🚆Off Track - MM#586
Good day my good friend.
There’s plenty to talk about today, and I am nearing Substack’s word limit. So no time to waste!
If the recent announcement by the Prime Minister still has you hot under the collar, we are talking ‘changing the narrative’ on sustainable transport at Mobility Camp on 26th September 2023 in Birmingham. It would be great to see you there. Get your tickets now.
If you like this newsletter, please share it with someone else who you think will love it. I will love you forever if you do. ☺️
James
🚄 Why is it so hard getting trains back on track?
Following Friday’s post where I shared the current levels of usage of public transport in the UK compared to pre-COVID, some of you messaged me almost immediately, pointing out that on the UK rail network, passenger trips are back to pre-COVID levels, but revenue is not. Hence why the Treasury is so keen on cutting costs on the railway but doing things like trying to close ticket offices.
This is worthwhile exploring in more detail, as this comes down to a question of what the railways are for and the nature of the recovery. And while the lessons here are particularly applicable to the UK, considering the challenges globally, I think they are widely applicable. All of the data can be found on the Office of Rail and Road’s Data Portal.
Lets start with the obvious question - has rail passenger usage recovered to pre-pandemic levels? For this we will compare the 2022/23 financial year to previous years. And what we can see is that, according to ticket sales data, in 2022 the total number of passengers is around 1.446 billion trips, compared to 1.739 billion trips in 2019/20. So the usage in 2022/23 was more similar to that 2011/12 (1.456 billion trips).
I have used full financial years for ease of comparison, though it should be noted that more recent quarterly statistics still indicates a lower level of usage than 2019/20. But it also needs noting that this overall picture is highly variable. The full detailed breakdown (e.g. by specific operators) is provided by the ORR, but for here and now I will just focus on one thing - revenue and tickets.
UK railways receives ticket revenues from several types of tickets, and the income is reported in a number of ways. The ORR reports them as so:
Franchised ordinary ticket Advance - Advanced purchase tickets, usually heavily discounted. I will refer to them as Advance tickets from now on.
Franchised ordinary ticket Anytime or Peak - For travel at any time, including in the traditional peak hours of before 9:30am on weekdays. I will refer to them as Peak tickets.
Franchised ordinary Off Peak - Tickets that can only be used after 9:30am on a weekday, all weekend, or on public holidays. I will refer to them as Off-Peak.
Franchised ordinary Other - Other tickets, such as operator-only tickets, Carnets, and Rovers. I will refer to them as Other, but as they make up a tiny proportion of sales my commentary on them will be limited.
Franchised Season - Tickets for regular travel between two points over a set time period. I will refer to them as Season tickets.
Open access passenger journeys - Tickets only available to users of open access operators like Grand Central, and only valid on those services. I will refer to them as Open Access.
Whilst not exactly an exact fit, these tickets closely correlate with many of rail’s key markets. Season tickets are clearly for the commuter market. As are Peak tickets to some degree, but these are often tailored towards time-sensitive travellers like people travelling for business. Off-peak and advanced are mainly for leisure markets, while open access operators price according to the market on their routes.
What we can see from the national data is that off peak and advanced tickets have not just recovered, but exceed the number of trips before the pandemic. Off-peak, for instance, accounted for 662 million trips in 2022/23, compared to 602 million in 2019/20. Advanced tickets were at 97 million trips in 2022/23, compared to 80 million in 2019/20.
By contrast, season ticket trips have crashed and are recovering more slowly. The interesting thing on season tickets is that they have been in gradual decline since a high in 2015/16 (706 million trips) to 588 million trips in 2019/20, and in 2022/23 there were just 210 million trips. Even peak time fares have rebounded to their pre-pandemic levels (452 million trips in 2019/20 compared to 459 million trips in 2022/23).
What this means is that as well as there being fewer trips, the demand profile of the rail network has radically changed from a peak hour railway to an off-peak railway.
This is also reflected in the distribution of passenger revenue between the different ticket types. The amount of revenue generated from off-peak tickets has always been biggest segment - around £3.9 billion in 2019/20 and £3.4 billion in 2022/23. But the notable shift has been in season tickets. In 2019/20 it was the third highest earning ticket type with £2.4 billion. That has crashed to £714 million in 2022/23. For completeness, peak tickets generated £3.5 billion in 2019/20 and £2.7 billion in 2022/23. Advanced generated £2 billion in 2019/20 and £1.8 billion in 2022/23. Others and open access operators had a minimal contribution to overall revenues, with other tickets actually generating LOSSES in revenue since 2019/20.
Lets paint a complete picture and map out the revenue per trip for the different types of ticket over time. I have also added the average revenue per trip for all ticket types. In this context, revenue per trip is per single trip. In other words, a return ticket has two trips associated with it..
