Monday, July 2, 2012

Proposing a Train Autocompensation Scheme

When I was using the old Metcards, I regularly claimed compensation from the train operator when it failed to meet its performance targets (Ref 1). It would usually take a month or more to receive the compensated ticket. However, since switching over to Myki, I have yet to make a claim. This is due to several reasons. First, I am using a combination of Myki pass and money. Only 28 days or more of Myki pass is eligible for compensation. A printed Metcard helps to remind me (whenever I open my wallet) that I could make compensation claims while the use of automatic top up and absence of a physical paper record means that I no longer keep track of transactions and whether my travel duration falls within the compensable period. The trouble of checking Metro's performance monthly, filling a compensation claim form and mailing it to Metro's address at St Kilda serve to discourage people from claiming. I believe that many, if not most, commuters like me, do not bother to apply for the claims. As I have yet to make a claim after using Myki, I do not know whether Metro is going to mail you a compensated Metcard day ticket or whether it is going to top up your Myki money by that amount.

A key selling point of Myki is its ability to perform electronic transactions. It is this feature that makes possible an autocompensation scheme which is not possible with the paper-based Metcards. The scheme can be easily implemented without additional hardware. What needs to be done is just to add a little extra programming code. If Metro fails to meet the performance target in a particular month, then compute for each Myki account/ticket whether the Myki holder has travelled on a Myki pass for 28 days or more for the compensable period. If the answer is yes, credit the ticket automatically with the compensation amount when the Myki holder next touches on.

If the autocompensation scheme is implemented, Metro will probably need to pay a considerable amount of compensation to the commuters whenever it fails to achieve its performance targets. I believe that Metro is contractually obliged to make full compensation if every affected commuter requests for it. Hence, it should have budgeted for this expense. But the reality is that only a small percentage of commuters bother to make claims, which means that Metro can pocket whatever that is not claimed and add to its profits. A default autocompensation scheme will be highly welcomed by commuters but is something that is not in the interest of the train operator.

An obvious benefit of this proposal is that the train operator will try even harder to achieve its performance targets. This proposal will remove the need for manpower to process the claims but Metro would probably prefer this over a mandatory compensation for all the commuters affected. This proposal will not impact on the revenues of the State Government as it is the train operator, not the State Government, that pays the compensation. If Metro resists this proposal on the basis that it will affect its bottomline, it can be argued that this is precisely what the compensation is designed for, that is, to ensure there is a compelling reason to meet the performance targets. The compensation should not be used only for compliance or as a tool for public relations but should carry effective purpose.


David said...

That is far too sensible a proposal for any company to take up!

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