Privatised industry, nationalised TOC brands (Transport Designed)


The changing and potentially not-so-changing face of UK rail branding.

The government (and therefore the tax payer) still own all the stations and track (through Network Rail) and the ROSCOs (rolling stock operating company) own pretty much all the trains (who in turn are largely owned by banks or investment companies).

The stations and train services across all UK regions, routes and lines are grouped and placed into franchises. Private companies (largely big transport conglomerates) then bid on a fixed-term basis, to run one of the franchises as a TOC (train operating company). These TOCs staff the stations and operate the trains, based upon rules the government get to define (including things like ticket types, fares and timetables). Technically, the TOC is also still a government owned business, but run by the private company for the length of the defined term. After which the franchise is re-let and the TOC (and all its staff) possibly handed over to someone else.

As part of their deal, the private companies are given limited freedoms to run their franchises as they see fit, in return for paying the government a healthy fee (and profit share) of course. Some subsidies are offered to the companies to run certain services or meet certain goals, plus incentives are added for good performance, and they can also take a profit after things like track access fees, staffing costs and train lease fees have been paid.

With a few exceptions, these private companies have actually been very proud to splash their names up the side of trains, trying (sometimes successfully, sometimes not) to improve their identity, boost their brand, and become synonymous with great value, excellently-operated rail travel (which would, in turn, attract more people to their services).

With that in mind, the current trend of operators dropping their corporate names in favour of newly created ‘franchise brands’ (largely using just franchise names themselves) isn’t much a surprise. You can build advocacy around your new brand and leave your name out of it in case it takes a turn for the worse (indeed many people have said this is why First Great Western renamed themselves as GWR – in order to drop the ‘First’ name, which over time has come to represent poor service and delays – Worst Late Western anyone?!). The truth, however, is that this is actually being driven by the DfT, and in turn, the government.

In recent bids, the DfT are now pushing operators to (and quoting from the last few freely available franchise initiation to tender documents online)…

Use branding to maximise the value of the franchise whilst having regard to the overall costs and benefits of branding including, where practicable, enhancing the franchise brand so that it could be used by the successor operator and its successors, as well as limiting the costs of de-branding at the expiry of the franchise.

Sounds like a great idea. Less costs for both current and future franchisees, less confusion for customers and creating brands that can stand the test of time. But, is it actually such a good thing for the future? The new franchise requirement could mean that the rail brands we have now are largely it. So although GWR might be operated by First now, if it passes to another operator, the name, colour scheme and brand will stay as is.

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Written by Long Branch Mike