A mate and I got into a discussion about how the revenue from the
Oyster card is allocated between participating operators. If I make a
journey on a bus at a cost of £1, I assume the £1 goes to the bus
operator (possibly with deduction of a service charge). If I then
travel on the tube at a cost of £2.20, logically this money would go
to London Underground. This brings the total spend to £3.20. Next I
travel on DLR with a fare of £2.20. I then make a second journey on
the tube. This money can go to London Underground. Total spend is
now £5.40. Now suppose I go on DLR with a fare of £2.20. This makes
a total of £7.60. At this point the price cap kicks in and the cost
is limited to £5.80. I then get on another bus (£1).

Who gets paid what? Does the first bus operator and London
Underground get paid in full, DLR in part and the second bus operator
not get paid at all? Or do they all have their payment scaled back on
a pro rata basis? Or do none of them get paid the actual fare and
they all take a share of the total Travelcard revenue?

Or looking at it another ways If I only make one journey, on a bus,
does the bus company keep the £1 or do they get a pre-determined share
of the total Oyster money instead?

Thanks
Scott

"Scott" wrote in message
news
A mate and I got into a discussion about how the revenue from the
Oyster card is allocated between participating operators. If I make a
journey on a bus at a cost of £1, I assume the £1 goes to the bus
operator (possibly with deduction of a service charge). If I then
travel on the tube at a cost of £2.20, logically this money would go
to London Underground. This brings the total spend to £3.20. Next I
travel on DLR with a fare of £2.20. I then make a second journey on
the tube. This money can go to London Underground. Total spend is
now £5.40. Now suppose I go on DLR with a fare of £2.20. This makes
a total of £7.60. At this point the price cap kicks in and the cost
is limited to £5.80. I then get on another bus (£1).

Who gets paid what? Does the first bus operator and London
Underground get paid in full, DLR in part and the second bus operator
not get paid at all? Or do they all have their payment scaled back on
a pro rata basis? Or do none of them get paid the actual fare and
they all take a share of the total Travelcard revenue?

Or looking at it another ways If I only make one journey, on a bus,
does the bus company keep the £1 or do they get a pre-determined share
of the total Oyster money instead?

AIUI London operators don't take revenue risk. So all farebox income whether
cash fares, paper travelcards, or Oyster goes to TfL who pay operators
agreed sums for operating the service. I'm not sure how it works with
National Rail TOCs, who do take revenue risk.

Peter

On May 29, 8:37*pm, "Peter Masson" wrote:

"Scott" wrote:

A mate and I got into a discussion about how the revenue from the
Oyster card is allocated between participating operators. *If I make a
journey on a bus at a cost of £1, I assume the £1 goes to the bus
operator (possibly with deduction of a service charge). *If I then
travel on the tube at a cost of £2.20, logically this money would go
to London Underground. *This brings the total spend to £3.20. *Next I
travel on DLR with a fare of £2.20. *I then make a second journey on
the tube. *This money can go to London Underground. *Total spend *is
now £5.40. *Now suppose I go on DLR with a fare of £2.20. *This makes
a total of £7.60. *At this point the price cap kicks in and the cost
is limited to £5.80. *I then get on another bus (£1).

Who gets paid what? * Does the first bus operator and London
Underground get paid in full, DLR in part and the second bus operator
not get paid at all? *Or do they all have their payment scaled back on
a *pro rata basis? *Or do none of them get paid the actual fare and
they all take a share of the total Travelcard revenue?

Or looking at it another ways If I only make one journey, on a bus,
does the bus company keep the £1 or do they get a pre-determined share
of the total Oyster money instead?

AIUI London operators don't take revenue risk. So all farebox income whether
cash fares, paper travelcards, or Oyster goes to TfL who pay operators
agreed sums for operating the service. I'm not sure how it works with
National Rail TOCs, who do take revenue risk.


You're absolutely correct in saying that under the current system
London bus operators do not take the revenue risk at all. London Buses
(the part of TfL that contracts out to bus operators), London
Underground, the DLR, London Overground and Croydon Tramlink are all
part of the "TfL family" - though I must admit I'm somewhat hazy on
how farebox revenue gets divided up internally within the TfL family,
i.e. between LU and DLR etc - and I don't think it's as
straightforward to say that it just gets divided up as such either.
(Also LOROL, the operator of the London Overground network, doesn't
take the revenue risk but gets paid an agreed amount according to
their performance; on the DLR I think the operator, Serco Docklands,
is subject to a similar regime, though I think they might get some of
the farebox take - plus there's the infrastructure concessionaires who
built and maintain the more recent extensions - e.g. CGL Rail for the
Lewisham extension - who I think get payments based on patronage of
those sections of the line).

