Uncharted Territory

July 17, 2013

Staggering Piccadilly Line Trains

Filed under: TfL, Transport, Tube — Tim Joslin @ 11:03 am

Does London Underground appreciate that the vast majority of tube passengers (or “customers”, “clients”, “johns” or whatever might be the latest business-speak term for the long-suffering punters) simply want to be delivered to their destination as quickly as possible (and in reasonable comfort, but let’s put that issue to one side for the moment).

Why, then, would the operators deliberately slow tube trains down?

I’ve been pondering this question on many an occasion over the last year when I’ve had the dubious pleasure of making use of the Piccadilly Line to travel into central London from Acton Town (previously I took the Central Line from Ealing Broadway, which has a different set of problems).

Take last Saturday. I was concerned how long it would take me to get to Golders Green due to the closure of the Northern Line, I understand to test new signalling. As it turned out I needn’t have worried, since a frequent replacement bus service whisked me there from Finchley Road (though anyone who didn’t twig they were best off catching the Jubilee Line there might well have arrived late at their destination). Still, credit where credit’s due.

Anyway, when I left home last Saturday morning I naturally had no foreknowledge of the impending outbreak of efficiency at Finchley Road, so I was keen to get there as soon as possible. When I saw a Piccadilly Line train on platform 4 at Acton Town, I jumped on immediately, even though there were no free seats and I had to stand. When traveling into London, Acton Town is the first station on the Piccadilly Line after two branches come together. Well, they partially come together at Acton Town, since there are two platforms serving Piccadilly Line trains in each direction and two sets of track each way, it seems for much of the distance towards Hammersmith. Sometimes there are trains at both platforms and occasionally there’s even an announcement telling you the other train will leave first.

But on Saturday there was no Piccadilly Line train waiting at platform 3.

Nevertheless, to my considerable annoyance, the full train I was on was OVERTAKEN by TWO other Piccadilly Line trains as it trundled towards Hammersmith. Since the Piccadilly Line operators like to maintain the gap between trains this happenstance added maybe as much as 10 minutes onto my 1/2 hour journey to Green Park to pick up the Jubilee Line.

And the trains that overtook us were fairly empty. That’s right: a full train with hundreds of passengers was held up to allow relatively empty trains, perhaps with only scores of passengers to pass.

What’s going on? The only conceivable explanation is that the Piccadilly Line operators are not concerned directly with the passengers at all. No, they’re simply focused on their timetable. Operational processes, I suspect, take priority over customer service. Now, a glance at the Piccadilly Line reveals there is no branch in the east, only in the west:

130717 Piccadilly Line

It’s not outwith the bounds of possibility that the Piccadilly Line timetable ensures trains join the merged section of track based on where they’ve come from. That is, it could be that trains from Uxbridge are held up to allow Heathrow trains to overtake. I know: this is stupid. The trains appear to be identical. It’s not as if there’ll be a knock-on effect if trains arrive at the other end of the line in the wrong order. In fact, the trains being identical is another problem with the Piccadilly Line: the Heathrow trains need more luggage storage space. More about that issue another time perhaps.

Another possibility is that the trains are being ordered according to their destination. Not all trains go to Cockfosters. Some terminate before then. But holding up trains to ensure that (say) every other train goes to Cockfosters is almost as stupid as ordering the trains based on where they’ve come from. The reason not every train goes to Cockfosters is presumably because they are fairly empty when they get there. So delaying trains full of hundreds of people at Acton for the convenience of a few passengers at the other end of the line would make no sense. Which isn’t to say that’s not why it’s being done.

As I mentioned earlier, Piccadilly line eastbound train ordering is usually achieved by holding trains at Acton Town station. Infuriatingly, you often can’t tell whether the train at platform 3 will leave first or the one at platform 4. Simply providing this information would save hundreds of person-hours of tube travel time every day. But maybe (understandably) the operators don’t want hundreds of people rushing from one train to the other – though not everyone would necessarily move, since there’s the issue of access to those precious seats to consider.

But why hold up any trains at all? Holding up trains ALWAYS delays many passengers whereas managing train ordering – or, as we’ll see, the intervals between them – generally speeds up very few journeys.

Here’s my advice to Transport for London: stop trying to be clever. Start trains according to a timetable, but after that just run them as fast as possible. Hold them at stations only long enough for passengers to get on and off.

The calculation the operators should be carrying out, but I very much doubt they are is whether the amount of time they are costing the passengers on held trains is less than that saved by passengers who would otherwise miss the held train.

