Insight from Laura Wright, Laura Wright Strategy
One of the much-heralded benefits of nationalising the railways is reducing duplication. In the world of rail retailing – i.e. the selling of tickets rather than the setting of fares – the current 14 operator sites will be condensed into a single platform, Great British Railways Online Retail (GBROR). On the face of it, a tangible, headline-grabbing benefit.
The advent of GBROR raises two interesting questions. How will the platform be developed and maintained and how will it compete fairly with existing third-party retailers?
The first question will be answered by a forthcoming, although already delayed, procurement process.
Innovative, independent rail retailing is a British tech (and rail) success story. Ranging from global brands such as trainline through to smaller employee-owned co-operatives like Atomised, these companies invest and innovate to provide B2C platforms that passengers love, and B2B propositions that help the sector grow the market. Competition to develop and run the first incarnation of GBROR will be hot.
Even with fierce competition, for the government, however, the set up costs of a new app and website will not be inconsiderable. There are questions around how this fits in with value for money in managing public money and subsidy controls. The procurement, and management of the contract will have to be carefully managed.
The delivery of GBROR is likely to be a very public, critical success factor of nationalisation. GBR will have to simultaneously demonstrate reliability, innovation and affordability. Those vying for the contract will have to submit sharp bids, mindful of GBR’s reputation and how to deliver something truly innovative at a competitive cost.
Once established, the rules governing how GBROR competes with the established rail retailers will be critical to a continued, thriving market. ORR is currently consulting on a new Retail Code of Practice which sets out those rules (https://www.orr.gov.uk/search-consultations/draft-retail-code-practice-gbr).
Independent, or third-party retailers can help attract more passengers onto the railway through promotion and innovation. Indeed, their success depends on growing the market and encouraging more people to use the train. Without demands on the public purse they innovate: providing platforms that not only seek out the cheapest deals and split tickets for better value but are also user-friendly. It is important for the industry, and UK PLC, that they can continue to thrive.
The proposed Code of Practice goes some way to supporting this, with a commitment to fair and equal access to fares, products, systems and data in a way that does not exist today. This may not be enough to create a level playing field. The real test will be whether shared systems, run by GBR, are governed fairly and whether costs and subsidy behind the national operator are transparent.
And will this all matter?
It is vitally important that passengers can conveniently buy tickets and more people are attracted to travel by train. This could be achieved through an innovative, consolidated GBR app, coupled with a thriving third party market. Legal, policy and regulatory decisions must support this.
However, it is important to remember that public and passenger sentiment consistently shows that the travelling public are more interested in fares than retailing. Cheaper trains that are on time are high priority. If the benefits of consolidation and competition are passed onto the consumer, then passengers will be happy. It is far more likely, however, that any savings will be used to reduce the £11bn annual public subsidy to the railways.
The success of re-nationalisation will be judged on cost first, then convenience.
About Laura
Laura is an independent consultant passionate about helping transport and logistics organisations develop clear strategy and policy that anticipates and responds to an ever-changing regulatory, legal and political context. A Law graduate from the London School of Economics, Laura began her career working for an MP and became London’s youngest female councillor. She now combines her legal and political background with her rail strategy expertise.
Laura works with clients from across the sector from rail freight to infrastructure, passenger operators and rail retailers. Her recent focus in the UK has been supporting clients through rail reform including responding to the Railways Bill and preparing for greater devolution of rail. She has worked with rail retailers including on the Code of Practice. Overseas Laura has worked on rail privatisation including helping the Finnish, French and Argentinian governments with their own programmes of reform.
Do you want to know more? Contact Laura via email here – [email protected]
