Scope for Travelcard compromise

Thursday 19th October 2023

In last Thursday’s blog about the upcoming demise of the Day Travelcard in London I added the caveat to my analysis of how the new regime come January would impact passengers, TfL and Train Operating Companies (TOCs) that I “may have got all my assumptions wrong including what Apportionment Factors are currently in play – the figures I’ve quoted (from the original 1995 Agreement) may be out of date and no longer applicable.”

Thanks to those with inside knowledge of TfL and its involvement in Travelcard getting in touch I can now confirm my assumptions were indeed wrong.

Not only has the 1995 Agreement been updated but I misinterpreted the share out apportionments as well as quoting the wrong figures. I’m told the Apportionment Factors have “traditionally been updated on a quarterly basis” but in practice haven’t varied significantly, so current figures (regretfully still unknown) aren’t likely to be much different from the 1995 Agreement. It’s just that I applied the percentage shares to the wrong definition of “Travelcard”.

So I’m pleased to correct things now which paints a somewhat different picture of how and why the current apportionment of Travelcard revenue is unfair to TfL while the TOCs do rather well out of it.

This updated analysis also shows the TOCs are likely to be worse off come January which means, (politics aside) there must be scope for compromise enabling this popular integrated ticket giving unlimted travel on virtually all London’s public transport and used by millions each year to be retained.

Key to understanding this issue is the definition of what are called In-boundary and Out-boundry Travelcards.

The former refers to a standard London Zones 1-6 Travelcard which can still be purchased from stations (rail and Underground) within Zones 1-6 for £15.20 although most people now use Oyster/Contactless and rely on the daily cap, which at £14.90 potentially saves them 30p. Nevertheless the In-boundary Travelcard is still a thing and importantly is used as the basis for the apportionment of revenue between TfL and the TOCs for Out-boundary Travelcards.

An Out-boundary Travelcard is the ticket I purchased at Guildford and includes return travel by train from (and back to) a station outside of Zones 1-6 into Zones 1-6. A frying pan shape analogy applies.

The share out between TfL and the TOCs has nothing to do with the additional price a passenger pays for their Out-boundary Travelcard compared to the price of a return (rail only) ticket into London which as Geoff and I found varies considerably from different origin stations. The difference from Guildford was £7.40 but we found others range from around £2 to £12.

The share out is also not based on the price of the Out-Boundary Travelcard – I paid £32.20 for my Guildford Travelcard but that price is set by SWR with no involvement of TfL so it would be unfair to base a share out based on that.

What happens is no matter what price the Out-boundary Travelcard costs, £15.20 of it (representing the cost of an In-boundary Travelcard) is allocated to the share out pot between TfL and the TOCs.

So £17 of my £32.20 goes straight to SWR rather than being shared and £15.20 is shared out.

Furthermore, insiders tell me the current Apportionment Factor for that £15.20 for revenue taken by SWR is something like 26.9% to TfL and 73.1% to SWR (the most up to date percentages are not known but are unlikely to be much different – and as explained last time they vary by TOC too).

The TOC gets the lion’s share as shares are based on mileage and it’s reckoned most rail passengers will travel into Waterloo rather than hop off in, say, Surbiton and switch to TfL services from there.

This means I was wrong to assert TfL gets 30.5% of the total £32.20 price I paid for my Guildford Travelcard (ie £9.80) with SWR getting the other 69.5% (ie £22.40).

The share out is in fact 26.9% of £15.20 to TfL (ie £4.10) and 73.1% to SWR (ie £11.10) plus the £17 already explained that is not shared out, giving a total of £28.10 to SWR.

Readers will immediately see under the new regime where passengers will need to purchase a return rail ticket from Guildford to London as Geoff did costing £24.80 (instead of a Travelcard), SWR are going to be worse off by £3.30 (£28.10-£24.80) – a reduction in its income from that ticket of 11.7%.

