The fiasco of privatised rail

Ah, rail ticket price hikes. Seems like once a year, rail companies like to get together and collectively fuck commuters up the arse for an extra few million in bonuses comically disguised as “required for ongoing modernisation”.

And the thing is, it’s every year, like Christmas. In fact, for the bosses of the rail firms, it’s probably better than Christmas (what do you get for the Southern Railways CEO who has everything?)

The real problem of course is that the very idea of privatised rail is fundamentally flawed. Privatisation is a bastion of capitalism, built around the idea that private competition will trim bloated ex-public sector bodies and result in a better service.

The problem is that in order for capitalism to work effectively you need competition. It’s sort of fundamental to the concept. Competition provides choice, which allows me as the consumer to vote with my feet. Charge too much, or provide too shoddy a product, and the consumer will go to your competitor. If enough consumers move, you’re forced to lower your price, or improve your product, to win customers back. Thus the market self-regulates; it is the concept of competition and the choice that competition provides that forces individual companies to behave in a way that is pro-consumer.

Now back to the railways. If you want to, or have to, travel by rail you effectively have NO choice as to the supplier of your service. Each rail company has an effective monopoly on the routes that they serve. If I want to get a train from London Victoria to Orpington (for example) I HAVE to use Southeastern. There is no realistic choice, which is as good as no choice at all.

At this point then, the company can behave as they wish. There is no competition to regulate the market, so poor service and high prices are the inevitable results for any business primarily driven by the need to make profits. Without competition, there is no pressure on the business to lower prices (thereby earning less money and lowering profits) or improve service (thereby spending more money and lowering profits).

I realise that rail contracts are regularly put out to tender (every 5 years?), and thus this should provide an element of competition, with individual companies bidding to provide the best service. However, the problem with this is that it still doesn’t provide consumer choice. There maybe competition to win the tender, but the consumer has no direct say in what the ‘best’ bid is, not any ability to influence the decision, or future decisions, post-awarding of the contract.

You need more than just competition to regulate capitalist industry.You need the consumer to have the ability to choose from a variety of competitors. Unless consumers as a group have the ability to threaten the bottom-line profits of business, then the business is not obligated to consider them or respond to their criticism.

In effect therefore, the privatisation of railways was nothing more than a license to print money. And unless by some miracle we re-nationalise them, then terrible customer service and ongoing fare hikes are likely to be the reality for many years to come.