Getting a Move On

Startups can transform the way rail travel works in the UK - here's how.

This analysis is taken from our new pamphlet, Getting a Move On - read it here.

Behind cars, trains are the most popular way to get around the UK – assuming the service is not delayed or cancelled.

When people typically think of the rail network most focus on the visible infrastructure – the stations, trains, and track – but underneath there is an invisible mass of connective tissue, in the form of software infrastructure, that keeps the entire system moving.

Some of the biggest changes we’ve seen to consumers’ experience of rail travel in the past twenty years – from increased automation and smarter data sharing, to new ways to buy tickets or get discounts through railcards – have been technology-led.

With just a few key changes, startups could provide even more innovation within rail -through the inherently digital and scalable rail ticketing sector.

They’re ready and waiting to provide that improvement. But they, and those that invest in them, need to know that their attempts to enter the market will be welcomed by the rail network.

There are already massive changes planned for the sector. The introduction of Great British Railways is a fundamental shift in how the entire sector will be governed. But amidst this reform, we wanted to focus on what startups specifically need to innovate.

In our view, there are four clear areas that the Government, and in turn GBR, should make a priority in order to solve these issues.

Taming the TOCs

Startups have told us that the need to deal with a huge variety of stakeholders is a key barrier to their growth.

The Train Operating Companies (TOCs) are a major contributor to this issue. The introduction of a ticketing innovation often requires agreements with each of them - and there are currently 28 operating in the UK rail network.

Bringing some of them into public ownership, as the Government is in the process of doing, is not enough in itself to solve this issue.

The relationship between innovators and the TOCs, whether in public ownership or not, needs to be redefined.

A good first step would be for the Government, or GBR, to assess where the current model has gone wrong, and what structural incentives, and cultural changes, are necessary to ensure that TOCs welcome innovation with open arms.

Empowering GBRX

In February this year, Rail Minister Lord Hendy announced the creation of GBRX, a new body operating under the Great British Railways Transition Team (GBRTT), which is designed to fulfil Priority Four of the Government’s five priorities for rail: fostering innovation.

Startups need a clear front door to engage with the sector – and GBRX could fit the bill. A world in which GBRX builds relationships with innovators, and has the power to make adoption happen across the sector, could transform the prospect of UK rail startups.

While the initial ambitions for GBRX are promising though, its success will depend on how it is embedded within the wider GBR structure. For GBRX to drive genuine change, it must have the support, authority, and potentially funding of GBR.

Clarity is therefore needed from GBRTT and the Government about GBRX’s precise role and powers. In particular, its relationship with the publicly owned TOCs should be explicitly defined.

GBRX must have the mandate to engage these operators and ensure they remain open to innovation, rather than defaulting to risk aversion and legacy practices.

Access to Data

Data is the fuel that allows startups to innovate, and even a single day across the UK’s rail network generates huge amounts of it.

The ability to analyse and make use of it is a key competitive factor for any startup – but this relies on equal access to datasets in the first place.

With the consolidation of the rail network under GBR, the Government has the opportunity to expand and open up huge quantities of data, including that relating to fares, delay repay, and performance data.

With the new public ownership model in place, GBR will have both data that was formally controlled by the TOCs and a huge amount of data that is currently controlled by National Rail, Network Rail, and other bodies. Equal access to this data is paramount to allow startups to enter into, grow and innovate within the market.

Data standards are just as important though, to ensure that its analysis and processing is not unnecessarily expensive. These could include machine readability, that would make the processing of data significantly easier. With these standards, and open access to the data itself, the fuel that startups need to innovate will be easy to procure.

The ball is in GBR’s court. But with the new powers granted to the Government by the Data (Use and Access) Act passed earlier this year, they could also step in. If data continues to be siloed, a Smart Data scheme for certain elements of rail data could be an alternative solution.

And Finally, Some Quick Wins

Startups in the rail ticketing sector should already be able to offer the best deals and discounts to their customers – but this is not currently always the case. Both Digital Railcards and Digital Season Tickets are restricted in one way or another – meaning needless friction for consumers.

Currently all nine types of digital railcards can be purchased and hosted on a smartphone app built and operated by National Rail, but only seven of the nine can be purchased and hosted by a private company providing a ticketing app.

At the same time, consumers travelling on sixteen of the 28 major TOCs are able to host their season tickets on an app, but can’t on the other twelve.

The reasoning behind these decisions is largely absent - instead based on inertia. The Government could take some quick wins now, before the transition to GBR. Just as importantly though, they need to ensure that future schemes like Digital Railcards or Digital Season Tickets are accessible across the entire network by default.

The Potential

If the Government is going to achieve improvements in productivity and economic growth, they need to improve our rail network.

Indeed, the Government has recognised this, undertaking some of the most fundamental reforms of public services, through the introduction of GBR, that we have seen in decades.

But we know that innovation is most often market-led - and startups are at the vanguard of it.

By ensuring they have the data they need, and clear pathways to engage with the sector, we can achieve a smarter, cheaper, and more productive rail network.

Read our full pamphlet on rail ticketing here.