Obviously SWR may benefit if, once in London, passengers tap with their Oyster/Contactless and travel on its services within Zones 1-6 but it doesn’t need much of a stretch of the imagination to assume most passengers, as Geoff and I did, will mostly use TfL services such as the Underground and bus while in London from which all the revenue will go to TfL.

While SWR almost certainly loses out, TfL, which currently receives just £4.10 per SWR Out-boundary Travelcard, will be better off as soon as a passenger makes more than one Zone 1 Underground and one bus journey with their Oyster/Contactless.

That’s why there’s scope for compromise. I can’t imagine DfT and Treasury officials being enamoured by an 11.7% fall in revenue from these ticket sales (annual sales reportedly 12 million) so it makes good sense to negotiate with TfL as the Mayor invited in his letter of 20th July. And this is quite apart from many passengers being dissuaded from travelling to London at all, not least families with 11 to 15 year olds as explained last time.

Let’s hope a sensible outcome in the interests of passengers can be achieved rather than any political point scoring.

My grateful thanks to the two ‘insiders’ for getting in touch.

Roger French

Blogging timetable: 06:00 TThS and a bonus Book Review blog coming this Su.

Comments are welcome but please keep them relevant to the blog topic, avoid personal insults and add your name (or an identifier). Thank you.

26 thoughts on “Scope for Travelcard compromise”

  1. The pricing of out boundary travelcards was always constructed as an add on even though passengers only saw one price. So to use the Guildford example it’s a 1-6 travelcard plus a day return to Surbiton (first station in zone 6). The same applied in reverse so a boundary zone 6 to Guildford return would be the same price as the Guildford-Surbiton ticket. Worth noting that this means the usual fall in the rate paid per mile the further you go doesn’t work in the same linear fashion that it would with a rail only ticket.

    Season pricing is constructed using the same logic. As always with rail fares some caveats and exceptions always apply. In the case of SWR the introduction of 3 tier pricing will have muddied the waters further.

    Personally I can only see this price rise & introduction of more complication leading to a fall in passengers so everyone will lose. Road traffic levels are apparently at around 110% of pre pandemic levels in London, so it’s clear something isn’t working. Constant price rises on public transport relative to the cost of driving and service reductions on many mainline operators like SWR can’t be helping at all.

    Surfblue

    Liked by 2 people

  2. Excellent article Roger. You have really addressed fully the points I have been making for months. I personally would rather see anything that benefits bus users continue however currently Transport for London and those who fund it arei significantly worse of than the TOCs bringing in users from the Shires. One would hope for a resolution to the funding but at present I still support TfL leaving the scheme when alternatives such as Oyster are available.

    Liked by 1 person

    1. The alternatives are unsuitable for:
      – Network Railcard holders and anyone travelling with them
      – Children aged 11 to 16
      – Visitors who don’t have a contactless payment card (including some foreign tourists)

      The alternatives are much less convenient for
      – Groups
      – Many disabled people who encounter problems with maximum journey times.

      Liked by 1 person

      1. Network Railcard holders can easily get an Oystercard for use on the TfL . Children can apply for a Child Oystercard and travel free while visitors can obtain a Visitors Oystercard.

        Anyone travelling in group can also easily obtain a Oystercard from TfL.

        Network Railcards are irrelevant when Oystercards can be used throughout the TfL network

        Any Disabled Person travels free on the easily accessible TfL bus network so this is not an issue either.

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        1. Richard,

          Network railcards (and “Two Together” railcards cannot be added to an Oyster card so holders of these will no longer benefit from the current discounted prince if Travelcard acceptance on TfL services ends. Most other railcard holders can have the discount added to their railcard.

          Mark

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          1. I do know yiu cant add a Network Railcard to Oyster I didn’t actually write that Network Railcard holders can have their ticket added to an Oystercard . I suggested Network Railcard holders used an Oystercard for onward travel on the TfL network as an alternative. Oyster is a more than acceptable alternative to any Rail Ticket holder requiring onward travel on TfL. I am for ending the Travelcard usage on TfL services as rail users from outside the TfL area are currently being in effect subsidsed by TfL which totally unacceptable in the current economic climate.

