On Sun, 29 Aug 2004 16:12:38 +0000 (UTC), "Chris Read"
wrote:


Does anyone know what percentage of revenue from these machines merely
covers overheads? By overheads, I am thinking of:

i) Purchase/leasing and installation (depreciated over the estimated life of
the machine).
ii) Electricity
iii) Consumables (parts, paper for tickets etc).
iv) Repairs/fixing vandalism
v) Paying a team of people to drive around London in 20mpg top-of-the-range
Ford Focus estate cars to empty them
vi) Fraud (attaching devices etc to empty the machines of cash).
vii) Cleaning

No idea but I assume that the passenger benefits from quicker boarding
significantly outweigh the costs so therefore in TfL Business Case terms
it is a no brainer.

The machines have very limited functionality (single trip tickets, one day
bus passes and that's it) so are not well used IMX. If TfL were commercially
aware, they could have added Travelcard functionality and the ability to pay
by credit/debit card, but they aren't so they didn't.

Nothing to do with commercial awareness and everything to do with the
fact that the machines are simply *******ised car park machines. They
could never issue Travelcards because they need to be magnetically
encoded. This would add to the capital cost, maintenance cost and
consumable costs. Also a bit pointless when there is a dense rail
network which can vend such tickets plus thousands of Ticket Stops which
can also do so.

The use of credit and debit cards is pointless for machines selling
something costing at a maximum £2.50. There is also the issue of
commission and how anti fraud checks would be carried out. This is not
something that is in the gift of TfL - the banks would almost certainly
insist on a range of on line checks (thus adding to costs) or else they
would bump up the commission charges to reflect the fraud risk. Either
way it costs more to TfL and in the latter cash potentially the
passenger. Who would want to pay £2.70 for a £2.50 One Day Bus Pass for
the privilege of using plastic as payment?

The machines were bought down to a price to do a simple task - i.e. get
the cashless concept in and "working" as quickly as possible. I don't
like the machines - and I say this as someone who is a bit of an expert
on ticket machines - but I do recognise why they were bought.

The commercial awareness bit comes from offering an alternative called
Oyster Pre Pay or Saver tickets both of which offer a hefty discount
over paying cash and which are convenient to use.
--
Paul C


Admits to working for London Underground!