Is Alta Velocidad Fast?

Awaiting Fast AVE

This essay analyses and explores the regional passenger fare structure of Renfe, Spain’s national railway operator. The question, “Is Alta Velocidad Fast?”, derives from Renfe’s tradition of pricing slower trains cheaper. The question asks whether, in the era of yield management (balancing current patronage to current capacity by modifying price), the traditional fare structure should be applied to high speed, AV, operations? The journey provides an insight into the structure of modern transport geography, the haphazard strategic development and exploitation of Alta Velocidad, the management of national inequalities through fares, the conflation of public and commercial roles within single shared operations, and, from a perspective other than infrastructure, the contemporary challenges to Spain’s railways.

The introductory section describes the current trend toward Temporal Ticketing, with a reflection on how this alters transport geography and state: While the growing reliance on algorithms challenges established operator dominance, it is not necessarily incompatible with societal behaviour, especially for less familiar journeys. A brief history of Avant follows, the Regional Alta Velocidad funded as a public service obligation (OSP), with extensive analysis of fares on Avant corridors, including an assessment of the selective use of yield management on parallel commercial AV services. Avant is placed in context by a similarly detailed analysis of fares on slower regional services, those on which passengers are Paying to Go Faster. The strong relationship between fare and speed is confirmed, but with a balanced structure of revenue-to-cost that equalises quite different styles of operation.

Fare’s Fair exposes the differences in fares and speeds between Spain’s regional Autonomous Communities, demonstrating how fares have apparently been used to manage the inequalities between regions. Unfortunately the same structure has not been adequately deployed to counter AV‘s inequalities, ultimately because AV pricing has been defined by commercial aviation markets: By matching, not taxing, aviation, the cascade effects (of inflated expectation) to lesser classes of transport can only be addressed through subsidy – the flawed policy that is exposed by AV Cercanías, a theoretical high speed suburban railway – Avant being the closest non-theoretical product to AV Cercanías. Inter-City probes how Renfe has evolved the management of marginal longer-distance trains, especially over non-AV routes, where the same train may share regional public service and inter-regional commercial roles. The conflation of pricing models is highlighted, and evidence is presented that suggests the state is subsidising the train, and not specifically the seats upon it – a pattern that might concern the European courts, were it to continue after 2020.

The concluding section takes a contemporary journey From Extremadura to Catalunya Nord – the origin exemplifying the political impact of AV‘s inequalities, the destination actively challenging the idea of region as strictly administrative. Along the way, how transport geography relates to the source of its finance, how the preoccupation of the Spanish political state with infrastructure inhibits behavioural policy interventions, and ultimately, how Renfe transpires to be a better manager of state than state. The Postscript provides an intense reflection on an otherwise somewhat long and technical analysis of what may seem quite a trivial topic, but actually explains much about the state of contemporary Spain.

Temporal Ticketing

The curious case of railway ticketing is one that invariably embeds and perpetuates cultural biases to the perennial question, what is value? For example, the pre-privatisation British Rail ingrained its primitive yield management strategy, that return fares were “cheaper after 09:30”, so deeply into the state psyche that decades later concessionary fares policy was still formulated to protect “the morning peak”, even though the late afternoon had long since become the busier period for many regional public transport networks in Britain. Britain’s railways are still stuggling with the issue, although Britain seems unlikely to shift away from a model that emphasises the temporal capacity of the transport system to handle the intending passenger, and prices journeys accordingly. In parts of Europe, not least Spain, the temporal capacity of the transport system is traditionally not a consideration in pricing. Indeed, every “salida”, the busy days for longer-distance travel at the start and end of holiday periods, the mere possibility that the capacity of Spain’s transport system might have been temporally exceeded, can be rendered a national preoccupation – the media routinely broadcasting reassuring images of half-empty roads and passengers boarding trains like normal. The underlying presumption is that the system accommodates the passenger, even if that means some time periods are far busier than others, and some operational assets lay idle during quieter periods. For example, Barcelona’s metro currently has no fare variation by time of day, even though its patronage is far from constant across the day. The idea of introducing such a variation has been considered only recently, as a means of managing peak overcrowding, and that was only triggered by the post-Independència financial realisation that increasing demand could no longer be met with extra capacity. For state-provided systems, the implicit presumption is that the state will provide. The reasoning is indubitable: State, in its broadest sense, is perpetual, as stable a constant as can be reasoned – not a facet that alters at 8 o’clock just because other people also want to travel then.