Perhaps this becomes clearer if we consider what happens when trains are held to even the intervals between Piccadilly Line trains in Central London. There’s only one tunnel and one set of platforms there, so there’s no issue of trains overtaking each other. Yet frequently – maybe on as many as half of all journeys – you sit in a station and hear that “we’re being held to regulate the service”. But consider the effect of this procedure. ALL the passengers on a train are being held up so that a few passengers further down the line find the train hasn’t already left when they reach the platform.

Such train staggering only makes sense when trains are fairly empty and many passengers are arriving at the platform. But the reverse is the case for morning journeys into central London and evening journeys out. When I’m on staggered Piccadilly Line trains it’s almost always the case that many more passengers are being delayed than are being convenienced.

If TfL is not swayed by the simple numeric argument, perhaps they should consider the business argument that the more often people have a rapid journey, the more they will be inclined to use the Underground rather than alternatives, such as taxis.

My advice to TfL’s London Underground operations team is to stop dicking around trying to timetable Piccadilly Line trains along the whole line. Release them at regular intervals and then get them to their destination as quickly as possible. Simples.

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September 16, 2011

Off the Buses in Ealing

I reported yesterday that TfL is planning to increase fares on average by RPI+2 each year until 2018, and Travelcard prices by RPI+3 over the same period, the supposed justification being that rail fares are to rise by RPI+3. I briefly discussed the implications of this discrepancy, but had a subsequent conversation which led me to consider a different case.

I don’t know about you, but I always feel short-changed if I buy a season pass for a transport network and then find I’d have been better off paying for each journey individually. How likely is this to happen for someone living in Ealing, but working in central London a) now and b) in 2018?

Case 1: A morning and evening peak commuter
This individual uses the tube during the morning and evening peak and sometimes catches a bus back from the station.

In the following table I’ve ignored inflation and just increased costs by 2 or 3% p.a. So in today’s prices a zone 1-3 Travelcard will cost £41.55 in 2018, compared to £34.80 in 2012.

Year   Travelcard cost       Less 10 peak tube fares      Bus fare cost         No. bus fares to break even
2012         34.80                     34.80 – 10*3.10 = 3.80         1.40                             3.80/1.40 = 2.71
2018         41.55                     41.55 – 10*3.49 = 6.64         1.58                             6.64/1.58 = 4.21

So whereas in 2012 our peak commuter would only have to catch the bus 3 times in 2012 to avoid feeling cheated on a weekly Travelcard, he’ll have to catch it 5 times in 2018. If, like me, he walks to and from the station most of the time, he’ll be in a bit of a dilemma by 2018 as to whether or not to buy a weekly Travelcard.

Case 2: A morning peak and evening peak/off-peak commuter
It gets even worse in the case I actually discussed yesterday. The evening peak is from 16:00 to 19:00, so many people working in London may not actually travel home until off-peak fares apply. If this happens 3 times in a week, then the calculation changes somewhat:

Year  Travelcard cost     Less 7 peak, 3 off-peak tube fares     Bus fare cost   No. bus fares to break even
2012        34.80               34.80 – (7*3.10 + 3*2.60) = 5.30              1.40                     5.30/1.40 = 3.79
2018        41.55               41.55 – (7*3.49 + 3*2.93) = 8.33              1.58                     8.33/1.58 = 5.28

By 2018 this commuter will need to use the Travelcard on more than one bus each work-day (or for leisure journeys) to justify the expenditure.

Personally I feel the Travelcard should be a better deal. In London, it seems, regular tube users are likely to pay as much per journey as occasional travellers. And it seems unfair for commuters to have a dilemma as to whether to by a season ticket or not – I haven’t even discussed the effect of Bank Holidays, leave, sick-days and occasional home-working. This is the opposite of the case for main-line rail commuters who get a tremendous deal compared to the occasional traveller.

From TfL’s point of view inflating the cost of Travelcards relative to pay as you go (PAYG) fares may also not make sense in the long-run. The result may be that more of us in suburban London stop buying Travelcards and instead cut out as many bus and tube journeys as possible. As I said yesterday, “maybe it hasn’t occurred to TfL that people might consume less of their product when they put the prices up”.

September 15, 2011

Off the Buses

Boris has announced the 2012 London Transport fare increases already. Do we always get an announcement at this time of year? Or is our leader trying to get the bad news out of the way as long as possible before the mayoral election in May 2012? I note that the last time I visited this topic was in January this year when the last fare rises actually came into effect. With a bit of luck there’ll be a double whammy with negative stories now and in January 2012.

Let’s get the ball rolling with a negative story, then.

