In the last post I wrote about the problems that need to be addressed in Mumbai’s AC locals. Today let us have a close look at one of those issues – fare structure.
IR has been very lazy in deciding AC local fares. First big mistake was pricing AC local journey tickets at 1.3 times of non AC first class (referred to as FC from now) fare. This pretty much priced it out of consideration of non MST travellers (once in a while commuters). For season tickets they simply picked up existing formula of NON AC fares & applied it to AC. What prevented IR from making different rules for AC MST?
One argument supporting 1.3x FC fare for journey ticket is that it is still cheaper than an Ola/Uber. Completely agreed. But then what is the sample size of Ola/Uber users? I am sure it is not more than 5% of daily commuters. So if IR’s target audience for AC rakes is such a low percentage of total passengers, how do they expect to fill up 12 coach fully AC rakes with just Ola & Uber users? The target audience should be much wider than this! Any aam aadmi does not think twice before choosing a metro for single journey. Honestly tell me, will he choose AC local without hesitation when its single journey ticket is priced thrice of metro ticket? It is simply not affordable to the majority.
The solution:
IR should immediately slash the single journey ticket price & price it somewhere between non AC second class & first class. I would say it should be around 0.5 to 0.6 times the first class fare. This will raise many eyebrows, but we should change with times. Non AC first class is a concept that has become obsolete in today’s times. Even AC chair car fares are lower than non AC FC on long distance trains, so why can’t AC local fare be lower than non AC FC? This is the only way to lure more people to AC rakes from second class. Metro has already proved that people are ready to pay a slight premium for AC travel. 1.3 times FC fare is not going to work. Period.
Now coming to season ticket. Let’s compare Mumbai metro line 1 & AC local. Mumbai metro line 1 has one of the highest fare in all metros. End to end journey ticket (11 km) is Rs 40 (it will be Rs 20 for other metro lines in Mumbai). Comparable AC rake journey ticket is Rs 90.
Now what is the monthly unlimited trip pass rate for both of these? Metro line 1 costs Rs 1400 which is 35 single journeys. And AC locals? Just Rs 885, which is not even the cost of 10 single journeys. IR is literally selling MST for peanuts.
Let’s say AC local single journey ticket for this distance is changed to Rs 40 (which is 0.6 times first class ticket). MST can be kept at 25 single journey to start with, which comes to Rs 1000. The increase of Rs 115 compared to the current Rs 885 MST rate is not unreasonable for AC travel. This fare structure will ensure more patronage by journey ticket holders. The increase in ticket holders at low fare can even lead to increase in total revenue from journey tickets. Two people purchasing a Rs 40 ticket is almost same as 1 person travelling on a Rs 90 ticket. I am sure the lower fare will not just double the passenger count. The increase will be higher. So there will be dual benefit of improved patronage + nearly same or more revenue from ticket sales. Revenue from MST sales will also see a rise in this structure.
IR badly needs to try out this fare structure. There are chances that it may not work, as you can never predict public sentiment in India. But if there is any fare structure that has a good chance of turning AC local’s fortunes, it is this. At the present fare structure the services are not going to succeed anyway. So what is the harm in trying?
Do leave your thoughts in the comments section!
PS:
- I have just taken 1 sample fare slab for comparison & demonstration of what needs to be changed. Some tweaks may be needed in actual implementation.
- I have assumed a fare of 0.6x FC fare for journey tickets. That is the maximum point at which AC locals can be priced. Ideally it should be priced even lower.
- The fare structure also needs to be complemented with a reasonable availability of services. If there is 1 service every 2 hours then there is no hope of success.
MRVC Mania - MRVC rakes & more! 
110% Agree with your thoughts
A Few of my own thoughts :
1. I think Railways needs to increase ticket prices, current prices haven’t even kept pace with inflation and are highly unsustainable.
2. I think the whole class system in the Suburban Rail should be done away with and only have 4 subdivisions in the rails
ie. Ladies, Regular, Luggage & Disabled.
Benefits:
1. During off-peak hours Second class is very crowded while first class is fairly empty which is wasted space IMO. The No. 1 target of any public transport should be to Ferry as many people as possible in a fairly comfortable manner. A well distributed crowd is always net better than crush in one compartment while seats are empty for richer people in other.
2. Ladies First class gets dangerously packed in peak hours similar de congestion will take place like in regular first classes
3. Layout will be simpler and easier to understand on stations because of the generalization of the rough layout. Like its quite easy to find regular coach on any station but it takes much more time to search where the first class coach aligns on each station.
4. Lots of wasted space inside the trains in the form of partitioning will be freed up. If railways change the current seating from a 3 seats to a 2 seat aisle lots of more standee space will be made available compounded with the partition area benefit, One less person falling to death is always better than 100 people who might have to stand a bit longer.
5. Raising overall ticket prices will give railways money to modernize stations by increasing platform levels and improving circulation areas and building commercial areas above major stations that can be leased out to local Municipalities to operate vendor markets that currently happen in station area streets causing severe crowding
This will makes some people unhappy in the short term especially those who pay more to travel in peace during off-peak but how many are they anyway, IMO most first class passengers will happily pay less since the only difference between 1st and 2nd class during Rush Hour is the quality of cologne people use. Construction work will also cause some disturbance to daily commuters but people will generally comply
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To recoup the losses from the loss of First class fare i would propose to increase the Monthly pass to at-least somewhere around 25 Days of the fare from the current 10.
eg. CSTM to Thane
Single Journey Ticket 15rs
1 Month Pass Regular 215
1 Month Pass Revised 375 (15×25)
1 Month Pass Current AC 1635
1 Months Pass Revised AC 500 ( 375 + 33% Assuming AC Rakes require 33% more for operations than regular rakes)
As More AC trains are made available people will be incentivized to move towards AC trains for obvious comfort reasons and the small 33% increase in MST will also make paying more palatable to the people because there is a significant increase in comfort. This will create a smooth ramp that will make people pay more voluntarily for trains in the future . Current exorbitant pricing for AC several Multiples of Second Class fare is pricing out a lot of people especially when the Services are so far-in-between.
I am not aware of the Income Structures for IR Subdivided By Class so cant take these calculations at Face Value minor adjustment to such a structure taking into account the profitability math to offset it would be
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IMO profit making empty AC train hogging precious slots is far worse than a slightly loss making but transporting people to capacity. The goal of Public transport is to ferry people, there aren’t many examples of profit making Public Transports because the benefits such systems have by enabling commerce in such a large metropolises are under-looked
Also AC trains shouldn’t be treated as something special rather they should aim to completely replace current rakes(As they plan to, looking at MUTP 3A order book) . I am not sure if luggage compartment exist in AC Locals i haven’t traveled in one. If Luggage doesn’t exist in AC trains ICF should rectify this issue since lots of commerce in Mumbai depends on the ability to transport goods in trains.
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To ensure accessibility to the underprivileged sections of the society, Season Tickets should be linked with a subsidized season ticket which will be issued on presenting a proof like Ration Card/EWS Certificate/Newer Barcode Verifiable Income Certificate. Since Season tickets are usually a once in a few months affair they shouldn’t cause much hassle.
I have a lots of thoughts but putting them into text is very difficult and time consuming you can contact me at @VedantMhatre1 on Twitter
Agree wholeheartedly with your suggestions!