Where transport systems are liberalised, most obviously in European aviation, yield management has become the accepted norm. The price of a flight might double or halve from day to day, as airline operators try to fill every seat in every plane – managing their supply, which is largely fixed in the short run, by altering price. Likewise, few will be surprised to discover a flight from Madrid to Berlin (2300km) that today just happens to be cheaper than a flight from Madrid to Barcelona (600km) – in stark contrast to the state-centric model, where fares typically retain a strong correlation to distance. Just two examples of how liberalised transport systems are shifting geography from the spatial to the temporal, and, perhaps more alarmingly, de-humanising geography: Not only by emphasising the economy of the carriage over that of the passenger, but also by encouraging travel specifically when others are not, in opposition to many natural group dynamics. It is in the midst of this tumult that we find the contemporary “Alta Velocidad”, Spain’s high speed passenger railway – a state-implemented network operating in an increasingly liberalised market.

The question posed by this essay, “Is Alta Velocidad Fast?”, is not just the question it may first seem, that which begets the retort, compared to what? Traditional Iberian railway fare structures differentiate between trains based on their speed, where those that complete their journey faster cost more to travel upon. Thus, to quote Franklin, time is money – but here the value of time is constant over time, not varying within time (from hour-to-hour or day-to-day) as is more common in Anglo-Americanised markets. AVE, and similar long distance inter-regional public transport services, are forced by their increasingly competitive liberalised environments to adopt fare structures which undermine the base understanding of state: The national in Spain thereby becomes the liberalised global. Yet within Spain’s regions the traditional fare structure still predominates, and thus perhaps regions better retain their state. Spanish railway liberalisation implicitly acknowledges this by opening up most inter-regional services to competition in 2020, while likely retaining state control (via Public Service Obligation) of services within regions. An analysis that might confer the dominance of regional politics over national, but more specifically, that regions are more knowable among their own populations than the nation of “Spain”, and thus regions evoke greater protection of their state. The strategic counter-balance, that the national will, by dint of improved asset utilisation and reduced reliance on new assets to deal with insufficient capacity, become relatively more efficient economically. However as this essay explores, while local juxtaposes to national, regional is not necessarily aligned to local.

Such protection of the more local state is not arbitrary. The more locally and the more frequently a transport service is used, the more that use is considered normal by the user, the more the consistency of its state is appreciated. The hassle, what economists call shoe leather cost, of navigating a complex ever-changing fare structure may be acceptable for exceptional journeys, but surely not for a daily commute or a trip to the shops. The differing acceptance, based on geographic familiarity, of transaction costs – the cost of making a trade – evokes modern behavioural concepts such as bounded rationality: That decision-making is a pragmatic reflection on users’ perceived reality, that the terms of this “geography” are not as universal as the word might imply. The physical, spatial geography that makes the whole that science calls nature, may be reasoned universal. However societies in both Britain and Spain have strong “virtual” components – the British predictive analytic routinely juggles time across a wide spectrum of past-future, while the Catalans (and, dare I suggest, other Spaniards) emphasise social knowledge through “knowable groups”. In both societies the physical geography continues to play an important role, but analysis of only that role omits these virtual themes, which can be important when trying to understand modern societal behaviour. So instead of presuming a flawed universal notion of geography, derive geography from the perspective of those within their respective societies: An alternative model where transport geography is expressed in terms of users’ familiarity, rather than a specific absolute notion such as time or distance. For example, a regular or local journey is typically more familiar to the person making that journey, than an occasional or long-distance journey. The familiarity of each person is first and foremost a function of “knowing” – of, in the broadest sense, state. This relationship between knowing and geography is especially obvious in video game world design, a theme developed from my Adventures in the Invisible Tent: The scale of such a world, a hybrid of time and distance, is optimised for knowing that world. Game worlds are far more compact than planet earth because even complex games contain far less to know.