The BBC provides a link to the documents issued by the mayor. I only looked at the first one (pdf), which seems to tell me everything I need to know.

It turns out that TfL has a Business Plan based on fare rises of RPI+2%. News to me, most likely totally unjustifiable, but certainly worthy of discussion.

First, are we to believe that TfL’s costs rise faster than general inflation? This seems unlikely, though we do know that many of their employees are extraordinarily privileged to the extent that they apparently deserve a bonus just for doing their job during the Olympics. A lot of people will be working then, and the vast majority will be paid their normal salary, and would expect nothing more. I don’t support the present government, but I was rather hoping they might look at strike law with a view to stopping Londoners being continually held to ransom.

Second, on the customer side, how is it possible to bear continual above inflation rises in transport costs? I’m thinking of low-paid workers travelling into central London. The cost of a weekly Travelcard (tube and bus) season in 2012 will be £34.80 to zone 3, £42.60 to zone 4, after rises of 8.1% in each case. That’s about £1 per hour of work! Surely the minimum wage for central London needs to be higher than elsewhere to compensate? Assuming your pay rises roughly in line with inflation (which is doing well these days), then, if you have to spend more on transport, you have to spend less on something else. That is unsustainable. TfL is not like national rail, which, as the Transport Secretary pointed out this week, is now a service for the wealthy. It is simply not realistic for TfL to increase its prices by more than RPI for a long period of time, unless the lowest wages are increasing by at least the same rate.

So why has TfL adopted the RPI+2% formula? Maybe the document I downloaded doesn’t tell me everything I need to know after all. There seem to be a lot of TfL Business Plans, but the 2009 one for 2009/10 to 2017/18 tells us what we need to know:

“…fares in January 2011 and in subsequent years are now assumed to rise at RPI plus two per cent.”

So it is indefinite. And the purpose is clearly to increase the proportion of operating costs covered by fares and therefore reduce what TfL term “Net operating expenditure”:

Excerpt from TfL Business Plan 2009/10 - 2017/18

Let’s just note in passing that the congestion charge is going to raise less in 2017/18 than 2009/10!

Bizarrely, TfL don’t state what the figures in the table refer to. Presumably they’re 2009 £s (i.e. adjusted for inflation). Assuming that is the case, TfL assumes a steady growth (several % p.a. varying erratically) in passenger numbers as well as a 2% annual increase in the fares. They say:

“As the economy recovers from recession, it is projected that demand will return to current levels by 2012 and then continue to grow strongly as London’s employment and population increase, with demand reaching record levels by the end of the Plan.”

This is a fairly heroic assumption, as it seems to assume a very low elasticity of demand – maybe it hasn’t occurred to TfL that people might consume less of their product when they put the prices up. I’ll return to this point in due course.

TfL’s Business Plan suggests they expect costs to also rise by several % p.a. more than inflation, and also erratically, with a bigger increase in 2012/13 presumably to reflect the need to bribe the staff not to disrupt the Olympics, and in 2017/18, perhaps because Crossrail comes onstream (though there is no concomitant increase in fare revenue).

So in answer to my earlier questions, it seems that unlike every other field of economic activity, running London Transport becomes less and less efficient with time. And low-paid London commuters are expected to pay an ever-increasing proportion of their income on transport.

It seems to make sense that the fare-payer should cover the cost of the service, but let’s make a few observations:

1. Unlike many others, the London transport market is not segmented, so that those who can pay more do (compare walk-on national rail or air fares with advance tickets). I’m not saying I’m a fan of dramatic market segmentation. It creates its own problems, such as making urgent travel punitively expensive for everyone. But in an unequal society, it does allow some access to services for the less well off. Obviously it’d be better to have greater income equality in London, but until that happy day, subsidising fares helps alleviate the problem.

2. The fare-payer is not the only beneficiary of the London transport network. Just as, in the ’80s and ’90s, out of town superstores and malls benefited from the motorway network, such as London’s M25, (and generally improved roads), so the new millennium has seen similar developments – notably London’s twin east and west Westfields (or perhaps the new one should be an Eastfield?) – piggybacking on the city’s public transport network. Maybe these businesses should chip in and subsidise fares from the taxes they and their customers pay.

3. Just as for customers, businesses benefit from the availability of employees. They don’t pay a higher minimum wage even for staff having to travel into the centre of London. Maybe they should, but in the meantime it doesn’t seem entirely unfair for businesses and higher paid employees to subsidise the fares of the low-paid through the tax system. £1 travel cost for each hour of work is a lot for those earning little more than the minimum wage of £6/hour.