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  3. There has to be a solution for the 11 to 15 age range. It’s absurd that families with teen-agers would be put off visiting London. Who is going to go through the absolute faff of getting a child Oyster card complete with photo just for two or three trips per year?

    While they think about it, why don’t LuL just drop the price of child paper tickets to be much closer to the Oyster/Contactless fares

    Liked by 1 person

  4. Oddly, I do not think the DfT, and their political masters, would be too worried by the 11.7% drop in revenue from these tickets. The handling of the pay dispute, the proposal to close tickets offices and various other small local measures suggest that the railway is seen as an albatross around the neck rather than an opportunity to improve opportunities for travelers.

    Gareth Cheeseman

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    1. Gareth Cheeseman wrote “the railway is seen as an albatross around the neck rather than an opportunity to improve opportunities for travellers.”

      In the railway industry, the DfT has long been known as the “Department for ROAD Transport”.

      The railway predates the Ministry of Transport, as it originally was, and was historically overseen by the Board of Trade. When the MoT was created it was to oversee the new-fangled motor vehicles and the new roads they needed, and the MoT/DoT/DfT has never overcome that internal bias. It’s always viewed the other forms of transport in its remit (rail, air and water) as a distraction from its primary role of facilitating road transport and as at best a nuisance.

      Liked by 1 person

  5. Ironically I attended an SWR Meet the Manager event at Clapham Junction yesterday and spoke to one of their senior finance guys. I was asking him why they hadn’t promoted Battersea Power Station given that the local station was Queenstown Road. We also discussed the general lack of marketing on SWR compared to SWT. I must say I found him to be very negative and obviously not interested in promoting the railway. But there again why bother when you don’t keep much of the revenue and you get paid handsomely to run a basic railway with hardly challenging performance targets. Perhaps he came from the DfT ?

    Liked by 1 person

  7. Thanks for making this so clear. Perhaps one way forward for the TOCs would be for them to increase their suburban services to ‘tube-level’ – at least 6 per hour, or preferably 8, which seems to me the level at which most people will be happy to turn up and wait. It is, after all, a bit inconsistent for the inhabitants of Ickenham, say, to have a service like that, whereas if you live in Chessington, you are down to the south London standard of half-hourly. So as not to clog up Waterloo, trains could divide at say Motspur Park or Surbiton, so it might be necessary for the techies to come up with a coupling/uncoupling system which takes less than 10 minutes – apparently they can do it on the Berlin S-Bahn in 2 minutes.

    Seeing that we are unlikely to see Crossrail 2 before 2050, maybe a simpler, cheaper way of joining up the London terminals could be considered, which could be funded partly by sale/rent of the redundant parts of the terminuses concerned. Candidates might be be Waterloo (Wimbledon line) linked to the West Anglia (now OG) lines from Liverpool Street, possibly rebuilding the route of the Waterloo & City ‘drain’ and incorporating a station at Blackfriars; and the London Bridge to Peckham Rye line linked to the GN & City line at Moorgate. These would not serve the West End, but would have good connections to it, and the prize for the TOCs would be, via the increased service level, a massive increase in passenger numbers – and for the passengers, much more frequent trains.

    Rick Townend

    Liked by 1 person

  8. Having travelled in many other European cities the one day travelcard is a rarity. My concern is that through ticketing through London is going to be the next target.

    The last thing we want is travelling through London being made more complicated. Especially for tourists who would have no idea (although they probably end up on the more expensive “Express” trains anyway!)

    While everyone is excited about Crossrail2 it’s worth pointing out that East West rail opens up the possibility of direct Peterborough to Clapham Junction trains.

