Economic threats to interurban passenger railways
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- Hector Edwards
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1 Economic threats to interurban passenger railways Alain SAUVANT Ecole des ponts ParisTech December 4th 2015 Birmingham University System conference Alain SAUVANT 1 French context Two new interurban (> 100 km) modes Ride-sharing Coaches Page 1
2 Google search results in France SNCF BlaBlaCar Inter-urban ride-sharing More than 70% annual growth in France Worldwide extension underway (> 100% annual growth) Alain SAUVANT 4 Page 2
3 Price attractiveness Paris Nantes 400 km (average price Euros one way) Ride-sharing Coach Lone car Alain SAUVANT 5 But frequency too (mid-2015) Ride-sharing Départs/jour/sens Per day per way Alain SAUVANT 6 Page 3
4 Departure points (may h-10h Paris Reims) TGV Ride-share Alain SAUVANT 7 Departure points (may h-10h Paris Reims) TGV Covoit Ride-share Alain SAUVANT 8 Page 4
5 Worth a detour Is a 15 mn detour negociable? Train, coach : Non 0% Ride-share : Yes for 6/8 Proximity + detour possible «door to door service» for large flow city pairs in the future Alain SAUVANT 9 Ride-share and coach are different Ride-share 100 km/h 5 cents per km Much more frequency Detour possible Medium size towns too No yield management Big Luggage issue Bill Coach 70 km/h 5 cents per km but Down to 3 if double-decker on main routes Small frequency No detour Large towns Yield management No luggage issue Bill Page 5
6 Pivot time value Time value (euros/pass.hour) when generalized costs are equal Generalised cost = Cost + total time * time value Total time = 1st leg + Wait + Main Travel + Last leg Alain SAUVANT 11 A market for poors in the beginning (Paris Reims (150 km) 2009) Nombre de voyageurs Passenger numbers Covoit Ride-share TGV 2009 Time value Valeur du temps Alain SAUVANT 12 Page 6
7 Paris Reims 2012 Nombre de voyageurs Covoit TGV 2012 Valeur du temps Alain SAUVANT 13 Paris Reims 2015 Nombre de voyageurs Covoit TGV 2015 Valeur du temps Alain SAUVANT 14 Page 7
8 Towards a mass market? (Paris Reims 2018) Nombre de voyageurs Covoit TGV 2018 centre 2018 banlieue Suburb Valeur du temps Alain SAUVANT 15 Modal split loss Modal Split of rail Within Rail + R-S Loosing interurban Revenue of 15% to 30% for rail Due to both Coaches And ride-sharing Seems possible 3 year time lag Alain SAUVANT 16 Page 8
9 French long distance mobility (passkm)(+ 100 km) 2014 Modal split Lone car Coach Ride-share Plane Alain SAUVANT 17 Estimating long term future Logit 5 mode 2 motives (pro, leisure) long term demand model (over 100 km) Data used Coach : flow, time, price frequency in Spain Main hypothesis Ride-share ; same attractivity as coach for same price travel time and frequency Alain SAUVANT 18 Page 9
10 Long term 2025 (+100 km) (no frequency proximity loop) Modal split Lone car Coach R-S Plane Alain SAUVANT 19 Potential modal split (+100 km) 2035 (if ride-sharing becomes door to door) Modal split Lone Car Coach Plane R-S Alain SAUVANT 20 Page 10
11 Rapid growth likely -> No need for new infrastructure Alain SAUVANT 21 Ride sharing in Europe France = base 100 Google trends search index results for BlaBlaCar (november 2015) Page 11
12 Ride-share >>> coaches in France Ride-share < coaches in Germany Ride-share Coaches Page 12
13 Ride-share < coaches in Spain Ride-share <<< coaches in England Page 13
14 BlaBlaCar is growing in England (nov 15) Essex Birmingham 40 Parlez-vous français? BlaBlacar Search Index Nov 2015 Page 14
15 Railway reactions Targeted price reductions Example 1 : SNCF : «Happy hour» price Sold on Day D-5 à D-2 Example Paris Vichy (400 km) Normal train price : 52 euros 3h Happy Hour train price: 27 euros 3h Ride-sharing : euros 4h Example 2 : Thalys «tick-up» offer 29 euros if group of 4 Alain SAUVANT 29 Railway reactions Improving last mile (cheap easy cab in urban leg) Low-cost TGV : exemple TGV «Ouigo» (high seat density, running on high speed lines only, internet sales only, ) Is there a market from central stations for some coaches «à la Ouigo» (high seat density, maybe standing at peak hours?) Maybe better 1 h standing in a TGV than 2h ridesharing or 3 h in a coach? Alain SAUVANT 30 Page 15
16 Conclusions New competitor(s) for interurban rail including high-speed Will widen the overall market but probably reduce rail income (volume and/or price) Rail can (and should) come up with new commercial offers and improve productivity Impact may differ across countries and regions Page 16
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