Mobile Applications

UK Rail Operators Solving Problems, But Can They Make The Trains Run On Time?

What are the ripple effects of investing in a mobile payment system when there are much bigger fish to fry?. The U.K. rail transportation system may soon find out. The rail network, now a number of franchises, is considering the rollout of a mobile phone app-based ticketing system when the rail services themselves are, at best, emotionally wearying for commuters and, according to some, unsafe. Frictionless payments are all very well, but shouldn’t reliable, safe travel come first?

The U.K.’s current transit troubles and strife reflect the ripple effects of not taking action where it is sorely required — when a system is so badly broken that even incremental improvements seem pointless. While U.K rail is about to introduce a mobile app-based payment system, customers are so disgusted with the rail system that they are buying cars to avoid rail travel completely.

The beleaguered British rail system is notorious for a couple of things: privatization and delays, where the former allegedly may have exacerbated the latter. So goes the recent heated discourse on Go-Ahead, which owns Southern rail operator Govia Thameslink Railway and which has reported a 27 percent increase in profits, reaching £100 million. Meanwhile, passengers are buying cars purely to avoid a rail commute, according to The Guardian.

One pregnant passenger recounted her experience.

“The last five months of Southern Rail chaos has coincided with the 20 weeks of my first pregnancy. It’s been unsafe and exhausting … Being crammed in the aisles, pushed around on platforms, held in a pen behind a fence at Brighton station for long periods of time [with no way to nip to the toilet or sit down]. Weeping to myself quietly as I stand in the aisles, seething with anger that there are elderly and disabled left on the platform with no help to navigate the chaotic coastway route … I’m sorry to contribute to the congestion on the roads, but the safety of me and my bump comes first, so I’ve bought a car. Southern you’ve finally broken me!”

Another rail traveler, this time from northern England, complained that complex ticketing rules that did not integrate bus, trains and trams, the inconvenience of non-running trams and park-and-ride options that were often not an option because parking lots quickly reach capacity early in the morning by those who live in-town had forced him also to commute by car. He can now sit “in warmth and comfort, listening to my own music and admiring the buzzards, kestrels and herons you often see on an M60 commute.”

While executives of Southern are patting themselves on the back, enjoying a pay raise and, presumably, not commuting via Southern, the public backlash against the franchise has exploded. Dave Brown, Go-Ahead’s CEO, has publicly apologized to passengers and agreed to waive his bonus — but not without noting that the country’s rail infrastructure is largely to blame.

Still, infrastructure issues aside: How can a transportation company make such profits while providing such a miserable service? Could it be a ripple effect of an upstream decision creating havoc downstream and, in this case, a “money-raking disaster,” according to the Rail, Maritime and Transport workers’ union?

This example of a dysfunctional franchise has been followed by an announcement that the U.K. rail system is to test an Uber-style mobile payments system, which won’t exactly placate the travelers already disgusted with the current intolerable services of an apparently profit-making enterprise. How about first establishing a functional transportation system before adding a mobile payments service? Otherwise, it’s like putting a Band-Aid on a broken bone.

But back to the payments system: The BBC announced that the new mobile app-based system will be implemented first with Chiltern Railways. The pilot will run in 2017 with an aim to secure a nationwide rollout of the technology in 2018. A mobile app-based payments system will detect passengers boarding and exiting a train by scanning their phones, automatically deducting the fare from the traveler’s loaded card or bank account information, ostensibly reducing queues at ticket machines, while providing data on train performance. Ah, data on train performance, well, now we’re getting somewhere!

Also, in great British rail fashion, the obvious seems to have been overlooked: What happens if a passenger’s phone dies? Ian Fogg, a voice of reason and principal analyst at IHS Technology, noted that the new system should consider providing on-train phone-charging services for travelers. Oh, right.

But credit where credit’s due: The Rail Safety and Standards Board did say that the technology could reduce delays by tracking each train’s performance. Still, there are quite a few ripples then in the rail community and beyond: Frustrated commuters are putting more cars on the road and at the worst times of the day, and the government will collect more tax revenues from increased gas consumption. It’s possible that automobile manufacturers might even see an uptick in sales. And, perhaps most notably, smartphones carried by travelers will provide data and allow trains to be reallocated according to demand. Loosely interpreted, this could mean that some services will be canceled. Now, that’s not going to help those commuters who rely on lines even if they are unprofitable, is it?

But ultimately, shouldn’t a public transportation company, as British rail franchises are so often considered, forgo a certain amount of profit to provide a service to the public at large?

And the ripple effects extend further: If rail lines are closed, jobs are lost. Driver-only trains are already widespread in the U.K., which use CCTV rather than guards to open and close doors. According to the unions, these trains will cause more accidents rather than increase safety, as is claimed by the Rail Safety and Standards Board. The new mobile system requires no guards, no ticket sellers and eventually no drivers, once driverless trains are introduced.

And what about those unions? Pushed far enough — and they are close to the edge — there will be no rail services at all. There could even be riots and a stalled economy — sorry, failed economy, if Margaret Thatcher and the miners are anything to go by.

The U.K.’s remaining 27 train operators have not committed to adopting the technology. Virgin Trains told the BBC: “We always want to be on the side of passengers and make their experience with us the best it can be.” Well then, perhaps it’s time to re-nationalize the U.K. rail system? Now, that would certainly be a ripple effect!


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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