Optimisation for knowing differs from optimisation for analytic efficiency – and herein lay much of the tension between contemporary society and computational optimisation: Since (and arguably before) Euler tried to cross the 7 bridges of Königsberg, transport has been posing computationally challenging problems, from network route planning to supply chain logistics. But it is perhaps only in the last two decades that the average traveller has become directly exposed to such computational optimisations. In the mid-1990s the apocryphal tale was told of an Operational Researcher who commuted each day to his workplace in London Transport’s headquarters near St James’s Park, central London. Upon arrival in the capital at Paddington railway station he was faced with two potentially viable Underground (metro) routes – direct on the Circle line, or via Bakerloo and Victoria lines. For the casual user, the direct Circle line would be the obvious choice, both requiring no change of trains and, based on the stylised London Underground network map, of similar distance. However those distances are actually a lot less similar than the stylised map betrays, and the Circle line had a far lower effective frequency than the alternative route via Bakerloo and Victoria lines. The calculation of optimal route, at the precise moment our expert commuter arrived at Paddington, originally would have relied on train service predictions, but could now be improved with live-time data delivered to a mobile phone application. The optimisation rarely saved more than a few minutes. In the 1990s these were games played by mathematically-minded transportation planners. Now they are becoming the norm among regular travellers, those whose behaviour is optimised by their “smart” mobile phones. The domination of this technology over its human users is clearest among those that happily walk or drive round in a circle, simply because the underlying dataset is missing a network node or link – and thus cannot calculate the direct path that should be obvious to the user, had they not placed absolute trust in their (sadly fallible) device. In the final analysis, these users have become so optimised that they have ceased to know.

This trend is not new: In the spirit of Kuhn, the Enlightenment West has progressively expanded the complexity of its worldview by simplifying every-thing within that world. And given such apparent acceptance of technology over human, yield management of the most familiar of journeys should now seem entirely reasonable: Blind user trust in journey-planning algorithms readily extends to ticketing. In practice the algorithms taking users’ fare decisions would compete with the operator algorithms setting prices, a computer-vs-computer model already successful (except when dealing with the unexpected) in financial market trading. The economic efficiency implied would liberate humans to obsess about something else – and ultimately the minutiae currently associated with transport ticketing would be replaced by trust that the system tends to offer “best value”, with any user interaction reduced to broad concepts such as brand. Transport operators traditionally consider themselves to be the sales channel of their product, and even in the most entrepreneurial arenas (Ryanair vs Skyscanner in 2007) operators are naturally hostile to any optimisation they don’t control. Aside from exerting ownership over data (a battle largely lost), the operators’ only logical defense is to simplify their ticketing structure – logically opposing the yield management that is inextricably driven by market competition. Thus operators in open transport markets will ultimately be reduced to supplying a service sold by technology platform providers (such as Google) or travel metasearchers (such as KAYAK) – a keenly fought technology market that has not yet peaked or consolidated. And once again, in the midst of this tumult that we find the contemporary AVE, its state-owned operator, Renfe, accustomed to a national prominence that it will not yield easily – even if, as discussed in Arriva Celta, Renfe’s role as the provider of national “presence”, beyond mere journey utility, is easily taken by state track owner ADIF, leaving Renfe vulnerable.

Continue reading “Is Alta Velocidad Fast?”

