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Dynamic Pricing - First Great Western Case Study

  
  

Are First Great Western "ripping off travellers"*?

First Great Western 125 train One commuter* from Westbury to Reading found First Great Western's pricing was costing him dearly. His yearly season ticket for the 55 or so miles (90 km) was £4,264 (6,000 Euro) per year. However, if he bought 2 tickets, one from Westbury to Pewsey (a station he passed through) and the other from Pewsey to Reading, then the combined price was only £1,942 (2,700 Euro), under half price! Even a ticket from Castle Cary, 22 miles (35 km) further down the line (and increasing the journey distance by 50%), was also cheaper than the Westbury ticket.

First Great Western put it down to demand and commercial analysis - i.e. based on the type of traveller (business) and what they think the market will stand. They were trying to discourage, even ban, the practice of buy tickets for 2 legs of a journey - presumably by turfing people of the train and telling them to wait for the next one, or not allowing them on if the train didn't stop at the intermediate station.

Managing Change in its own travels has often found that location of departure and destination is a significant factor in the price, as much as the time of day and distance. E.g. a Saver Return from Westbury to Exeter (100 miles / 160 km) is £25 (35 Euro). There are very few restrictions:- travel on a specific day, but at any time, and return  the same day or within 1 month, again at any time. The full price is about £45 (60 Euro). Yet a ticket from Westbury to London (90 miles / 145 km) is over £80 for a normal unrestricted and open return, with the off-peak fare at about £45 (60 Euro).

As reported in Wiltshire Times on 21 March 2003, a commuter was reported as saying "People from Westbury are being singled out and ripped off to the tune of £2,000 a year"

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External Resources
 

  1. ThePriceMan, a web site dedicated to Dynamic Pricing.
  2. See the full list of resources for this web site for other related resources.


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