The thirteen Ferry Advisory Committee Chairs have called upon the BC Ferry Commissioner to protect the interests of ferry users when he considers BC Ferries’ proposals for a new on-line reservations system.
BC Ferries says their website and ticketing systems are long overdue an overhaul and the Company has applied to the BC Ferry Commissioner for approval for a multi-million dollar “Fare Flexibility and Digital Experience Initiative” to enable them to introduce a range of discounted fare products on the four major routes out of Horseshoe Bay and Tsawwassen, followed by four other routes on which reservations are currently available.
The FAC Chairs acknowledge that the present system, where customers who reserve in advance for ferry travel are charged up to $22 for the privilege, works contrary to most reservation systems that offer discounts for advance payment – and they broadly welcome BC Ferries’ proposals to drop the reservation charge. But BC Ferries currently makes $13 million income from reservation fees and that lost income – together with the cost of financing the new investment – will all have to be recovered through ferry fares. Once the system is operational, BC Ferries hopes that the discounts they will offer will encourage more of us to reserve (and pay) in advance for ferry travel – in the full expectation that traffic volumes will grow as a result.
The problem, say the FAC Chairs, is that although the Ferry Commission regulates ferry fares, the “price cap” (the maximum fare increase that BC Ferries is allowed to impose) is regulated against the average fare paid, not against individual fares. Thus, if BC Ferries makes discounted fares available to up to 80% of their customers who travel on the major routes, then the remaining 20% (including most of us who depend on the minor ferry routes) could face higher prices as a result – and providing the average fare stays within the price cap, there’s effectively no limit to the increase that BC Ferries could apply to non-reservable fares.
Gabriola FAC Chair John Hodgkins sees a close parallel with Britain’s railways after privatisation, when train operators wanted to offer deep discounts to attract new passengers to fill thousands of empty seats. Rail Regulators accepted this was desirable, but to ensure that the train operators didn’t impose higher fares on regular commuters, limits were was imposed on permitted fare increases for “regulated” rail fares (season tickets, commuter fares and most tickets purchased on the day of travel), pushing the incentive back onto train operators to fund the discounts offered for advance bookings by attracting new business.
Ferry Advisors believe the same principle should be applied to ferry fares. After all, why should ferry users who (for whatever reason) cannot take advantage of discounted advance fares be expected to pay more, simply to fund those that can? The FAC Chairs want the price cap mechanism on ferry fares to exclude any discounted fares, so that it’s the average fare available to “turn-up-and-go” travellers (still the majority of ferry users) that’s regulated by the price cap.
Hodgkins believes there should be more than enough scope for BC Ferries to fund the new discounted fares by attracting more business onto the major routes. “There has to be an incentive on BC Ferries to grow the market, without expecting ferry users on Gabriola and elsewhere to pick up the tab until they do” he says. He also supports the call for a new body to represent the interests of ferry users on the major routes. “80% of BC Ferries’ passengers travel on the four major routes, but only one of those routes (Horseshoe Bay to Langdale) is currently served by a Ferry Advisory Committee.” FAC Chairs are seeking the Ferry Commissioner’s support to the establishment of a consumer body to represent ferry users on the other three mainland routes.
The full text of the FAC Chairs’ submission to the Ferry Commissioner can be found here.
BC Ferries submits a quarterly report to the Ferry Commissioner comparing the average fare charged with the permitted Price Cap. If the average fare exceeds the Price Cap for three consecutive quarters, the excess income must be returned to ferry users through adjustments to fares or other means.
A quarterly Complaints Resolution report is also submitted to the Ferry Commissioner. In the report for the 3 months to September, 2014, ferry fares attracted the highest number of complaints. The operation of the ferry reservation system attracted the fifth highest number of complaints.