The case for ‘premium economy’ train carriages

A few years ago I wrote here about the unexpected symbiosis between economy passengers and business travellers on commercial flights. Largely unnoticed by people in either cabin, those buying each class of air ticket are unintentionally helping out their fellow travellers at the other end of the plane. Precisely because the two classes of passenger have wildly different priorities (the people at the front are sensitive to time, productivity and comfort; the people at the back are more sensitive to price), it benefits both groups to share the same aircraft.

Why? Well, put simply, leisure passengers do not much care whether a flight to Miami operates daily, weekly or even fortnightly, since they are most likely going away for one or two weeks. By contrast business folk will reject an airline unless they can fly out and back on the precise day they choose. So, without leisure travellers, the airline cannot afford to operate flights with the frequency the business passenger demands. But without the high return on premium cabins, the airline cannot offer the prices economy passengers want.

It’s why pubs traditionally had a public bar and a saloon bar. It is a more efficient arrangement than having a boozer and a gastropub operating as separate entities. One business can hence serve two markets: a public bar for those wanting to start a fight and a saloon bar for those treating the lady wife to a gin and bitter lemon.

Likewise, first-class and standard-class rail travellers share the same trains but have very different reasons for travelling by train. Standard class needs to be pleasantly affordable for people who may have no alternative. First-class rail needs opulence to entice people out of their Jag.

It’s called price discrimination, and a lot of people hate it. Yet this is one place where trickle-down economics may actually work. One academic has estimated that about 20 per cent of wealth redistribution happens invisibly this way. For instance, were it not for those rich gits renting a villa in August for £3,000 a week, it wouldn’t be available to you in October for £1,200. Most commercial organisations – from McDonald’s to Tesco – would not be able to offer the low prices they do were they not also adept at making richer people pay more for things that aren’t always that expensive to provide.

Yet despite this Southeastern Trains has decided to get rid of first class, using the old bureaucratic trick of making a service utterly rubbish and then citing ‘lack of demand’.

Yes, the old system was broken. But a sensible solution would be for commuter railways to create what an airline would call premium economy. Make a few carriages a tiny bit pleasanter than the rest (i.e. with seats that don’t look like ironing boards and with more tables for people to work). Charge a flat daily fee of £5 for sitting in the comfortable part, making it an impulse buy, not an annual commitment. Anyone disabled or with a senior citizens’ railcard could use the comfier section for free. In addition, season ticket holders could be given an annual allowance of upgrades since, if a train is overcrowded, they deserve seating priority over random travellers.

Southeastern claims to carry 400,000 passengers every weekday. If only 10 per cent of passengers paid the premium, that’s over £25 million a year in additional revenue, enough to provide benefits for everyone.

Southeastern claims their declassification will make the railway ‘more inclusive’. It sounds plausible, but in fact offering only one level of service is the opposite of being inclusive. It means individual circumstances and preferences are given no consideration at all. Whatever happened to ‘From each according to his abilities, to each according to his needs’?