Ticketing and Pricing Strategy. Towards Affordable, Seamless Travel

Transcription

1 South Yorkshire Passenger Transport Authority Ticketing and Pricing Strategy Towards Affordable, Seamless Travel

2 Ticketing and Pricing Strategy Outline of contents Executive Summary 3 Chapter 1 A Vision for Public Transport Ticketing 4 Chapter 2 What Actions are Required to Deliver our Policies? 6 Chapter 3 Delivering the Policies 10 Chapter 4 Indicators and Targets 20 Chapter 5 Delivery Options 22 Appendix A Existing Ticket Products 25 Appendix B Detailed Proposals

3 EXECUTIVE SUMMARY SYPTE s role in ticketing is about providing an integrated ticket offer that meets the needs of all passengers in South Yorkshire. Our Vision is that by the end of the period covered by the Strategy we will be able to say: South Yorkshire has an excelent range of afordable, understandable and easily available public transport tickets. Thanks to this, price and convenience of payment are no longer significant barriers to the take-up of public transport. South Yorkshire Passenger Transport Authority s three policy goals are that public transport in South Yorkshire should provide: A realistic alternative to the car that will encourage a shift in people s mode of travel (sometimes described as providing modal choice). Quality transport for those without the use of a car to enable them to access jobs, education, shops, healthcare and other facilities (sometimes described as reducing social exclusion). Sustainable access to businesses for employees and customers. In line with the Bus Strategy (of which this Strategy is a daughter document) we propose to do this by (i) maximizing and seling public transport s strengths and (ii) targeting improvements to market and geographical areas where we can achieve greatest growth. A continuation of the existing decline in public transport use is not sustainable. We have been guided by research showing passengers priorities.service reliability is paramount. We must I. Establish and maintain attractive pricing for public transport. II. Provide multi-operator and through ticketing. III. Have a multi-modal approach. IV. Recognise the value of single- as well as multi-operator tickets. V. Provide a comprehensive concessionary fares scheme and facilitate the introduction of other ticketing products to address social exclusion, where appropriate and affordable. VI. Provide an easy to understand range of tickets and fares structure. VII. Provide for easy to use off bus sales and encourage increasing take up. VIII. Use smartcards as a potential facilitator or solution to all of the above. We identify a range of specific interventions that have the potential to address the main policy goals. These will need to be evaluated in the context of changing resource availability and the emergence of accessibility planning. We propose the development of a framework for assessing the relative priorities of these measures. A range of indicators and targets will be developed in line with a similar process for the Bus Strategy. There are a variety of options for the delivery of the Strategy s aims. We wil continue to pursue a partnership approach as long as it shows potential to deliver our aims. It is only prudent, though, to make preparations in case it should be necessary to adopt the more interventionist approach of quality bus contract schemes

4 Chapter 1 A Vision for Public Transport Ticketing What do we require from public transport ticketing? Self evidently, the price of using public transport is a significant issue for passengers and potential passengers. Also, patterns of use of public transport vary considerably, from those who use it every day to get to and from work and education to very occasional users. For this reason, it is necessary to have a range of different ticketing products appropriate for different types of public transport user. If we are to encourage public transport use, it is important that these different products can be easily understood, that people are aware of the options available to them and that they can be purchased in a convenient manner. For many people public transport is curently a distress purchase something they do not want to spend their money on and that they want to get over and done with as easily as possible. This means that they find it easy to erect barriers to taking up the product. These barriers can include: It s too expensive It s inconvenient to pay each time I get on the bus It costs me more because I have to travel across the county boundary I d need to use the bus and the train It s not convenient to queue up and buy my ticket in advance The right ticket s not available localy It s al so confusing All the above reasons for not making the switch to public transport (or for making the switch away from public transport) are areas where ticketing is involved. They are also all capable of being fixed or at least improved. The South Yorkshire Public Transport Information Strategy addresses these issues too and should be read in conjunction with this document. There is also a significant, though declining, proportion of the population who have little choice other than to use public transport for many of their journeys. For them, the price and ease of purchase of public transport tickets can have a significant effect on the accessibility of work, education, shopping, services, leisure facilities and social activities. In the light of these issues, our Vision for public transport ticketing is that, by the end of the period covered by the Strategy, we will be able to say: - 4 -

5 South Yorkshire has an excelent range of afordable, understandable and easily available public transport tickets. Thanks to this, price and convenience of payment are no longer significant barriers to the take-up and use of public transport. In order to achieve this vision, it is important that we achieve integrated ticketing, which we regard as: Ticketing that, through the design, pricing and marketing of a range of products, removes or minimises barriers to the take-up of public transport