    John Airey

    Liked by 1 person

  9. Another anomaly, not exactly to do with Travelcards, apologies for that, is with reverse travel tickets.

    For example Super Off-Peak tickets are not sold, at least on the Southern network, from London to stations outside London. And ordinary off-peak returns are a different price depending on direction of travel.

    For example a Super Off-Peak Day Return from Three Bridges to Victoria is £ 16.00, a Super Off-Peak Day Travelcard from the same station is £ 20.00, and an Off-Peak Day Return is £ 22.70.

    However, if you’re starting off from Victoria for a day trip to Three Bridges the cheapest fare is £ 21.80, which is for an Off-Peak Day Return.

    Bear in mind that Super Off-Peak tickets are not valid for returning from London in the late afternoon and early evening rush hour. Also trains from London in the morning are usually quieter as the predominant passenger flow is into London then. There’s no incentive to offer, perhaps as London originating travellers are perceived to be richer?

    You know it makes sense.

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  10. Once again RF has done us all a service by trying to unravel the mysteries of the pricing arrangements for the Add-on London Day Travelcards, presently threatened by Mayor Khan.

    Correspondents to the previous blog and this have drawn out some interesting points about the benefits and downsides for TfL and its finances, but have only briefly touched on the benefits to the travelling public and those who use the ticket. I reside in Hove and travel to London off-peak from Brighton via Thameslink (which is cheaper than on the Southern by some margin) and use the Zones 1-6 day add-on to achieve complete freedom of travel within those zones, including East Croydon to Victoria via the Southern if needed! The most important facility that the ticket offers is that you can pass through all ticket barriers (National Rail, Elizabeth line, Underground, DLR and Tramlink) without delay – no touching in or touching out and certainly not being caught by penalty fares by mistake (the rules for which are a complete mystery to most, if not all, outside London). It also covers local bus travel.

    As now explained by RF, the formula used by the RDG and railway companies to reimburse TfL appears to me to be overly complicated and I applaud RF for digging it out. To an Ordinary Joe like me I fail to see why TfL should get less, or more, depending on the method of entry into the Capital by the traveller. If the railway companies wish to pretend that they run aeroplanes and dabble with differential pricing by advance purchase, time of day, days of the week or completely separate offers why should that affect the reimbursement due to TfL?

    Surely the correct methodology should be that if you wish to add on, say, Zones 1-2 to the off-peak return rail ticket you should pay a flat rate (say £5.00) which should all go to TfL. If you want the freedom of London for the day it should be, say £8.00. However, whatever the actual tariff it should perhaps be lower than the normal daily cap for Londoners, to compensate for the fact that the provincial traveller will invariably arrive after the morning peak. At least in this way the traveller would know the cost of what was wanted and could then make a judgement as to whether to proceed with the trip.

    If the resulting reimbursement does not cover what TfL thinks it is due, then renegotiate the price upwards. If TfL wants to encourage off-peak visitor numbers to the Capital for general economic stimulation for the region, keep the price lower. The add-on should also encourage travel by rail to the Capital as well, but if the RDG insists on charging commission on the cost of issuing the ticket that should be no more than, say 10p, as the reduced cost of working out the reimbursement would surely pay dividends.

    Chris Warren, Hove

    Liked by 1 person

  11. I haven’t seen anything on them, but are the existing ‘Undergoirnd Zone 1’ tickets being retained (I.e. a Guilford to U1 return ticket would include a return to London Terminals and a return on the underground within zone 1)?

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    1. I believe so, among others like U12 etc. Not least as TfL treat most Crossrail stations between Paddington and Abbey Wood as tube stations for ticketing purposes, NRCoT be damned.

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  12. From what Roger has said, does it mean that TOCs other than SWR that operate trains in London get no income from a Guildford outboundary travel card, even though the ticket is valid on their services?

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    1. The travelcard element of the fare is shared out between all London operators. ie Tfl and all TOC’s on which it would potentially be valid.

