We’ve abolished payment fees, making Loco2 the only pan-European rail booking system with absolutely no booking fees.
My first CEO job - when I was seven years old - was selling lemonade outside my house in St. Louis, Missouri, for 25¢ a cup. If I sold ten glasses in an afternoon, I felt pretty pleased with myself. But if the lemons, water, sugar and cups cost me $2.50, what was the value of the service I was providing?
Loco2 provides a valued service too. Better than lemonade if you ask me: nowhere else can you book a rail trip in the UK or across Europe in a single transaction.
When you book, Loco2 is paid a commission of about 2% by the train operator. That’s how we make money. But when you pay by credit card or PayPal - and many of you do - the banks charge us a fee for your transaction... of about 2%.
Until now we’ve passed those fees on to you. But this week, we stopped charging for all types of transactions.
Loco2 is already one of the cheapest ways to buy European train tickets; but now we’re even cheaper.
We’re doing this because a new law requires it. We could probably find a way around it if we wanted. It might even be interesting to try - it’s driven by hornswoggling credit card industry lobbyists after all - but when I heard they don’t show baseball on TV in UK prisons I decided it wasn’t worth the risk.
What might be surprising is that we’re not doing anything to make up for this lost revenue. We’re not adding booking fees. We’re not adding a service charge or hidden fee. We’re adding nothing.
We firmly believe that when life gives you lemons, make lemonade. But lemons can be bitter, as these babies will testify. Adam Smith would call this is a terrible business decision - and perhaps it’s not sustainable - since now we’ll make less profit on many of the tickets we sell.
We’ll have to think creatively to make sure we can sustain and grow our business in the face of new challenges like this. But that’s part of the fun!
We believe in what we’re selling, and if we’re truly committed to putting the customer first, that means thinking beyond price when we value our product or service.
So if it’s a sunny (or rainy) day and if the people at your service - whether a seven-year-old or a passionate group of travellers - have always treated you right, perhaps you’ll decide to buy more from them. We’ll be here, more valuable than before, every time you decide to stop by.