4. Today’s fares shouldn’t subsidise investment. That should be paid for by future fares, i.e. the beneficiaries of the investment. And in fact, the goal in TfL’s Business Plan is not apparently to increase fares to pay for more investment. So when Boris mentions investment in the same bluster as higher fares he’s actually being misleading and trying to deflect criticism.

And on top of this, there’s an anomaly in the pricing scheme – this is what really got my goat and prompted me to delve into the mire of transport fares once again:

“Travelcard season prices increase by 8% overall because of the link with National Rail fares which, as approved by the Secretary of State for Transport, are to rise by 8% (RPI+3%).”

What tosh.

Fares other than Travelcards are going to increase by RPI+2% (7% this year), but Travelcards are going to increase by RPI+3%, because you might get the train.

Do they think we’re stupid?

The price for a mainline train within London is the same as the price for the same journey by tube. I can go to Ealing Broadway and get a train to Paddington or I could get the tube there. I’d touch in and touch out with my Oyster card the same either way.

The daily limit applies just the same whether I use tubes and buses or tubes, trains and buses.

No, increasing the weekly limit faster than other fares (and remember this won’t happen just this year, but indefinitely until the policy changes) affects certain people disproportionately. The sort of people most affected are those who use the system most, that is, those dependent on it most likely to get to work, that is, those with least choice.

I’m in zone 3. If you need to get a bus and tube to and from work – and tube stations are thin on the ground out here, so often a long walk – then you’re going to need a weekly Travelcard (£32.20 in 2011; £34.80 in 2012), given that 10 peak pay as you go (PAYG) zone 1-3 tube journeys alone cost £29 in 2011 and £31 in 2012.

Of course, the tragic thing about all this is that many Londoners get the bus all the way into the centre to save a few pounds at the expense of perhaps an hour a day. But even they’re being screwed. The cost of a 7 day bus and tram pass is rising by 7.3% from £17.80 in 2011 to £19.10 in 2012. I can understand why the individual bus fare is increasing by 7.7% – that’s to keep a round number (£1.40 in 2012 after £1.30 in 2011). But £19.00 for the weekly pass would have been a 6.7% increase. Why not stop there? Gratuitous.

As far as I can see, the main beneficiaries of the fare changes for 2012 are off-peak occasional tube travellers for whom the zone 1-2 fare rises by only 5.3% (£1.90 to £2 – OK a nice round figure) and the zone 1-4 fares by a mere 4% (£2.50 to £2.60). For the last, £2.70 would only have represented an 8% increase. It seems fairer somehow to impact what is most likely discretionary travel a little more and that for people trying to make ends meet a little less.

What else could be done to help the low-paid? Besides fair pay, that is.

Well, here’s another curious anomaly. “Peak” in regard to the daily limit means 4:30-9:30am. That is, if you travel between those hours the daily cap will be the peak rate (£10.80 in 2012, rather than the off-peak £7.80). But if you don’t reach the daily limit and just pay as you go, the peak is 6:30-9:30am and 4-7pm (16:00-19:00). Odd. Why not give people more of an incentive to travel before 6:30am, when presumably there is spare capacity? Why not make the peak daily limit apply only if you travel between 6:30 and 9:30am? Wouldn’t this be sensible demand-management? It would help at least some of those who currently spend more than the off-peak daily limit because they take a bus and tube to work (e.g. in zone 3 in 2012 a pre 6:30am tube fare, a peak return fare and two bus fares would come to £2.60 + £3.10 + 2x£1.40 = £8.50, above the off-peak cap of £7.80 but below the £10.80 peak cap).

The case I’m most interested in is my own, of course. It’s the borderline case, where I may as well walk to and from the tube station rather than catch the 297 (or infrequent E10). If the service were more frequent I might take the 297 to Ealing Broadway. As it is, I never do, because I don’t know how long I’ll have to wait, at least until I get to the stop, when there may be a few clues. When I come out of the station, though, I can sometimes see the bus waiting, or at least a queue of people. I’d take it more often if they actually bothered to display a departure time. But sometimes it comes down to a cost consideration. Basically, I’ll rarely pay the full fare. I might take the bus, though, if I reckon I’ll hit the daily limit.

I note that for 2012 the daily limits for zones 1-3 are increasing by more than the relevant tube fares. The peak daily limit is going up from £10.00 to £10.80 (8%) whereas the peak tube fare is increasing only from £2.90 to £3.10 (6.9%). And off-peak, the daily limit is going up from £7.30 to £7.80 (6.8%) whereas the tube fare is increasing only from £2.50 to £2.60 (4%).

