it's not a true free market, it's only the services which are franchised, they don't own the metal or the signaling equipment, they are also beholden to minimum service schedules rather than being allowed to run profitable schedules only and do not have freedom to set prices accordingly
also, as has been pointed out it's not a monopoly as other forms of transport are available, i'm off on my 30 mile commute in the morning and there are many ways I could get there, I could walk, cycle, drive, use buses, a train or a tube, a boat, a plane (assuming Stansted has a London City service still), if I chose to live in an area with only one form of transport available that would be pretty fudging stupid wouldn't it