How many customers do they have
£100m per year for the ticketing system seems steep for Greater London (pop 7.5m in 2006). How much would an old fashioned system cost (you know, with humans on trains and at barriers)
Transport for London and London's mayor Boris Johnson have ended their contract with Transys, the group of companies which provide Oyster cards - the card ticketing system for the capital's buses, trams, some trains and tubes. TfL said it is convinced it can save money by offering the contract to another company. The Oyster …
Millions of customers. It's revolutionised public transport in London.
Whether it's worth £100m a year is debatable, as is the PFI structure in a scheme that's continuously changing as the network expands, but reintroducing an 'old-fashioned' system would be ludicrous at this point. £100m is roughly the estimated staff cost for replacing single-crew bendy buses with two-crew Routemasters, let alone employing people on the rest of the bus fleet and tubes. Scrapping it would be hugely unpopular (the slowdown on boarding buses, for a start) and I can't see anyone seriously proposing it.
Let's see. A quick back of the envelope calculation suggests they're doing well...
if 10% of 7.5million make a return trip on the bus (£0.90) on weekdays only, TFL gets £351 million.
I know it's simplistic, and I've no idea where staff salaries factor in. However, given that the tube carries over four million passengers a day (http://www.tfl.gov.uk/corporate/media/newscentre/archive/7103.aspx) you can see that they're getting in some money.
Of course if just 10% have yearly zone 1 & 2 (tube) travelcards, TFL gets 407million profit
those figures are rough, so it's fair to say they're raking in money, even if they're not visibly improving things
The Greater London population is less of an issue than the London Commuter Belt, which was estimated at 13,945,000 in 2001. Givewn the rate of expansion in the South East thats certain to have grown significantly over the last 7 years.
Given the perceived lack of staff on the London transport network I'm guessing the Oyster Card pays for itself in avoidance of casual fare jumping alon ( I know I do it a lot less these days)
"I know it's simplistic, and I've no idea where staff salaries factor in."
Or capital costs, equipment maintenance, track maintenance, fuel, security, management, or cleaning.
The transit system doesn't make a profit - that's not what it's meant to do. It's meant to help people get to places. Obviously minimizing costs is good. Is £100m a good cost for a ticketing system for one of the world's largest transit systems? Honestly, I haven't got a clue, and unless you're a specialist I suspect neither have you. But that's the question to ask.
"it's fair to say they're raking in money, even if they're not visibly improving things"
Right. Because it's not like TfL recently embarked on the the biggest transformation in the Tube's history, is it?
As far as I recall when they introduced Oyster the biggest benefits were allowing station staffs to be reduced, because season tickets etc could be bought from the machines, and in reducing the cost of collecting money from the machines that used cash. It was some huge figure a year that TfL spent on collecting all the change and converting it into useful money.
But in any case the benefit to the consumer is worth at least this £100m. It is so much easier to have an oyster card with £20 quid on even if you only travel to London a couple of times a year. No fiddling with change or anything in front of a ticket machine. You just take the trip and the system works out the cost for you.
Oh and it is also better for the environment - think how many paper tickets are not being printed out every day now!!
£100m per year for for a population of 7.5m works out at about £13 per person per year. If you consider that divided by approximately 200 working days you get 6.5p per person per working day. Whilst a lot of Londoners may not use public transport, it's not a large part of the cost of your ticket.
1. those horrible bendy buses & the CCTV's which take your photos each few seconds and display it to the public are all a deal with the pentagon - yep this is why the bendy's live on even though boris wanted them gone...
2. middle east oil snatchers has made the whole LT paranoid - with hidden cctv's undercover feds, sniffer dogs and police enforced stop checks all over the network - hmm and they want us all to leave our cars and get on their over crowded over monitored service...
3. to top all that they have today admitted on the news another 7/7 is GB's biggest threat.
