The ORR is currently conducting a market review of the rail ticket market. As part of the review it has issued a call for evidence to consider whether the current market for selling train tickets is operating as efficiently as possible. The review's main focus is to assess whether the best interests of the passenger are being served by current ticketing arrangements.
The review will look at how current industry arrangements and practices within the market are facilitating choice and whether they sufficiently promote investment and innovation within the industry.
The ORR states the scope of the review is to examine the following:
- TOCs’ costs and benefits of driving demand for rail tickets. We are keen to understand better the impact industry arrangements and practices have on TOCs’ incentives to increase passenger revenue and to create new types of fares or products, with a view to understanding better the general functioning of the retail market.
- The impact of industry arrangements and practices on the kind of products TOCs must sell and the way in which they can be sold, including the permitted sales channels, the information to be provided at the time of sale and the arrangements for TOCs selling fares on behalf of other TOCs. In particular, we are keen to understand how these arrangements promote more competition and innovation.
- Innovation in the market for ticket products and sales channels. We have seen some evidence of innovation in, for example, TOCs selling e-tickets or integrated tickets (that combines a rail journey with something else (eg theatre tickets)). We are keen to understand more about the drivers for innovation, how competition and innovation relate to each other and the role of industry arrangements and practices in facilitating innovation. We consider this to be particularly salient given scope for more smart ticketing and ticketing systems.
- The structure of and arrangements for the third party market, including the licensing arrangements of third parties (which is done by ATOC, the trade association for TOCs) and the arrangements third parties are subject to in selling tickets. We recognise the importance of ATOC’s work in ensuring these third parties meet minimum standards and, going forward, we are keen to ensure that the arrangements can continue to meet passenger needs and, in particular, play its part in promoting more competition, innovation and choice.' [source: ORR open letter to interested parties dated 19 February 2014]
At the end of the review, the ORR may or may not provide recommendations for change. Any substantive change is likely to require changes to core rail industry agreements such as the Ticketing and Settlement Agreement (the TSA).
The ORR wishes to hear from TOCs and other interested parties as part of the review on the above issues. It is also inviting interested parties to comment on the scope of the review and whether additional factors/drivers should be considered. The ORR is inviting comments by 21 March 2014 with a follow up workshop scheduled for 8 May. For more information, please visit the ORR's consultation page.
The author Richard Binns is part of Burges Salmon's specialist Rail team.