Here in the UK there was news recently that commuter rail fares may rise by 8% in January 2012 at a time when the economy is struggling and fuel (petrol / gas) prices are very high. We are told that more people have been travelling by rail, and no doubt that is in part because of the cost of motoring, but we all know there are consequences when no one bothers about joined up planning. You really have to plan ahead.
I commuted into London for quite a few years and never enjoyed the experience. There was a feeling of uncertainty because the service was unreliable. Unfortunately it still is, with equipment failures always liable to cause chaos. It only takes one breakdown to have serious knock-on effects. If you have to be in a certain place at a certain time, you do not need the stress of worrying whether you will get there, especially if you have arranged a meeting.
Price hikes and value
My feeling is that actually such a sharp rise will be costly to the rail network. The extra money will not go into rail investment but to reduce the Government subsidy. Customers will need to pay more and way above inflation but out of a smaller amount of disposable income. And they will get no better service for their money.
The big advantage of rail over road is that it is an extremely energy-efficient way of moving people around; vastly better than having them drive. Another big plus is that if enough seats are provided, travellers are able to use the time either for reading their newspaper, book or Kindle, but yes, actually to work. None of that is available to a car driver.
Just the same, people always look at price over value unless positively persuaded otherwise. As we who sell know, prospects have to think about the experience to buy value, and no one is selling that value to commuters.
Another problem is that with the advance of technology, there really is no logic to squeeze customers who may in the next decade no longer needed to commute. We on-line business people already use conference facilities which don’t involve our leaving our offices or homes in order to talk to our colleagues, business friends and customers. Even for big business it won’t be necessary to have all the workers on-site in service and financial industries, which are the ones who have the majority of rail commuters. Rail customers will have choices and they may stop choosing rail.
Short-term thinking is costly
The short-term short-sighted policy of squeezing a market which is likely to go away as a result doesn’t make sense. Railways will remain a very efficient way of moving goods, but they are currently also a very efficient way of moving people. As in the tax world, the more people have to pay, the more the revenue will fall and the rail companies will not be paying tax if they have no profit. It all seems rather counter-productive and rather damaging. It doesn’t send a good message about saving energy which is necessary with dwindling carbon fuel resources.
You and I know that we need to deliver value to our customers or clients. We have to convince them that they are getting great value and we have to deliver that value. We can’t just put up our prices blaming the costs of our overheads. I wish the Civil Service advisers to Government understood that, but they have never been in business, have they?
Do you rely on the rail network? How do you feel about this? Is it a life sentence despite the cost?