So, in 2011, an off-peak return tube journey to the centre, and a journey within zone 1 (£1.90) came to £6.90, leaving 40p of the daily limit to be taken up by a bus fare, but the same itinerary in 2012 would come to £7.20 before the bus, which effectively costs me 60p. OK, it’s a 50% price increase but I expect I’ll still hop on a 297 at Ealing Broadway station if passengers are boarding!

Nevertheless, if TfL persists in increasing weekly Travelcard prices by more than other fares, there will be people who switch to pay as you go, and walk to tube stations rather than take the bus. Maybe this is all very healthy, but it seems a strange policy. It would make more sense to me to raise all TfL prices by exactly the same percentage and charge – now that it’s all electronic with Oyster – to the nearest penny if necessary.

January 4, 2011

Subsidising Cambridge Commuters?

Filed under: Bus, Economics, Inequality, Rail, Tax, Transport, Tube — Tim Joslin @ 4:28 pm

Labour is choosing to attack today’s VAT rise as “the wrong tax at the wrong time”. I’m not so sure. It seems to me that stealth tax rises, such as on public transport, are far less fair.

Pre-empting arguments over the figure, Labour are cunningly pointing out that the Lib Dems claimed during the General Election that the VAT rise would cost “the average household” £7.50 a week.

Curious. £7.50 extra VAT a week at 2.5% implies £300 of spending that qualifies for the tax – that is, £300 of spending that doesn’t include mortgage or rent, food, children’s clothes, books or newspapers, lottery tickets, gas, water, electricity, public transport or Council Tax. Difficult to manage on an income of ~£30K, that is, a weekly spend of ~£600, I’d have thought.

On the other hand, multiplying £7.50 by 52 weeks and the ~20m households in the UK gives around £7.5bn, which does seem about right. I suspect VAT is in fact a progressive tax.  The wealthy spend proportionately more on the sort of things that qualify – restaurant meals, expensive booze, nibbles and confectionery, new cars, designer gear and other big-ticket items.  The poorest – getting by on Tesco bogoffs, saving up for the odd bus ticket, buying all their clothes from charity shops and so on – must have eff all VAT-qualifying expenditure.

I strongly suspect that this is a case where Mr & Mrs Average do not in fact actually exist.

Maybe Labour would gain more votes by instead pointing out what appears to have been another case of dissembling during the election campaign by those (allegedly) lying liar Liberals.

Or perhaps they could have focussed instead on the increases in public transport costs which are in many cases seriously regressive.

Take the Zone 1-4 Travelcard (and daily Oyster limit) which will affect those working in the centre of London.  It’s rising from £6.30 to £7.30, off-peak, that is, by nearly 16%, not the 11% the BBC calculates, bless. What’s more, if you happen to live near muggins here in zone 3, the peak Travelcard/Oyster limit has increased from £8.60 to £10 – that’s over 16% even if you’re the BBC – to match the unchanged rate for zone 4.

Curiously, bargain of the year for 2011 is the 7-day zone 1-3 Travelcard which remains less than that for zones 1-4 at £32.20 against £30.20 last year, a mere 6.6% increase.  This could now pay for itself in 32.20/10.00 = 3.22 days, against 30.20/8.60  = 3.51 days last time out.  Even off-peak it’s worth considering at 32.20/7.30 = 4.41 against 30.20/6.30 = 4.79 days.  More realistically a mix of peak and off-peak travel into London over 4 days (2*£10.00 + 2*£7.30 = £34.60) would justify buying the Travelcard for £32.20 whereas last year you were much more likely to need to travel on 5 days (2*£8.60 + 2*£6.30 = only £29.80, still less than a £30.20 Travelcard).  Where’s the logic in that?

Having to decide in advance whether to invest in a weekly Travelcard is an unnecessary irritation, since the system could cap weekly expenditure in the same way as daily.  I understand TfL’s IT experts will get round to doing this by around 2013.

Hours of amusement, perhaps, though maybe deadly serious if, like me, you fall into the category of zone 3 residents who travel into London on an irregular basis.  A category that is being seriously screwed by the latest fare rises.