So why on earth should anyone use it ?
ahh it has CCTV its safe - we can catch who blew it up sorry if the CCTV stands by and watches u get blown to peices or stabbed to death - at least we can catch or see who did it since this is the most important thing - not your LIFE
Not wanting to sound like the Ken Liberation Movement, but things have really changed a lot in London's public transport - the Tube, being idiotically part-privatised, only came under proper democratic control recently, so that's where the least improvement is visible. However, new trains are being built and tested right now, the Jubilee has had a seventh carriage added and new signalling systems are being introduced to increase capacity, starting on the Victoria Line, so it's not all doom and gloom there, either.
Elsewhere most of the action is unsurprisingly in the Olympic/Docklands bits of the East End, with the DLR extensions (Lewisham, City Airport, Woolwich, Stratford) plus a load of other bits and pieces for the Olympics, like much more frequent services along the North London Line from Camden to Stratford.
Finally they're building a whole new line from Dalston, under the Thames along the old East London Line and linking into various southern rail routes, which is already well advanced and may even open early.
That's just the bits underway now - Crossrail and Thameslink construction is just starting up, and that's another huge leap in capacity. Me, I just enjoy the frequent, bus service at prices way below those in other parts of the country (90p a trip).
There's nothing wrong with bendy buses, either.
What a load of moaning minnies. As a casual (non season-ticket holder) user I never have to worry about having cash (it tops itself up automatically from my credit card, emailing me when it does so). I don't have to queue for a ticket machine. I don't have a ticket to lose (the card sits in my wallet and I just touch it on the reader). I don't have to debate whether to buy a one day Travelcard or return tickets because the system automatically caps daily spending to the Travelcard rate. Fares are guaranteed to be cheaper than using conventional tickets. Buses go so much more quickly with embarking passengers just touching their cards on the readers rather than throwing money at the driver and expecting change.
And at a cost of £3 (deposit!) and no expiry on the cash loaded on them, I can afford to have a collection of them for visitors to use so that they can take advantage of the savings too.
Those are the advantages for *me*. The advantages for LT are obvious. The only disadvantage is privacy concerns. But I've convinced myself I can live with those.
isn't another 7/7. It isn't police with sniffer dogs. And it sure isn't the £100M profiteering of the Oyster provider.
No, the biggest problem with London's transport is yobs running amok "steaming" through the cars, and those that can't figure out what soap and anti-perspirant is for. In short, parts of the very public that rides it...
Enough with the CCTV, which is only really useful in the event solving a major crime after the event. Get more Transport police with guns and/or tasers....replace those little placards trying to show characters being nice on the Tube with stern-faced officers armed with disapproving looks at loud stereos, spitting, and other anti-social behaviour. Take back the system...
and the bastard gates still manage to wipe it out. I only had the latest one for 2 days. According the the ticket office I changed it at they are getting hundreds per week with the same problem, it is all down to the software used for the gates.
Crap system that slows me down even more. What was wrong with paper tickets again?
"It's revolutionised public transport in London." "The London transport system has changed dramatically." "TfL recently embarked on the the biggest transformation in the Tube's history."
Erm, no. Travelcards have been around for donkey's years. The pre-pay thing could have been dealt with by a simple "subway token" system. And wouldn't "transformation" be the fixing of existing stuff wot is broke?
The reason people think it's better under the eye of the Oyster is because it was so royally f*cked up by the installation of those awful grey robot barriers. Before those were installed, one could nip in and out of the stations and buses by just waving your travelcard at the inspector. It was well quick. And convenient. If you were skint, you could blag your way into work, borrow some money off your boss and get one on the way home. A human(e) system, that fulfilled its main purpose: getting people to work. Of course they did lose a bit of revenue, but how much did the Oyster barrier system cost to design, build and install? Remember, the £100m is just the running costs, and Cubic are an American defense company -- not cheap. And who on earth pays on a bendy bus anyway?
One of the big benefits that were sited by the gov for the PFIing of teh underground was new and advanced ticketing systems that would be developed by the PFIs.
TFL run the Oyster because none of the PFI companies would bother to develop anything new. Bastards.
Anyway, let's add EDS to the list of failed PFI companies, who have failed, which is currently:
Why do they still get work?!
Hmmm , little wonder the clone equivalent company is having so much trouble introducing the very same identical system down under in Oz to the various State governments owning and operating the vast majority of Public Transit systems !
