Trainline sets aside nearly £4m over competition probe into pricing tactics

Ticketing platform Trainline has seen half-year profits slump as it revealed nearly £4 million set aside to cover costs relating to a competition probe into “drip-pricing” allegations.

The £3.7 million provision comes after the Competition and Markets Authority (CMA) said in August it was investigating Trainline, as well as airline Virgin Atlantic and Red Driving School, over concerns customers were not shown full prices upfront.

The Trainline investigation focuses on whether all mandatory fees were displayed upfront to travellers buying train and coach tickets in advance, on its app and website.

The CMA said it observed transactions with additional fees ranging from 50p to £2.79, with a £1.50 booking fee for coach journeys.

The probes are part of a wider clampdown by the regulator over misleading pricing practices, which includes practices where mandatory charges are separated from the headline price or added later in the buying process, known as drip pricing.

Consumers affected could get compensation if it is found that the companies broke the law.

The CMA will update on the case in January.

The provision contributed to a 17% drop in Trainline’s pre-tax profits to £55.2 million for the six months to August 31, sending shares down as much as 8% at one stage on Wednesday morning before they settled around 2% down.

Trainline said: “We continue to engage proactively with the CMA and other relevant regulators, looking for a swift resolution that ensures customers have clear and transparent information, and maintains a straightforward booking experience.”

It added the final financial impact to the group could vary considerably, given that the “ultimate outcome of the investigation remains highly uncertain and is very difficult to predict with precision”.

Trainline said first half earnings were also impacted by the wider clampdown on rail refunds, which cut fee revenues for the platform, which charges people to refund their tickets.

From April, rules changed so people can only request a refund before 11.59pm on the day before travel.

UK consumer revenues fell 5% in the first half to £102 million, largely as a result of the refund change.

Overall net ticket sales in the UK remained flat at £2.1 billion amid the Government’s move to freeze regulated rail fares.

The group’s new boss Ian Brown – the former UK and Ireland head of Paddy Power owner Flutter Entertainment, who took over as chief executive from Jody Ford in September – called on the Government to ensure parity of treatment ahead of the launch of its new state-backed ticketing website and app.

He said: “Rail is entering a new era with Great British Railways (GBR), and the Office for Rail and Road’s draft retail code of practice is an important step forward.

“It confirms fair, transparent and non-discriminatory access to fares, products, systems and data, and is a positive foundation for a fair and open retail market.

“But it needs further strengthening, and we are maintaining our assertive stance, actively engaging through the consultation and with Government.”

The group added: “The proposed framework in relation to funding of GBR states GBR will need to act in a way which does not exclude competitors, distort the online retail market or abuse its position.

“However, Trainline believes that the proposed code and frameworks require further clarity to deliver fully on this commitment.”