The 2020 vision for tickets
PAUL STEPHEN investigates how Northern has partnered with thetrainline.com and joined the increasing number of operators signing up to the mobile ticketing revolution
Northern’s mobile ticketing partnership with thetrainline.com
On January 26, then-Rail Minister Claire Perry predicted that smart ticketing on the railways was ‘inevitable’, and that the days of magnetic stripe tickets were numbered. At the Transport Ticketing and Passenger Information conference, held at Old Billingsgate in London, she boldly stated: “It is a ticket that has done its job well, but now seems woefully inadequate for the future - especially for an industry focused on customer service.”
Less than a week later the Rail Delivery Group set out an ambitious plan to turn this vision into reality, by announcing a threeyear project that would enable rail passengers to travel anywhere on the network with a barcoded ‘m-ticket’, sent directly to their smartphones.
It would mean not only being able to purchase a ticket online or via an app, but also using the very same electronic devices on the readers at gatelines, or presenting them on board to ticket inspectors. By 2020, the hassle of queuing at ticket offices or printing advance purchase tickets at vending machines may no longer exist.
M-tickets and pay-as-you-go smartcards are not new concepts, with London's Oyster scheme and apps from train operating
It’s a really good example of the industry working together on a new approach to retailing Stephen Bond,
companies and retail providers including thetrainline.com now well established. But technological barriers limited their application to buying advance purchase tickets only, or using them on operator-specific services.
But in 2014, a pan-operator pilot scheme covering more than 230 stations in the north of England, Scotland and the Midlands overcame those obstacles, proving that technology is capable of letting passengers switch between different operators’ services on a single journey, and buy a variety of ticket types. Following that breakthrough, it is now just a matter of encouraging all operators to adopt the system until it has nationwide coverage, and m-tickets can become a commonly accepted medium to travel.
With that in mind, Northern joined the ranks of Virgin Trains, Virgin Trains East Coast, London Midland, Chiltern Trains and several others in May, in accepting m-tickets bought from other operators, and selling their own.
“Northern’s first foray into m-ticketing was a joint venture with the rest of the industry,” explains Northern's head of retailing Stephen Bond." The idea behind getting everyone together in 2014 was to define an interoperable standard that everyone could work from, and we were very happy to join that party as it developed.
“It’s a really good example of the industry working together on a new approach to retailing. The process itself was a very positive one, with many people working together to achieve a common goal.”
In October 2014, a northern pilot area was put together served by CrossCountry, Northern, Virgin Trains, Virgin Trains East Coast plus TransPennine Express, with participation from independent ticket provider thetrainline.com. More than 10,000 journeys were made using the new flexible barcoded m-tickets, with a 97% passenger satisfaction rating. thetrainline.com not only sold m-tickets for the pilot scheme through its own website, but is one of several retailers to offer the software and digital infrastructure to support operators selling them online via their own digital platforms.
“The first area was chosen very carefully for a couple of reasons,” adds John Davies, retail director at thetrainline.com. “We had the main line part from York to Newcastle, where you have three inter-city operators, but then we extended it from York-Harrogate at one end and Newcastle-Hexham at the other, so we had two contexts that we needed to prove. How would it work from the Northern feeder services on to an inter-city carrier?
“The first pilot area was then extended to a second pilot area, which was the West Coast Main Line operated by Virgin Trains. We joined the two areas across the top from Carlisle-Hexham and Hexham-Newcastle, making Hexham the centre of the railway universe for one very brief moment!”
The trial went without a hitch, giving participating operators the confidence to begin offering large parts of their product portfolios under this new system. Following the change in franchise in April, Northern turned to thetrainline.com to deploy its own version of the new digital customer offering.
Says Bond: “All the barriers to regional operators using something which wasn’t a magnetic strip were removed, and that’s why this project is so exciting for us. On the first day of our franchise we introduced m-ticketing across the whole of our business, and we could only do that because we’d tested the product in partnership with thetrainline.com and other operators.
