The new rail fare structure is confusing and will help airlines

The new pricing scheme for the Rajdhani, Shatabdi and Duronto Trains, announced by the Indian Railways, leaves a lot of holes in it. In some quarters the new model has been described inappropriately as “surge pricing”, which it is not. The differentia of surge pricing is that price varies in accordance with demand, leaving the possibility of fares coming down in a lean season. But in the railways’ case, whatever the demand may be, the pricing will follow a certain pattern for the AC 2 and AC 3 classes. Under the new formula, base fares will jump by 10% for every 10% of the tickets sold. And once half the tickets are sold, the 10% hike rule will cease to hold, and the new fare will be 50% more than the base fare.

Read: The new rail fare is confusing and help airlines

At this level of knowledge, many questions can be raised. Let’s suppose there are 350 berths in AC III tier in the Rajdhani Express from New Delhi to Patna on a certain day. The first 10% of the berths, 35, will go at, say, Rs 2,000. But on which base will the next 10% of the berths be calculated – 350 or 315 (350 minus 35)? Next, while we know that the first 10% of the passengers will pay Rs 2,000 and the next 10% (whatever may be the way of calculating it) will pay Rs 2,200, but what about the third 10%? Will they pay 20% more than Rs 2,000 or 10% more than Rs 2,200? Then it is also not known what rates those purchasing unconfirmed tickets should pay. If they pay the base rate and then get their tickets confirmed through the quota system, what should be the balance that the passenger should shell out? The ministry of railways should immediately clear all doubts at this stage, because the new scheme kicks in on Friday.

Read: Rail minister envisions plans for trains to run at 500kmph

This is just one part of the story. The more damaging thing would be that black marketers will have a field day in the new system. There is every possibility that tickets will just vanish from the buying counters. As it is now during the busy season tickets are hard to get. While one can always argue rail tickets are not transferable because passengers have to give identity proof while travelling by train, it is also true that travelling ticket examiners mostly skip that part of the job except for those who have bought their tickets online. At best, this will help airlines to get more passengers.

Now that the system has come into force it will run for some time. The railways should have a more simple structure of fares in place and have a flat increase if it is working on the assumption that people can pay 50% more than they are doing now. All this is happening because passenger fares had not been increased in a decade.