BahnCard
Encyclopedia
Loyalty program
Loyalty programs are structured marketing efforts that reward, and therefore encourage, loyal buying behavior — behavior which is potentially beneficial to the firm....
offered by Deutsche Bahn
Deutsche Bahn
Deutsche Bahn AG is the German national railway company, a private joint stock company . Headquartered in Berlin, it came into existence in 1994 as the successor to the former state railways of Germany, the Deutsche Bundesbahn of West Germany and the Deutsche Reichsbahn of East Germany...
(DB), the German
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
national railway company. Unlike airline loyalty programs, but similarly to the UK Young Persons Railcard, the BahnCard entitles the passenger to a discount price and must be purchased prior to travel.
Like most contracts in Germany, Bahncard contracts are automatically renewed each year, unless they are cancelled with sufficient notice.
Three variants of Bahncard are sold by Deutsche Bahn: The BahnCard 25, the BahnCard 50, and the Mobility BahnCard 100. The first two variants allow passengers to get 25% and 50% discount respectively on standard long distance rail fares, while the Mobility BahnCard 100 is a type of annual ticket
Season ticket
A season ticket is a ticket that grants privileges over a defined period of time.-Sport:In sport, a season ticket grants the holder access to all regular-season home games for one season without additional charges. The ticket usually offers a discounted price over purchasing a ticket for each of...
that allows free unlimited travel on most of the German railway network for a fixed price
Flat rate
A flat fee, also referred to as a flat rate or a linear rate, refers to a pricing structure that charges a single fixed fee for a service, regardless of usage. Rarely, it may refer to a rate that does not vary with usage or time of use...
.
In 2007 there were 4.01 million BahnCard holders in Germany(~5% of Germany's population).
More than half of the passenger revenue
Revenue
In business, revenue is income that a company receives from its normal business activities, usually from the sale of goods and services to customers. In many countries, such as the United Kingdom, revenue is referred to as turnover....
of DB Fernverkehr
DB Fernverkehr
DB Fernverkehr AG is a semi-independent division of Deutsche Bahn that operates long-distance passenger trains in Germany. It was founded in 1999 in the second stage of the privatisation of German Federal Railways under the name of DB Reise&Touristik and renamed in 2003.DB Fernverkehr operates all...
(long-distance) comes from tickets sold to BahnCard holders.
Apart from entitling the holder to discounts, the BahnCard also functions as an ID card for the validation of online tickets, mobile phone tickets
Mobile ticketing
1. Mobile ticketing is the process whereby customers can order, pay for, obtain and validate tickets from any location and at any time using mobile phones or other mobile handsets. Mobile tickets reduce the production and distribution costs connected with traditional paper-based ticketing channels...
, and for purchasing tickets on vending machines. Bahncard holders can also call a discounted hotline printed on the cards, and an optional travel insurance can be included.
Motivation
The main motivation for introducing the BahnCard was to increase competitivenessCompetitiveness
Competitiveness is a comparative concept of the ability and performance of a firm, sub-sector or country to sell and supply goods and/or services in a given market...
against the automobile
Automobile
An automobile, autocar, motor car or car is a wheeled motor vehicle used for transporting passengers, which also carries its own engine or motor...
. Prior to the BahnCard, Deutsche Bahn priced a trip between any two points in direct proportion to the distance travelled; this pricing structure proved uncompetitive with driving.
The card allowed a two-dimensional pricing schedule, which consists of card price (a fixed cost
Fixed cost
In economics, fixed costs are business expenses that are not dependent on the level of goods or services produced by the business. They tend to be time-related, such as salaries or rents being paid per month, and are often referred to as overhead costs...
), and ticket price (a variable cost
Variable cost
Variable costs are expenses that change in proportion to the activity of a business. Variable cost is the sum of marginal costs over all units produced. It can also be considered normal costs. Fixed costs and variable costs make up the two components of total cost. Direct Costs, however,...
). Once a passenger has bought a card, its price becomes a sunk cost
Sunk cost
In economics and business decision-making, sunk costs are retrospective costs that have already been incurred and cannot be recovered. Sunk costs are sometimes contrasted with prospective costs, which are future costs that may be incurred or changed if an action is taken...
and this makes the train more like the automobile, which is also characterised by high fixed costs. The decision whether to take a car or train for a particular journey depends mostly on the marginal price
Marginal cost
In economics and finance, marginal cost is the change in total cost that arises when the quantity produced changes by one unit. That is, it is the cost of producing one more unit of a good...
per kilometer, not on the total cost.