Who will this arbitrary unfairness affect the most?  The poorest of course.  Consider those who live in zone 3 and can’t afford the higher price of property near a tube station.  In 2010 two off-peak tube fares to the centre at £2.40 each, for example, brought you within striking distance – £1.50 – of the daily limit of £6.30.  You didn’t end up spending full whack on the bus each way to the tube station – the cost was capped at another £1.50.  In 2011, though, those two tube fares will set you back £2.50 each, but the daily limit has been disproportionately raised to £7.30, so the buses will cost you £2.30.  The tube fare – which is all Mr Rich who lives near the station has to worry about – might have gone up by only 4%, but the bus fare will have risen by 80/1.50 = 53%!  The percentage is even greater if one of the tube fares happens to be at the afternoon peak rate (£2.70 in 2010, £2.90 in 2011, charged from 16:00 to 19:00) when the off-peak daily cap still applies. [In 2010, £2.40+£2.70 left £1.20 of the £6.30 daily limit for the bus; in 2011, £2.50+£2.90 leaves £1.90, so the cost of choosing the bus rather than walking has risen by more than 58%!].

I happen to fall into the category of those who live near enough to a tube station to be able to walk if I’m not feeling lazy.  I now have much more of an incentive to do so.  What TfL has done is make it much more expensive for zone 3 travellers to use a bus as well as the tube.  So more people will walk instead and TfL may not even realise the extra revenue they may expect from the daily cap increases.  Leaving everyone worse off.

Boris may want to take note that with another 8.3% increase (from £1.20 to £1.30) in the flat-rate bus fare, following the 20% increase at the start of 2010 (from £1) he’s making short hops in general more and more expensive.  The flat-rate fare makes a lot less sense in a purely fare-based system than in a subsidised one where the fares don’t recover the full cost.

Commuters who make one tube journey each day haven’t been hard hit, but it’s difficult to find categories of bus user who aren’t much worse off after these latest changes.  The daily bus limit has only increased by 2.6% – from £3.90 to £4 – this time (though it was £3.30 in 2009).  This is good news only for occasional bus commuters to the centre, who most likely have to change – and it’s a disgrace that some people are paid so little that they can’t afford to use the tube (and note that you face no penalty for changing tube routes) – since the 7 day bus pass has increased by 7.2% from £16.60 to £17.80.  [And now represents 4.45 rather than 4.26 daily maximum fares.  Where’s the logic in that?].

All this has been rather a digression as what I really wanted to do was provide an update on the cost of mainline rail travel.  ‘Cos if you want to get about the UK within a finite time you need serious money.

A couple of years ago I introduced the Cambridge Day Travelcard (with Network card discount) fare index, which is admittedly not yet perhaps quite as famous as the Economist’s Big Mac Index.  Here’s the full series, brought up to date:

2003     £11.55

2004     £12.60     9.1% increase on previous year

2005     £13.85     9.9%

2006     £14.85     7.2%

2007     £15.20     2.4% (presumably lower because of the new afternoon restrictions – the return can no longer be used on trains departing King’s Cross between 16:30 and 19:00, which is inconvenient, to say the least)

2008     £15.85     4.3% (lulling us into a false sense of security)

2009     £17.50     10.4% (out of the blue – it’s a record!!)

2010     £17.50     0% (but still a real-terms increase! – according to the RPI, prices in July 2009 were 1.4% lower than a year earlier)

2011     £18.50     5.7% (close to the July RPI of 4.8% plus 1% which I understand was allowed for the average of each operating company’s fare increases)

So the cost of a day Travelcard from Cambridge to London – for a degraded service, remember – has risen a whopping 60.2% in the mere 8 years since 2003.

What about inflation?  Really we should compare the RPI for a month from December 2010 to December 2011 (reflecting general prices when we’re actually travelling) with the same month in 2002-3, but the latest data available is for November 2010 when the RPI index was 226.8.   It was 178.2 in November 2002, so prices in general over the same 8 years have risen only roughly 27.3%.

That is, in 8 years, the day Travelcard from Cambridge to London (with Newtork card discount), for a degraded service, has risen about 25.8% in real terms.

And the formula for the next few years is RPI+3%.

But what really got my goat, and prompted this post, was reading the comments of an RAC spokesman in Saturday’s Guardian:

“The RAC Foundation, a motoring thinktank, claims that the annual £5bn subsidy of the rail network disproportionately benefits Londoners and the well-off, with 40% of households earning more than £50,000 a year using the railways at least three times a week – double the figure for those on less than £25,000 per year.

Stephen Glaister, its director, said: ‘The rail subsidy comes from the Treasury and, in that sense, it is paid for by everybody. But the benefits are weighted towards the south-east and the relatively well-off. If government policy is intended to help redistribute wealth and help the less well-off, rail subsidies are a poor way of doing it. Spending the money on helping road users would be a better way of doing it.’ “

Well, of course only the wealthy can now afford to use the railways!  There’s not much point taking a £15K a year job in London if it’s going to cost you £5K of that just to get to work, is there?

