Trainline is one of those companies where I donāt understand how they can still exist and make money in this day and age.
I know a lot of it is because theyāre a relatively old company and so have had a long time to get themselves stuck in peoples brains when it comes to thinking of where to buy train tickets. To the extent that people think that theyāre the only place to look and there isnāt any alternative.
But. They donāt sell any tickets themselves, theyāre basically an aggregator and will look up the various train company prices for you and then act as a middleman for you, and get a booking fee for doing so.
So why not cut out Trainline and book with the train companies direct? If Trainline find a GWR ticket for you and want to sell it to you with a booking fee on top, why go and buy it directly from GWR for the same price with no booking fee? That seems like a no-brainer to me.
I always suggest to people that they use National Rail to look up tickets instead. It basically does the same aggregation as Trainline, but rather than act as a middleman when you want to make a booking, it directs you straight to the relevant company instead, so youāre always booking direct.
Thatās not even considering the split ticketing sites, which are there if youāre determined to try and save as much money on trains as you can.
Now, I may be missing a trick, I may be passing up a golden investment opportunity, but all the above is why I will not be investing in Trainline and why I canāt see doing so making any money. I canāt see the genuine value they add that would make a booking fee worth it, and I canāt see a future where people never realise that Trainline are basically taking money for nothing. Therefore, sooner or later, they will surely struggle.
i agree with this (maybe i donāt get it either because clearly they are doing quite well).
I used to take the train quite a lot (and was a student so very price sensitive). I worked out that in the UK if you use, say, virgin train website, you can get tickets for any of the other train companies like Chiltern railway etc. You get the same deals ie off peak/advance across the network and there is never a booking fee whereas trainline somtimes charge you. I checked trainline and they always showed the cheapest but also exactly the same px as using any of the main operatorsā websites.
This is completely different from skyscanner et al as individual flight booking sites do not show the same px and the difference is very significant so you need to check them all to save money. In this scenario, an aggregator adds tremendous value.
I havenāt studied the company in depth & I only have my personal, anecdotal experience as a reference point here but this sounds like a classic case of user experience adding more value than monetary cost to me.
Iāve noticed that a lot of FinTech companies deliver this too. They provide services that rational analysis tells you is more expensive & therefore shouldnāt be attractive to customers. But rational behaviour is not the same as human behaviour and whether itās laziness, convenience, inertia, greater trust or something else that motivates people, often theyāre willing to pay more for a better user experience.
Whether thatās a sustainable competitive advantage is hard to say. But itās definitely something that the incumbents have historically struggled to replicate - the National Rail app is a great example an incumbent trying and falling short.
The vast majority of that revenue is just money collected by them on behalf of the train companies. Itād be more interesting to see the revenue they actually keep - their booking fees, commission from sales, and ad income (bizarrely they have adverts in their app).
Completely agree. This is why I stay away from the IPO hype, it always seems to cloud judgement and give people the fear they will miss out on the next 10 x banger.
Iāll wait for the financials to settle and let the market guide the price before I jump in.
I think the expansion and monopoly they have makes them attractive but I want the hard facts first.
Weāre already adding companies as soon as we can after their IPOs (we added Uber, PagerDuty, Levis etc recently) and since Trainline are a UK company then as long as they list on the āmain marketā, weāre hoping to add them sooner after they go public than the US stocks.
I get the point about it being an aggregator etc. But at least for me, thereās something about it that makes it easy (good interface, easier to use than other app options etc). I have other rail apps on my phone, but always end up using Trainline Also, donāt know about other offerings, but they are extremely convenient to use for business travel when you need an invoice
Trainline doesnāt have much competitive advantage IMO as many of the train companies have built their own systems (or use Trainline in the background). Factor in that Trainline charges fees which people can easily avoid by going direct and it doesnāt make for much of a long term future particularly as the rail companies improve their e-ticketing.
There is also the possibility that the Rail Delivery Group will convince DfT that they should be allowed to completely change the current ticketing system in the near-medium term future.
The one positive Iāve mentioned is selling their service to rail companies and Iād like to know the split in profit from direct ticket sales using Trainline vs profit from licensing Trainlineās system to rail companies.
I agree and I think Trainlineās revenues are mostly made up from corporate as the booking fee from corporate is usually Ā£6-7 minimum (even for a Ā£3-5 ticket)! and you are just better off booking it personally.
There are already alternatives such as Trainpal which I just used and it became even cheaper than Trainline because of:
No booking fees, same price as you will get from trainās websites.
Split tickets function (two ticket journeys with same seat but at cheaper compared than just buying one ticket)
Promo codes (there are usually promotions going on, though that might because they are growing user base at the expense of price)
Was trying out a new Train iOS app called Omio.
Itās a direct competitor to trainline offering the exact same services, with a slicker user experience in my own person opinion and feels a lot less clunky.
Virgin are apparently developing a new app for launch by the end of the year which if it comes off will automatically find you the cheapest tickets (including splitting tickets) and charge you retrospectively like TfLās Oyster system. Could completely change rail ticketing.