The most lucrative tickets are advanced purchase and open access, generating £18.42 and £24.10 per trip in 2022/23 and £24.85 and £26.35 per trip in 2019/20 respectively. Then its peak tickets generating £5.81 per trip in 2022/23 and £7.84 per trip in 2019/20. Then off-peak generating £5.20 per trip in 2022/23 and £6.45 per trip in 2019/20. Finally season tickets generate £3.40 per trip in 2022/23 and £4.06 per trip in 2019/20. Across all tickets, revenue per trip was £5.98 in 2022/23 and £6.88 in 2019/20.
Of course what is shown here is revenue per trip, and not changes in the cost of tickets for passengers. Those have gone up consistently over the same period. But this does not articulate the problem that rail operators face. And the data is stark:
Total passengers have decreased by around 300 million trips per year between 2019/20 and 2022/23, even if some types of trips (notably off-peak) have recovered to pre-pandemic levels
Total ticket revenue has dropped by around £3 billion per year between 2019/20 and 2022/23, equivalent to more than the revenue generated annually by season tickets before COVID
Revenue per trip across all ticket types has dropped by 13% between 2019/20 and 2022/23.
In a business such as railways where the fixed costs (trains and infrastructure) are high, this is a nightmare scenario. Fewer passengers, and earning less from those passengers, running on high cost infrastructure and services. The boom times are well and truly over.
So what to do now? From a financial point of view, options are limited to 3. Increase the prices to generate more revenue, cut costs wherever you can, or get more subsidy to run services. Many extremely clever people running public transport across the world are dealing with this question.
This decision is partly a matter of principle. And whatever your principles are, you have to make a decision on prices and costs. The people with the purse strings would argue for some revenue raising through increased fares and cost savings. But the value judgement comes in choices on public subsidy for public transport. And that value judgement will determine public transport’s future post-COVID, whatever your views on the future are.
What you can do: This depends on your value judgement around public subsidy. For me, its clear - public transport should be run as a public service. Transport planners must get advice from public transport economists and experts on getting the best value for additional public subsidy. And be prepared to make a largely political argument that will succeed or fail based on whether its stacks up economically.
Regardless of what you do, encourage people to use public transport services. I would recommend reading Transport for Humans on examples of behavioural nudges that could be tried. Sorry to say, a poster campaign won’t cut it.
🎓 From academia
The clever clogs at our universities have published the following excellent research. Where you are unable to access the research, email the author - they may give you a copy of the research paper for free.
An agenda for creative practice in the new mobilities paradigm
TL:DR - Art is good. We should do more art.
The Scientific Foundation for Impacts Estimation in Transportation Appraisal: A Literature Review
TL:DR - Some of our appraisal methodology has little scientific basis, we should tackle that.
Assessing perceptions of pedestrian-focused intervention in a car-dependent European island
TL:DR - The perceptions of the people of Malta are presented.
People-focused and Near-term Public Transit Performance Analysis
TL:DR - Base investment decisions on how people behave. At least that is what this approach tries.
✊ Awesome people doing awesome things
Two for the price of one today. Following my rather obvious mess up on Friday.
To start with, a common frustration I have is that for the most in need in society, we seem focused only on providing them with trips for the essentials. When they deserve joy and leisure as much, if not more, than others. So a huge well done to CT4N in Nottingham. They are providing discounted travel to places like Chatsworth House, Newark, and Skegness purely for leisure. And specifically for volunteer and community groups.
You should also show your backing for the residents and businesses of Trowbridge in Wiltshire. They have campaigned for a new pedestrian crossing in Newtown, and now they are getting it. Not that it has stopped people complaining because they have had to turn their cars around at the road closure. Has someone got the world’s smallest violin going spare?
📼 On the (You)Tube
JFK Parade and Great Highway Park in San Francisco have had the people-friendly treatment. A worthy reminder that for all the dominance of motor vehicles, people just keep on winning.
What you can do: Identify a path in a park that would be great to have a shared use path on. If you are in the UK, LTN 1/20 has some good guidance on what makes for a good shared use path (this guidance may also be applicable elsewhere). If you are professional, get together some revenue budget to come up with a design to engage on.
If you are a campaigner, start talking to local councillors about making this happen. And if your park already has shared paths, why not organise a led ride for the community? This guide from Cycling UK gives you good advice on what to expect.
🖼️ Graphic Design
The changes in population forecast over the next 70 years will determine our transport outcomes more than anything else. And this excellent graphic from Our World In Data shows what is in store. A population pyramid that, while expanding in all directions, is becoming increasingly top heavy. Maybe we need to start becoming more age friendly.
📚 Random things
These links are meant to make you think about the things that affect our world in transport, and not just think about transport itself. I hope that you enjoy them.
A refresher on business air-travel etiquette (The Economist)
Longitudinal – Reflections On Recent Economic Writing (Naked Capitalism)
The skull maps that quantified racism (Big Think)
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