6 Chapter 2 What Actions are Required to Deliver our Policies? What are the main policies driving the strategy? SYPTA s core policies South Yorkshire Passenger Transport Authority s three policy goals 1 are that public transport in South Yorkshire should provide: A realistic alternative to the car that wil encourage a shift in people s mode of travel (sometimes described as providing modal choice). Quality transport for those without the use of a car to enable them to access jobs, education, shops, healthcare and other facilities (sometimes described as reducing social exclusion). Sustainable access to businesses for employees and customers. The Bus Strategy The new South Yorkshire Bus Strategy pays considerable attention to the twin-track approach of, firstly, making the most of the existing public transport offer and, secondly, targeting specific market segments where service improvements have the greatest potential to bring about market growth. i. Making the most of what we ve got: Focused on public transport s key seling points, highlighting where and when it is successful. Maximising and selling its strengths and reducing the impact of negatives. ii. Specific actions for identifiable groups and locations: Targeting specific market segment(s) and journey purpose combinations. Targeting specific geographic areas or corridors of greatest potential. 1 For more details on relevant local, regional, and national policies, readers are referred to the Bus Strategy

7 SYPTE s position in the ticketing market could be summarised as ensuring that public transport is as accessible as possible to passengers. These passengers come in a wide range of types all of whom have differing ticketing requirements. Daily commuters and other frequent travellers. Some have their travel needs met by a single operator, others need to use a combination of two or more operators and/or two or more modes, Regular but less frequent users, part-time workers for example, Occasional public transport users who might be tempted to switch from the car more frequently, Visitors to South Yorkshire who wish to purchase access to the network for a short period of time, Younger, disabled, and older people who qualify for concessionary travel, and Other socially excluded or low-income groups who may struggle to afford fares or to access services. For very good economic reasons public transport operators must inevitably adopt a marketing strategy that is designed to maximise their revenue. For a great many passengers the ticketing options provided by individual operating companies are entirely acceptable and appropriate. For others the existing multi-operator ticketing range is equally acceptable and appropriate. The growth of sales of the TravelMaster family of tickets indicates that there is a demand for this kind of product. This Strategy attempts to build on that success. On the other hand, accommodating some passenger groups just isn t a commercial proposition. It is in addressing the needs of these passenger groups that the PTE has its role in the ticketing offer. The Bus Strategy ( ) identifies the characteristics of a good bus service. Ticketing can contribute to most of these characteristics to a greater or lesser extent. In order of declining susceptibility to being influenced by ticketing measures they are: Characteristic It must be reasonably priced compared to alternatives Where there are unavoidable barriers (for example interchange) the negative effects of these must be minimised You must know about it and it must be easy to use The service must be reliable It should provide a consistent journey time comparable with alternatives Ticketing Impact Obviously changing the price of ticketing has a significant impact on the attractiveness of public transport Having to buy a second ticket for a second journey leg can be expensive and inconvenient. Uncertainty about ticketing options doesn t aid ease of use. Simple, go anywhere, all-operator tickets reduce the uncertainty and so aid easy travelling. Many factors influence journey time, reliability, and (indirectly) frequency. However, ticketing can play its part. When the driver is collecting fares and selling tickets the passengers are not - 7 -

8 Characteristic The service should be quite frequent during the daytime, it can be less so in the evenings or Sundays but not be such a drop in frequency as to be off putting; Ticketing Impact getting any closer to their destination. Pre-paid ticketing can speed boarding and improve time keeping. As well as identifying what makes a good bus service good, the Bus Strategy makes use of recent market research that attempts to quantify the impact of different aspects of the bus journey on people s travel choices. What do people want? The Bus Strategy reviews available research into the requirements of passengers and potential passengers. It summarises the key messages as follows: (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) Reducing all delays to the smooth and consistent operation of bus services, including rapid intervention to deal with problems when they arise. Better customer relations and more customer focussed standards, consistently delivered Comfort and convenience across the whole journey Value for money Good and consistent standards of cleanliness, upkeep and information Reasonable safety throughout the whole journey, and effective systems making bus use easy (i.e. it should be easy to get value for money tickets and up to date, accurate information is widely available). Ensure interchange is not a big barrier Addressing these would, by definition, improve the overall image of bus services, promote confidence in the bus network and assist its positive marketing A number of these issues can be addressed, at least in part, by ticketing products, their pricing, and their design. In particular, the following actions are implied. Ticketing Strategy Action Relevant Passenger Priorities I. Establish and maintain attractive pricing (ii), (iv) for public transport. II. Provide multi-operator and through (ii), (iv), (vi), (vii) ticketing. III. Have a multi-modal approach. (ii), (iv), (vi), (vii) IV. Recognise the value of single- as well as (ii), (iv) multi-operator tickets. V. Provide a comprehensive concessionary fares scheme and facilitate the introduction of other ticketing products to (ii), (iv) - 8 -

