Skip to content

We bet you didn’t know about this way of making money that startups have

Delays of the train are a nuisance to the passengers – and a lucrative business for many startups. Railway customers can look forward to simplified processes and some money.

Last year, Deutsche Bahn paid around € 54 million in delays

This is regulated in the passenger rights, which provide that the customer gets refunded for a delay of more than one hour 25 percent of the ticket price, at two hours, it is 50 percent. In 2017, there were just under 35 million euros, which could be reimbursed to the railway customers. A total of 2.7 million train users completed a refund application – around a third more than in the previous year. On average, around 20 euros were repaid. It is well worth it to demand its right.

There is likely to be a high number of unreported cases because Deutsche Bahn still does not manage or want to succeed in converting the reimbursement process into a digital process that is easy for the customer to handle. On the other hand, paper refund certificates are distributed, which the customer then has to send by post to a central location or with which he can have his money refunded at a ticket counter. There are a variety of reasons, which lead in case of doubt, that the railway customer runs out despite delays empty. That just a few legally educated customers often can not judge whether the explanation of the train is an excuse or justified, makes things even more complicated. The calculus behind it: the more complicated it is, the more the customers will forget the thing or shy away from the effort. And indeed, there may be some customers who – right, annoyance – their time is too bad.

Train ticketing rewards are suitable for Legaltech startups

But there are now a variety of services that help the customer to get his right. The system is always similar: The customer indicates whether he has started the trip in whole or in part, whether it is a transfer connection and which ticket variant. Mostly then the exact traffic route is queried and partly also reasons why a delay came about, as far as the railway has communicated this. At the end the customer uploads his ticket.

The business models behind the services are different: forwards the entire reimbursement to the customer. A fee of 99 cents per application will cover the costs, with one application per year free of charge. The settlement takes between four and eight weeks. Robin Zug, on the other hand, specializes in the needs of commuters and season ticket holders who regularly travel the same route. Although the refund in absolute terms is usually lower than the single ticket, it is worthwhile for the customer to submit their ticket due to the regularity of delays. The first three cases are processed here for free, other cases cost 69 cents (local transport) or 99 cents (long-distance ticket).

With waiting time or rather the fast money?

If you want to settle for a smaller amount, you can bet on Bahn Buddy. Similar to various flight reimbursement portals, the startup from Dusseldorf buys the ticket and refunds in return a certain amount. He is calculated with algorithms and is based, for example, on the probability with which the train could reject the complaint or the refund request. In return, the customer does not have to wait for six weeks and three months to answer the train as with other startups. Incidentally, the data that the startups use to reconstruct the train run originates in all cases from the railway itself, which is obliged to provide this information on the basis of an EU regulation.

Somewhat more individual is Refundrebel from Heidelberg. The startup, which has been on the market for about a year, does not rely on the passenger rights form, but tackles the railroad individually, making it also suitable for somewhat more complicated cases, which indeed also exist in train delays. It also brings out compensation for taxi, hotel or other special features that some of the other companies do not promise or cover. In addition, other railway companies, such as Flixtrain, are being approached by Refundrebel – here founder Stefan Nitz currently sees an increasing demand. This somewhat more individualized approach may take longer – yet you have no blanket purchase model at the start, although the company does indeed have a collection license. After all, the customer gets right after answering a few questions a corresponding offer, what is to get for him and what the service should cost.

In addition, there is Lametrain, a new provider on the market, which works until 28 February for free. Lametrain also promises reimbursement within 48 hours, so also buys the claim. The disadvantage with Bahnbuddy and Lametrain: The customer has less cost transparency, learns only after giving all the data, in what amount he can expect a refund and what will cost him (in the case of Lametrain after the end of the launch phase from March).

Delays in rail are likely to remain a lucrative market

The quite large number of startups for a limited service such as train ticketing shows that there is a market here that is well covered by Legaltechs: The cases are more or less standardized to process, with the incorporation the company can achieve a high degree of efficiency and there is (not least) a large number of cases that could help the startups survive.

And another number is exciting: in the future it could be even more expensive for the railways, if it goes to the will of the European Union. The fact is that after one hour delay half of the fare is due, after 90 minutes three quarters of the fare, after two hours the entire fare. At the latest then the train will get a real problem with their current delay rate – and the customer on his right to reimbursement thump.

Incidentally, in other countries, such as some UK rail companies, reimbursement is automatically based on the ticket booked. This is no problem especially with train-bound tickets, but even with Flextickets this could in many cases be based on the assignment to the ticket control, if this is done via app or the customer checks in personally.

Also published on Medium.

Published inStartups

Be First to Comment

Leave a Reply

%d bloggers like this: