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

Ev 2 Transport Committee: Evidence
14 November 2007 Mr Chris Austin, Mr David Mapp <strong>and</strong> Mr Richard Malins
Mr Mapp: I cannot remember the exact wording but
eVectively it asks customers in the context of the
station which they have just bought their ticket from
to rate how satisfied they were with ticket buying at
that station.
Q9 Chairman: What are rail companies doing to
improve this?
Mr Mapp: There is a whole range—
Q10 Chairman: Even 67% is not what you would call
a raging success, is it really?
Mr Mapp: 67% is the average. There are some
elements of the market which are significantly more
satisfied. Longer distance travellers for instance
were 80% satisfied with ticket buying at stations. I
should also emphasise that the National Passenger
Survey question is specifically related to stations,
<strong>and</strong> stations now account for less than 60% of all
sales. Over 40% are through the Internet, through
call centres, through travel agents <strong>and</strong> other
channels, so the question itself only relates to a
proportion of overall ticket sales. We are not
complacent about the 60%, or indeed the 80%, <strong>and</strong>
there is a whole range of initiatives that we are
pursuing to improve our customers’ experience of
retailing across the network. In particular we have
invested significantly in the Internet to the extent
that Internet sales represent 14% of all sales in total
<strong>and</strong> nearer 30% for longer distance train operators.
There has been significant investment in the
ticketing on departure network which now covers
500 stations <strong>and</strong> through which about £500 million
worth of sales pass. There have been round about
900 new self-service ticket machines installed at
stations in the past three years. We are participating
fully in the development of smartcards, in particular
ITSO smartcards but also the Oyster scheme in
London as well. Looking further ahead there is
active development work underway looking at print
at home tickets <strong>and</strong> also barcode tickets on mobile
phones. We certainly are not complacent. There are
many things that we are doing which we hope will
improve retailing for customers in the future.
Q11 Clive EVord: The industry appears to be
reluctant to make a major investment in smartcards.
What do you think the Government can do to
encourage you to invest <strong>and</strong> make the business more
attractive?
Mr Austin: The investment required is quite high
<strong>and</strong> quite clear. There is a lot of ticketing equipment,
back oYce systems <strong>and</strong> software support required,
<strong>and</strong> so far the benefits coming from it have been less
tangible. There is some revenue generation but some
of the other advantages or some of the other
potential cost savings are more diYcult for us to
achieve than for example for Transport for London.
The increase in sales through smartcards <strong>and</strong> the
reduction in sales through ticket oYces will in the
long run allow savings to be made in the cost of
operating ticket oYces. Transport for London have
realised that at some of their ticket oYces. We are
precluded from doing that by regulation which
controls the hours of opening of ticket oYces, so that
is one area where the benefits are much more diYcult
for us to realise.
Q12 Clive EVord: The information we have is that
some organisations have been critical of ITSO.
There are new technologies coming in such as
contactless credit cards; Barclaycard do one for
Oyster for instance. Is that the way forward then
rather than investing in huge kit like ITSO?
Mr Mapp: I do not think the issue is ITSO—<strong>and</strong> I
should declare an interest here as a board director of
ITSO Ltd—which has developed a world st<strong>and</strong>ard
in smartcard technology. Whilst that has perhaps
taken longer than some people expected, in
comparative terms it has actually been developed
quite quickly. By comparison the magnetic stripe
bank cards took 25 years to develop. I do not think
ITSO is the issue; the central issue has been the lack
of a business case for commercial operators to invest
in the fairly expensive infrastructure you need to
support smartcard schemes. As far as the rail sector
is concerned, the current Government strategy of
specifying ITSO enablement in every new franchise
is a very eVective method of leveraging in private
sector investment to fill that gap, <strong>and</strong> I think that
strategy is likely to be fully eVective over time.
Q13 Clive EVord: How does the rollout of ITSO
compare with for instance Oyster across London?
What is the diVerence?
Mr Mapp: Oyster of course had a head start over
ITSO in the sense that the Mayor <strong>and</strong> Transport for
London decided to introduce the Oyster scheme
some years ago now. ITSO has taken longer to
develop partly for the reasons that I have already
articulated. It is now a franchise requirement in
several of the recently let franchises, most notably
South West Trains but also East Midl<strong>and</strong>s, West
Midl<strong>and</strong>s, Cross Country <strong>and</strong> East Coast as well. In
each of those franchise agreements there are
commitments to roll out ITSO over the next two to
three years, so I think whilst it had a slower start
than Oyster ITSO is likely to catch up progressively
over the near future.
Q14 Clive EVord: You have suggested that ATOC
could provide “the client” for a national integrated
ticketing system. What would this achieve?
Mr Mapp: I am not sure I underst<strong>and</strong> the question.
Mr Austin: I think I can help there. In our written
evidence we said that our subsidiary organisation
Rail Settlement Plan has the technology to provide
the back oYce support for these smartcard systems,
<strong>and</strong> so whether it was rail only or rail <strong>and</strong> bus we
have the ability to do that for a national system.
Q15 Clive EVord: And how would that benefit either
you or the travelling public?
Mr Austin: The advantage is it would end up being
a little quicker because it is a ready-made system
capable of adaptation, but of course there is a cost
attached to it.