9 Ticketing Strategy Action address social exclusion, where appropriate. VI. Provide an easy to understand range of tickets and fares structure. VII. Provide for easy to use off bus sales and encourage increasing take up. VIII. Use smartcards as a potential facilitator or solution to all of the above. Relevant Passenger Priorities (ii), (iii), (vi) (i), (ii), (vi) All above These actions also target the aspects of ticketing that can help to address the development of good bus services identified earlier in this chapter. Finally, there is another set of considerations that are not so easily tied in to passengers needs but that nevertheless must be considered. Any ticketing initiatives we develop must also be: Efficient not putting too great an administrative burden on operators or the public sector, nor requiring platform staff to recognize too many new ticket types, Fraud resistant proof against passenger misuse, driver abstraction of fares or operator over-claim from the public purse, and Affordable either in terms of the level of public subsidy required or achieving an appropriate financial return if operated on a commercial basis

10 Chapter 3 Delivering the policies In the preceding chapter we identified the key actions that are required to deliver our policies. In this chapter we define more precisely what is needed to implement these key actions. I. Establish and maintain attractive pricing for public transport. All the available research suggests that fares and pricing are major influences in determining people s usage of public transport. To some extent we can look at price in terms of value for money. That is to say, if we can improve the service significantly, passengers (and potential passengers) will regard it as better value for money and will be more willing to pay a particular price for it. For this reason, the measures detailed elsewhere in this Strategy (and in the Bus and Information Strategies) remain valid. However, for many years public transport fares have risen significantly faster than general inflation. In particular, fare increases have completely outpaced rises in motoring costs and town centre car parking costs. Relative Changes in Travel Costs (adjusted for Inflation using the Retail Prices Index) Local Bus Fares Motoring costs Index 1980/81 = /81 81/82 82/83 83/84 84/85 85/86 86/87 87/88 88/89 89/90 90/91 91/92 92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 In this environment, improvements to the service alone would need to be very dramatic if perceived value for money were to be improved by this means

11 Public transport trip making in this country is falling outside London. Some of this decline is doubtless due to structural factors such as increased affluence and with it greater car availability. However, some of it must inevitably reflect the increases in the real and relative cost of using public transport. We are currently locked into a cycle of decline, with declining bus use leading to lower profitability for operators who respond (at least partly) by increasing fares, which in turn leads to further declines in patronage. An authoritative review of available research (Transport Research Laboratory Report TRL 593, A Practical Guide to Public Transport Demand ) has concluded that the long term elasticity of demand with respect to fares for public transport is -1, which means that over a number of years a, say, 10% increase in fares leads to a 10% decline in patronage. Fares increases can therefore only improve profits in the short term and further increases will be needed to counteract the effects of falling demand. We must break this cycle by a making public transport better value for money. With regards to pricing, we could perhaps do this by: Facilitating the establishment of fares at a level that will be perceived as being reasonable and which is capable of helping to drive patronage growth (and perhaps simplifying them, see below); Considering specifying fares on supported services if we are unable to influence the operators to implement acceptable fare levels on the general network; Linking maximum fares increases to an agreed index; Facilitating the introduction and maintenance of ticketing products that provide value for money for different patterns of public transport use (actions identified under different headings below); Promoting the product (see South Yorkshire Public Transport Information Strategy) research suggests that perceptions of the relative cost of public and private transport are flawed. The idea of reducing and simplifying fares to grow the public transport market has been used before (it has been successful in Gothenburg and in Brighton for example). In particular it has been a significant component in the growth of public transport usage being seen in London at present. Simplification seems at first glance to have the potential to help grow the market a simple product range is easier to sell. However, any attempt at simplification has to recognise that removing tickets from the product range reduces our ability to target particular segments and inevitably leads to price increases to some passengers. It also needs to be noted that simplification, while widely supported, means diferent things to different commentators. Before SYPTE can make any decisions about pursuing such a strategy it will be necessary to institute a significant piece of work to assess the likely economic impact of a range of pricing assumptions. This work will need to include: Reviewing local market conditions and experiences in other regions to determine whether there is a prima facie case for simplification of ticketing for immediate travel having a positive impact on public transport use in South Yorkshire Producing detailed economic models of the predicted economic and social inclusion impacts stemming from any further simplification of fares