But I rather dispute that the benefits are “weighted towards the south-east”, or at least towards commuters on busy routes, such as Cambridge to London.  What I suspect happens is that commuters subsidise those travelling off-peak; busy routes subsidise those at the periphery of the network; and busier regions, especially in the south-east subsidise less-busy regions.

The Guardian could, for example, have taken a peak at the latest (2009-10) National Rail Trends (NRT) Handbook from the Office of the Rail Regulator (ORR).  On p.62 you’ll find table 6.2c which gives the 2008-9 passenger subsidies for each Train Operating Company (ToC).  I crudely show it here:

As can be seen at a glance, First Capital Connect (FCC), which operates the Cambridge-London route, is not directly subsidised, but in fact pays 3.4p per passenger kilometer for the privilege of running the trains.  Now, this is for the whole franchise, which must include peripheral routes that are less heavily used, as well as the most overcrowded trains in the country from Cambridge.  But those peripheral routes at least help to bring some passengers onto the network, so let’s take the figure of 3.4p to be realistic.  A round trip to London must be in excess of 100km, so travellers from Cambridge are on average paying in at least £3.40 every time they buy a return ticket.

But the franchise payments are not the main subsidy to the railways.  The taxpayer provides around £4bn a year in direct support to Network Rail (see Table 6.2a of the ORR’s HRT handbook – self-serving obfuscation in Network Rail’s financial statements reveals no more detail).  Table 6.2c shows a total of around 50bn passenger kilometers per year (note that some operators are outside the franchise system so the distance total in table 6.2c is not complete).  Making the heroic assumptions that Network Rail’s subsidy is evenly spread and not used to support vanity investment projects, rail passengers do indeed appear to be subsidised to the tune of around 8p per passenger km.

Combining the two subsidies suggests FCC passengers are on average subsidised by around 4.6p per km (8p – 3.4p) whereas those on, for example, Northern Rail receive around 12p/km (8p + 4p from Table 6.2c).

The Guardian notes that an annual season ticket from Cambridge to London costs around £4000.  If this is used 250 times, that works out at around £16 per day return, not bad at all compared to the £13.85 price for an off-peak day return with a Network card. It seems commuters in fact get a relatively good deal since their season ticket entitles them to unlimited travel to London at times when the day return fare would otherwise cost an absurd £34.

This isn’t quite what I expected – as always, it pays to delve into the numbers.  It seems a bit daft for an annual season ticket to represent no more than 120 daily trips (£4000/£34).  I don’t really see why anyone making fewer than that should be so severely penalised.  This discourages all kinds of business and other activity, part-time working, working from home and tourism, for example.

It remains conceivable that even commuters on the Cambridge to London route are still being subsidised, though the trains are so busy I’m confident that the Cambridge to London route in fact subsidises the rest of the FCC franchise.

The people really being fleeced are:

– those adults without a Student, Senior or other railcard – since anyone can buy a Network card for around £25, this means occasional users are penalised, which hardly helps to bring new passengers onto the railways;

– all non season-ticket holders forced to travel at peak times (which, since 2007, includes 16:30 to 19:00 from King’s Cross);

– purchasers of single or open return tickets. An Anytime (i.e. including peak-time trains) open return from Cambridge to London now costs the same as two peak singles, at £40, a ridiculous two and a half times the effective rate (£16) for a season ticket-holder occupying the same seat – or more likely standing on the same train.

The numbers suggest these categories of passenger from Cambridge to London are definitely not being subsidised.

If the strategy is for costs of rail travel to be attributed to those using the service, then it makes no sense for some categories of passenger to pay substantially more than the cost.  The open return ticket price should be reduced to that of the day return and single tickets should be half the return price.   For Cambridge to London, the non season-ticket peak fare is way out of line and should simply be reduced to say 1/150th of the season ticket price, that is, around £27 (from £34).

The TOCs effectively have monopoly pricing power.  Prices therefore reflect expediency rather than the cost of providing the service.  If there were a decent level of competition they’d soon find another operator could afford to undercut them on those fares that are out of line.

What’s more, allowing peak fares of effectively twice the off-peak rate gives no incentive to rail companies to increase passenger numbers, for example, by running more late-night and pre morning-peak trains.  Allowing an afternoon peak is insane – the rail company has a disincentive to ease over-crowding.

The whole rail franchise system is dysfunctional.  What’s effectively being sold is the right to charge monopoly prices.  This is absurd.