But still the original setup means it has become a literal license to print money although the ever artful dodger bean counters will find more ways to hide the profits whilst increasing the ultimate end user charges like an endless conveyor belt from their wallets to the bosses back pocket !
Travelcards have been around, but NOT travelcards that were smart enough to retrospectively charge you the LOWEST fare by virtue of your prepay.
If I get on a Tube and pay cash, it's £4 for a trip. I pay with Oyster, it's £2. If I use the Tube AGAIN, well, then Oyster knows to charge me for only a full-day fare, which is CHEAPER than simply adding on another trip. After that I can take as many trips on the Tube as I want that day for free effectively - and I didn't have to think about it: Oyster charges me whatever is the lowest rate that I qualify for.
You don't get that stuff with paper tickets, or tokens, or travelcards. You end up paying more with them, because they can't offer such a huge prepay advantage, and know when to apply it. Oyster LEGITIMATELY is a boon to those of us that have used the Tube/Buses as a primary transportation method.
And if you find yourself so skint you have to jump barriers, I suggest an alternative line of work than as a Dr. Who extra...
The PRESTIGE contract covers the operation of the Oyster card, the barrier readers and nightly processing of all the days travel information and card management.
The original contract was for 15 years (I think - although it may have been 17) whereby the consortium had to stump up all the up front costs. They would then be paid as a percentage of ticket sales. The original break-even point was supposedly in the 10 - 12 year range, I have no idea whether that is still true or not, but expect that Cubic will not be pulling out with a loss.
But still, all the risk was placed squarely on the consortium that bid. It took LT almost 2 years to finally accept the system - which I bet did not count as part of the payback period.
In case you're wondering it collects approximately 10 million journeys per day which it processes overnight. It works out the start and end points for each journey and then determines if the sum of the individual trips would be greater than a daily travel card and caps it at that - obviously there is a bit more complexity if several zones are involved.
Is £100M a lot ? Depends on what you think the alternative is. Do you want to give this kind of project to local government to run ?
In the end they'd just outsource and waste the money between them and the outsourcer. At least Cubic had some incentive to deliver quickly and get it right.
Compare with any of :
- Child Support Agency
- Rural Payments Agency
- Inland Revenue - it may be OK-ish now but it took a while
- NHS Patient details
- LIBRA - Magistrate court system
I don't think I need go on ...
@Equivalency Dalek - you clearly don't know what you're talking about.
"And who on earth pays on a bendy bus anyway?"
93% of people, apparently. Evasion is accepted by both sides to be 3 times greater on a bendy, but it's nowhere near everyone.
It's better under Oyster:
a) because people who use it almost universally think it is, and being exposed to the thing frequently means their opinion isn't just reflected some politician or bit of journalism - they actually know something about it. Try telling your friends, if you have any, that Oyster is being canned but it's OK because we've had paper travelcards for years so they can have one of them. Most of mine would think I'd gone mad, either because they've had paper travelcards needing frequent replacement or because they just use PAYG - explain to someone used to the simplicity of touching their card on a reader and having it topped up automatically that they now have to buy and carry round a load of tokens and this is somehow equivalent - you'd be lucky to keep your teeth.
b) because people not paying is not just a problem of revenue but one of associated overcrowding and anti-social behaviour - when Oyster (and extra staff) were introduced on Overground trains ridership went up, takings went up, ticketless travel went down and more crucially people felt safer. Obviously these things are interconnected - more people use the trains because Oyster is cheaper and easier, there's reassurance in being on a busy train rather than in a carriage empty apart from some yobs and the staff at the stations deter casual fare evasion so the yobs are less likely to be on the train in the first place. Result of investment: people switch from cars, there's less crime and you can demonstrate a clear need for the shiny new trains being built and the more frequent services planned. Win/win, and Oyster PAYG is a key part of it.
c) I'm going into London with my son in a minute to go shopping - I'll use the £3 Oyster bus cap. Under your idea, if I unfortunately ran out of money I'd have to find someone's boss (mine's in Basingstoke) and blag some money off him? Not all journeys are to work, after all.
d) because all sides and practically everyone unfortunate to live near one recognises that Oyster on rail services is a serious deficiency - it's extremely annoying being cast back in time and having to queue up at the bloody machine when I've got an Oysterful of cash I could pay in a second with if there was a reader - taking the tube or Overground is so much more convenient it ends the argument there, even though for me it's twice the walk - I have to allow the extra time in case the crap SWT ticket machine's got more than one person at it.
