16 January 2016
A generic piece on fare increases v2.0
Patrick Crozier

Every January in Britain, the rail companies put up some of their fares. And every January in Britain lots of people complain.

Which is odd, because most other businesses are constantly changing their prices but we don’t get anything like the same fuss when they happen to put some of those prices up.

The reason, for the most part, is government. In Britain the government uses the threat of violence to regulate a certain number of fares, largely those on London’s commuter routes. In January the government allows rail companies to increase their fares in line with inflation plus or minus a small percentage.

As well as involving violence regulation has all sorts of negative side effects. The main one is overcrowding (see A generic piece on overcrowding). It also deprives rail companies of the sort of price signals they need to run their businesses successfully.

The term “price signals” deserves some explanation. Essentially, it is a rather hoity-toity economic term for when consumers and producers change their behaviour in response to changes in price. As consumers we do it all the time. We do it every time we say “that’s too expensive” or “that’s good value”. As employees we say do it when we say “that job’s offering more money, I think I’ll take it.”.

But producers do it too. They say “That’s expensive, we could make a profit out of doing that.” It is the phenomenon that makes markets work. Without it we wouldn’t have the adundance of goods of all kinds we currently enjoy.

Because rail companies are deprived of price signals they don’t know how much people are genuinely prepared to pay for a seat, how much they are prepared to pay to stand, and, therefore, don’t know what sort of mix of seating and standing they should be providing. Nor do they know how many trains they should run and whether increasing the number of trains would justify the cost of, for instance, new signalling.

OK, so maybe you’re not quite so keen on the theory. But take a look at the practice. What do rail companies do when they are free to set their fares? Before the Second World War there was very little regulation of fares. In the period from 1900 up to then all sorts of improvements to the railways took place. This was mainly in the form of electrification but also other things such as comfort, safety, speed and frequency. That’s not to say that some people didn’t stand, they did, but generally-speaking things were getting better. Few people complained about fares being too high.

If you’re unconvinced by that look at other industries. The general rule is where there are price controls there are shortages and where there aren’t, there’s abundance.

It is worth pointing out that while allowing rail companies to charge something nearer the market rate is a step in the right direction so long as regulation and the threat of regulation exists, it is difficult for companies to plan for the future. And given the wheel-rail split and the short-term nature of franchises that is even more the case.

So, you would allow train companies to charge whatever they like?

But wouldn’t they charge the earth? And when they do wouldn’t that mean that lots of people could no longer afford to get to work and end up unemployed?

What we have here is a conflict between the short term and the long term. The advantages of market prices will for the most part only be seen in the long-term while the disadvantages (higher prices) will be seen almost immediately.

One of the sad things is that we don’t know how severe the short term pain is likely to be. It might indeed lead to the doomsday scenario but equally other things might happen. For instance, in many cases employers may find that they don’t need all their employees to show up on the dot at 9 o’clock in the morning. So, it may be possible for many of them to travel off-peak. Now in Britain we already have low prices after 0930 but not before 0700. This is odd because before nationalisation there were lower fares for early-morning travel known as Workmen’s Fares. If they could do it then we can surely do it now. Equally, many rail companies may take the view that the profit-maximizing price isn’t that much higher than it is at the moment or that a better way to gain goodwill would be to approach it at only a slow pace, say 20% a year or so. But the point is that impoverishing ones customers is unlikely to be good business. The sensible rail company would seek to minimize the pain.

What sort of long-term gain do you see?
It is difficult to gaze into the future. That’s one of the weaknesses of being in favour of freedom: you can’t predict with any certainty what will happen. For instance, it may be the case that something comes along which replaces railways for good.

I could speculate on rail companies running longer trains or double-deck trains or having different classes of carriage: guaranteed seat, standing-room only etc or introducing seats that are locked out of use at peak hours, but I really have no idea what would happen. All I can be sure about is that it is likely to be a lot better than the situation that we have at the moment.

I take heart from the fact that in the days of fare freedom when the London and South West Railway was about to introduce the first electrified services they reduced the fares. Why? One can’t be certain but my guess is that electrification meant that they could run more services so they wanted more people to use them.

11 March 2012
Today marks ten years since Transport Blog’s…
Patrick Crozier

...first post. Thought I should mention that.

