Flexi-ticketing on the Railway

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At present, the small number of flexi and other ticketing options available on the railway makes flexible working an unattractive proposition for many. Changing this will form one part of creating a “flexible working friendly” UK. 

Flexible working is the ability to deviate from the standard pattern of work (typically the ‘9-to-5’) and includes but is not limited to: part-time working, term-time working, job-sharing, flexitime, compressed working hours, annual hours, working from home, mobile working, agile working and zero-hours contracts.

There is a wide body of research demonstrating how flexible working can boost productivity in the workplace1. In addition, there is a growing awareness of the value of a proper ‘work-life’ balance amongst HR departments (e.g. the work-life estimator tool at Prudential, work-life effectiveness coaching at KPMG and the SUSTEL project into sustainable telework). In particular, there appears to be certain points in working life where flexible working is very important for many to be able to stay in employment such as when being a carer, raising young children or having to juggle a number of commitments.  

Of all age groups, research shows younger people are the most eager for flexible working arrangements2Flexible working is important to young people as they seek to obtain a modern work-life balance allowing them to juggle different aspects of life. Such an approach prevents one-aspect of life (e.g. employment) precluding another aspect of life (e.g. starting a family).  

In addition to this research, government recognises the benefits of flexible working and has been introducing legislation in recent years to encourage its uptake. This includes the ‘Flexible Working Regulations 2014’ allowing all employees with more than 26 weeks service to make a statutory request for flexible working which their employer is required to consider in a ‘reasonable manner’. More recently, in July 2019 the government began a consultation on addressing unfair flexible working practices in order to further encourage uptake and to ensure flexible working is a choice for all. This led to the Employment Bill’s inclusion in the December 2019 Queen’s Speech which stated flexible working should be the default option offered to all employees unless a company has compelling reasons not to do so.  

There have been historic concerns about the practicability of large-scale flexible working, however, the recent Covid-19 outbreak has demonstrated it is possible for a large portion of the work force can do this and in challenging circumstances too. The use of remote working has been dramatic but has also been accompanied by many workers adopting flexible working practices to manage their children, care for relatives, participate in volunteering and to food shop during off-peak times in order to avoid crowds.  

Flexible Working and the Railway 

In order to live a truly flexible working lifestyle, a truly flexible transport system is needed. This would allow workers to get to and from their chosen workplace at a time that fits their chosen schedule. Although some flexible working activities, such as remote working, electronic service delivery and remote monitoring/diagnostics have a travel-reducing effect (meaning commuting to work is not required), other flexible working practices simply change travel patterns. It is these that create the demand for flexible travel, however, current arrangements on the railway discourage flexible working in a number of ways. 

The Railway Delivery Group (RDG), which represents the rail industry, has shown the industry is eager to accommodate passenger demands. This was emphasised in the RDG’s submission to the government’s independent root-and-branch review of the railway led by Keith Williams (the Williams Review)For this, the RDG submitted six principles it endorsed for the industry to create positive change going forward This included the principle of putting “Customers at the heart of everything the railway does as well as “Strengthening communities” to “ensur[e] towns and cities across the country get the maximum benefit from a vibrant, growing railway which is more responsive to, and designed around, the needs and aspirations of the areas it serves”. As flexible working is a key for many employers and employees throughout the country the rail industry should therefore back initiatives which support flexible workers using the railway.  

At present, there are three key barriers, explored below, to accommodating flexible workers on the railway: 

  1. Price Discrimination
  2. Flexible Payment Systems
  3. Railway Income from Season Tickets

Barrier 1 – Price Discrimination 

Commuters who follow a traditional ‘9-to-5’ lifestyle are able to benefit from discounts in the cost of travelling to work but these are not available to others. Season ticket holders commuting 5-days per week typically pay 20% to 30% less than if they purchased individual tickets and benefit from free travel on weekends, however, the majority of train operators do not offer discounts for persons commuting 3-days a week. Furthermore, in the South of England five-day a week season ticket holders are also issued with a ‘Gold Card’ entitling them to a range of discounts on leisure rail journeys for themselves and others. 

