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Train Delayed? Find the Right Platform for Compensation with Zug-Erstattung.de

Train Delayed? Find the Right Platform for Compensation with Zug-Erstattung.de

Having sat on the platform at Berlin’s central train station, the Hauptbahnhof, for several hours as my train was delayed again and again, it wasn’t a great surprise when it was finally cancelled altogether. It was the first time that Deutsche Bahn’s long-distance train service had let me down, and I duly went to the service centre to rebook onto a different train the next day (thus missing the start of the conference near Koblenz I was trying to attend).

In doing so, I was given a form and an envelope and told that I could claim some compensation by filling it out and sending it in the post.

Nearly two years later, I still have that form somewhere.

This is the pain point that Michael Schmitz is trying to solve with his one-man-band startup, Zug-Erstattung.de (Zug Erstattung is German for ‘train refund’). Rather than go through the faff of dealing with the compensation, you can just upload the details and let him do it. It’s a dead simple idea – but one which I, at least, would seemingly benefit from.

Users upload their ticket PDF – or a smartphone picture of it – to the website or the iOS app, add a few details, and let the service do the rest. Zug-Erstattung.de then mails the physical paper request to the central service center to help travellers get their money back.

The platform was launched last month as a kind of boutique startup. The potential revenue might not be exactly earth-shattering, but talking to Silicon Allee, Schmitz revealed that more may yet come of the idea.

Disrupting travel has been a hot topic in recent years, with the likes of GoEuro and Waymate two examples of Berlin startups looking to make booking transport easier. And air travel – where trying to win compensation from an airline, especially a no frills one, is like watching England play at the World Cup; time-consuming, annoying, frustrating and ultimately completely pointless – has already seen companies similar to Zug-Erstattung.de in the shape of Getairhelp and Flightright.

But air travel compensation is a lot bigger business, especially when you are only considering one train company.

With somewhere between a million and 1.5 million requests received by Deutsche Bahn (DB) a year, Schmitz will have to tap into the untold numbers who don’t apply to make a reasonable amount of revenue. He is still working on his business model – thus far he has done it for free, but he will now experiment with a set fee (€1 per application, say) or a percentage (most likely 8 percent) to see which works best. He is also hoping to rely on word of mouth for news of his platform to spread, and two business angels are apparently interested.

But Schmitz doesn’t believe that DB will react to his efforts by making the process easier themselves. According to him, Deutsche Bahn has an agreement with the other, smaller train companies in Germany to deal with all requests for compensation via outsourcing to a third party, the Service Centre.

This means that “there is already some kind of inertia around this, and on top of that, the reason why this case exists at all is because I think DB doesn’t want to make it easy for people to do it online. They want to make it difficult because then people will just throw it away, and it’s money that they save.”

And, he argues, the business can quickly be expanded to other EU countries, thanks to European laws which give passengers the right to compensation. But even then, he admits, the potential revenue might not be all that enticing: “So you have to think about how can you leverage this kind of business. If I have millions of people looking for refunds, I have to look at what other kind of stuff I can offer. … [And] it’s a very clear business model; it’s slightly limited but then you have very little upfront costs so it’s attractive to at least test it out – then it’s very interesting to see where you can go from there.”

And here, perhaps, is the crux of the plan: “I can get a lot of data, I can see a lot of problems, and who knows, maybe there is something else that can be done. So I see it like a very safe exploration.”

Either way, the head honchos at Deutsche Bahn might have to start taking into account a much higher compensation bill – and the company’s five million users might be that little bit more inclined to actually apply for it.

About David Knight

David is co-founder and Editor-in-Chief of Silicon Allee. Originally from London, he has lived in Berlin for over seven years, having previously worked for news portals including Bild.de and Spiegel Online before helping to found Silicon Allee in 2011.

One comment

  1. This is a pretty dumb idea. Given that payment can now be made from one’s smart phone, surely the system can be programmed to automatically refund the cost of the cancelled trip. A refund that can be displayed on one’s smart phone.

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