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Turning the Health World Upside Down

There’s a growing acceptance of the links between health, wealth and wider society. Not just the impact of wealth inequalities on measures like life expectancy. But the importance of fixing the underlying social causes of medical problems, rather than just administering the medicine and wondering why the patient doesn’t get better.

It’s convenient to frame this as a Third World problem. And while it is, it’s also a problem within and between developed countries. For example, people from one area of Glasgow (in Scotland) live a decade longer than people residing in another area of the same city, in spite of (theoretically) having access to precisely the same medical expertise.

A most basic analysis of Great Britain (and much of the developed world) reveals an organizational chasm, which most people are not prepared to cross: For example, medical services and social care provision are completely different activities – separate funding, differing structures, responsibilities, professional bodies. Even though individual “patients” shift seamlessly between them. It’s an organisational situation made worse by the difficulty both groups seem to have integrating with anything – in my experience (largely failing to integrate public transport into health and social services), a combination of:

  • The intrinsic (internal) complexity of the service itself, which leaves little mental capacity for also dealing with “external” factors.
  • The tendency to be staffed by those with people-orientated skills, who are often less able to think strategically or in abstract.
  • The dominance of the government, with a natural tendency towards bureaucracy and politicized (irrational) decision making.

Complexity is the biggest problem, because it keeps getting worse: More (medical) conditions and treatments to know about, higher public expectations, greater interdependence between different cultures and areas of the world. Inability to manage growing complexity ultimately threatens modern civilization – it will probably be one of the defining problems of the current age. So adding even further complexity in the form of understanding about “fringe issues” is far from straightforward.

Beyond these practicalities lurk difficult moral debates – literally, buying life. Public policy doesn’t come much harder than this.

Into this arena steps Nigel Crisp. Former holder of various senior positions within health administration, now a member of the UK‘s House of Lords. Lord Crisp’s ideas try to “kill 2 birds with one stone”: For the developed world to adopt some of the simple, but more holistic approaches to health/society found in the less developed world, rather than merely exporting the less-than-perfect approach developed in countries like Britain.

To understand Crisp’s argument requires several sacred cows to be scarified: That institutions like the National Health Service (which in Britain is increasingly synonymous with nationhood, and so beyond criticism) are not perfect. That places like Africa aren’t solely populated by people that “need aid” (the unfortunate, but popular image that emerged from the famines of the 1980s). That the highest level of training and attainment isn’t necessarily the optimum solution (counter to most capitalist cultures). If you’ve managed to get that far, the political and organisational changes implied are still genuinely revolutionary: To paraphrase one commenter, “government simply doesn’t turn itself upside down”.

While it is very easy to decry Nigel Crisp’s approach as idealistic, even naively impractical, he is addressing a serious contemporary problem. And his broad thinking exposes a lot of unpleasant truths. This article is based on a lecture Crisp gave to a (mostly) medical audience at the University of Edinburgh. And the response of his audience. The lecture was based on his book, Turning the World Upside Down: the search for global health in the 21st Century (which I have not read). Continue reading “Turning the Health World Upside Down”

A Strange Game

Deathwing. So it happened again. The player client software for the latest World of Warcraft expansion, Cataclysm, leaked into the public arena long before it was intended to become public. Again, because this also happened with the previous 2 expansions. A third leak is beginning to look careless.

WoW.com’s (unofficial) explanation of this “failure of secrecy” ironically fails to explain most of reasons behind the Cataclysm leak. Perhaps because the politics are rather too Machiavellian?

This article discusses the relationship between the game developer and its “fansites”. It uses the Cataclysm leaks to try and explain the underlying politics. The article questions why Non-Disclosure Agreements continue to be used, when they are worse than useless. Finally, it ponders the risks of such apparently one-sided relationships.