In an ideal world, there would be no need for peak and off-peak fares – sufficient trains would be run to meet demand at all times.  In the meantime, though, the need for demand management skews incentives for the TOCs.  It’s therefore necessary to divorce ticket-pricing from financial rewards to the TOCs.  The TOCs should be paid just for the service they provide – that is, the same rate per passenger regardless of when they travel and how much they’ve paid for their ticket.  And less per passenger on trains that are more than 70% full. The TOCs should have an incentive to increase use of the railways, not screw more money out of fewer passengers.

October 16, 2009

Bus Fares, the Minimum Wage, Pensioners, and the Nonsense of RPI and CPI

Filed under: Bus, Economics, Inflation, Local government, Minimum wage, Politics, Transport, Tube — Tim Joslin @ 7:40 am

BBC Radio 4 is more than usually surreal this morning. Unless my ears deceived me, they just broadcast a nursery school teacher asking her young charges: “What rhymes with ‘bucket’?”. Recipe for disaster, I’d say. Earlier they’d announced that “Google, the world’s biggest search engine” has an opinion. No, the company may have an opinion, or, better, the CEO, but, unless the internet has become self-aware overnight, search engines do not have opinions.

So I decided that, rather than slob about, I’d make a point I’ve been dwelling on overnight.

On the BBC London News, after News at 10, the reporting of the London Transport fare rises brought home to me the scale of the price rises. Bus fares are going to rise by 20p. At the moment my Oyster is charged £1, now it will be £1.20. That’s 20%. Previously I’d only skimmed a BBC report that noted that:

“Bus fares are to go up by 12.7% and Tube fares will rise by 3.9%.”

I hadn’t really taken in the rest:

“Oyster card pay-as-you-go bus journeys are to rise from £1 to £1.20. … and the price of a seven-day bus pass will also jump from £13.80 to £16.60 but London Travelcard prices will be frozen in the vast majority of cases.”

This makes me suspicious. I’ve just downloaded the PDF from the BBC’s report. Yeap. The 12.7% and the 3.9% are spin – well, they’ve been constructed somehow, but without any information as to how, they are virtually worthless.

Like RPI and CPI, these % increases mean little. They do not reflect the effect on specific individuals.

In fact, the fare rises are ludicrously unfair. Is this the start of a Tory assault on the poor?

The key point is that fare rises on buses are much greater than those on the tube. The result is that the cost of living increases fastest for the poorest. Boris may not realise this (Ken did, apparently), but he shares London with people who catch the bus because they can’t afford the tube.

Let’s consider first how the fare changes affect those struggling on the minimum wage. Let’s assume Mr Minimum catches a bus to and from work 5 days a week. That’s 10 fares now at £1.20 rather than £1 – £10/wk now but £12/wk after 2nd January – a 20% increase as already mentioned. Now, the minimum wage recently increased from £5.73 an hour to £5.80, that is by 7p an hour. If Mr Minimum works 40 hours a week, he’s better off by £2.80/wk (before tax) because of the pay rise, but worse off by £2/wk because of the bus fare rise. That’s right – the fare increase has wiped out all but 80p, or (200/280)*100 = 71% of the rise in the minimum wage.

Maybe that’s not incredibly realistic. Mr Minimum might have to take 2 buses to work and 2 back. In that case he’d reach the daily fare cap on the buses. But this has risen from £3.30 to £3.90 or by 18% (exactly where did this 12.7% come from?). More to the point Mr Minimum will have to pay 5*60p = £3 extra per week to get to work. Wiping out his entire annual pay rise plus an additional 20p.

But, of course, if he used the bus to travel to work 5 days a week, Mr Minimum will most likely have taken advantage of the weekly Bus and Tram pass. How has this increased? From £13.80 to £16.60, that is by £2.80 or just over 20%, that’s how. Unbelievable.

If Mr Minimum works a 40 hour week, the bus fare increase wipes out his entire annual pay rise.

On the other hand, fares for most tube commuters will not increase at all – some peak fares and more to the point 7 day Travelcard prices are (mostly) frozen.

Bizarrely, off-peak tube fares have risen more than peak fares. The way to use the system more efficiently is to spread the load more. I would have thought a greater differential was called for. Train fares are punitive at peak times. Maybe both could converge on a happy medium.

I was going to mention pensioners, who have just been awarded a £2.40 weekly rise. Then I realised that pensioners can travel free on the buses anyway. In fact, pensioners are now rather more than £2.40 a week better off, since they would have been entitled to no rise at all based on RPI, which is negative. In general the increase in the state pension is based on an inflation index that includes transport costs, even though they pay less for transport than the general population.

What’s actually needed are indices that reflect the cost of living rises for different segments of the population, to be used for different purposes.

But there’s a bigger issue. When are we going to start treating the low-paid fairly?

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