TfL considers Taylor Swift-style 'dynamic pricing' for Tube journeys

A Government announcement on rail fare rises is due imminently

Transport for London is considering whether to introduce Taylor Swift-style “dynamic pricing” to get more people travelling by Tube.

TfL chiefs and Sadiq Khan’s top transport advisor were asked whether dynamic pricing, when prices fall or rise with demand, could be used to address changing commuter travel patterns resulting from hybrid or home working during and since the pandemic.

Dynamic pricing was used by Taylor Swift during her Reputation tour in 2018. It has also been used by Bruce Springsteen, sparking an angry backlash from fans who faced soaring prices if they were unable to secure tickets immediately upon their release.

Airlines also offer dynamic pricing – with lower fares available the earlier they are booked, but increasing as the date of travel approaches.

Seb Dance, Mr Khan’s deputy mayor for transport, was asked by Lib-Dem Caroline Pidgeon at a London Assembly meeting on Tuesday whether TfL might introduce “more differentiation between types of services”, such as “dynamic fare pricing”, when the annual fares review happen next March.

Mr Dance replied: “It’s a decision for the mayor but it’s also on the advice of TfL as well, as well as my own [advice].

“In terms of dynamic fare pricing, there are many different variations of what that looks like, and TfL has indeed been tasked with looking at various options.”

Pressed by Ms Pidgeon on the feasibility of “surge” pricing to address Londoners’ changing travel patterns, Mr Dance continued: “I can assure you that a whole range of options are being looked at.

“It’s not just looking at travel patterns here, but looking at travel patterns worldwide.”

TfL commissioner Andy Lord said TfL was examining the use of dynamic pricing by other world cities – but warned that the Oyster and Contactless ticketing system was getting dated and may not have the capacity or be flexible enough – without an upgrade - to cope with surge ticking.

“There are some hard IT challenges,” he said.

Mr Lord said another consideration was that TfL rail fares were linked to peak and off-peak fares on the national rail network.

But he added: “We are watching closely where some cities and some transport networks have made some changes to their pricing policy and fares policy, to see what impact it’s having.

“I think we are still of the view that some form of peak and off-peak fare is the right thing to have. Friday mornings are typically the lowest of the weekday peaks, but overall numbers on a Friday are still higher than overall numbers on a weekend.

“One of the things we need to be careful of is that we don’t just incentivise people to travel on a different day. What we ideally want to do is incentivise people to come into London more frequently. But we are looking at a range of options.”

A Government announcement on rail fare rises from next March is due imminently.

TfL fares for London buses, the London Underground, the London Overground and the Elizabeth line will be set by Mr Khan, and are likely to change at the same time.

TfL has a “working assumption” that its fares will rise by four per cent, but the final decision remains with the mayor.

Asked by Ms Pidgeon whether there could be further hikes in the premium fares paid by Heathrow passengers on the Tube and Elizabeth line, to enable other fare increases to be minimised, Mr Dance said: “I think all of those different factors that you have raised will be part of the consideration that the mayor would make.”

TfL expects to make an “operating surplus” of almost £500m a year by 2026/27 due to higher fares revenue, property income and cost savings. This money is reinvested in services.

TfL’s fares income is expected to grow by 11 per cent in 2024/24 to £5.6bn, driven by a six per cent increase in demand and a five per cent rise in the amount paid by passengers, including a crackdown on fare evasion and the retention of existing morning peak hour restrictions on the Freedom Pass.

Mr Dance said the mayor was “acutely aware” of the importance of keeping fares as low as possible, especially during the cost of living crisis.

He said: “We are very proud that we have among the lowest bus fares in Europe, and certainly in the country. The Hopper fare has enabled people to take many different buses without additional cost.”

Ms Pidgeon told the Standard after the meeting: “London has always been a world leader in terms of technology on its transport network, including the introduction of Oyster and contactless payments.

“It is clear a lot of work is going on behind the scenes to look at the potential for dynamic pricing for fares on TfL services in London.  While it would clearly need investment and upgrades in ticketing technology, it could potentially help manage overcrowding and demand for transport services in the future.

“I will be seeking more detail on TfL’s research into this area and the opportunities it could give to Londoners for cheaper, more flexible and convenient fares in the future.”