This acts as a deterrent to employees taking up flexible working practices and is illustrated by the Campaign for Better Transport’s research showing part-time workers (a form of flexible working) commuting by rail are significantly worse off than full-time workers as they have to buy full 5-day season tickets which they then do not use. The report states:

“Under the current ticketing system people who work less than five days a week must either buy a season ticket and lose money on the days they don’t use it or buy individual peak-time tickets. If a three-day-week season ticket were available at 60 per cent of the cost of a full season ticket and a four-day one at 80 per cent, a part-time worker travelling into London from the South East would save on average between £700 and £1,400 a year.”

In addition, where discounts are available, they have a range of restrictions or a lesser discount rate. In fact, there is very limited availability of flexible season tickets in the UK. The c2c railway have offered flexible season tickets since June 2016 but these only offer a 5% discount. The Great Northern railway provides a carnet scheme where packs of 5 or 10 tickets can be bought with a 10% discount, however, this is less than the typical discount on a season ticket. Northern Rail was also introducing a flexible season ticket before its demise and the Thameslink railway has formed a ‘Passenger Panel’ and is hoping to create a range of flexible tickets to reflect passenger preferences. The recent South Western Railway and Great Anglia franchises have also introduced carnet tickets and the new West Midland franchise promised to introduce a form of flexible season ticket but none of these will provide an equal discount to that enjoyed by regular, 5-day per week season ticket holders. Taken together, this price discrimination acts to discourage persons from working flexibly. 

Making flexible travelling affordable is essential to encourage flexible working. There is already considerable political recognition of this with the introduction of part-time season tickets supported by several MPs including: Maria Caulfied, Fiona Bruce, James Cartlidge and Iain Stewart among others. 

Barrier 2 – Flexible Payment Systems 

Another disincentive to flexible travel is the lack of quick and simple payments for railway tickets throughout the UKModern payments technology, including smartphone apps and contactless payments, which are partly in place across the rail network, allow ‘travel on demand without flexible workers wasting time queuing for tickets or pre-planning their journeysRemoving this barrier is important as it allows workers to travel exactly when they need and hence undertake flexible working ‘on the fly’. 

Partly in recognition of this, the RDG is proposing the entire UK rail system adopt a tap-in, tap-out system for ticket payments. Built-in to this system would be a limit on the price travellers’ pay so that their maximum expenditure on travel is the price of a weekly season ticket. Additionally, the Rail Delivery Group encourages station car parks to offer three-day a week pricing for those parking who are part-time commutersThis initiative supports the proposed three-day a week fare structure on the railway but is not national policy for all railway stations. 

Barrier 3 – Railway Income from Season Tickets 

Season tickets have historically represented a large portion of railway income and therefore the industry has resisted changes to the existing season ticket regime. Before the Covid-19 outbreak, the statistics from the Office of Road and Rail (ORR) for the year 2018-2019 showed season tickets represented 20.6% of all railway fare income or approximately £2 billion. Historically, the majority of Train Operating Companies (TOCs), which run the UK’s passenger rail services, are franchises that take-on the revenue risk of ticket sales increasing or decreasing during the franchise. As such, TOCs with large volumes of commuter traffic were averse to decreasing this revenue stream.  

Further complicating matters is the different proportion of traffic generated by season ticket holders on different franchises. TOCs such as c2c, South Western Railway and South Eastern experience high proportions of commuter traffic and hence season ticket holders whereas long-distance operators see fewer. The season ticket discounts each TOC offers reflects this– with established commuter lines providing smaller discounts to suppress demand and those with light commuter numbers trying to drive up demand by increasing season ticket holder discounts. This difference has historically made it difficult to provide universal off-peak season ticket pricing throughout the UK.  

