UK: Robust regulatory safeguards are needed to ensure that the ticket retailing market remains open, fair and attractive to investors, the Independent Rail Retailers trade association says in its response to the government’s consultation on rail reform.
IRR says competition has ‘transformed’ retailing, helping to reduce the cost of ticket sales, increase revenue and improve the customer experience.
It says the move from a fragmented to centralised industry structure offers ‘a unique opportunity to create a level playing field’ by addressing retailers’ current concerns and ensuring future competition.
IRR says Great British Railways’ future ticket retailing activities must be managed as a standalone function, with full legal, accounting and financial separation to prevent bias and anti-competitive behaviour.
Financial separation would also allow commission levels to be reviewed independently so that they reflect the true cost of retailing, with consideration given to developing new rates reflecting the different costs of sale associated with different products. Commission and cost allocation should be fair and transparent, with GBR Retail operating on the same terms and an independent regulator to maintain market integrity.
IRR would like the Competition & Markets Authority to have a mandatory role in reviewing GBR subsidies, with binding recommendations to mitigate distortions. It says IRR members have experience of successful legal challenges against anti-competitive practices in Spain and in Germany, but they would rather resolve problems more collaboratively.
IRR says all retailers should have equal access to the full range of fares, products, data and services, and licensing should be overseen by the Office of Road & Rail to avoid potential conflicts of interest caused by GBR self-licensing.
IRR says the market must be designed to be fair and safeguards must be embedded from the outset, rather than bolted on as remedies for poor behaviour.
‘The consultation did recognise the role of third-party retailers in adding significant value to the rail marketplace and playing a fundamental role in driving innovation and attracting more customers to the railway’, IRR CEO Anthony Smith told Rail Business UK. ‘We are at a real crossroads here. It’s an opportunity to get this right’ so that the private sector can help GBR ‘fill empty seats and grow revenue.’