“From a delivery point of view it’s been alarmingly easy. But from a business perspective, there are three questions you must ask when considering things like this – is it attractive to customers? Does it work for our staff? Is there a commercial case for it? The pilot scheme ticked all three boxes so we didn’t need much persuading.”
Both Bond and Davies have reported a strong demand for m-tickets since their introduction six months ago. 17,578 m-tickets were sold by Northern in the last week of August (21-27) and volumes are increasing by 5% a week. It works particularly well for Northern, explains Bond, due to the number of unmanned stations across its wide geographic network.
“For a regional railway it’s very much the right thing to do. If you’re travelling from a station without a ticket office there’s no way of knowing how much your ticket will cost before you board the train. It also works really well compared to a vending machine, which doesn’t always tell people about off-peak restrictions, so the app can start to take away some of the anxiety and mistrust people feel.”
But mistrust is always likely to pose a barrier to the uptake of new purchasing methods and detractors of m-ticketing have already pointed to the inherent dangers of phasing out paper tickets. These include the risk of excluding those less confident in using mobile or computer technology, or costconscious operators using it as a means to justify the widespread closure of ticket offices.
This is heavily disputed by Davies, who adds: “It brings up a lot of questions around inclusion and people who don’t use mobile devices. We’re not saying that paper tickets can’t exist as well, but customers expect now to be able to use their mobile phones to get them around and support all their other journey planning.”
Bond concurs: “It’s about choice, and not about closing ticket offices at all. Many of our customers value the interaction of a ticket office, and that’s not going anywhere. It’s about offering customers a viable alternative to ticket offices if they choose to use it and, in the longer term, it’s more of a replacement for vending machines - customers comfort
using those are also more likely to be comfortable buying m-tickets online.”
The conversation turns to the advantages of using m-tickets for both passengers and operators alike, including greater revenue protection, the provision of instant refunds, delay repay and improved customer service.
Says Davies: “For the first time, we know who’s bought the product, and if the product has been used before. The mobile ticket also expires automatically after one day, so it can’t be used again and again, unlike paper tickets which have escaped being marked by an inspector. All these products will also have a refund entitlement with them, so passengers don’t have to write to anybody or wait 28 days for a cheque to arrive in the post.”
Bond stresses that holding electronic information about passengers does not come with any data protection risks, as has been claimed. This is not only illegal, but it would be harmful to any operators’ interests if they were to misuse it to sell products, or pass it on without permission to third parties.
“Understanding how passengers use the product is incredibly important to us. Not only does it help us tailor products for them, but also it helps us support them if their journey goes wrong. It needs further development, but in future we can use GPS technology to tell
them when their stop is coming up, for example, or give direct assistance to disabled customers via a mobile handset. We can’t offer that with paper tickets.
“People won’t tolerate being treated in the wrong way and the message has to be timely and meaningful if it’s not to become counter-productive. It may be that you have to communicate with people en masse because the wires are down on the East Coast Main Line and people need to be advised not to travel.
“The process of communicating key messages makes it valuable to them, but bombarding them with marketing information would diminish its credibility and validity. It’s a useful tool but only if used in the right way.”
The ability to offer split ticketing as the cheapest means of travel via m-ticketing has also been questioned by critics, and Bond concedes that there are still some tickets that are ill-suited to conversion to m-ticketing, for the time being.
“Split ticketing is a product and pricing issue which is a result, largely, of fares regulation and it’s no different on mobile phones than with any other kind of ticket. Clearly there are a few challenges for m-tickets, but those issues pose challenges across all outlets, including vending machines.
“Carnets are another example that work in paper form but not particularly well with an app. However, I think that by first addressing some of the constraints we have around channels of retail we can then start to address some of the problems around specific products.
“We’re now offering a new way to purchase products, and will eventually begin to offer a greater range of tickets.”
