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Rail commuters face 20% rise in ticket prices as cap is axed - Evening Standard
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wrote: In article , (Roy Badami) wrote: In article , Clive D. W. Feather wrote: Um, won't that breach the present franchise agreements? Presumably the gov't will negotiate (or legislate) a variation in the franchise agreements that will balance lower subsidies/higher premiums with an increase in the fares basket cap, such that the overall package is revenue-neutral on the TOCs. That could be more expensive than it seems if cap and collar applies to most of the franchises I'm not sure why. By definition it would be calculated to be revenue neutral, so any increase in fares collected will effectively go to the exchequer. -roy |
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Rail commuters face 20% rise in ticket prices as cap is axed - Evening Standard
In article ,
wrote: In article , (Roy Badami) wrote: In article , wrote: In article , (Roy Badami) wrote: Er, it's not quite that simple. Cap and collar isn't cost-free to TOCs and higher fares could drive passengers away, worsening their results. Therefore they might not accept the change without some compensation. Oh, I see. Yes, presumably there would have to be an agreed estimate of demand elasticity to allow calculation of how many passengers would be lost. You could then scale the revenue levels that cap and collar are based on appropriately, and also calculate the change in subsidy or premium. Presumably the process won't be entirely cost free, but I'm not sure I'd expect it to be hugely expensive either. -roy |
#4
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Rail commuters face 20% rise in ticket prices as cap is axed - Evening Standard
In article , (Roy
Badami) wrote: In article , wrote: In article , (Roy Badami) wrote: In article , wrote: In article , (Roy Badami) wrote: Er, it's not quite that simple. Cap and collar isn't cost-free to TOCs and higher fares could drive passengers away, worsening their results. Therefore they might not accept the change without some compensation. Oh, I see. Yes, presumably there would have to be an agreed estimate of demand elasticity to allow calculation of how many passengers would be lost. You could then scale the revenue levels that cap and collar are based on appropriately, and also calculate the change in subsidy or premium. Presumably the process won't be entirely cost free, but I'm not sure I'd expect it to be hugely expensive either. I'm assume that if the Government wants something badly the TOCs will press to get a better deal. Who's buying and who's selling here? -- Colin Rosenstiel |
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