Those National Rail TOCs who currently accept Oyster PAYG for at least
a part of their routes in London have reached an agreement with TfL -
in the case of routes that have interavailable ticketing (easiest
example being Stratford to Liverpool Street) I'm not sure they had any
choice in the matter, but for other routes where there's no
interavailable ticketing (e.g. West Drayton to Paddington) they have
done so voluntarily.

However without a doubt one of the major issues in the ongoing
negotiations to get all TOCs to accept Oyster PAYG across London is
how farebox revenue will be allocated - and the issue is not just how
much should go to the 'National Rail' TOCs as such but also to which
specific TOC it should go.

On 29 May, 22:09, Paul Corfield wrote:
On Fri, 29 May 2009 20:31:27 +0100, Scott
wrote:



A mate and I got into a discussion about how the revenue from the
Oyster card is allocated between participating operators. *If I make a
journey on a bus at a cost of £1, I assume the £1 goes to the bus
operator (possibly with deduction of a service charge). *If I then
travel on the tube at a cost of £2.20, logically this money would go
to London Underground. *This brings the total spend to £3.20. *Next I
travel on DLR with a fare of £2.20. *I then make a second journey on
the tube. *This money can go to London Underground. *Total spend *is
now £5.40. *Now suppose I go on DLR with a fare of £2.20. *This makes
a total of £7.60. *At this point the price cap kicks in and the cost
is limited to £5.80. *I then get on another bus (£1).

Who gets paid what? * Does the first bus operator and London
Underground get paid in full, DLR in part and the second bus operator
not get paid at all? *Or do they all have their payment scaled back on
a *pro rata basis? *Or do none of them get paid the actual fare and
they all take a share of the total Travelcard revenue?

Or looking at it another ways If I only make one journey, on a bus,
does the bus company keep the £1 or do they get a pre-determined share
of the total Oyster money instead?

As others have stated the fare revenue for TfL provided or contracted
services goes to TfL directly. *Payments are made to the operators (such
as bus companies) based on a contracted fee which is adjusted up or down
according to the performance of the service. *I believe DLR works on the
same basis with Serco who operate the service being paid on a
performance adjusted fee basis. *

As Mizter T indicated there are two sections where infrastructure is
also privately provided on DLR so a separate fee is paid the consortia
who built and maintain the Lewisham and Woolwich extensions. I believe
this is also a performance (availability) based fee although the
Lewisham line was originally based on a "shadow toll" whereby there was
effectively a ridership based incentive as an amount would be paid for
every passenger carried. *However given the consortia had no right to
set DLR fares there was not really a direct linkage between ridership
and what the consortia controlled.

The Overground concession is similar to DLR whereby all revenue goes to
TfL and LOROL (the operator) is paid a fee subject to performance of the
services and a range of other service attributes. I believe there is
some financial upside for LOROL if performance reaches very high levels
and also if there are very low levels of revenue fraud.

As LUL is not operated "on contract" then it has its own budget for
revenue and operating costs but this is set by TfL and the money
collected from ticket sales still goes forward to TfL for allocation and
apportionment in accordance with the various agreements for the
different products.

I am not entirely sure what happens with the PAYG revenue as there are
parallels with the Travelcard "pot" given the use of capping but NR
participation is much lower. *Clearly many journeys are accurately
recorded via PAYG and it is possible to see which operator is used in
many circumstances. *In some cases it is not possible to see what route
is taken (Highbury to Richmond via LUL or via Overground) so there must
be an element of apportionment in addition to the ability to allocate
individual trips. *I will have a look at the TfL intranet to see if a
PAYG apportionment document exists as there was certainly a document
explaining how Travelcard revenue is apportioned (via a Travelcard
survey process which defines the modal and then operator split). *If I
find some more info I'll post a follow up.

Where Oyster travel is against a Travelcard held on the Oyster card then
the total revenue is shared as per the Travelcard Agreement factors.