12 Reviewing the existing prepaid ticketing range to see if rules and/or product ranges can usefully be changed and Reviewing existing marketing approaches to see if a subset of the product range can provide a simple offer without misleading the public. II. Provide multi-operator and through ticketing Central to the approach of South Yorkshire s new Bus Strategy is a core network of high frequency services with complementary, lower-frequency services filling in the gaps. A secondary network of supporting services including demand responsive and taxi operations would provide all areas with access to the core network. This model provides for a stable, sustainable network but it might imply an increased need for passengers to interchange between services. Interchange is, generally speaking, a bad thing it would be ideal if everyone could get from anywhere to everywhere on a single vehicle but this is never going to be achievable. We need to expend effort, therefore, in making the process of interchange as smooth and seamless as possible. Interchange facilities, information at stops, and reliable services are all important but ticketing should also support this process. Ticketing measures can be of considerable help in reducing the inconvenience of interchange: Through ticketing Multi-operator ticketing and/or Simplified single fares can all provide confidence to the passenger that changing to a second vehicle (and even to a second mode) will be a relatively painless process. In the future, unconventional bus services (e.g. demand-responsive community transport operations) may become significant as feeder services to the core network. At present this is not the case but if this should change, it would become desirable to have through ticketing and concessions between conventional and unconventional services. This would however, have significant funding implications that would have to be carefully addressed at the time. As is noted below, single operator tickets can provide good value for money for most passengers. Other passengers, however, are not so lucky. The vagaries of the network are such that they need to use the services of more than one operator and so they must buy a TravelMaster product. At present, operators price the TravelMaster range of multi-operator tickets at a premium above the single operator prices. At the time of writing the multi-operator price premiums for the most directly comparable bus operator tickets range between zero and 52%. These premiums change periodically as prices are reviewed. The current range of values is about as extreme as it has been at any point in recent years. Although it is logical that there be some additional charge for the flexibility of using different modes, there are factors that lead to multi-operator prices being higher than this consideration alone would suggest. Firstly, operators have increasingly moved

13 to issuing their own tickets on-bus. This avoids the need to pay sales commission which practically makes up the first five percent of the premium. Secondly, and more significantly, operator concerns about market share (often at the expense of market growth) have led to them pricing multi-operator ticketing such that their own products retain their dominant market position. The price premium makes it difficult to attract to public transport would-be passengers who are price-sensitive and whose travel needs are not met by a single operator. It is also the case that while current TravelMaster products cater well for very regular users, they are less attractive for frequent but less regular users. The product aimed at this particular group FlexiMaster is reasonably competitively priced at 9.50 for three days compared to FirstDay s 3.50 per day but restrictions on purchase (a photocard being required) seem to make it unattractive to many potential customers. Actions under this heading are therefore: Continue to offer the TravelMaster range of products but seek to establish a more limited premium above single operator tickets (e.g. +10%); Make it easier for customers to create personalised tickets at the lowest cost for their particular journeys; Provide multi-leg and through (integrated) ticketing to minimise interchange penalties III. A multi modal approach This Strategy is a daughter document of the Bus Strategy and many of the actions we identify to drive forward public transport in South Yorkshire will be bus-based. This is reasonable given that bus is by far the predominant mode as far as volume is concerned. South Yorkshire's Public Transport - modal share Tram Train Bus

14 However, we must remember that for many passengers public transport is multimodal. Any strategy we adopt must take account of people s need to interchange between modes. The Executive s Rail Strategy requires that we Improve accessibility to work, leisure, health care, education and other services, through integration with other modes. Discussions with the new operator of the majority of South Yorkshire s rail services suggest that they are keen to pursue a rationalisation of ticketing and are seeking to provide as much integration as possible with other modes. South Yorkshire has an extensive range of multi-modal ticket products (See Appendix A). In the past, however, there has been a tendency to implement some new products on a bus and tram only basis because of the administrative dificulty of involving the railway. With the new operator keen to move forward, there is a chance to: simplify the product range by making all, or nearly all, tickets valid on all modes. IV. Recognise the Value of Single-operator tickets In South Yorkshire, the pre-existing ticket became the major operator s singleoperator ticket at deregulation. Since then, multi-operator ticketing has played a secondary role. For many passengers this is not a bad thing. Where all of the services they need to use are provided by a single operator (usually Yorkshire Traction in Barnsley, First in the rest of the county), single operator tickets provide them with the cost and convenience advantages of prepaid ticketing. V. Provide a comprehensive concessionary fares scheme and facilitate the introduction of other ticketing products to address social exclusion Under current legislation, SYPTE has to provide a concessionary fares scheme for elderly and disabled people which is as good as or better than the nationally mandated scheme of half fares on buses after 9.30am on weekdays and at weekends. It is also empowered to provide concessionary fares for children up to the age of 16 and students in full time education up to the age of 18. The current scheme has a flat fare of 40p for travel within South Yorkshire on buses, trams and trains. It is available at all times for disabled people, children and eligible students and after 9.00am and at weekends for elderly people. There are SeniorMaster travel card season tickets available to elderly people. There are also a number of agreements with neighbouring authorities that provide for cross boundary concessionary travel for elderly and disabled people. From April 2006, the nationally mandated scheme will be free travel for elderly and disabled people. At the time of writing, consideration is being given as to whether this can be extended to trams and trains, for the times of eligibility of the current South Yorkshire scheme and can cover current cross boundary arrangements. The Regional Assembly is also conducting research into the feasibility of a regional scheme

