Last week, NS announced a significant change with regards to their policy with the newly-rebranded NS Group Ticket (Groepsretour in Dutch). It is going to affect all frequent domestic travellers: the ticket will be applicable to only one way trips and thus will be relatively more expensive if you take a round trip. Although this tightening of rules can be anticipated from months ago, this still came as a surprise to many because NS had been extremely lenient with their previous policy adjustments. This could very well be the death sentence of the Group Ticket.
As of the date of publication, the Group Ticket still allows you to form a group up to 10 different individuals as each will pay a minimum of €7 for each ticket. This will allow you to travel from and to two fixed destinations on the ticket, presumably for an indefinite number of times. The ideal scenario is that this group would help you to travel on a discount with 9 of your friends in a way that encourages people to use the train service during the weekend. However, since it is so difficult to form a group of 10 by solely getting your company together, there have been many Facebook initiatives that were created to bridge the gap and connect these people. As per the latest adjustment to the policy last year, all individuals of the group are required to board on identical departure and arrival stations. The current scheme allows a lot of freedom since members of the group could board the train at any time.
However, the distinctive feature (which characterizes it as a Group Ticket) is that the administrator of the group has to collect every piece of information from other travellers willingly without getting any compensation. Growing frustrated with other unhelpful people of the group, many users are not keen on being the group administrator anymore and (along with everyone else) starting to become the free riders. This is where the situation gets really tricky. Acknowledging the inconvenience that people have to endure when forming a group, some took advantage of the situation and thus created a service when they would be willing to do the tedious work of filling out the details for everyone, but they take a surplus fee of 1 on each ticket. Making money is never as simple as that, isn’t it? While the extra cost of €1 seems minimal to the traveller (and why not since they might have otherwise paid €20 or €25 euro for a one-way trip!), this service has illegally received a huge sum of money because of the Group Ticket as they are not recognized as a legitimate service. A report indicates that there are approximately 15,000 to 20,000 domestic travellers each month that use this fraudulent service.
NS, of course, acknowledged the situation and decided not to overlook the severity of it anymore. From January 15, 2018, the maximum number of people in a group will be reduced to 7, and all members of the group will have to board the same train. This policy will do its job in tackling the fraudulent practices of the Group Ticket, but at the same time disincentivizes the creation of travel groups which will directly interfere with the company’s revenue streams.
What are the other options?
I am not entirely convinced that such policy change would hurt the income of the company, if not they would be far better off financially with this new policy. The ideal situation for NS, from the financial point of view, is that the revenue lost from the number of NS group ticket travellers can be totally compromised by the increase in the use of OV-chipkaart and other NS subscription packages, which is of course possible. These alternative packages are much more expensive if you compare it to the Group Ticket, but if you are a frequent traveller, then some of the following options could be possible substitutes for the group service.
The most costly subscription, Dagkaart, can be purchased for 50 euros at every electronic ticket counter at the train station (which costs around 6 to 7 times more than the Group Ticket). To put it in perspective, that is almost equivalent to a round trip travelling on the north-south axis of the Netherlands (e.g. from Groningen to Maastricht) on the original fare. This seems to be the least feasible option, considering that if you do not consider travelling to, well, at least 4 or 5 cities on a single day.
The second option that you could choose is the Dagretour, as you have to buy the ticket online and not at the ticket counter. At first sight, this does look similar to some of the features of the current Group Ticket, as you could use that ticket to travel and come back to your original station within a day. You have to choose your predetermined departure and arrival when you complete the online form, and your ticket needs to be either printed out or imported into the NS mobile application. What separates these two subscriptions are that the Dagretour is only reserved for only one person and the fare will depend on the distance between your selected destinations. Apart from online purchases, there are also frequent discount periods for Dagretour throughout the year, as you could get the Dagretour on nationwide convenience stores such as Hema, Blokker or Albert Heijn for as low as a third of the original fare.
The third one, and probably the most economical one out of the three, is the Dal Voordeel package. The most prominent feature of this ticket is the discount of 40% that applies to travels to all off-peak hours during weekdays, on weekends, and even more beneficial if you are travelling with three other friends. To subscribe to this plan, you only have to pay a yearly fixed subscription fee of €50. If you’re registering it in September, then you might get a discount of only €29 (only applicable for the subscription of the first year). This is a very good option if you do not consider to travel or commute too frequently from two distant stations. As a matter of fact, you can even save some money with this plan compared to Group Ticket in some, albeit really limited, cases.
How is this going to affect the sales of the NS group ticket moving forward?
Despite all of the seemingly positive financial benefits, NS should be watchful of some of their competitors. Their direct railway competitors, such as Arriva, Connexxion or Veolia, cannot exercise business practices where it can compete on equal terms with NS, however, since NS wins the right to operate exclusively in many regions of the Netherlands. Other transportation carriers such as other international shuttle bus services can be extremely provocative. For example, Flixbus has established their bus stops in major cities around the Netherlands, such as Amsterdam, Rotterdam, Eindhoven and Utrecht. The company offer their service at extremely affordable prices (to students), as long as you book your trip early enough. For example, a trip from Amsterdam to Rotterdam might only cost you as low as €5. Although the price can be slightly more expensive than the new 7-person group ticket if you’re travelling across two distant destinations, you will not have to endure the hassle of getting 6 other companions for your trip.
So what now?
The consumers certainly do not like the new policy, but I think a response from NS is what needs to be done right now. From the standpoint of NS, it does suggest that the changes are not merely tentative but will be here for the long haul.