Ticket gate market a ‘near monopoly’, says Office of Rail and Road

The Office of Rail and Road (ORR) says the market for automatic ticket gates is a “near monopoly” with buyers of gates potentially paying too much, while the market for ticket vending machines is delivering “poor service quality with low availability of machines”.

The findings were released in an update to its Market Study into the sectors on September 13. The Market Study was launched in March.

The regulator ruled out involving the Competition and Markets Authority in the market for ticket gates and machines, arguing that the costs would outweigh the benefits. However, its analysis suggested that one company, Cubic, provides most of the gates, and that purchasers demand innovation rather than competition.

For ticket machines, the ORR argues that competition is driving innovation - “albeit slowly” - and that regulatory intervention should focus on making accreditation processes easier to drive innovation and entry into the market by other companies. It says it will work with the rail industry “to develop and refine a package of remedies primarily targeted at improving the way in which demand is brought to market”.

ORR Head of Competition Tom Cole said: “This study has revealed a number of concerns about weak competition for retail equipment, and the detrimental impact this has on price, quality and innovation. This is having a direct impact on passengers and taxpayers who ultimately pick up the bill and miss out on new product developments.

“We are committed to working with industry to change how competition works and how this equipment is purchased to ensure new and existing suppliers are better incentivised to invest, innovate and compete in these markets.”

The ORR is inviting responses to its emerging findings and actions.