Atomic Systems

This is something I've been wondering for a while.

My local station is served by East Coast, CrossCountry, and ScotRail, but as a normal ticket allows you to travel on any train that calls at the station, how do the TOCs split up the money? Was wondering because there's not much of an indication which TOC the passengers will be travelling on.

Thanks,
Daniel

Daniel,

http://en.wikipedia.org/wiki/ORCATS

Andy L

ORCATS divides revenue from 'any TOC' tickets by taking things like departure time and journey duration into account along with connection times.

Say you're travelling from Newcastle to York at around 11:00.

There's an 11:02 XC service (55mins), 11:05 EC service (55mins) and a 11:15 (1hr 10mins) TP service. ORCATS will assume that more people will travel on the 11:02 rather than the 11:05 as it leaves first when they're so close together and allocate a larger share of revenue. The 11:15 service is slower so it will assume the 11:02 and 11:05 will be more popular and again give a larger share. Multiply this equation for all services thoughout the day/week/year and you get the picture.

This is why Open Access causes such a stir. They in theory nobody could be travelling and yet they still get a share of the profits whilst selling their own cheaper tickets onboard which they keep 100% of.

This is why TOCs are so keen on advance tickets as they get 100% of the profit. Around 50% of East Coasts tickets between York and London are sold as advance fares.

The other sneaky tactic is for a TOC who doesn't set the fare to offer a TOC only ticket. As East Coast is the principle operator between Newcastle and York they set the fare and the other TOCs have to follow suit. However last year XC introduced an XC only ticket, so you could travel at anytime so long as it was with XC. Again XC would get 100% of the profit rather than share it out. This was/is also the case with Virgin offering much cheaper fares on runs like Brum - Cov where I think LM set the fares. As East Coast/LM set the fares they can't offer their own 'EC only' fare.

All of this can be calculated through a system called MOIRA so TOCs can sit and alter the arrival/departure times and see what affect this will have on revenue. Although with todays busy network its hard to make any major changes to an individual train path.

ORCATS doesn't take train quality into account or company reputation. A shame really as I always try and travel EC over XC!

Finally, whatever TOC sells you the ticket (of any type) they get either 7 or 10% of that tickets value. So buying a EC ticket for £100 on XC's website instantly gives them £10 before you've even set foot on a station. The same goes for booking offices and ticket machines at stations. Season tickets are 2%.

Ali

Thanks for the info, always wondered how it worked.

I think the XC only fares have now been removed as I tried to get a Durham - Newcastle XC only the other day and the automatic ticket machine no longer had the option.

mforeman04 wrote:I think the XC only fares have now been removed as I tried to get a Durham - Newcastle XC only the other day and the automatic ticket machine no longer had the option.

Indeed, although First Class XC only fares still exist on certain flows, it appears that the XC only walk-on standard tickets have been withdrawn.

startours wrote: My local station is served by East Coast, CrossCountry, and ScotRail, but as a normal ticket allows you to travel on any train that calls at the station, how do the TOCs split up the money? Was wondering because there's not much of an indication which TOC the passengers will be travelling on.

The short answer is "using ORCATS", which AlistairW has gone into a bit more detail on. However we do not know the full details of ORCATS, only rough principles. No-one knows how much revenue is allocated in any scenario where more than one TOC operates the service. The things we do know (e.g. "It is weighted toward direct trains" and "Overtaken trains receive less or no revenue") raise many questions...

yorkie wrote: I believe there are very few people in the country who will know where the revenue for a [a specific ticket] goes. The formula for calculating ORCATS payments is a closely guarded secret. We know very little about it.

If any TOC feels that they are not getting a fair proportion of any particular flow, they can request for an audit to be carried out. However this may be costly and it is unknown (that I know of) who pays for the cost of such an audit.

I'd really like to know, for example, how much ORCATS revenue the 2033 King's Cross - Nottingham (change @ Grantham) gets versus the 2030 St Pancras - Nottingham (direct but arrives Nottingham 2 mins later and overall 5 mins slower). I suspect most people here would go for the faster option as it's a vastly superior train and service with better on-board facilities, catering etc, and most here would know it's a simple case of walking from one side of a platform to another, and the chance to get fresh air for a few mins during the journey is usually welcome. But you can guarantee any elderly, disabled, or families using the train would want to get the direct train and wouldn't realise that they're getting a rattling mid-range DMU for such a journey (and they might not even care!). The irony is that those coming from the London Underground station (ie, the majority of passengers I reckon) would do a lot less walking at King's Cross and at Grantham combined than the St Pancras people would! But would ORCATS know any of this? I'd hope that ORCATS would give more money to the faster journey, but I suspect probably not as the direct train is only 5 minutes slower and it is weighted toward direct trains. But we can only guess!

Is that before or after the government's taken it's cut. ( what cut you might ask, to which that answer is the one they are paid for giving some companies the better franchises.)

davejc64 wrote:Is that before or after the government's taken it's cut. ( what cut you might ask, to which that answer is the one they are paid for giving some companies the better franchises.)

This post is misleading. There are few TOCs that pay a premium to Government; most require a subsidy. The details will be in the franchise agreement.

So much for a privatised railway system, The companies might be privately owned, but the system is hardly privately run, since the government dictates what fares they charge, what services they are allowed to run and where those services are allowed to stop.

The system will never be privately run as its a public service. No private company is going to run a loss making service for "the greater good". In a truly private railway you'd never get the early morning or late evening services that many people depend upon yet the service never pays for itself.

Thats before we get into the wider economic benefits good rail links bring and that the fare box will never support the huge infrastructure investment costs.

As mentioned elsewhere in detail the government probably does have too much say but when they're funding around 50% of the total cost of the railway it makes them the largest shareholder as it were so has the biggest voice. If farebox revenue was significantly larger then passengers would have more say. In theory?*

Ali

*This is more of a moot point than my own opinion.

Just wondering what they do money when there are delays... Like for example, if FCC had a train break down at stilton fen, which caused delays to EC, would EC have to pay the compensation out or alternative travel costs for their passengers, even though it was another TOC that caused the problems or would they get the money back? Also, if it was infastructure that caused an issue, would the TOC get money from Network Rail?

I seem to recall that it depended on the cause of the delay - i.e. if an infrastructure problem caused the delay, it would be NR responsibility to compensate the TOC who would compensate the passenger and if it was another TOC causing the problem it would similarly pass through in the same manner.

Not sure what happens when it is a "matters beyond our control" situation such as vandalism or person on the track though.

When it comes to infrastructure delays NR will pay compensation to the TOC. The amount varys between TOCs and are usually related to the fixed track access charges that they pay. So the higher the fixed access charge the higher the compensation per minute. Northern for example is a matter of pounds per minute, East Coast is in the low hundreds.

TOC on TOC delay is payed in the same manner although I am unsure of the rates.

Neither payments have anything to do with the amount compensation issued to passengers. The real costs to the TOC in major delays comes down to additional train staff or pay.

Acts of god such as flooding are exempt, I'm not sure about tresspass though as perhaps NR could prevent this?

Ali