You also need to bare in mind that there are other flows of money for
single and return tickets and also through tickets between LUL and NR
which have their own agreed rules for apportioning revenue and payment
of commission for the ticket selling activity. *Oyster PAYG cuts in to
this area as it will typically displace cash sales and you have the
issue of cash being paid up front and then being "drawn down" from the
card balances (at passenger level). *Nonetheless if a journey has
happened on a TOC train where PAYG is valid then some revenue has to
reach the TOC. *I do not know what the nature of the agreements is for
TOC acceptance of PAYG but I would guess it is some sort of combination
of provisions from both the Through Ticketing Agreement and also the
Travelcard agreement (given the daily capping element).

--
Paul C

Cheers for that info, I was wondering about this issue myself and
couldn't really work out how it would work. You mentioned that singles
and returns vary from travelcards, and in the same vein oyster capped
journeys also vary from oyster singles, but with Oyster you do have
more information about the journeys than travelcards, so revenue
allocation *could* potentially be more representative. LOROL, DLR, and
LUL journeys can all be grouped under their seperate headings, but I
find the revenue allocation for NR operators much more confusing, and
I'm starting to see why take-up of Oyster PAYG acceptance in South
London is taking so long, they can't quite decide how to work the
system. There are 2 main options. They could A) put all Oyster PAYG
revenue into one fares pot and then divvy it up in whatever way they
like, which would be agreed with the operator before (which probably
being discussed now) or B) allocate revenue based on which operator
was used for the journey, so if the Oyster is used on LUL and NR
equally, then it would be half and half, or if the journey was 3/4 LUL
and 1/4 NR then the revenue from that individual journey would be
divvied up on the same basis. Obviously it is easier for multiple tube
line journeys, because they are all LUL, and this revenue doesn't need
to be allocated per line because it is all grouped. NR is a lot more
complicated and I can't quite work it out, whether the powers that be
have thought this through or not remains unknown.

The easiest way to solve the problem would be to adopt a LOROL style
approach to ALL suburban services in London, whereby the service
frequency and operations are determined by TfL and operated under
contract by the respective TOCs. This way they would remove the
revenue-risk nonsense from the TOC and the fares etc would be
determined by TfL and collected for TfL.

The more difficult (by far) option would be to allocate fares on a
similar basis to the national rail model, whereby fares (oyster or
otherwise) are based on the route taken and the operator on that
route. So if the route was Southern only then southern would get the
revenue from the single fare. (This analysis only concerns single
fares at this point). Then if the route was operated by multiple TOCs
then you would divvy up the fares based on the same theory as national
rail tickets which divide the fare based on the number of seats and
services provided on that route etc. This would be difficult, to say
the least, but at least *possible* ish.

Oyster capping however would add another complication to the mix
because the single fare which previously would have been wholly
allocated to a particular TOC would now be reduced since the oyster
reductions for further journeys are 0. To be honest it would be easier
at this stage to *give up* as it were, and simply adopt a travelcard
revenue allocation method. But maybe it could be possible to only
divide up the total revenue between the operators used and the
operators not used on this occasion get nothing? Not sure if this
would make the revenue allocation skewed on Oyster/non-Oyster routes
though.

Southern seem to be gaining oyster readers at many of the stations I
have visited recently, so they are going to be accepting oyster PAYG
soon presumably, the main barrier to implementation being revenue
allocation, and not lack of Oyster readers.

Well, that's my tuppence worth, I would go on, but that's enough I
think!!!!

"D DB 90001" wrote

The easiest way to solve the problem would be to adopt a LOROL style
approach to ALL suburban services in London, whereby the service
frequency and operations are determined by TfL and operated under
contract by the respective TOCs.


But wouldn't that effectively mean that almost the entire rail network in
the south-east would be decided by TfL - a body controlled by the mayor of
just part of that network?

Most south-east services are to, from, through London.

On 30 May, 23:38, "Richardr" wrote:
"D DB 90001" wrote

The easiest way to solve the problem would be to adopt a LOROL style
approach to ALL suburban services in London, whereby the service
frequency and operations are determined by TfL and operated under
contract by the respective TOCs.

But wouldn't that effectively mean that almost the entire rail network in
the south-east would be decided by TfL - a body controlled by the mayor of
just part of that network?

