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
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.
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