As someone who has travelled in London for the past 11 years, Oyster WAS a revolution. Its easier, its cheaper and the cards are difficult to lose. Privacy issues aside its been a success. If you have never been to London or owned an Oyster card, then quantify your comment with that.
what happens with things like this in major European cities ? Do they waste millions on technology and "PFI"-style projects, or do they do things nice and simple, such as having simple daily/weekly/monthly tickets at prices which mean you'd be stupid to NOT have one, and with enforcement practices (such as inspectors) that mean you'd have to be *seriously* stupid to travel without a ticket?
I think we know the answer, but then elsewhere in Europe the local and central government is probably not run by Accenture, BAe Systems, Cubic, EDS, etc stooges whose primary interest is reducing government expenditure on headcount and transferring equivalent (or greater) amounts into their own bank accounts instead...
Just try Clapham Junction - which always seems to seems to need another 10 automatic paper ticket machines no matter how many more they install.
The newsagents thereabout do a roaring trade thereabouts issuing season tickets on Oyster for at least two reasons, you're buying a newspaper anyway and it takes seconds to add a season ticket with your credit card.
There's a whole distributed network of newsagents on all the routes to CJ. Newsagents are a forgotten benefit of ticket buying akin to the Post Office epiphany* moment that it it would be better for sales of stamps to allow card shops to sell stamps rather than try and sell cards in Post Offices.
It will be perfect when I can use pay-as-you-go directly to travel to Richmond or Wimbledon (Underground/SWT interchange stations for those north of the water) in 10 minutes rather than go Overground to West Brompton and then the District Line in 45 minutes
*subsequently screwed up by introducing charge by size as well as weight
I travel to londimium on odd days. I've tried oyster PAYG, but have always been charged more, due to various issues beyond my control. The paper travelcard is fool proof, you pay for it up front £4.80 and no matter what you do, fail to put into gates, fold it, abuse it, you never get charged any more, and you can sell it to student for £2 - bargain
Try going to Paris, where the Carte Navigo is slowly taking over from paper tickets in the same way as Oyster did.
You try figuring out what paper tickets are valid where. At what point on RER Ligne A you will all of a sudden find yourself outside Paris (even though you are still within eyeshot of the Arc de Triomphe). Try understanding why you can go to La Defense with a normal Paris ticket on the Metro, but not the RER. Why you can travel all over the RATP area on a Bus, but not by train, unless you buy a different zonal ticket, the option for which is hidden in a tricky menu system on the ticket machine.
Then there is the problem of keeping track of the paper ticket, being careful not to damage it (or its flimsy magnetic strip) or lose it. Having to produce it from your pocket every time you encounter a barrier.
Then imagine having one contactless ticket, that could stay inside your wallet, that charges you for whatever journey you make automatically, no matter whether you use the RER, Metro or the Bus. That can be used by anyone in any language as it does not require the user to decifer ticket booth menu systems, and that never charges you more than the appropriate travelcard for your days travelling.
Paper tickets are dead, and about time too.
1: TOM: What's worng with bendy buses? Well, they're 18 metres long, and the drivers seem to think they are in Smart cars, going into intersections on amber and blocking them for complete light phases at a time. Even on Sundays.
2: @AC - "Cancelling a contract like that takes too long". If you have ever found yourself in the position of having to terminate a contract of a size such as this, and transition to a new arrangement, you'd know that it's not the cancellation that takes the time - it's ensuring that you can move to whatever the new arrangements are while continuing to operate effectively. In this case, the 'new arrangements' may not yet be known.
