At 4.53 p.m. on December 13, a second AC premium Tatkal ticket from Mumbai to Delhi by Rajdhani Express for December 14 cost ₹6,692.47, while the normal Tatkal fare was ₹3,225. Air fares for the same day ranged between ₹6,490 and ₹7,016.

Buoyed by dynamic pricing of tickets on premium trains, the Indian Railways recently extended the concept to the Tatkal scheme, which earned ₹1,298 crore last fiscal. From October 1, fifty per cent of the existing Tatkal quota is being sold under the dynamic fare scheme.

Of about 12.95 lakh berths and seats made available each day by the Indian Railways, about 2.24 lakh seats and berths are available under Tatkal. Premium Tatkal would account for half of that. Dynamic fares kick in only after 50 per cent of the total Tatkal tickets quota is sold.

Rail passengers, while welcoming the dynamic fare pricing model for premium Tatkal tickets, have called for fine-tuning the pricing model, besides better on-train services and punctual operations.

Dheeraj Sanghi, Professor of Computer Science, IIT Kanpur, says, “About 12 hours before the train departs, the price should drop if the train is not close to full.”

Make it transparent Delhi-based communications professional Shashanka Nanda thinks the fare structure in Indian Railways should be easy to understand for the passenger.

“The whole concept of dynamic pricing has reduced transparency in railway fares. With so many quotas and formulae, the passenger has no idea what the fare will be until the last moment. Fare calculation logic should be made public so that passengers can plan their journey better.”

Giriraj Bissa, Director, erail.in (an information portal on Indian Railways), says, “Dynamic pricing is not a viable proposition. Instead, the Railways can convert all Duronto and Sampark Kranti trains as Tatkal trains. They need more coaches to fulfil demand, which is mostly on weekends and festivals.”

“They also need to fine-tune quota allocation logic in their passenger reservation system (PRS) as after chart preparation and in the running train too, one observes lots of berths going empty for a section of the journey whereas PRS shows huge waiting lists before chart preparation,” he adds.

The Railways, on the other hand, wants to pocket the premium. Passengers are willing to pay middlemen to get confirmed reservations at the last minute. Says DP Pande, Member, Traffic Railway Board, “It is a facility we have extended to travellers who are willing to pay the premium to obtain confirmed bookings at the last moment.”

Some passengers question the quantum of premium charged. Hyderabad-based dentist Vrijilesh Rai says, “It should not be extremely high so as to kill the proverbial goose. And since the passengers are being charged several-fold, top-notch catering and punctuality is necessary, it goes without saying.”

As bookings can be done only through the internet, some passengers also feel that this facility should be extended over the booking counters. Sridhar Joshi, a Chennai-based insurance professional, says, “Something needs to be worked out to have these tickets booked at the PRS counters as well.”

Finally, refund is one issue where travellers want at least a part of their money back in various situations.

Samit Roychoudhury, a Kolkata-based cartographer, feels that if the train is cancelled, there should be a penalty payable to the passenger.

“Allow cancellations with a rider. Refund, if any, will be made after charting.” After charting, if the train remains full, Indian Railways can consider refunding at least the base non-Tatkal fare for the equivalent class. If there are vacancies after charting, no refund to anyone. Fares must be refunded to passengers in case the train is late,” says Joshi.

How the pricing is done

Dynamic fare pricing takes into account the actual demand for a service and is a function of percentage of seats booked [seats booked (in buckets of 10) divided by seats available] vis-à-vis the elapsed advance reservation period (ARP). Demand changes in multiples of 10 as buckets get filled. The variation of actual demand over normal demand (100/number of days in the ARP) gives the dynamic factor which is added to the base price (normal fare + Tatkal charges). Premium basic fare is determined by adding the base price with base price multiplied by dynamic factor per cent.

For instance, consider a train with four third-AC coaches having a capacity of 64 berths per coach, totalling 256 berths.

For an ARP of five days, the normal demand would be 20 per cent. If 234 berths have been booked on the third day, the system would calculate it to be 230 (as per bucket size 10).

The actual demand for the third day works out to 29.94791667 and the dynamic factor or variation of actual demand over normal demand is 49.74.

For a base price of ₹2,116, (normal fare of ₹1,751 +Tatkal charges of ₹365), the premium basic price is ₹2,116 *(1+0.4974) = ₹3,168.50.

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