I jumped at the chance to speak today (26 January 2016) at the seventh Transport Ticketing and Passenger Information Conference. Because although transport ticketing has come a long way in 7 years, the impressive technology on display here today shows how much more can be delivered. And I think we are at a tipping point of improvement and innovation, where government can help but private transport operators can drive forward and deliver the changes.
So this morning I would like to give you a refreshed government perspective on transport ticketing. To set out what has already been achieved. But also to set out a direction of travel for the future.
How far we have come
The great news from recent years is just how far smart ticketing has spread outside London.
While London still leads in the number of journeys made using smart tickets, the regions are catching up.
Britain’s 5 biggest bus operators have just announced their plan to introduce contactless payments on all their 32,000 buses operating outside London by 2022. And next month, customers with a smart card registered account travelling on Essex’s C2C rail services who suffer a delayed journey, even for only a few minutes, will receive compensation automatically.
While rail customers in the Midlands and the north can now download tickets directly to their mobile phones and have them scanned on-board and at the station gatelines. I saw the system in action last July and was really impressed — a simple and quick digital ticketing system planned and introduced by the rail industry working together. It’s fitting that the north of England, the birthplace of the modern railway and a place where the first Edmondson railway ticket was issued is once again pioneering the future of ticketing.
That pioneering spirit is one reason why in the Spending Review we committed £150 million to support Transport for the North — a new partnership of the northern city authorities, government and national transport agencies who are together working on a plan to bring a single smart ticketing and travel information system to the north of England, making travel by rail, bus, Metro and tram as simple and convenient as possible.
Making rail journeys better
So there’s a huge amount happening across all forms of transport.
But as Rail Minister, my primary focus is on making rail journeys better. It’s no easy responsibility.
For decades, successive governments have failed to spend the amount of money needed to support the demands we are placing on our railway network. Since privatisation, passenger journeys have more than doubled, and customers rightly expect a good journey for what they are paying.
But by 2009, the World Economic Forum ranked the quality of Britain’s railways as 21st in the world. Far behind Germany at 5th and France at 4th, and even one place behind India. That is completely unacceptable.
Rail is not some heritage “has been”, but a vital, fast and clean part of a 21st century transport landscape. So since 2010, we have begun a massive programme of rail investment: committing over £38 billion to improve our railways — and that sum does not include the vast bulk of HS2 spending.
We are building new stations, and refurbishing old ones like Reading, Manchester Victoria, Birmingham New Street and London Bridge. Laying new tracks. Electrifying more than 850 miles of the network. And bringing thousands of new train carriages into service.
Since 2013, we have also had a fresh approach to franchising. Rather than assessing franchise bids purely on the basis of the best possible price, we also take into account quality of service for rail customers. So any operator who wants to run a rail franchise in this country must show how over the lifetime of the franchise they will deliver a better service for customers.
It’s an approach that is delivering real benefits, such as better trains, more frequent services, onboard wi-fi, refurbished stations and better customer information and service.
But we cannot claim to have truly modernised our railways if we don’t also transform ticketing.
South East Flexible Ticketing
Since 2011, we have made good progress on smart ticketing in the south east of the country through the South East Flexible Ticketing programme, known as SEFT.
SEFT is a government-backed programme under which train companies can collaborate to offer smart ITSO-based tickets that work seamlessly across the south-east.
The programme has grown to include 5 train companies covering over 70% of the south-east’s annual season ticket commuter market.
But SEFT is doing more than extend smart ticketing coverage. SEFT is showing that different operators can come together. They can get their back-office IT systems to talk to one another. And they can provide a seamless customer experience across different operators and different transport modes.
So SEFT has helped smart ticketing technology to mature and industry expertise to grow. But above all, it has helped us reach the point at which future innovation can be led by the private sector. By companies who know their customers’ needs and have the ambition to meet those needs, and an ambition to run their businesses with more innovation and efficiency.
And it’s that sense of ambition that our new approach to franchising is designed to stimulate.
So when last year we set out our aims for the forthcoming Southwestern and West Midlands franchise competitions, we said that we wanted bidders to make a significant increase in the use of smart ticketing.
When the competition begins in earnest in the spring, we expect to see some really exciting proposals. But this expectation isn’t a one-off.
In the future, anyone who bids to operate a rail franchise will need to show plans to offer smart ticketing that meets customers’ needs.
Thanks to our SEFT programme there’s a proven system ready for train operators to use, so customers can enjoy a seamless travelling experience.
The future — moving on from magstripe
Because, after all, the industry’s overriding commitment should be to the fare-paying customer.
And if smart ticketing is to become established on our railways, it will mean the death of the tangerine ticket; the familiar orange magstripe paper ticket that has served Britain’s rail customers for thirty years.
A ticket that has done its job well, but now seems woefully inadequate for the future — especially for an industry focused on customer service.
As Rail Minister and a regional MP, I travel on our railways a lot. And I know how after a few journeys the tangerine tickets proliferate in every purse, pocket and bag.
Tickets, seat reservations and even the receipt from the ticket machine — all the same size and colour. All needing to be physically printed at some point in my journey. Easily lost or mistaken. Leading to the familiar gate line ‘pocket pat-down’. Or the shamefaced plea for mercy from the harassed station staff. “Honestly I did buy the return, here is my receipt.”
Imagine how much worse that is when you are the Rail Minister.
But it’s not my experiences that matter. But the missed opportunity to link ticketing across travel modes, deliver much more customer convenience, and drive great customer relationship management.
Any good business wants to get to know its customers better. To know their preferences and habits. To be able to close the gap between what customers pay for and what they actually use. And to offer new products and services that meet their needs. That’s what smart ticketing can offer both company and customer. And that’s why it’s important that in the longer term customers are offered not just digital tickets, but truly smart tickets.
I am often asked what sort of smart ticketing the government wants to see. And my answer is this. The government is agnostic. The choice should be the customer’s.
If the customer wants to load their tickets onto the bank card they used to buy their tickets online, or onto their phone, a watch, or a bracelet, or, if like one Moscow Metro user they want to insert a chip under their skin, the choice ought to be theirs.
And rail operators should be free to figure out how to deliver what their customers want and what works for their business.
But amid all the radical ideas, careful thought must also be given to the needs of customers who over many years have grown used to paper tickets.
There’s nothing wrong with a big bang introduction of new technology. But some people will benefit from a staged approach, or extra help from staff. Many people still like interacting with others when buying tickets. Or carrying paper proofs of their purchase. And of course, smart devices need electrons.
So I hope that I have given the conference plenty to talk about.
Since privatisation, customer numbers on our railways have more than doubled, and the government is now investing an unprecedented sum of public money in rail.
It’s fair to expect the industry to respond with new ticketing that customers want to use. Because the momentum is with smart ticketing. It’s no longer an optional extra. It’s an inevitability.
Smart ticketing has already made travelling easier for millions of customers. Now the challenge is to bring its benefits to millions more.
That’s an exciting prospect — and I’m looking to the industry to make it happen.