15 The lack of provision for cross boundary travel for children and students has often been raised as an issue of concern and consideration needs to be made as to whether it is feasible to make provision for this. Actions therefore are to: Implement the nationally mandated free fare scheme for elderly and disabled people from April 2006, together with any locally agreed extensions to this; Consider the potential for a regional scheme in conjunction with other authorities within Yorkshire and the Humber; Consider the scope for providing cross boundary travel for children and young people. In addition to concessionary fares, a number of specific products are provided on a commercial basis by the operators (set out in detail in Appendix A). SYPTE is not empowered to fund such products, but potentially could act as an agent for the Districts under their more general powers to promote the wel-being of their residents. Incontinuing to develop such niche products, we need to be sure that they continue to meet a need and do not lead to confusion with the range of different products on offer. Actions therefore are to: Continue to facilitate the provision of a range of products addressing social inclusion on a commercial basis; Consider the potential for development of additional products under the Districts wel-being powers; Continue to review the range of products provided in these ways to ensure that they meet a continuing need. VI. Provide an easy to understand range of tickets and fares structure A simple ticketing offer is easy to promote and easy to understand. In an ideal world one might see something like: A simple flat fare for all single journeys A comprehensive, countywide, multi-modal season ticket for regular travellers A discounted version of both of the above for concessionary passengers and other disadvantaged groups. However, the real world has a habit of not matching up to the ideal. Such simplification is all very well but it becomes far less appealing if the products concerned do not represent good value for money. The current price of the countywide, multi-modal season ticket (Travelmaster) will inevitably be unattractive to some passengers for whom multi-modal or multi-operator travel is a necessity. A glance at Appendix A shows the range of products that has been developed to meet the needs of particular market segments. A complex ticketing range makes it more likely that there is a ticket that s just right for you but makes it harder for you to find that ticket. This complexity becomes increasingly significant as smartcards come along. New technology can only succeed in bringing in new people into public transport if they

16 understand what is on offer. With smartcards they need to understand both how to use the technology and which product to buy. A three pronged approach is therefore needed: 1. Simplifying the ticket range as much as possible while 2. Seeking to achieve and retain attractive pricing and 3. Using a wide range of marketing approaches to educate passengers. To the extent that niche products remain the most effective way of achieving atractive pricing, the method of using the Executive s Travel Options Planning service, as well as staff in Travel Information Centres, to find customers the right product remains crucial. Similarly a flat fare or zonal fare system (for instance as on London Underground) is simple to understand and market to customers. However, unless fares are relatively low, such systems can create severe anomalies for passengers who, for instance, make regular short journeys that happen to cross a zone boundary. For this reason it would be crucial to understand the effects of such a system and optimise it to reduce anomalies. The action against this is therefore to: Facilitate the implementation of a simplified fare offer, based on research into its impacts (the full scope of this action having first been determined by the work set out under Action I above) VII. Provide for easy to use off bus sales and encourage increasing take up. The Executive s Total Travel Experience research shows that the main determinant of satisfaction or dissatisfaction with the bus travel experience is waiting time at the stop. Frequent, infrequent, and rare users of public transport all agree on this. In fact they differ by only a few percent in the importance they attach to it. In fact, what passengers want has been described as, reliability, reliability and reliability. If they can be sure that the bus (or train or tram) will turn up when they expect it, their opinion of the value for money that public transport represents will be substantially improved. The Bus Strategy recognises the importance of this point and covers such issues as bus priority measures in detail. Here we consider the role of ticketing. It is vital, then, that we take measures to save time on the journey. Ticketing can play a part here because the use of a pre-paid ticket is an inherently quick transaction. The purchase of a weekly ticket from the driver tends to be a slower-than-usual transaction. This leads to delays which inevitably increase passenger dissatisfaction with the journey time. This effect is particularly felt on Monday mornings when many commuters purchase their weekly tickets. Would we then wish to see all tickets for periods of longer than a day sold off-bus? Perhaps, but the reality is that there are competing advantages to both on- and offbus sales for period (day, week etc.) tickets. On-bus sales Off-bus sales

