The Office of Rail and Road (ORR) has recently published the conclusions of its Retail Market Review. The Review focused on who sells tickets, what tickets are sold, where and how tickets are sold and the ticket format. Currently train operating companies (TOCs) determine many of the rules and industry practices that third party retailers are subject to when selling tickets.
Since June 2015, the ORR has been working with TOCs, the Rail Delivery Group (RDG) and third party retailers to develop four main recommendations. TOCs (through RDG) plan to implement the following three recommendations by March 2017:
- Transparency – publish guidance that determines third party retailers’ commission and cost contributions for shared IT systems/data.
- Working Group – set up a formal working group consisting of existing or prospective online third party retailers.
- Dispute Resolution – introduce an independent dispute resolution mechanism for online third party retailers.
The ORR's fourth recommendation to appoint an independent customer champion who would participate in TOCs' decision-making groups was not accepted by RDG. RDG felt this would undermine its accountability with third parties. The ORR continues to support its recommendation and hopes that it will form part of changes to RDG governance in the future.
Retailers' access to discounted fares
The ORR highlighted that the lack of availability of discounted fares through all retail channels may raise competition law issues. Restricting some third party retailers from selling discounted fares may encourage passengers to use other websites which benefit from them, ultimately undermining competition in the market place. The Review has examined the industry as a whole and not considered the conduct of any particular TOC – individual TOCs should carefully assess their conduct under the competition rules.
Improvements to the retail market
The ORR has also been progressing a number of other recommendations since June 2015, such as:
- TOCs encouraging smaller third party retailers to enter the market (for example, convenience stores).
- RDG facilitating the development of ticket vending machines. By March 2017, the ORR will report on whether the TOCs have made progress to improve the machines.
To what extent will the ORR Review benefit consumers? Whilst the recommendations draw attention to the issues, they remain only recommendations. Time will tell the extent of the benefit to customers and other stakeholders. Other issues remain at large, such as the myriad of different ticket options for a single journey and lack of transparency about these. There is also a risk that ticket sales by individual TOCs may be scrutinised by the ORR under the competition rules if retailers are able to show that they are being excluded from selling a reasonable range of fares for the rail services operated by the TOC.