Most south-east services are to, from, through London.

Ah, I was only referring to Z1-6 services which usually terminate
inside zone 6, but I didn't take account of services which terminate
at South London Termini and call at a Z6 station only, but no
intermediate stations. I didn't think that through, forgetting about
the journey opportunities which you have at East Croydon for example,
which would be oyster payg compatible, but also have fast services
that would inevitably have to be included in the oyster system. That
probably wouldn't work as I thought then.

However, I still think that local suburban services that *do*
terminate inside of Z1-6 or at stations such as Sevenoaks or Dartford
just outside Z6 should be managed by TfL, just like all bus routes,
even those which run outside of London but are mainly inside Z1-6, are
managed and run by TfL. Frankly because TfL are more likely to get
better results than other local authorities or DfT.

In article ,
(Richardr) wrote:

"D DB 90001" wrote

The easiest way to solve the problem would be to adopt a LOROL
style
approach to ALL suburban services in London, whereby the service
frequency and operations are determined by TfL and operated under
contract by the respective TOCs.


But wouldn't that effectively mean that almost the entire rail
network in the south-east would be decided by TfL - a body
controlled by the mayor of just part of that network?

Most south-east services are to, from, through London.

That is already a concern for us in Cambridge. In Ken's day he was trying
to impose additional stops on WAGN/FCC trains to suit his electorate but
not ours.

--
Colin Rosenstiel

"D DB 90001" wrote

However, I still think that local suburban services that *do*
terminate inside of Z1-6 or at stations such as Sevenoaks or Dartford
just outside Z6 should be managed by TfL, just like all bus routes,
even those which run outside of London but are mainly inside Z1-6, are
managed and run by TfL. Frankly because TfL are more likely to get
better results than other local authorities or DfT.


But the capacity on the roads isn't constrained in the same way as that on
the railways.

I believe that a lot of London commuter routes run at pretty much capacity
at peak times. Allowing one part of the route to determine what happens
there fixes what happens elsewhere.

Take Thameslink, for example, which stops and potentially stops at a lot of
London stations. If the Mayor of London had sole rights to determine
stopping patterns in London, then he would, quite rightly for him and his
electors, choose patterns wanted by his constituents, which I would imagine
would mean stopping all trains at all stops in Greater London. Thus those
passengers from outside London, e.g. Brighton and Bedford, would get a
massive deterioration in service.

I can't see why letting London alone decide the Thameslink timetable in its
own interests is such the bonus you think to Brighton or Bedford people?

Isn't it the same for most south-east routes - nearly all of which are
designed mainly for non-Londoners to get to and from London, or share tracks
with such a route?

"D DB 90001" wrote:
Southern seem to be gaining oyster readers at many of the
stations I have visited recently, so they are going to be
accepting oyster PAYG soon presumably, the main barrier
to implementation being revenue allocation, and not lack of
Oyster readers.


Revenue allocation is not the issue now - the agreements have been made
operator by operator, not line by line; so Southerns deal was made before
they started installing readers on non-shared stations.

Much more likely that installation is being phased to spread the financial
pain, and where possible to tie in with other work. It's not the readers
that are expensive, but installing them and making them part of the system.
There's even planning issues; though they may appear random, someone has
decided where they should go. The apparent randomness may indicate shortcuts
to share cable runs with other items, etc., etc.
--

Andrew

"D DB 90001" wrote
The easiest way to solve the problem would be to adopt a LOROL style
approach to ALL suburban services in London, whereby the service
frequency and operations are determined by TfL and operated under
contract by the respective TOCs.

Ken planned to do exactly that, and there is a certain logic to London
controlling its own 'metro' services (as Liverspool and many foreign cities
do). The understanding was that as each franchise came up for renewal, TfL
would negotiate for appropriate lines to be transferred and upgraded by
LOROL.

For example, there discussions with DaFT when the new 'south central'
franchise document was drawn up, eg about the South London Line. Nothing
happened, but I don't know if that was Boris' cooling on the idea, money not
being available to upgrade to LOROL standards (about half a billion, at a
guess) - or the more prosaic reason that with Thameslink wrecking London
Bridge for a few years, this was not the time (it's short franchise,
anyway!).

But watch carefully as each London Franchise comes up for grabs ...
--

Andrew

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