      Surfblue

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  13. A very long time ago SWT had wrongly calculated the ODTC fare from Walton-on-Thames Station, one year, and for about three to six months there was a minor fare reduction on those buying ODTC tickets yet of course this was only a minor respite from the inevitable escalator of railway fare increases. In 2003 when a minimum weekday fare for Network Railcard holders was introduced I left SWT in the cold by buying my ODTCs from TFL sources instead. In that era I never bought so many ODTCs IN ADVANCE from TFL sources to thwart the TOC changes to Network Card discount changes. As an active football referee at the time the additional walk from home to a TFL agent was a mere bagatelle as I was hell bent of thwarting and showing contempt for this malicious change to Network Card conditions. “Tomlins Store” at Central Avenue, West Molesey refers. 8961being the “Tomlins” Agency Code. Leaving for London on a 411 bus from West Molesey was tedious and arduous compared with leaving by train from Hersham Station yet a cheaper ODTC was to be had on a weekday at “Tomlins” than at Hersham Station. I also let my Network Card expire without replacement. The speed I walked from my home at Burhill Road (Hersham) to “Tomlins” was quite astonishing but I was spurred on by my thwarting SWT and TOC by getting a cheaper fare, walking past Hersham Station during my journey.

    Liked by 1 person

  14. A very useful update, but here’s the bit I don’t understand.

    On your trip with Geoff, in London your trips were all on TfL services, for which they received £4.10 as quoted in your article. But instead of those trips, imagine that at Waterloo you went across the bridge to Waterloo East and then took a few journeys around south-east London by train. All the journeys in zones 1-6, but all operated by Southeastern. Would they really receive nothing for those trips, with the £4.10 still going to TfL?

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  15. Two things come to mind from my days in the 1990s working for BR and then SWT on National Rail Enquiries.

    We’d often tell people going to London about the Travelcard option, mentioning that it covers all zones in London, to which the answer would often be “but I only want Zone 1”, and we had to point out that it had to be all zones as they would travel through them to get to Waterloo. I was never quite sure of the legitimacy of that answer!

    Also when overhearing ticket office staff asking ‘do you want the tube with that?’ I used to get annoyed as the result was that people didn’t actually know the Travelcard is valid on buses too. I can understand how explain it all succinctly quickly was tricky, hence the shorthand.

    Liked by 1 person

  16. Living within walking distance of a TFL “Ticket Stop” in West Molesey the best tickets were the Z2-6 Travelcards or in Oyster Days the Z2-6 Daily Cap. £3.80 for a day out in London avoiding Z1 by rail. Crossing from the Elephant & Castle to Caledonian Road was quite a common journey. Football in Sutton, bus to Morden, then to Elephant & Castle and bus to Caledonian Road then a whole day out in North London before going home. The 298 between Southgate and Potters Bar were decent single decker’s in those days – ARRIVA. Bring back the Z2-6 capping, I say. Of course, in those days one had a 84 bus to Barnet which has only recently been restored to a limited extent.

    Liked by 1 person

    1. I understand from a source close to Mr Khan said: “Agreement has now been reached by all sides to keep the Day Travelcard. There’s been a lot of back and forth between TfL, Rail Delivery Group and government in recent weeks and a good compromise has been found”. However the cost of the one-day Travelcard, which offers train passengers unlimited travel on the Tube and London bus network, will increase by a “small amount” to help cover its costs. TfL has now been given an increase in the revenue generated by ticket sales, to help slash the £40million losses from fares. I am sure everyone will welcome this compromise to benefit of both Greater London residents and those who use Travelcards from outside its boundaries.

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  18. Re the benefits to passengers, and encouragement of more travel by bus and train etc., I just viewed some youtube videos about using public transport in Berlin: almost every other sentence was “And make sure your ticket is valid”. Makes one think what a great thing the Travelcard is – simple in concept, simple to use; if Chris Warren’s suggestion (above) is taken up it could even be simple for the administrators – but maybe that’s not what they want …

    Rick Townend

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