14 January 2012
A generic piece on fare increases
Patrick Crozier

Every January in Britain, the rail companies put up some of their fares.  And every January in Britain this leads to outrage.

Which is odd, because most other businesses are constantly changing their prices but we don’t get anything like the fuss when they happen to put some of those prices up.

The reason, of course, is government.  In Britain the government regulates a certain number of fares, usually on the busy London commuter routes.  Or, to put it another way, in Britain the government uses violence and the threat of violence to regulate fares.  It is in January that the government allows rail companies to increase their fares in line with inflation plus or minus a small percentage.

Not only is this practice wrong but it also distorts the market leading to overcrowding (see A generic piece on overcrowding).  It also deprives rail companies of the sort of price signals they need to run their businesses successfully.  Because they don’t know how much people are genuinely prepared to pay for a seat, against how much they are prepared to pay to stand, companies don’t know what sort of mix of seating and standing they should be providing.  Nor do they know how many trains they should run and whether increasing the number of trains would justify the cost of, for instance, new signalling. 

Worse still, while allowing rail companies to charge something nearer the market rate is a step in the right direction so long as regulation and the threat of regulation exists, companies are unable to plan for the future.




What sort of long-term gain do you see?
It is difficult to gaze into the future.  That’s one of the weaknesses being in favour of freedom.  You can’t predict with any certainty what will happen.  For instance, it may be the case that something comes along which replaces railways for good.


Notes for the next version

“Outrage”.  We need a better explanation as to why.  I think a lot of it is to do with fear: “I’ve got my job, bought my house and if the fares go up too much one of them is going to have to go.  Hey, I could even end up destitute.” Hmm, actually that’s the fear of fare freedom.  The outrage at a rise is different.

We need something on the history of this.  Before 1940 there was almost no fare regulation at all.  Things seemed to work fine.  Certainly, there was nothing like the outrage we get these days.  OK, there were some problems immediately after the First World War with delays and overcrowding.  I’ve heard the explanation that this was to do with the introduction of an eight-hour day but I would like to get to the bottom of this.

“Not only is this practice wrong...” Weak.  What I want to get across is that the government is using violence and violence is wrong.  I want to point out the inherent niceness of freedom.

Price signals.  Too technical.  I think we need to imagine a situation where price signals would have an impact and avoid using the term entirely.

Could do with a piccie as well.

Actually, I’m not even sure this is the right article.  “A generic piece of fares” might be more appropriate.

17 November 2011
Good riddance to Cuba’s old cars
Rob Fisher

This slightly odd BBC News video was linked on Google Plus with this description:

As President Raul Castro agrees to allow people to buy and sell cars in Cuba, there are concerns the move could spell the beginning of the end for many of the island’s classic American cars.

This sent flecks of spittle flying around me, but the text does not actually appear on the BBC site I wonder where it came from. Although Michael Voss sounds a bit sad, he does point out that Cubans will be glad to see the back of these cars. One man inherited a car from his father, but would rather have the money to start a business. Well, that’s kind of the point of free markets right there: you can swap stuff you don’t want for stuff you do.

01 November 2011
Transport related photos
Brian Micklethwait


22 October 2011
Advice to the new Secretary of State for Transport
Patrick Crozier

I see we have a new Secretary of State for Transport.  You know what? I’ve even met her! Long time ago, mind.

When I heard that news I started thinking about what advice I would give (fantasising that I might ever be asked).

I started coming up with a long list of sensible things like: ending the wheel/rail split, liberating fares, tearing up the Transatlantic air treaties, privatising the road network etc.

But then it occurred to me that what I am doing here is suggesting ways of making the world a better place.  That is not necessarily what politicians want.  What politicians want is to keep their jobs, be popular and climb the greasy pole.  In that case what you really want to be doing, as Ernest Benn said is to be: “...looking for trouble, finding it whether it exists or not, diagnosing it incorrectly, and applying the wrong remedy”

Fortunately, for Justine, most of the non-existent troubles already have plenty of wrong remedies.  Hence, we have CrossRail and HST2 and fare control.  About the only good solution is the proposal to raise the motorway speed limit to 80mph.  That is likely to be hugely popular even if (much to my annoyance) it comes from the EU.  Get your paws all over that one, Justine.

