Is Dynamic Pricing of Indian Railways Fair?

cantonment railway station

Indian railways has announced dynamic pricing for some exclusive trains like Shatabdi express, Rajdhani express and Duronto express. Before proceeding any further let’s first understand what dynamic pricing is?

Dynamic pricing, also referred to as surge pricing, demand pricing, or time-based pricing is a pricing strategy in which businesses set flexible prices for products or service based on current market demands. Businesses are able to change prices based on algorithms that take into account competitor pricing, supply and demand, and other external factors in the market. Dynamic pricing is a common practice in several industries such as hospitality, travel, entertainment, retail, electricity, and public transport.

Source: Wikipedia

As per this system base fare will rise by 10% with every 10% of berth sold subject to a ceiling of 1.4-1.5 times, depending on ticket class. It also puts severe restrictions on how you will do the journey. Check the salient Features of Premium Special Train on Dynamic Pricing:

• Premium special train is being introduced from Railway with dynamic fare pricing.
• Dynamic fare stands for the fare component which may be increased with the subsequent bookings.
• Advance Reservation Period (ARP) of this train will be a maximum of 15 days.
• Agents will not be allowed to book tickets in these trains.
• Dynamic fare shall be charged for confirm as well as RAC passengers.
• Waitlist Ticket Booking is not allowed in this train.
• Upgradation option shall not be applicable in this train.
• Modification is not allowed.
• Only E-tickets will be permitted for booking.
• I-ticket Booking is not allowed in this train.
• E-ticket booking is allowed in General Quota only.
• Tatkal/ Ladies/Other Quota tickets cannot be booked in this train.
• No concession shall be applicable in this train.
• Identity card number of the prescribed proof of identity is required at the time of booking. At least
one passenger should travel with his/her ID card in original which was used at the time of booking.
• Vacant berths left at the time of charting will be offered for current booking at current booking
counters of train originating stations.
• Cancellation is not allowed. However, ticket can be cancelled only if the train is cancelled.
• Dynamic Fare along with Total fare will be displayed after filling Reservation form. Users must ensure
the Fare and Journey Details before proceeding for payment.

I experienced dynamic pricing first hand yesterday when I was trying to book a ticket for Yeshwantpur – Howrah duronto express. I did not find the name Duronto express in the list on IRCTC.co.in and I purchased the ticket on Yeshwantpur – Howrach AC express for AC 2 tier for Rs 1516. But the allocated berth was side upper, hence had to cancel it. The ticket was for a senior citizen. So if you must have a lower berth, select book only if one lower berth is allocated while booking your ticket. This way if lower berth is not available, your ticket will not be booked. Otherwise after booking you will have to cancel the ticket and in the process will also lose around Rs 250 on cancellation charge. The cancellation charge was increased to deter agents who bulk book and cancel. But it is also affecting genuine train travellers like me.

Then again booked on Yeshwantpur – Howrah AC express for AC 3 tier for Rs 1066. I had to cancel this ticket as well for change of date. Finally when I was trying to book ticket with the changed date, I found Yeshwantpur – Howrah Duronto express on the list this time. I prefer Duronto express for better service and less travel time ( 29 hrs). The amount flashed on the screen looked unbelieveable at first. Yes it was Rs 1965. Yes Rs 449 more than the AC 2 tier ticket I purchased earlier and Rs 899 for than the AC 3 tier ticket I purchased earlier. This is when 71 tickets on AC 3 tier was still available and the journey date is almost couple of months away. I take Indian Railway’s idea of dynamic pricing but should not that be fair? I also get that Duranto express runs better but does it provide a premium service to command that price. Note that the prices are for a senior citizen. The actual price for AC 3 tier I found on Duronto was Rs 3310. For that price I would prefer to look for a flight which will drastically reduce my travel time. For a AC 2 tier on Duronto, people would prefer a flight for that price. The less the pricing gap between AC berths on trains and flight, there would be more converts from train to flight. There should be fair pricing. If premium service is provided, then they can charge for it. They can use dynamic pricing on current premium trains but there should be a fair and decent cap on it.