So, which side is winning the battle for hearts and minds? Davies says that the statistics speak for themselves, with an enormous appetite for more m-ticketing.
“We measure success in two ways - availability and what we actually sell. Not every operator offers or accepts m-tickets yet although the RDG has a plan to get them there, which we are part of. We can currently offer an m-ticket to about 45% of all the journeys we sell across the UK, and where we sell tickets to a customer on a mobile device they still have the opportunity to get it from a vending machine, if that’s what they want. But, increasingly, the default is a barcode to mobile and 75% of people offered an m-ticket take it. We find that once they’ve done it they never go back.”
The next chapter in the m-ticketing story is now to establish acceptance across the entire network. Regardless of whether individual TOCs decide to sell tickets in this way, acceptance is crucial for barcodes to become a universal standard.
However, there are still several major and expensive technical issues to be surmounted, such as installing barcode readers at London Underground stations to facilitate crosscapital journeys and at all other gatelines
75% of people offered an m-ticket take it, and once they’ve done it they never go back John Davies,
across the country, where m-tickets often currently have to be manually checked. thetrainline.com is also working on ways to send universally accepted barcode tickets via e-mail, and ways to facilitate the transfer of tickets from a third party. This would perhaps benefit a parent who pays for it on behalf of a child who is travelling.
Says Davies: “We’re ready to take the next step in mobile ticketing, which is something we’ve been working on with Virgin Trains. One of the constraints at the moment is that you have to have an app to drop the ticket into, and there’s a friction point there if you haven’t downloaded it. We’ve done some work with VT, Gatwick Express and Caledonian Sleeper, however, to deliver a ticket as an e-mail. But transferring a ticket that can be used anywhere is then a key constraint because you’re effectively giving the customer the means to reproduce a ticket as many times as they want. The scanning infrastructure needs to be more secure if we are to reduce the likelihood of someone using a ticket multiple times. In the medium term, the system can report if it’s already been activated or not.”
Riding on the success experienced by Northern and other train operating companies, Davies is confident that other TOCs will be forming m-ticketing policies shortly, if they have not already committed. He says that the business case is so strong that we are not likely to see the DfT prescribe it as a franchise condition. The DfT policy so far has been to take a step back, recognise the needs of individual operators and allow the industry to develop the most appropriate products, rather than imposing it as a new regulation.
“It’s early days for m-ticketing, but has there been a sales uplift? The revenue people in the TOCs we’ve worked with most closely are quite adamant that there has been a positive effect. Even if it’s an extra 1%, then that’s £ 50 million a year in revenue for the industry, which has to be good news. The DfT would be right if it were to stipulate in franchise conditions that offering m-tickets is not mandatory, but that they must be accepted. For a London commuter-based network, they might need something more contactless-based and not barcode-based, so the DfT is right to refrain from being prescriptive.
“The work done to date has given encouragement to other operators who are on a different journey technically, specifically those with smartcard ticketing that has been right for their contexts. Some TOCs are more in favour of m-ticketing than others, but all understand the necessity of a ubiquitous token.”
When pushed to offer a prediction about when a network-wide rollout of m-tickets can be achieved, both Bond and Davies seem sure that we will be close to a point of universal acceptance within two years.
With the technology gap largely bridged and the RDG accelerating the pace and direction of travel, Northern and other operators are certainly moving that little bit closer to Claire Perry’s ambitious vision of a digital-only future.
Concludes Davies: “The next task is to bring in the late adopters, and I think that’s going to take about two years. Many TOCs have legitimate concerns that we need to address, but we are part of the RDG’s strategy process, and it’s in our interests to support the industry.”
The final word goes to Bond, who adds: “The RDG work is a very important part of this as it looks at all the detail of barcodes. I’m leading the governance stream of the overall project, but from a governance perspective there are few obstacles. We’re down to working out some technicalities, so I think two years entirely possible."