3: @AC - "Public sector moves far too slowly" - I've worked in private and public sector contract transitions, and while I can confirm that the private sector generally moves more quickly, the reason for this is that if there's a balls-up in the public sector, it's big news and generally, many taxpayers are impacted. Thus, there's more of a risk-averse, butt-covering focus in such projects. Private sector organisations are generally happy to assume more risk in the interests of balancing the cost/benefit/risk equation. Private sector organisations would rather see benefits accrue more quickly, Public sector organisations want to stay off the front page (and off Reg!) because people like you will have a dig if they took more risk and got it wrong.
@Equivalency Dalek - So you would be one of the bastards who cause the ticket prices to be higher for the rest of us because you have decided you don't want to pay. In any case linking travel cards and a token system and saying the resulting system is as good as Oyster is a joke:
1 ) Tokens are just as complicated as cash since when they run out you have to go find a machine to get more as your wallet isn't automatically topped up when they run out. This negates one of the major advantages of Oyster - the auto top up system!
2) Tokens also only work if you have a transit system where it is feasible to have a single ticket price for all journeys - is it really fair to have someone going from Heathrow to Epping pay the same as someone using the drain between Waterloo and Bank? This may work for a relatively small transit system, but for a system as big as the one in London it would be infeasible.
3) Tokens are expensive, either you print paper tokens and then have to collect and recycle them (which isn't exactly great for the environment) or you have something more durable which then has to be collected and redistributed. In both cases you need more staff than under Oyster, either to keep ticket machines topped up or to do the redistribution.
4) Fraud - fraudulent tickets are much harder under Oyster. Anything leading to a reduction in the level of fraud is a good thing. This includes people like paul fox above passing on a travel card to someone else when they are done with it. (As a note, in my opinion, this is different from selling an unused return part of a return ticket) The price of a travel card is based on estimated average use of that card, by passing on the card you increase the use and thus the cost of the card. The increased cost of the card will not cover the lost revenue from the person the card was passed on to, think marginal costs here...
5) You still have to faff around and buy a travelcard, this means fiddling with a machine, so again Oyster is easier!
On your other points so what if it cost £400m to set up Oyster with the barriers and ticket machines, that is like saying BA repainting its planes with new livery costs x millions ignoring the fact that you have to repaint a plane every couple of years anyway so the new livery doesn't actually cost any more than the old. The fact is that the barriers and machines have to be replaced over time anyway, if I remember rightly they started installing the Oyster barriers as part of the normal replacement cycle well before the system went live, so part of the cost comes from the maintenance/replacement budget.
Paris - since her tubes have no barriers....
Something that people may not realise is that Transys is obliged to pay TfL the daily revenue that SHOULD have been collected. On those days when the system breaks down and the barriers have to be left open, as happened recently, Transys still has to pay up. Given that the likelyhood of mass cloning of these insecure mifare cards is getting more likely by the day, I just hope that TfL manage to hand off all this risk to the new provider. Yeah right, of course they will.
According to another article I've read, EDS were responsible for operation of the system, but the architecture+development was subbed out to Deloitte's (!). But reading Deloitte's own PR for their role in the system, it looks like all they did was build an RFP and then sub it out yet again...
I'm sorry chaps, but you really have been sold a pup.
1. You may be willing give TfL the interest on your prepay money and hand over to them the complicated decision of whether to buy a Travelcard tomorrow but most people have a reasonable idea of where they are going on any particular day. The reason you think you save so much is because TfL have hiked up the single and bus fares so much and you imagine that you will always remember to swipe out, no matter how distracted you are. It WILL happen. You are a human, not a robot.
2. OYSTER IS NOT CHEAPER. It merely appears cheaper because the normal ticket prices have been raised by hundreds of percent.
3. OYSTER IS NOT QUICKER. The quickest was the open barrier with a human guard eyeballing tickets as the commuters flocked through. When TfL first installed the Cubic it was reasonably OK because one could insert one's ticket into the machine while the person in front was walking through. With the Oyster, you have to wait until the person has gone through and wait behind the magic eye yourself before you can successfully swipe your Oyster. This takes longer, especially in rush hour. It just does.
4. Maybe the class of customer is better since Oyster. I really couldn't say -- I haven't noticed any great improvement. Even if there was, could it not be due to other socio-economic factors relevant to London? Perhaps you could supply us with some data to clarify.
