service (eg Arriva Trains
Wales or Northern franchise) <strong>and</strong> in these cases the value of an integrated system is a function of
the importance of an integrated system with local bus services.
(e) Who is, or will be, the customer with the vision to drive it forward?
1.14 On the bus network, the barriers to integration include:
(a) the de-regulation of bus services outside of London <strong>and</strong> the multiplicity of small operators mean
it is diYcult to deliver a national integrated system unless it is m<strong>and</strong>ated at the outset as part of
an operators’ licence—this may be possible through the intervention of PTEs; <strong>and</strong>
(b) Nationally integrated ticketing will be low on the agenda for the multitude of small local bus
operators because they will be reluctant to pay for the infrastructure cost associated with a
National system.
2. Does the Government have an adequate strategy for developing the integration of ticketing systems?
2.1 No, TranSys does not believe that the current strategies being pursued will result in a National
integrated ticketing system in the short to mid term that truly benefit both regular mass transit passengers
<strong>and</strong> operators.
2.2 The current strategies are:
— to m<strong>and</strong>ate ITSO compliant cards on national rail in franchise agreements <strong>and</strong> require bidders to
submit bids for smartcard schemes;
— TranSys is not aware of any policy on buses other than to m<strong>and</strong>ate ITSO cards; <strong>and</strong>
— integration of London into a national scheme will be by requiring TfL to accept ITSO cards.
2.3 TranSys believes this will not deliver an integrated ticketing system because:
— A national integrated ticketing system is an achievable but very complex system—the ticket
medium (smartcard) or ITSO specification used on the card is only a small element in that system.
Other key features of a successful integrated system are base data, ticket logic <strong>and</strong> fares tables,
revenue allocation protocols, inter-device <strong>and</strong> device-to-communications processing
communications protocols, security protocols, comprehensive business rules <strong>and</strong> operational
rules, data outputs <strong>and</strong> formats, system <strong>and</strong> equipment redundancy, disaster recovery
arrangements, maintenance <strong>and</strong> service levels <strong>and</strong> device availability.
— The ITSO specification is “permissive” (allowing diVering solutions <strong>and</strong> options) rather than
“definitive” (providing a measurable <strong>and</strong> defined envelope of parameters or performance). It is
therefore capable of being met by a number of diVerent interpretations.
— By allowing multiple operators to develop smartcard solutions within franchises there is the danger
that they develop ITSO compliant solutions that meet their franchise obligation but do not
consider a national perspective as part of the delivery <strong>and</strong> are therefore unlikely to be an integrated
solution. The worst outcome would be a passenger taking a journey from (for example) Brighton
to Birmingham that requires 3 separate smartcards.
— Following the franchise replacement route will mean that a totally integrated ticketing system will
not be available until late in the next decade.