The effect of the BahnCard was to shift the marginal cost of the train journey below that of the car journey for many customers.
History
Predecessors: 1955-1992
A predecessor of the present-day Bahncard was introduced in 1955 by Franz-Josef Wuermeling, the then Minister for Family Affairs. Discounted train tickets became available for families with many children, and the eligibility pass became known as "The Wuermeling". This pass was offered until 1999.In 1975 a Senior rail pass was introduced by the Bundesbahn, valid for men older than 65 years and women older than 60 years, and entitling them to a discount of 50% on long-distance train tickets. Later similar passes were introduced for minors and families, valid for journeys longer than 51 kilometres (31.7 mi) (reduced to 31 kilometres (19.3 mi) later). In the Deutsche Reichsbahn (DDR), the East German
German Democratic Republic
The German Democratic Republic , informally called East Germany by West Germany and other countries, was a socialist state established in 1949 in the Soviet zone of occupied Germany, including East Berlin of the Allied-occupied capital city...
rail company, which was later merged with the Bundesbahn, normal student ID cards entitled students to a discount of 50% on all journeys and 75% if the journey was between home and university.
Introduction and growth: 1992-2002
The Bahncard itself was introduced on 1 October 1992.Initially the card was available for second class travel and 50% discount only, but at Christmas 1992 the BahnCard First for the first class was launched along with gift vouchers for the new product. By the end of the year, it was bought by 650,000 clients. A major advertising campaign was started by the (then called) Bundesbahn, where the card was marketed under the slogan travel for a year for half the price. The TV advertising campaign for the new product won several awards.
The introduction of the BahnCard coincided with the launch of the high speed InterCityExpress
InterCityExpress
The Intercity-Express or ICE is a system of high-speed trains predominantly running in Germany and neighbouring countries. It is the highest service category offered by DB Fernverkehr and is the flagship of Deutsche Bahn...
trains, a luxury service that gained wider customer acceptance than previous intercity trains. One million Bahncards were sold by 20 January 1993.
In July 1995 a BahnCard with credit card
Credit card
A credit card is a small plastic card issued to users as a system of payment. It allows its holder to buy goods and services based on the holder's promise to pay for these goods and services...
functionality was introduced in cooperation with Citybank. Two new versions were now offered in addition to the original card, a BahnCard with Visa payment and credit card function a BahnCard with Visa Electron
Visa Electron
Visa Electron is a debit card available across most of the world, with the exception of Canada, Australia, Ireland and the United States. The card was introduced by VISA in the 1980s and is a sister card to the Visa Debit card...
payment (a rechargeable debit card). The credit card Bahncards were valid for a period of two years, and the regular card still for a period of one year. The validity of the cards was altered from the exact day to the end of a month. The new cards now also included a photograph of the customer. The DM 50 (€25) fee for replacement cards (in case of loss) was abolished, and a dining car voucher worth €5 was included with new cards. The customer data and photographs were processed in the USA, which raised privacy
Privacy
Privacy is the ability of an individual or group to seclude themselves or information about themselves and thereby reveal themselves selectively...
concerns with some groups.
This campaign, called "better Bahncard" was criticised by the newspaper Die Zeit
Die Zeit
Die Zeit is a German nationwide weekly newspaper that is highly respected for its quality journalism.With a circulation of 488,036 and an estimated readership of slightly above 2 million, it is the most widely read German weekly newspaper...
in June 1996, which reported that customers were tricked into buying the credit card version against their will and that organisational errors lead to delays of several months and the delivery of incorrect cards. In June 1996 the magazine Focus reported that "CitiBank must improve Bahncards". Despite a high profile marketing campaign, customers largely rejected the "better Bahncard"; only 390,000 were sold by May 1996 instead of the projected 1.5 million. The partnership with CitiBank was terminated on 31 March 1999.
In 1995, the Rhein-Main-Verkehrsverbund
Rhein-Main-Verkehrsverbund
The Rhein-Main-Verkehrsverbund is an organised transport network in the German state of Hesse, centred around the city of Frankfurt am Main. Its head office is located in Hofheim im Taunus...
was the first local public transport
Public transport
Public transport is a shared passenger transportation service which is available for use by the general public, as distinct from modes such as taxicab, car pooling or hired buses which are not shared by strangers without private arrangement.Public transport modes include buses, trolleybuses, trams...
network outside Deutsche Bahn to join the Bahncard system. A 40% discount on all local train, tram and bus tickets was offered to Bahncard holders, and included in promotional tickets such as the Guten-Abend-Ticket. Long distance DB tickets with Frankfurt as a destination also allowed a single free connecting journey for non-Bahncard customers. In exchange, Rhein-Main-Verkehrsverbund customers were able to use Deutsche Bahn Interregio (regional) trains for free. Commuters who held season tickets of the Rhein-Main-Verkehrsverbund could now also use Intercity, Eurocity, and InterCityExpress
InterCityExpress
The Intercity-Express or ICE is a system of high-speed trains predominantly running in Germany and neighbouring countries. It is the highest service category offered by DB Fernverkehr and is the flagship of Deutsche Bahn...
trains in the Rhein-Main area for a small surcharge.