17 Attractive to the customer (easy, quick, no going out of your way to buy a ticket) Slows boarding (relative to prepaid travel or single cash fares) Low cost of sales (no commission paid) No income to PTE Less attractive (but recent experience at Arundel Gate Travel information Centre suggests a well-placed, highly visible outlet can be very attractive of sales) Speeds boarding (relative to cash transactions) Commission paid to agents (typically about 5%) Commission on sales at TICs helps to offset the administrative costs of running multi-operator ticketing. Clearly if we are to deliver the frequent, reliable services that passengers value, we must get the balance between on- and off-bus sales right. Two aspects of the retail approach can be used to address this concern: 1. Use a variety of innovative and traditional sales outlets to increase the amount of off-bus purchase of tickets and, 2. Use new technology to make sure that on-bus transactions have the minimum on buses travel times and hence reliability. These two considerations will be dealt with in more detail below. In the past decade or so, the high street banks have demonstrated that it is possible to move substantially away from a face-to-face approach to customer interaction. However, market research suggests that, on the whole, South Yorkshire s public transport users prefer a face-to-face transaction. Telephone contact with a human being is second choice and a human-machine transaction is definitely third best. As we have seen, one route for face-to-face purchase of tickets is from the bus driver. This is ideal for single and return tickets and may also be appropriate for day tickets too. However, the issue of longer period tickets is slower because of the need frequently to accept and give change for notes and because of the need to provide a wallet or laminate to protect the ticket and/or reduce later opportunities for its fraudulent alteration. Our twin track approach, then, is to increase the volume of off-bus ticket sales on the one hand and to speed up the on-bus transactions that remain. Given the public s stated preference for face-to-face interaction, sales through Travel Information Centres are likely to remain a very significant way of getting tickets into the hands of passengers for some time to come. The same applies to staffed railway stations. We must continue to ensure that our TICs and stations are attractive, welcoming places where people are happy to come and buy tickets. In addition, with a staffing presence, TICs have the potential to help passengers overcome any resistance to new sales technologies. The implementation of selfservice ticketing machines in TICs would allow staff to guide first-time users to purchase, say, weekly TravelMasters without needing to queue at the counter. Similar assistance would be invaluable during the roll-out of smartcard-based ticketing. The high street banks and London Underground have both used a similar approach as new self-service machines have been deployed

18 The Executive continues to maintain a network of sales agents in local communities. These provide local outlets for tickets and remove the need to travel into large population centres. At present most of these agents sell SeniorMaster pre-paid concessionary tickets. Unfortunately, this product will cease to exist with the implementation of free travel for senior citizens in April Agent sales turnover could therefore be expected to drop significantly after that date unless action is taken to address this problem. It will be particularly useful to have a network of small agents in local communities in order to encourage the uptake of smartcards under the Yorcard scheme (see below). The scope of such an agent network would depend on the impact of commission payments on the business case. The Executive will continue to work with its partners in the Yorcard project to explore the possibilities. Telephone and Internet sales continue to attract an increasing amount of business across a variety of sectors. An increasing proportion of the population have access to the Internet (although some research has suggested that a large proportion of these people choose never to use that access). The internet can therefore be a useful sales outlet but only as a part of an integrated approach combined with more traditional routes. Internet sales are probably best used to target particular market segments - students and perhaps under-16s example. Sales by both Internet and telephone are to be implemented as part of the Yorcard Smartcard-based ticketing project. Clearly these sales routes will have to be pursued regardless of the results of the Yorcard Pilot and subsequent decisions on Yorcard s viability. Actions under this heading are therefore to: Continue to develop the role of TICs Maintain and enhance our network of local agents Develop telephone and internet sales (particularly in the context of the Yorcard Scheme) VIII. Use Smartcards as a potential facilitator or solution to all of the above At the time of writing this Strategy, SYPTE, in partnership with Metro and with the bus and rail operators of South and West Yorkshire, has received provisional confirmation from the Department for Transport of initial funding for the procurement of a smartcard-based ticketing system for the two counties. This system is to be introduced initially on a pilot basis. The pilot scheme will involve three conventional bus services in Sheffield, services to a local secondary school, and connecting rail services between Sheffield and Doncaster. The pilot is designed to allow all of the partners to identify clearly whether their individual business cases for smartcard-based ticketing are positive. For this reason there is a breakpoint at the end of the pilot programme. Should significant partners be unable to commit to the project or should DfT decide that Yorcard does not meet its own criteria for funding, Yorcard will close down and the emphasis will return to conventional means of delivering ticketing

