Rail season ticket decline is not a rebellion against high fares, but a change to working lifestyles

Rail season ticket sales are massively down on last year – possibly by nearly 10%.  It is tempting to put this down to increases in fares, or dampening of the economy.  These are good reasons, but cannot alone account for such a drop in demand for travel.  Fares increases should be softening the market, but the precipitous decline seems unlikely to be explained by this alone.  London Underground, which has enjoyed a real terms fares decrease, whilst managing much better than  the train operating companies , has suffered slower commuting growth than expected.  Meanwhile, off-peak walk up income has grown by 3.7% – despite also suffering the regulated fares increases.   My hunch is that commuters are going into the office less and buying other tickets, and in the process saving a bit of money and a lot of hassle.  The five day commuter is a dying breed.  The background to this and its implications  are significant.  Let me explain…

Regulated fares haven’t technically gone up in real terms if RPI is your measure of inflation,  but even if we don’t believe that RPI is appropriate (its higher than CPI or wages), it seems unlikely that fares can outweigh the big cause of commuting: employment.  Employment in Central London has been growing slowly but steadily – people must be taking the train to get to those jobs.  Commuting is a pretty inelastic market – people can’t just give up jobs/homes when the fares go up so a price increase has a small impact on commuting levels.  My belief is that people are still travelling to work just less, due to a major shift in working practices.

Workplaces in the UK are reaching a tipping point.  More bosses are recognising the benefits of flexible working, and more staff are realising they can be more productive varying their location.  According to Lancaster University’s Work Foundation 30% of workplaces allow flexible hour and this will increase to 50% by 2020.  The five day, routine point to point commute will no longer be the norm in the coming years.  The reasons are diverse and fast-moving.  Part-time and self-employment in the knowledge economy is growing.  Millennials are taking a more relaxed approach to physical work-space, and companies, realising the potential  savings are enacting clear desk and locker policies.   Vodaphone estimate that UK businesses could save £34bn by “freeing up desk space and working flexibly”.   The world kept spinning when staff worked from home during rail strikes and the 2012 Olympics, and  we are recognising the benefits of spending more time at home with family instead of on overcrowded transport networks.  New technologies with increasing internet access and cloud working are enablers.  It adds up to major changes to demand on transport networks –  operators and transport agencies need to adapt their business models.

The  change in working patterns has been well underway for years, but a tipping point is approaching as cohorts move through life-stages.  Millennials generally want to work flexibly and as they take over managerial roles, you can guess they will be implementing flexible policies pretty quickly.   The generation born after 1980 became the largest cohort in the workplace last year, outnumbering Generation X and the Baby Boomers.The critical mass of university graduates (more than 50% in the UK) and the culture of flexible work at university may also influence attitudes to working unconventional hours.    The rights of parents wanting to work flexibility are increasingly recognised, and with extortionate childcare costs a couple can save a fortune rotating work-from-home days.  People want flexibility, people want to avoid commuting – indeed Samsung found that many people would choose flexible working over a payrise.  Its not suprising as CEBR estimate that 80% of people would gain at least an hour’s leisure time per week, and 15% would gain over six hours by working flexibly.

Critically now, the technology enables us to exercise this option.  With cloud computing, ubiquitous broadband and an “always on” culture, little is stopping us staying away from the office.  This doesn’t mean the end of shared workplaces – the best ideas come about in collaborative spaces, and the importance of face-to-face meetings is well established.  But the technology allows us to do the collaborative office stuff maybe two or three days a week.

What does this mean for transport and cities?  Can we deliver cost savings as peak demand decreases?  Or does the sporadic and polycentric nature of new working practices require greater network flexibility?  What is the impact on funding,  capital investment and the development of new models of transport like mobility as a service?

Firstly transport use will exhibit reduced regularity.  Generally, with fixed workspaces and hours we have seen people using the same mode and time of travel nearly every day in a routine that is easy to predict.  At the same time the need to arrive at work before 9am has created highly peaked travel patterns. More irregular travel will be harder to predict, but hopefully will reduce growth in the peaks.  Since the cost of providing trains and busses is determined by the peak vehicle requirement this is good news: i.e. we have to spend less on transport to enable people to get to work and stimulate economic growth.

Demand into Central London on a typical weekday. There are 9 times more journeys in the peak hour than at lunchtime.
Typical weekday demand into Fenchurch Street, the terminus of the C2C line (LT&S), which is primarily a commuter line.  Demand into London is remarkably peaked with 28 times more people travelling in the peak hour than at lunchtime.

However, transport providers will need to ensure services throughout the day can meet more diverse trip patterns.  This may fundamentally the way individuals will want to interface with the transport system.  There will be more trip chaining, and more demand for flexibility in pricing.  The political pressure for the transport operators to discount part time commuting tickets will become unstoppable and this has funding implications. The point-to-point rail season ticket will lose relevance.  The Department for Transport will need to specify flexible products, and this will lead to lower priced franchise bids, unless fares are increased elsewhere.

Interactions will continue to increase so demand for travel for meetings will only increase as work locations are spread.  This requires full productivity on the move.  Incidental spaces for interaction such as coffee shops and flexible meeting rooms will continue to grow.  Perhaps the rail sector could monetise unloved station buildings by creating flexible meeting spaces bookable by the hour?

The complexity of interactions, and the availability of phone data driven routing, will make Mobiity as a Service the normal way to move around cities.  People will expect multiple modes and providers to transport them under a common route planning and payment interface.  It is unclear which direction this model will head.  Either transport operators might provide an integrated mobility app service, or there might be a dissaggreation of route planning/payment from operation.  Operators would provide services to other businesses rather than actual riders.  For this to work for passengers, there needs to be a means for complaints and refunds to be determined appropriately.  Accordingly, for operators, revenue needs to follow the customer and respond to capacity constraint.

Flexible working may or may not be the cause of the crash in season tickets.  Its just an theory – there could be myriad other causes.  The theory could be tested by searching for a commensurate increase in day return tickets on commuting flows.  I don’t have access to the detailed data for this.

In any case there are huge opportunities arising from flexible working, especially in conjunction with smartphone and data driven multi-modal mobility services. Public transport operators need to be ahead of the curve otherwise on-demand individual car based transport will win the spoils.


The Work Foundation, Lancaster University (2016), Working Anywhere: A winning formula for good work?  https://www.citrix.com/content/dam/citrix/en_us/documents/oth/working-anywhere-a-winning-formula-for-good-work.pdf

Vodafone (2013) Responsiblity News http://www.vodafone.co.uk/cs/groups/public/documents/assets/vftst041707.pdf

Samsung (2016) Research from Samsung Reveals That a Quarter of Employees Would Give Up a Pay Rise for Flexible Working. http://www.samsung.com/uk/news/local/research-from-samsung-reveals-that-a-quarter-of-employees-would-give-up-a-pay-rise-for-flexible-working/
Zhong, C et al.  (2016) Variability in Regularity: Mining Temporal Mobility Patterns in London, Singapore and Beijing Using Smart-Card Data


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