The Office of Rail and Road (ORR) has today announced that it will press industry to improve competition, value and innovation in automatic ticket gates (ATGs) and ticket vending machines (TVMs).
TVMs sell approximately 150 million tickets per year, and ATGs are crucial in protecting industry’s revenue from fare evasion. Both pieces of equipment are key parts of the passenger experience – their functionality and capability impacts on the safe flow of passengers through stations and the roll out of new smart ticketing solutions.
ORR launched a market study into ATGs and TVMs in March 2018. The update published today sets out the findings which include concerns that:
- The market for ATGs is a near-monopoly, with buyers of gates potentially paying too much; and
- The market for TVMs is delivering poor service quality with low availability of machines, something that has an obvious impact on passengers.
ORR wants to make the market for ATGs and TVMs more competitive in order to promote innovation and the development of new products. ORR proposes to work with industry to take forward significant change in how competition works in these markets, including how equipment is purchased, to generate more incentives for suppliers to invest and compete, and to ensure that alternative suppliers with new ideas are not deterred from entering the rail retail industry.
ORR welcomes proposals already put forward by the Rail Delivery Group in response to this study, to improve and simplify accreditation processes for businesses seeking to offer new retail solutions, including improvements to TVMs.
ORR is seeking feedback on its emerging findings and proposed action until 11 October 2018.
Tom Cole, ORR Head of Competition, said:
"Supply chains for key railway products should be competitive in order that they can deliver the innovative products and value that British railway passengers deserve.
"This study has revealed a number of concerns about weak competition for retail equipment, and the detrimental impact this has on price, quality and innovation. This is having a direct impact on passengers and taxpayers who ultimately pick up the bill, and miss out on new product developments.
"We are committed to working with industry to change how competition works and how this equipment is purchased to ensure new and existing suppliers are better incentivised to invest, innovate and compete in these markets."
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- The Office of Rail and Road is the UK’s rail regulator and strategic roads monitor for England. Follow us @railandroad.
- In addition to being the designated UK rail regulatory body, ORR is also a competition authority with powers held concurrently with the Competition and Markets Authority (CMA) to apply competition enforcement and markets powers in matters relating to the supply of services relating to railways.
- The market study launched on 14 March 2018. The statutory deadline for its completion is 13 March 2019.