In spite of this, the current outbreak of Covid-19 has forced government to suspend rail franchising and to implement short-term management contracts with franchises instead under the “Emergency Measures Agreement”. This is a radical change with the government now taking on revenue risk and TOCs simply being paid a set fee to run a timetable. By taking on the railway’s revenue risk, the government can more easily mandate changes in ticketing so that a universal or near-universal discount for off-peak season ticket holders can be offered throughout the UK without compromising TOCsSuch ticketing may lead to a reduction in the railway’s overall fare income, which is now borne by the state, but the benefits of a flexible ticketing outweigh this. 

Potential Options 

Strong government policy is required to overcome these barriers and provide a national flexible ticketing system on the railway to support workers choosing to work flexiblyPolicy is needed to provide flexible workers with: 

  • Discounts to train tickets at the same rate as conventional five day a week, ‘9-5’ workers’ tickets are discounted. 
  • A range of payment methods for tickets including ‘tap-and-go’ contactless payments and e-ticketing so you can use trains when required without pre-planning or waiting in queues for tickets. 

The following recommendations can potentially help deliver this:

  • For all rail operators to provide 3-day and 4-day season tickets, for peak or -off-peak travel without having to name the days of travel.
  • Provide a fully digital ticketing system across the UK with ‘simple’ ticketing that is easy to understand and access. This includes ‘tap-in’/‘tap-out’ ticketing that automatically delivers 3-day or 4-day season tickets prices.
  • For all rail users to be able to track their rail travel through one app showing their journeys made and providing recommendations on how to make cheaper travel in the future. This could be provided either via the public sector or via improvements to existing apps such as the Trainline or loco2.
  • To support flexible working ‘on the go’ by providing all trains with high-quality Wi-Fi that does not require users to sign-in. The current lack of mobile connectivity on UK rail was highlighted in the NIC’s “Connected Future” (2016) report and the continued lack of progress in this was highlighted its recent “Connected Future: Getting Back on Track” (2020) report and this will help address those issues.
  • For the availability and uses of 3-day season tickets to be promoted through a national marketing campaign.

These recommendations will help create a “flexi-friendly” working environment in the UK. However, the uptake of flexible working practices depends on more than the railway providing flexible ticketing options. Employees and employers both need to do more to allow flexible working to take place which includes companies providing the appropriate tools and organisational settings for flexible working and employees pushing for the changes they need for flexible working to succeed.

Opinion piece by Henry Metcalf, Engineer at Stantec

References

1. Evidence shows flexible working arrangements can boost productivity and worker self-effectiveness. For example:

  • Clarke, S. & Holdsworth, L. (2017), Flexibility in the Workplace, London: ACAS.
  • Kossek, E.E. and Thompson, R.J. (2016) ‘Workplace Flexibility: Integrating Employer and Employee Perspectives to Close the Research–Practice Implementation Gap’. In: T.D. Allen and L.T. Eby (Eds) The Oxford Handbook of Work and Family. New York: Oxford University Press.
  • Kelliher, C., & Anderson, D. (2010). Doing more with less? Flexible working practices and the intensification of work. Human relations, 63(1), 83-106.
  • Iii, E. M. S., Clifton, T. J., & Kruse, D. (1996). Flexible work hours and productivity: Some evidence from the pharmaceutical industry. Industrial Relations: A Journal of Economy and Society, 35(1), 123-139.
  • van der Voordt, T. J. (2004). Productivity and employee satisfaction in flexible workplaces. Journal of Corporate Real Estate, 6(2), 133-148.

3. See Fuller, J.B., Wallenstein, J.K., Raman, M. and de Chalendar, A., 2019. Future Positive: How Companies Can Tap Into Employee Optimism to Navigate Tomorrow’s Workplace. Harvard, USA: Harvard Business School and Powwownow Ltd; and Flexible Working in 2019 Survey

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