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NMa: train fare revenue distribution by rail company NS is undesirable

The Netherlands Competition Authority (NMa) believes that Dutch rail company NS should not carry out the distribution of train fare revenues among NS and its competitors. That situation increases the risk of a conflict of interests. An independent party should do it instead or at least closely monitor revenue distribution.

The system that NS uses to randomly measure ridership is called ‘Measuring in the train.’ It involves determining the number of riders per fare type. NS then distributes revenues among itself and rail companies Veolia, Arriva, Syntus and Connexxion. NS does so by order of the Ministry of Infrastructure and the Environment.

The ‘Measuring in the train’ system has not been explained in full detail by NS. As a result, the NMa is unable to fully test it, nor to determine whether any of those rail companies is given preferential treatment. The NMa’s advice to the Ministry is not only having revenue distribution be carried out by an independent party, but also creating a new and transparent measuring system that is reliable and accurate enough to realize the objective. The NMa believes it is vital that the industry is consulted about the new system’s design.

The NMa’s investigation into the ‘Measuring in the train’ system and the revenue distribution by NS has not resulted in a suspicion of a violation of the Dutch Railway Act or the Dutch Competition Act.