Cost of rail tickets could fluctuate based on commuter demand

The price of train tickets could be based on the level of demand as part of a government trial.

Rather than the traditional fixed-price ticketing system based on peak and off-peak windows, a new more reactive “airline-style” system, dubbed “demand pricing”, is set to be introduced on one of the country’s major rail lines.

The plan will be revealed in a speech on Tuesday by Mark Harper, the Transport Secretary, with a trial being launched on the government-run LNER line before a potential wider roll-out.

It will be part of a major overhaul of ticket pricing on the railways, which will also see the price of single tickets on many lines halved and a pay-as-you-go system installed for commuters travelling in the South East.

Demand pricing

Demand pricing, also known as dynamic pricing, is used by technology giants like Amazon and Uber and sets prices on an almost minute-by-minute basis using algorithms, based on demand and other factors.

In times of high demand, the price “surges”, which could mean the most popular services are more expensive.

It has become particularly popular with the airline industry and would replace the rigid system peak and off-peak tickets currently in place across Britain’s rail network.

The plans will be unveiled by Mr Harper at the annual George Bradshaw address on Tuesday evening, where he will say: “The industry’s road to recovery after Covid has been tough, with reform badly needed to win back that lost passenger revenue while putting customers first.

“Today’s announcement is the latest example of this government taking bold decisions and getting on with the job.”

The Transport Secretary will also confirm that many single fare prices will be slashed on the majority of journeys as part of a major overhaul that will scrap return tickets for a single-leg pricing model.

Currently journeys, such as the one between London and Durham, can mean off-peak single fares cost just £1 less than a return fare. Under the new reforms, one-way fares like this will be almost halved.

Single-leg pricing

On Sunday, The Telegraph revealed that Mr Harper was planning to scrap return fares and roll-out “single-leg pricing”.

In his speech, Mr Harper will guarantee that single fares will never cost more than half the cost of a return.

This will come as a relief to passenger bodies, who earlier welcomed the introduction of single-leg pricing but told The Telegraph that it would only work if single fares were not made more expensive as a result.

Passengers travelling across the South East will also benefit from the roll-out of a pay-as-you-go ticketing system, which will allow people to make contactless payments across different operators.

The overhaul of rail ticketing comes after years of campaigning by groups to try to simplify the rail ticketing landscape, which has an estimated 55 million different fares across the network.

Alongside the ticketing changes, Mr Harper will reveal more details on how Great British Railways (GBR), the new central body created to oversee the management of the network, will work alongside the private sector.

At the weekend, politicians raised concerns with The Telegraph that the new GBR could throttle the role of the private sector.

Mr Harper will say: “Growing the economy is rightly one of the Prime Minister’s top five priorities, and the measures I announce today will unleash more competition, innovation and growth in an important sector of our economy.”