“But what about the economic crisis?”, I hear you say.  That’s the wonderful thing.  The Secretary of State can almost completely ignore it.  Sure, one day it will happen and it will happen to the Department of Transport good and hard.  HST will be cancelled, CrossRail will be abandoned, fares will go up.  It may even be so bad that the government sells the motorways to get it through the week.  But when that happens it becomes oh-so easy for a Secretary of State for Transport to say: “Oh dear, unexpected economic conditions, no money, nothing I can do etc, etc.”

So, just from a political standpoint (putting prosperity, wealth generation and morality to one side for the time being) I see no reason why Justine Greening shouldn’t promise the earth.

What has she got to lose?

03 September 2011
A generic piece on overcrowding on trains
Patrick Crozier

Some overcrowding
Most Londoners know what it is like to get on a train at peak hours.  The carriage will be crowded.  You’ll be so tightly packed that you won’t be able to read.  You’re almost certain not to get a seat.  And even if you do manage to get a seat you will find it too narrow and lacking in legroom.

The reason for this is simple enough: plain ordinary supply and demand.  Normally prices adjust so that supply and demand are in balance.  But when fares are artificially held down by the government - as they are in London - supply falls and demand increases.  In this case it means less space and more passengers and thus, overcrowding.

[As an aside. I always find it funny how the same people who condemn high fares also condemn overcrowding which is a direct result of low fares.]

There is also an issue with investment.  Even if the incentives lined up there would be a problem.  Train operating companies (last time I looked) typically have a government-mandated franchise period of about 7 years.  But trains take 20 years to justify the investment so it makes no sense for operators to buy longer trains - let alone build the longer platforms needed to accommodate them. [Not that they could given that these are owned by Network Rail.]

Now the overcrowding situation in Tokyo is far from perfect but if I had to be overcrowded I would be overcrowded in Tokyo.  There is more standing room so you are more likely to be able to stand up straight and there are more doors per carriage so it’s easier to get out.  And if you are extraordinarily lucky and manage to get a seat it is at least comfortable.  I can’t help but think that this is due to Japan’s rather more sensible private railway system in which operators own both the trains and the track and can do more or less what the like with them.  [Except, incidentally, when it comes to fares which like London are held down.  Hence the overcrowding.]

Isn’t all this just a case for state ownership?
We tried that.  It was called British Rail and there was plenty of overcrowding there too.

Why was overcrowding so bad on British Rail?
Because politicians liked keeping fares down but disliked shelling out for new rolling stock.

But if fares were free wouldn’t the train companies put them up sky high?
I don’t know what would happen initially.  When markets are introduced overnight all sorts of funny things happen because the price signals aren’t in place.  It takes a while for things to adjust and (in this case) for train companies to work out just what their customers really want.  What you have is a choice between short-term pain and long-term gain or short-term gain and long-term pain.  There is no short-term gain, long-term gain option to my knowledge.  [Writing this I am reminded of Brian Micklethwait’s quest for examples of where freedom makes things better overnight.  Not here I’m afraid, Brian.]

It is worth remembering that in the days when fares were freer (before nationalisation) although people grumbled (particularly about freight rates - but that’s another story) it wasn’t that big an issue.

Isn’t it pretty obvious what people want? What they want is a seat.
Is that true?  Sure they want a seat but how much do they want it?  Let’s face it on many lines in London you can get a seat if you are prepared to pay the First Class fare.  But how many people are prepared to do that?  The truth is that people are prepared to forgo the comfort if it means saving some money.

For what it’s worth, my guess is that given enough freedom and enough time things will work out for the better for just about everybody.  Some companies will change their working hours for some staff encouraging them to travel outside the peak.  Train companies will have a variety of classes ranging from luxury to standing-only depending on what people are prepared to pay.  And standing will be nicer.  One of the worst aspects of standing in London is that you can never stand up straight.  You’re always standing at a slightly contorted angle.  Usually because you are bang next to a seat.

But I think you would also find that train companies would invest heavily on routes people wanted to use.  They would lengthen trains and platforms and improve headways and remove bottlenecks.

15 August 2011
Kulula liveries
Rob Fisher

The South African budget airline Kulula has some amusing liveries:

Flying 101 livery

This Way Up livery

Snopes has a video of their quirky pre-takeoff announcement. Novel at first, but possibly annoying if you fly with them all the time. I do like the liveries, though. The side of a plane is an interesting canvas, it’s nice to see some imagination used to paint it.