New tariff model and diversification: 2002-present
Towards the end of 2002, Deutsche Bahn undertook a major reform of its pricing strategy. The linear pricing model (where ticket prices were fixed and proportional to distance travelled) that had existed for over a century was partly replaced with a new model. Though the old fare system for standard tickets was kept largely unchanged, a degree of yield managementYield management
Revenue management is the process of understanding, anticipating and influencing consumer behavior in order to maximize yield or profits from a fixed, perishable resource...
was introduced for discounted tickets. As a part of this reform the discount offered to Bahncard holders was reduced from 50% to 25%. The justification was that the Bahncard discount was now valid on top of the new saver fares (called Plan-und-Spar) that offered discounts of up to 40% on the standard fares but were only available under certain conditions (non-exchangeable; booking more than 3 days in advance; return journey required; "weekeend rule"; limited number of seats).
This reform proved highly unpopular with customers. After passenger protests and declining passenger numbers, the pricing model was modified again in August 2003. The original 50% discount Bahncard was reintroduced alongside the 25% Bahncard, however its price was increased from €120 to €200. The non-transferrable Bahncard 100 was also introduced to replace the previous (partially transferrable) network cards.
On 14 December 2003 the City ticket (see below) was launched in 44 cities in cooperation with the Verband Deutscher Verkehrsunternehmen (Union of German Transport Operators), Deutsche Bahn
Deutsche Bahn
Deutsche Bahn AG is the German national railway company, a private joint stock company . Headquartered in Berlin, it came into existence in 1994 as the successor to the former state railways of Germany, the Deutsche Bundesbahn of West Germany and the Deutsche Reichsbahn of East Germany...
, and the individual local transport companies. On 12 December 2004, another 13 cities joined the scheme; on 11 December 2005 (coinciding with the new DB timetable) another 19, on 1 April 2007 another 16, and on 10 December 2007 yet 7 more. 100 million rail tickets with "City-ticket" function were sold by the beginning of 2008.
Between 2004 and 2008 the number of BahnCard holders grew by one million to 4.01 million, the highest in the history of the card. Deutsche Bahn plans to increase this number to five million by 2011. In 2007 DB announced that it plans to reintroduce a BahnCard with credit card functionality.
Current tariff structure
| Class | Second | First |
|---|---|---|
| Bahncard 25 | € 57 | € 114 |
| Bahncard 50 | € 230 (€ 118) | € 460 (€ 236) |
| Bahncard 100 | € 3,800 | € 6,400 |
| price in brackets denotes discount rate | ||
Bahncard 25
Unlike the Bahncard 50, the Bahncard 25 also entitles the passenger to 25% discounts on top of fares already discounted by 25-50%, called SparPreise 25/50, that are available under certain constraints such as advance purchase. It also entitles to group discounts, which are meant to make rail travel more attractive to groups of passengers who would have travelled by car otherwise.Bahncard 100 customers receive a free Bahncard 25 for a partner or family member. Families can purchase additional Bahncard 25s for household members for about 1/5 of the price. Minors can purchase a card for €10 that is valid for three years instead of one.
The number of Bahncard 25 holders is growing faster than the number of Bahncard 50 holders, and a Bahncard 25 passenger undertakes an average of 10 journeys a year, according to Deutsche Bahn.
Bahncard 50
The Bahncard 50 enables a 50% discount on standard walk-on fares, but not the discounted fares (SparPreise 25/50). It is aimed primarily at frequent travellers who want the convenience and flexibility of being able to hop on a train without making prior arrangements.In 2006 there were 1.8 million Bahncard 50 in circulation, and Bahncard 50 passengers undertake an average of 50 train journeys a year, according to Deutsche Bahn.
The Bahncard 50 can be purchased for a concessionary price by students under 27 years of age.