I’ve tried to present a fair and balanced analysis, which raises some important issues that aren’t getting discussed, and should be. Obviously, I can’t know everything. Continue reading “A Strange Game”

Animal Farm

Pandaren Monk We finally have some reliable figures for the commercial value of “minipet” micro-transactions in the game, World of Warcraft. Specifically, the sales of just 1 item: In November and December 2009, at least $2.2 million worth of Pandaren Monk pets were sold. 220,000 at $10 each. We know this because “50% of the purchasing price” was donated to charity, and “more than $1.1 million” was donated (via WoW.com).

Over 220,000 sales to a market of about 4-5 million potential customers (only active WoW players can use the minipet, and the pet does not appear to have been sold in China or Taiwan). Roughly 5% of potential customers spent $10 on an ostensibly useless vanity item: A small pet that follows you around, looking cute.

Like most virtual goods, the cost of making and selling this pet is marginal: Primarily some additional art and marketing time, all built on the back of existing systems (store, staff, world). The first 2 months of Pandaren Monk sales will have made contributions to Blizzard’s profits of about $1 million. That’s only around 1% of the business’s turnover in that 2-month period. But that 1% is “free money”. Blizzard (-Activision) would be doing a dis-service to its investors if it did anything other than continue to milk this virtual cash cow.

Apply a healthy bit of European cynicism, and it is easy to conclude a scam. Tobold‘s:

“Send me $10, and I promise to send $5 of it to charity.”

Of course, Europeans fundamentally don’t understand US philanthropic culture: The idea that it’s fine to exploit your fellow human and make outrageous amounts of money, so long as you give some of it away in the end. Some philanthropy is able to take a somewhat rational, balanced view of what is good for the world. But there is a tendency to support visually appealing issues, such as charities servicing the needs of children.

The purpose of this article is not to argue that a European, government-centric re-distribution of wealth is preferable to an approach lead by personal responsibility. (I’m not sure it is.) The problem emerging here is more fundamental: That virtual goods are replacing trade-able value with non-trade-able value. Non-trade-able value that, by definition, can not offset inequality in (game) society. Donating part of the price of sales to charity is pure irony. In true Orwellian style, we’re sleep-walking into a potentially broken social structure with the best of intentions.

This article started as a box during my Adventures in the Invisible Tent, but has been expanded here in much greater detail. This article describes what a minipet is, highlights the role of money to balance inequality in society, and explains the problem with virtual goods. Continue reading “Animal Farm”

Adventures in the Invisible Tent

Here’s a tent.

Invisible Tent

It’s invisible. But it is. There. Walk forward into the space it occupies, you find yourself within the tent.

Inside Invisible Tent

The tent only exists when one is within it. When outside, we see the world without the tent.

This article explores the implication of this uncanny art form on how we build and use virtual environments. It first explains why this invisible tent is considered to be a software bug. The article explores how our ability to accept the uncanny varies from person to person. It then suggests that the spatial, built, environment is far less important than the social structures that exist within them. This topic contains a lot of images. Continue reading “Adventures in the Invisible Tent”

Valuing Nothing

In 2007 I wrote some introductory Thoughts on a Socio-Economic Environment based on Nothing. This article continues to explore the value of things in a highly intangible, knowledge-based economy. It wanders through internet-based payment systems, economic structure, role of government, organisation of information, community, and society, before disappearing into the realms of philosophy. It contains no answers, but may prove thought-provoking. Continue reading “Valuing Nothing”

De-Analysing Blizzard’s Add-On Policy

Blizzard Entertainment’s new add-on policy has been discussed by everyone from Lum to Slashdot. The number of developers directly affected by the change is small, since only a few add-ons are popular enough to be considered commercial ventures. The policy is more significant because it changes a lot of established conventions, and goes to the heart of how Blizzard embraces (or increasingly, shuns) the talent within its player community. This article is an attempt to analyse the real motivations behind the policy, and highlight the apparent contradiction in policy between in-game add-ons and web-based services. Continue reading “De-Analysing Blizzard’s Add-On Policy”