11 August 2011
A380 airlines compared
Rob Fisher

The LA times has a nice picture gallery comparing the ways different airlines have used the space on their A380s.

I think Emirates first class wins on bling factor alone. The features sound nice, too:

Enclosed suites afford passengers in first class a high degree of privacy. The suites feature sliding doors, a personal mini-bar, wardrobe and a 23-inch wide viewing monitor. The seats recline to form a fully flat bed. A divider that separates adjoining suites can be lowered for passengers traveling together. Like business passengers, first-class fliers have access to an exclusive lounge.

18 July 2011
Crossrail goes past City Airport without stopping
Brian Micklethwait














15 July 2011
Mandatory vehicle insurance moan
Rob Fisher

I am a fair weather motorcyclist. I tend to tax my bike for 6 months of the year. For the other 6 months I have to declare SORN—statutory off road notification. This is onerous enough. And if we get some freakish good weather in November it takes considerable effort to get it taxed and then SORNed again. Since tax refunds are only given for whole months, if the good weather only lasts a week I lose.

To add insult to injury, there is a new rule that you must have insurance unless your vehicle is declared SORN, even if you are not using it on the road. It so happens that my insurance expires tomorrow but I have no plans to use the bike for a few weeks. I don’t want to pay for insurance I don’t need, and if I do SORN the bike in the middle of the month I won’t get the full refund. Perhaps more importantly, I don’t have time to research insurance quotes and I don’t have time to visit the Post Office for SORNing and re-taxing.

Politicians and bureaucrats do not consider the full costs of their interference in people’s lives.

12 July 2011
Landing on Barra beach (provided the tide is out)
Brian Micklethwait

A friend recently journeyed to the Hebrides, for one of those team-bonding, business-building get-togethers.

She had an interesting journey.  If, like me, you like small airports, you’ll love Barra.  It’s a beach with a bungalow on it!  Well, a bit more than a bungalow, but not a lot more.

So, presumably you can only land when the tide’s out.


The schedule is still governed by the ebb and flow of the tide …

Here’s the plane she rode in on, on the beach, snapped with her iPhone:


It’s a British European de Havilland Canada DHC-6 Twin Otter, or so I presume.  I like these obscure planes you’ve maybe not heard of, that do so much of the quiet donkey work in the world’s out-of-the-way places, of which, I surmise, there are a very great many.

Here’s a video of the same (or an extremely similar) plane landing at Barra.

And here’s an iPhoto my friend took from inside her plane, of that bizarre propeller effect that you get with mobile phone photography of propellers:


It’s fun the first few times you see this.  Ah the romance of propellers.  It’s like there are still real steam trains everywhere, rather than just pretend ones for tourists and for weekend loonies to play with.

08 July 2011
Transport infrastructure costs
Rob Fisher

Virginia Postrel reports on Bent Flyvbjerg’s studies into the costs of public infrastructure projects:


And the averages tell only part of the story. Rail projects are especially prone to cost underestimation. Seventy-five percent run at least 24 percent over projections, while 25 percent go over budget by at least 60 percent, Flyvbjerg finds.

By comparison, 75 percent of roads exceed cost estimates by at least 5 percent, and 25 percent do so by at least 32 percent.


H/T Instapundit.

This doesn’t bode well for Crossrail. I’m also wondering how the M6 toll road is working out. It seems like a fantastic road to me, but is it making enough money?

04 July 2011
Car bureaucracy
Rob Fisher

She has a folder of information. Everyone has folders for their car stuff? How can the whole world be so organized? How can the government require that you be this organized to get through life? Why is no one protesting?

That’s from a post by Penelope Trunk who has Asperger’s syndrome, about struggling with registering her car at the DMV, which is presumably one of those rituals people in the USA take for granted. We have similar rituals here in the UK, and I can relate to a lot of what’s in that post, particularly the above quote.

03 July 2011
Brian Micklethwait





Mad new machine for not getting around devised by some students from Adelaide University
Brian Micklethwait

When someone invents a totally new kind of transport, usually with not enough wheels, they tend to release a video which at least tries to suggest that, although actually mad, the new means of transport has glimmerings of sanity, and might have its uses for something other than sport, where the new mad machine merely competes against itself.