Bahncard 100
The Bahncard 100 allows unlimited travel on the entire Deutsche Bahn network and 109 local public transportPublic transport
Public transport is a shared passenger transportation service which is available for use by the general public, as distinct from modes such as taxicab, car pooling or hired buses which are not shared by strangers without private arrangement.Public transport modes include buses, trolleybuses, trams...
networks across Germany. The card itself is valid as a ticket; no additional paper ticket needs to be issued. Sleeper trains and special "Sprinter trains" (trains that travel non-stop between metropolises) are excluded from the card, but can be used for a small surcharge.
The Bahncard 100 is aimed at business travellers and heavy train users who make more than 30 long distance journeys a year. The Bahncard 100 automatically qualifies the passenger for Deutsche Bahn's VIP program called bahn.comfort. Card holders enjoy a number of privileges, like free baggage collection from home, and access to VIP lounges at train stations.
The car sharing service offered by Deutsche Bahn can be used at discounted rates by card holders. Some German employers issue the Bahncard 100 as a substitute for a company car and this function is intended to make the card a more attractive alternative.
An electronic key based on RFID technology is integrated into the card, which can be used to unlock carsharing vehicles parked near train stations. Since the RFID chip is automatically included in all cards, not only the ones with carsharing capability, and since the passenger's photograph is printed on the card, it has been criticised for violating privacy
Privacy
Privacy is the ability of an individual or group to seclude themselves or information about themselves and thereby reveal themselves selectively...
rights, and DB received the 2007 Big Brother Award as a result.
Mobility Card
Deutsche Bahn is in the process of expanding the Bahncard to a fully fledged "mobility card", offering discounts on other transport related services, such as hotel reservations, car rentalCar rental
A car rental or car hire agency is a company that rents automobiles for short periods of time for a fee...
, car sharing, public transport
Public transport
Public transport is a shared passenger transportation service which is available for use by the general public, as distinct from modes such as taxicab, car pooling or hired buses which are not shared by strangers without private arrangement.Public transport modes include buses, trolleybuses, trams...
, bicycle hire
Call a Bike
Call a Bike is a bike hire system run by Deutsche Bahn in several German cities, which uses a system of authentication codes to automatically lock and unlock bikes.-Usage:...
, and other services.
City-Ticket
The "City-ticket" is currently available in 118 German cities. Bahncard 25/50 holders who travel over 100 kilometres (62.1 mi) with a standard ticket are eligible for one free connecting journey by local public transportPublic transport
Public transport is a shared passenger transportation service which is available for use by the general public, as distinct from modes such as taxicab, car pooling or hired buses which are not shared by strangers without private arrangement.Public transport modes include buses, trolleybuses, trams...
at their destination, in all cities participating in the program. The return journey to the railway station is also free for a return ticket. The text "+City" is printed on the DB train ticket, making it valid as a local transport ticket. In most participating cities, this ticket is valid on the entire network (rail+bus+tram), in some it is valid beyond the city limits, and in a some only for certain operators. In Hamburg
Hamburg
-History:The first historic name for the city was, according to Claudius Ptolemy's reports, Treva.But the city takes its modern name, Hamburg, from the first permanent building on the site, a castle whose construction was ordered by the Emperor Charlemagne in AD 808...
the City-ticket is only valid in certain parts of the city, depending on what train station the passenger arrives in. In Berlin
Berlin
Berlin is the capital city of Germany and is one of the 16 states of Germany. With a population of 3.45 million people, Berlin is Germany's largest city. It is the second most populous city proper and the seventh most populous urban area in the European Union...
and Frankfurt
Frankfurt
Frankfurt am Main , commonly known simply as Frankfurt, is the largest city in the German state of Hesse and the fifth-largest city in Germany, with a 2010 population of 688,249. The urban area had an estimated population of 2,300,000 in 2010...
the City-ticket is only valid in the central tariff zone.
Mobility BahnCard 100 holders are eligible for unlimited public transport travel in the City-ticket zone of participating cities, regardless of whether they book a DB long distance journey or not.
BahnCard and Bus operators
Many bus companies in Germany, including most of the regional bus routes operated by DB, accept the BahnCard. The same discount of 25% applies both to the BahnCard 25 and the BahnCard 50, and the Mobility BahnCard 100 is valid as a full ticket. The Deutsche Bahn-owned bus operators in Sachsen and BrandenburgBrandenburg
Brandenburg is one of the sixteen federal-states of Germany. It lies in the east of the country and is one of the new federal states that were re-created in 1990 upon the reunification of the former West Germany and East Germany. The capital is Potsdam...
do not accept the BahnCard.