Anorak | Train Fares Rise: Blithering Sutpidity From The Campaign For Better Transport

Train Fares Rise: Blithering Sutpidity From The Campaign For Better Transport

by | 2nd, January 2014

Transport- Station Staff - Ticket Clipper - London - 1973: A British Rail ticket clipper waits for passengers for the last train to Bedford from St.Pancras at 18.08.

THEY’RE whining about how train fares are going up again: and as usual, they’re managing to get entirely the wrong end of the stick. Here’s their complaint about fares :

Rail fares are rising so quickly that the government will soon be making a profit from the commuting public, campaigners claimed as the new year ushered in higher annual season ticket prices.

According to a report from the consultants Credo, for the Campaign for Better Transport (CBT), by 2018 the fares collected from passengers will cover 103% of railways’ operating costs, compared with 80% in 2009.

There is a very slight problem with this analysis: operating profits are not profits. Operating profits are the costs of goods sold minus the costs of goods purchased. If you thought about Sainsbury’s for example, then it would be the cost of everything they sell minus the costs of buying the things that they sell. And the perceptive will note that those aren’t all the costs of running a supermarket. It’s necessary, for example, to have buildings in which to operate the supermarkets. Vans and trucks to move the stuff around. To pay for advertising to get people to come in and buy the stuff.

Profit profit is the operating profit minus all of those other costs. And with railways the same is true. Operating profits are the fare revenues minus the costs of running the trains

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Posted: 2nd, January 2014 | In: Money, News, The Consumer Comment | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink