ORR recommends moves to open markets for ticket machines and gates

13 March 2019

The Office of Rail and Road (ORR) has today published its recommendations following its market study into the supply of automatic ticket gates (ATGs) and ticket vending machines (TVMs).

The measures are a first step towards addressing issues in these markets preventing new suppliers from competing in ATG and TVM markets in Great Britain and hindering innovation in  ticket retail and revenue protection.

The recommendations call on industry players to work together to improve compatibility between systems - particularly between the mainline and London - simplify complex industry accreditation processes, and, work together to identify future solutions for revenue protection.

The market study, which launched in March 2018, found that the ATG market is a near-monopoly. We found that buyers of this equipment could be paying more than would be the case in a competitive market. Alternative suppliers are prevented from competing due to the fragmented way in which demand is brought to market and their inability to provide products that can connect to the TfL network. We found competition in TVM was moderate, albeit issues were raised about the unnecessary complexity of industry accreditation processes.

In response to these issues, we recommend that:

  • RDG hosts an industry working-group to look at ways on incentivising new entrants into the market, explores options for consolidating procurement, and examines options for greater compatibility between mainline and metro systems
  • TfL and industry work together to develop a solution for alternative ATG suppliers to connect to the TfL network
  • RDG continues to simplify its accreditation procedures for new and innovative retailers.

The ORR recognises that change will take time to achieve and will come incrementally. However, we welcome the positive initial response and we will continue working with colleagues from across the industry to take our recommendations forward.

Juliet Lazarus, ORR Director of Competition and General Counsel, said:

"Supply chains for railway products must be competitive in order to deliver innovative products and supply the value for money that passengers deserve.

"Our study has revealed weaknesses in competition which, in turn, have had a negative impact on price, quality and innovation, which have a clear impact on passengers and taxpayers.

"There is still a long way to go to rectify the issues, but we welcome the industry’s willingness to look for ways to fix these competition problems and will be working with them to bring about positive change."

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  1. The Office of Rail and Road is the UK’s rail regulator and strategic roads monitor for England. Follow us @railandroad.
  2. 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.
  3. The market study launched on 14 March 2018. An update paper was published on 13 September 2018.