Rail regulator wants more competition for ticket barriers, vending machines

The Office of Rail and Road (ORR) announced on Thursday that it would press the industry to improve competition, value and innovation in automatic ticket gates and ticket vending machines.

It said around 150 million tickets were sold through vending machines each year, with ticket barriers described as “crucial” in protecting the industry's revenue from fare evasion.

The regulator said both pieces of equipment were “key parts” of the passenger experience, with their functionality and capability impacting on the safe flow of passengers through stations and the roll out of new smart ticketing solutions.

ORR launched a market study into automated ticket gates and ticket vending machines in March, with the update published on Thursday including concerns that the market for ticket barriers was a “near-monopoly”, with buyers of gates potentially paying too much.

It also said the market for ticket vending machines was delivering poor service quality, with low availability of machines having an obvious impact on passengers.

The regulator said it wanted to make the market for both ticket barriers and vending machines more competitive in order to promote innovation and the development of new products.

It proposed to work with the industry to take forward “significant change” in how competition worked in those markets, including how equipment was purchased, to generate more incentives for suppliers to invest and compete, and to ensure that alternative suppliers with new ideas were not deterred from entering the rail retail industry.

ORR said it welcomed proposals already put forward by the Rail Delivery Group in response to this study, which it said were to “improve and simplify” accreditation processes for businesses seeking to offer new retail solutions, including improvements to ticket vending machines.

The Rail Delivery Group represents the country’s train operators, as well as the state-owned infrastructure operator Network Rail and the consortium delivering the High Speed 2 project, and runs the National Rail brand and the common ticketing system shared between rail operators and regions nationwide.

ORR said it was seeking feedback on its emerging findings and proposed action until 11 October.

“Supply chains for key railway products should be competitive in order that they can deliver the innovative products and value that British railway passengers deserve,” said the Office of Rail and Road’s head of competition Tom Cole.

“This study has revealed a number of concerns about weak competition for retail equipment, and the detrimental impact this has on price, quality and innovation.”

Cole said that was having a “direct impact” on passengers and taxpayers, who ultimately picked up the bill and missed out on new product developments.

“We are committed to working with industry to change how competition works and how this equipment is purchased to ensure new and existing suppliers are better incentivised to invest, innovate and compete in these markets.”