19 Smartcards (or other electronic media) have great potential to deliver many of the scheme improvements envisaged in this strategy. Advantages identified during the development of the Yorcard project have included: Potential for reduced boarding time and hence improved timekeeping and reduced journey times for passengers Improved image for public transport leading to market growth Reduced reliance on driver recognition of ticketing products (fare payable etc.) Automated checking of ticket validity (expiry date, time, zone etc.) Automated collection of information about ticket usage and patterns of journeys over sequential trips Reduction of driver and passenger fraud As well as various improvements that will make the whole network more efficient. Rather than revisit the arguments for electronic ticketing here (they have been well made in the previous strategy and in funding submissions to the Department for Transport), this Strategy concentrates on showing how smartcards can be used in delivering the specific measures identified as possible improvements to South Yorkshire s overal public transport ticketing ofer. For each measure identified we will examine three parameters: 1. How a smartcard-based ticketing environment would influence the delivery of the measure 2. How the measure would be delivered (if it is practical to do so) in a non-smartcard environment and 3. Whether it is desirable or practical to introduce a non-smartcard version of the measure in the short term before the Yorcard project is ready to deliver an actual, working system. Detailed measures set out in Appendix B are categorised in this way. Detailed Measures A suite of proposed detailed interventions in the ticketing market, in line with the actions identified above, is attached in Appendix B. In effect these form a toolkit of measures to enable us to achieve the main policy aim for South Yorkshire. Each measure will be identified in terms of its impact by market segment (as defined in Chapter 2). These are: Commuters - daily commuters and other frequent travellers. Some have their travel needs met by a single operator, others need to use a combination of two or more operators and/or two or more modes, Less frequent users - regular but less frequent travellers, part-time workers for example. This group also includes shoppers who are a very important group in terms of journey numbers. Occasional users - occasional public transport users who might be tempted to switch from the car more frequently, Visitors tourists and other visitors to South Yorkshire who wish to purchase access to the network for a short period of time, Concessionaires younger, disabled, and/or older people who qualify for concessionary travel, and

20 Other disadvantaged users other socially excluded or low-income groups who may struggle to afford fares or to access services. Additionally, each of the product enhancements will also be addressed in terms of its short- or long-term deliverability with or without smartcards. Prioritising measures As we have said, the detailed measures represent a set of tools available to drive forward policy. Resources may not enable us to use all of these tools. It may also be difficult to complete some of the measures because of resistance by other stakeholders. Although all of the initiatives could contribute to policy objectives, we need to provide the Passenger Transport Authority with a framework to allow them to judge which measures will make best use of resources in achieving this. The agreed capital project prioritisation criteria are a model for this approach

21 Chapter 4 Indicators and Targets Key Indicators Ultimately the key measures of success of our ticketing strategy are those identified in the Bus Strategy. Bus patronage Satisfaction Punctuality Reliability Modal split and Accessibility indicators. Ticketing will contribute to the delivery of improvements to the above measured against targets that will be finalised in the full Local Transport Plan to be published in March Detailed Indicators In addition to the above, more targeted indicators will allow us to monitor and measure individual actions. With the development of clear trigger points we can take appropriate contingency actions were necessary. The detailed measures are summarised below with an indication of the organisations responsible for delivery. Action Main Responsibility Principal Indicator(s) Product enhancements Operators and PTE Take up of products Percentage quoting cost as a significant barrier New technology and improved image Operators and PTE Take up of Yorcard in pilot and beyond Take up of new ticketing mechanisms Percentage of journeys made with smartcards Boarding time impact

22 Action Main Responsibility Principal Indicator(s) Other Yorcard pilot measures of success Improve availability Operators and PTE Number of transactions through local agents, on-bus sales, Internet etc. Highlight costs of alternatives Carry forward existing indicators PTE Operators and PTE Annual marketing spend Percentage quoting cost as a significant barrier Total multi-operator pre-paid tickets in circulation Multi-operator premium (for comparable products) Cost (to PTE) per concessionary trip Journeys per concessionary passholder (by category) Concessionary fare as a percentage of the adult single fare

23 Chapter 5 Delivery options How are we to deliver the Strategy? The five options There are five, not entirely mutually exclusive, options for the delivery of ticketing in South Yorkshire the partnership approach, the joint venture approach, the Ticketing Scheme approach, the use of Well Being powers to extend concessionary travel, and the Quality Contract Scheme approach. The first of these is the method that has been used up to now. SYPTE works in partnership with the operators to develop the ticketing range and the marketing of the constituent products. A touchstone for the continuation of this approach was its ability, during the currency of the previous strategy, to deliver zonal pre-paid multimodal ticketing. This was indeed achieved in May The joint venture approach would involve a more formal way of working together with the operators. This would be through a formal joint venture agreement (JVA) or perhaps the setting up of a joint venture company (JVC). In the latter case the ownership of the inter-operator ticketing products could transfer formally to the company. The third approach takes advantage of the powers given to the Executive under the Transport Act This allows a local transport authority to make a scheme under which a range of ticketing products are made available. Acceptance of these products would then become mandatory for all local operators. What the Act does not allow authorities to do, however, is to set the prices that must be charged for these products. In the past these first three options have been seen as mutually exclusive. However, there is increasing recognition that this need not be the case. The implementation of a statutory scheme could be combined with a JVA, for example, to give a measure of statutory protection against an operator (or operators) withdrawing from multioperator ticketing. Joint venture companies certainly have their place. One such entity is widely seen as an essential component of the delivery of the Yorcard programme. However such a

24 Yorcard company would be a region-wide body (i.e. covering both South and West Yorkshire and possibly expanding subsequently the points beyond) and would not be appropriate as a vehicle to run South Yorkshire s inter-operator ticketing. However, the presence of a successful Yorcard JVC could be seen as making the case for a ticketing company stronger. The Well Being powers stem from the Local Government Act These allow local authorities greater freedom to adopt innovative policies if these contribute to the environmental, economic or social well being of their areas. The powers do not, at present, extend to PTEs directly but they do apply to the Districts. Further investigation is needed to determine whether they could be used to extend the availability of travel concessions, should the Districts wish to do so either individually or working together through the PTE. Because of the uncertainty around the usefulness of these powers they are accorded only a secondary role in our consideration of the delivery options. Finally, there is the Quality Contract Scheme (QCS) approach. This is effectively an arrangement whereby the PTE franchises the local bus service provision. It can only be implemented when considered to be the only practicable way to deliver the Local Transport Plan. The PTE would determine the standards and network to be provided and would let contracts with operators granting them exclusive rights to run the specified services. QCSs consider routing, frequency, price, and interchange efficiency with other modes. A quality contract is an option which would allow the Executive control over many of the areas of concern including quality and coverage, and has the potential for greatest impact. However, a contract must be sanctioned by the Secretary of State and would only be approved after lengthy consultation, and with the general agreement of all parties. The following table assesses the potential of the various options to assist in the delivery of this Strategy. Delivery options matrix Specify prepaid ticket prices to drive market growth* Simplify and/or reduce single fares to drive market growth Provide subsidised fares to groups not covered by existing concessions** Effectively administer ticketing products under Yorcard scheme Modal integration (bus, rail and tram) Enforceable participation Partnership approach (current position) Can t specify prices Could be done with agreement of all partners Joint Venture approach Can t specify prices Could be done with agreement of all partners 2000 Act Ticketing Scheme Can t specify prices Scheme does not cover single fares None of these approaches is particularly suited to this option but the Districts Wel Being Powers may help in this regard. QCS Could specify prices Could specify fares Could specify fares All of these approaches are equally suited to the administration of ticketing products under Yorcard. The delivery and management of the Yorcard project itself by a JVC does not require such an approach to ticketing administration. All modes involved in current partnership Not suited to enforcement All modes could be involved in any Joint Venture Not suited to enforcement 2000 Act schemes cover bus only Could require participation for buses but not at QCS covers bus modal integration needs partnership working Could require participation for buses

25 Partnership approach (current position) Joint Venture approach 2000 Act Ticketing Scheme set prices QCS Notes: * The difficulties of specifying pre-paid ticket prices stem mainly from the working of the Competition Act (2000). The Office of Fair Trading is currently reviewing the Block Exemption for public transport ticketing and any revision may influence the extent to which the PTE can influence prices. ** The Districts Wel Being powers may be of assistance in extending concessions to new groups. Further work is needed to investigate this. In broad terms the present partnership-based approach and the slightly more formalised Joint Venture (JV) approach - whether it be through a formal agreement or a joint company are very similar when assessed by the above model. As yet, no clear case for the superiority of the JV approach over the current system has been demonstrated. However, it is understood that the operators favour a JV approach as they feel it will give them more confidence in the administration of multi-operator ticketing should this become a more significant player in the marketplace. Given this operator support, it may be that the JV approach has a marginally greater chance of delivering the Strategy aims than has the current approach. In this Strategy, and in the accompanying Bus and Information Strategies, the Transport Executive has specified what it wants to achieve. This will require significant changes from the operators. If a programme can be agreed that will implement these changes and meet the Strategy aims, the partnership approach (or perhaps a joint venture approach) can continue. However, it is only prudent to proceed with the preparatory work for adopting the QCS approach in the meantime. This approach is discussed further in the bus Strategy