4. I'm not a freeloader. I used to occasionally blag a ride, but I used to buy a ticket later that day as you certainly couldn't get away with flashing a pass with yesterday's date for very long. My point was that the system used to cut the honest user a bit of slack. Now everyone's treated like a fare evader.
5. I have been riding the tube and the rest of the TfL system to work and the shops every day for 22 years. You can stick your precious Oyster card somewhere dark and hope the RFID chip turns into a pearl.
I will rebut your points one by one!
1)(a) Statement: Yes, I am willing to give TfL the interest on my prepay money.
Explanation: There are two reasons for this. Making the assumption that I keep £50 prepay on my card at all times, at 5% interest (ie the interest gained from having the money in a good bank account) the opportunity cost of the lost interest is £2.50 for the year.
The first reason I am not worried is that this is actually a completely insignificant amount of money. I lose more than this a year through change falling out of my pocket.
Secondly, we make the further assumption that Oyster saves me, an infrequent traveller, an average of 30 seconds on any day I use the TfL network. I think on average it takes longer than 30 seconds to queue and buy a ticket but I'll be generous. If we value my time at the average perceived value of travel time of £22.11 per hour then to save £2.50, you only need to save 7 minutes over the year and the loss of interest is offset by the value of the time saved. So in other words use Oyster for 14 days and you have offset the cost of the lost interest with the reduction in the travel time.
(see http://www.webtag.org.uk/webdocuments/3_Expert/5_Economy_Objective/3.5.6.htm for details on the value of travel time)
1)(b) Actually I think Oyster saves me money because I don't have to plan ahead, I use the system as and when needed and I never pay more than the total cost of a travel card. Before either I bought a travel card and then felt stupid when I ended up using it for only one journey because my plans changed, or I bought a single and if my plans changed I ended up paying more in total than the cost of the travel card I didn't think I would need. With Oyster this is not a problem. Plus tapping in and out isn't exactly rocket science, with a modicum of intelligence it is perfectly possible to always tap in and out.
2) I think you own argument fails here, Oyster may not be cheaper now than paper tickets were 5 years ago but it is still cheaper than other payment methods today!
3) It may or may not be the case that Oyster is slightly slower than the old paper tickets, I haven't found it to be the case. As to human checking, it is fallible and relatively expensive so is not actually a viable option.
4) Erm - who cares about the class of passenger - I'm not there to strike up a conversation with them. Ok, so the system treats everyone like a fare evader instead of trusting people to be honest. Well I'm sorry to say this but the majority of the population are not honest, if they can get away without paying for something they will. However, by making paying easier I think you'll find that the number of people freeloading will actually have gone down.
5) So given you aren't using Oyster you'll actually have been paying more. Heck I don't mind if you want to pay more for the same service, all it does is subsidise my use of the system!!!
Mark, I have an annual Oyster card purchased with an interest-free season ticket loan. It is you who are subsidising me. But if you really believe that you are getting a good deal, and it's not just hype and price 'adjustments', then all the best to you.
Good luck also with that whole 00.000%-swipe-fail-rate infallibility thing.
So it would seem I am. But I don't see how the fact that an infrequent traveller subsidises a frequent one is at all related to the benefits or not of Oyster.
As to whether I believe I am getting a good deal I don't see what you are trying to say? I think I have clearly proved that at the current time from an analytical viewpoint Oyster >> Paper Tickets so no hype there.
Moving on to price adjustments, so prices have gone up? Well imagine that, to fund much needed upgrades to the entire system you have to raise ticket prices...
In point of fact, bus fares were £1 in central London in 2000 and are 90p now. In that time my income has about doubled. So yes, I do think I'm getting a good deal.
"It is you who are subsidising me"
Quite, and a good thing too. If season tickets were more expensive than daily ones, people would buy daily ones, and you'd have to employ armies of ticket sellers to sell them...
Oyster is at least partly to do with keeping ticket issuing costs down, which in turn keeps fares down, which encourages public transport use, which increases fare income, which keeps fares down, etc., etc.