But this video, of EDWARD the Electric Dicycle, seems to be going out of its way to prove that EDWARD the Electric Dicycle is completely insane, and has no uses whatever apart from turning its insane occupant upside down for no reason.


26 June 2011
Brian Micklethwait












… and this:






I want a Dreamliner world, rather than an A380 world.





24 June 2011
Michael Jennings

Prepare yourself for the full horror.

16 June 2011
Brian Micklethwait

Last week, in the London Evening Standard, the now free London evening paper, hard pressed commuters (commuters are always hard pressed – it’s the law) were able to read this, about some not so lucky fellow commuters:

Rail commuters were trapped on a train for up to six hours and then threatened with arrest when they tried to escape overheated carriages.

Tens of thousands of people - including a woman who is eight months pregnant - were caught up in the chaos that left 60 trains stranded last night in the middle of Transport Secretary Philip Hammond’s Runnymede and Weybridge constituency.

The crisis, caused by thieves who stole power cable, brought the line to a standstill at 6.30pm and left passengers trapped until after 11pm. Today commuters attacked rail company South West Trains as a “shambles”, as they described how they tried to escape from carriages only to be told they were breaking the law.

The heavily pregnant woman, Emma Firth, 35, told how she and a group of passengers decided to “make a bid for freedom” at 10.30pm after being trapped on a train from Clapham Junction since 6.30pm. But as they tried to climb down on to the track, guards made an announcement saying they would be arrested for trespass if they did.

A severe delay.  Harassment of travellers, no doubt for what seemed like very good reasons (safety, basically) when the rules being followed so charmlessly that night were put in place.  So far so routine.

But later in the same report, this:

A train spokesman said a review of how it responded to train disruption has been ordered.

“We are very sorry for the significant impact last night’s signal problems had on a large number of our passengers.

“We would like to thank them for their patience during some extremely difficult circumstances.

“We appreciate that many passengers spent several hours on trains while Network Railengineers worked hard to rectify the major signalling faults. Network Rail has confirmed today that the signalling problems were caused by an attempted cable theft.

“We are extremely angry and frustrated that mindless and irresponsible vandalism meant that many of our passengers had a terrible journey last night.

“Our station, train and customer service teams did their very best to keep passengers updated at the main locations across our network and to help get customers home through the night.

“We will be working with Network Rail to review how we responded to this incident. We are committed to learning any lessons, including taking any steps required to improve the flow of information to passengers.”

My blog posting title has already given my game away, but honestly, had I not done this, would you have spotted what I spotted?  “Passengers”.

For years railway people in Britain have been calling us “customers”, a usage that I do not like for reasons I find tricky to explain even to myself.

It’s something to do with the fact that the word “passenger” describes the true relationship.  We are at their mercy.  When they called us “passengers” they were acknowledging this fact.  Calling us “customers” attributes to us a spurious degree of autonomy, like we could get out at any moment if we didn’t like the journey.  Which (see above) everyone knows we actually can’t do.  And if we got off at an earlier station because we didn’t like the journey we were being subjected to, we’d not be given our money back.  Besides which, once you’ve committed to a train journey, the only logical course is to stick with it.  If you don’t like it, you don’t do it again.  But while it lasts, you must simply endure.

I see what they’ve been trying to do with all this “customer” talk.  They want all concerned to realise that market disciplines are in play, especially their own staff.  The last thing they want is for their staff to act, in a bad way, on the idea that we are totally at their mercy.  Trouble is: we are.  This is a fact which all concerned ought to be facing, not dodging, even verbally.

I have similar feelings about the word “patient” as used by health services.  If a hospital started describing its charges as “customers”, I think I’d feel that the same kind of verbal dishonesty, the same kind of falsehood about the real relationship involved, was being perpetrated.

My guess is that this reversion to the old word was a mistake, made in stressful conditions, rather than any kind of major policy shift.  But even so, interesting, I think.

Monty python train timetable murder
Rob Fisher



10 June 2011
Richard Wellings on rail privatisation and rail regulation
Brian Micklethwait

Today I received an IEA email newsletter, which drew my attention to a (fairly) recent (May 24th) blog posting by Richard Wellings at the IEA blog, calculated to confirm all our prejudices here about privatisation (good) and government regulation (bad).

First paragraph:

The recent history of Britain’s railways has undoubtedly brought the whole concept of privatisation into disrepute. But this is unfair. Rail privatisation was a pastiche of genuine privatisation - in many ways it actually increased the level of state control.

Final paragraph:

A truly private railway would be efficient, innovative, responsive to consumer preferences and would not require taxpayer support. It is time the critics (such as Will Hutton) stopped blaming privatisation for problems caused by government intervention.

The guts of Wellings’ argument is that in a truly free market, railway companies would have been free to integrate vertically, and being free to integrate vertically, they would have.  The irrational separation of ownership between track and trains would have ended.  The government did not allow this.

Maybe the new government will?

08 June 2011
Legible London?
Brian Micklethwait

I photoed this yesterday afternoon, embedded in the pavement in the top bit of Horseferry Road, just past the Channel 4 building as I walked towards St James Park tube.


I was baffled, and despite visiting the website alluded to, I still am baffled.  It says: What is Legible London?  Those were my exact sentiments, and they remain my sentiments.

It is something to do with the fact that walking is often quicker, for short journeys, than using the underground.  But why this plaque in the pavement?  Is there some kind of electronic gizmo underneath, with feeds into iPhones or something?

I am sure there is a semi-rational explanation, but can anyone oblige?

(The fact that two of the screws are missing doesn’t bode well, does it?)

05 June 2011
Transport Blog quote of the day
Patrick Crozier

Comparing socialism and capitalism:

It is necessary to compare the total costs and the total yields of both systems.  The fact that the electromobile needs no gasoline is no proof that it is cheaper to run than the gasoline-powered car.

Socialism, Ludwig von Mises p161 (in my edition).  First published in 1922.

24 May 2011
Making driving more pleasant
Rob Fisher


13 May 2011
Sir Humphrey’s roads
Rob Fisher


Hacker: How much further?




Hacker: And the cabinet let them get away with it?




I wonder how much truth there is in it.

11 May 2011
On the spot fines for bad driving
Rob Fisher







09 May 2011
Container ports and the Straits of Gibraltar
Michael Jennings









Spanish registered truck, there.


05 May 2011
Electronic signs at railway stations – good but not perfect
Brian Micklethwait





Take this sign, for instance, which I snapped yesterday:









24 April 2011
China’s high speed train wreck
Brian Micklethwait

Here.  Reading the whole thing is much recommended.

Money quote:

This month, I rode the bullet train from Beijing to Tianjin in half an hour - then returned by bus, which took two hours. Next to me on the decrepit, but packed, vehicle was a 17-year-old girl migrating to Beijing to search for work. She had never heard of the high-speed train, but when informed it cost $9, as opposed to $5.40 for the bus, expressed no regret at missing it. The bus driver assured me the girl was typical of his working-class clientele; to them, even a little money is more valuable than a lot of time. Small wonder that the Beijing-Tianjin line, built at a cost of $46 million per mile, is losing more than $100 million per year.

A mobile version of all those overpriced apartments and shopping malls, in other words.

The state of the world is now such that, if you want to be optimistic about your own country, don’t whatever you do look at your own country.  Look at all the others.

Happy Easter.

17 April 2011
If Formula One teams had to sell their cars
Patrick Crozier

I’m watching F1 and as usual wondering how you could make it better.

One of the things that bugs me is that it is not clear what question the sport is trying to answer.  In most sports it is clear.  In the 100 metres it’s the fastest sprinter.  In football the best football team.  But in F1 it’s never clear whether it’s the car or the driver.

What if, I wonder, manufacturers were obliged to sell their vehicles for a fixed sum (say, £1m) at the end of each race?  That way any team/driver who thought they were fastest would not be denied the opportunity to prove it simply because they didn’t have the right car.

The other good thing about this is that it would encourage manufacturers to keep costs down.  If you build a car for £10m and have to sell it for £1m you’re going to go out of business pretty quickly.  And if costs are kept down that will reward the best engineers.

I suppose there might be a problem with manufacturers not telling the new owners everything in order to preserve cosy relationships with favoured teams.

Is F1 a legitimate topic for Transport Blog?  I think we can just about get away with it.