Make sure variable fares do not put train passengers at a disadvantage

Systems in which fees change in accordance with demand trends have spread to many services, but caution must be exercised when applying such a system to infrastructure connected to daily life, such as railroads.

The Land, Infrastructure, Transport and Tourism Ministry is considering introducing a system in which railway fares will fluctuate depending on the time of day and other factors. The transport ministry included the adoption of such a system in its draft basic plan to set guidelines for transportation policy over the next five years.

The ministry plans to raise fares during rush hours and lower them for other time periods. Last year, East Japan Railway Co. (JR East) and West Japan Railway Co. (JR West) announced their intention to implement such a system.

The main goal is reportedly to reduce congestion, but costs can also be reduced due to the use of fewer train cars and personnel during peak hours.

Numerous railway companies have been in the red because of a sharp drop in passenger demand amid the novel coronavirus pandemic. The move to adopt variable railway fares is apparently aimed at streamlining operations, as companies believe passenger demand is unlikely to return to pre-coronavirus levels due to the spread of telecommuting.

Variable fees are common in such fields as accommodations and airfare, and have also started for concerts and sporting events. In many cases, prices are set higher on Saturdays and Sundays and other occasions when many people gather, and relatively lower on weekdays.

However, railways are an important aspect of daily life, indispensable to the public. Railway companies need to obtain approval from the government to raise the upper limit of their fares. The three major JR companies — JR East, Central Japan Railway Co. (JR Tokai) and JR West — have not raised their fares, except when the consumption tax rate was raised, since the privatization and breakup of the Japanese National Railways in 1987.

If they are to shift to a new fare system that includes fare hikes, they will have to provide detailed explanations and design the system carefully to gain the understanding of riders.

If rush hour fares go up, people who cannot change the time they start work will be most seriously affected. How do railway companies intend to handle commuter passes?

Nonregular employees, for example, may not receive commuting allowances from their companies, which will likely deal them a serious blow.

It is essential for the government and JR companies to closely examine various cases to see what kind of people will be affected and in what way, and to show consideration for people who will face disadvantages.

Society as a whole must consider reviewing current work styles, through such measures as expanding the scope of staggered commuting hours among companies.

Under the current system, fares are determined by adding a certain margin to the sum of necessary costs, such as labor and the maintenance and renewal of facilities. This is known as a fully distributed cost pricing method, and it is also applied to fees for electricity and gas. Variable fares are not envisioned under the existing system, so introducing such fares could involve systematic drastic reform.

Concerns remain that the pricing structure could become complicated under the new system, making it hard to know what the cost will be when using a train.

The government should give top priority to ensuring the convenience of passengers and the safety of operations, and deepen discussions for that purpose.

— The original Japanese article appeared in The Yomiuri Shimbun on May 5, 2021.