MPs have strongly attacked the Government's handling of rail franchises, saying passengers have been "badly let down".
The Transport Select Committee highlighted the "woeful experience" of travellers on Southern Railway, whose services have been disrupted for months because of industrial action, staff shortages and other problems.
Ministers were urged to "get a grip" on monitoring rail franchise agreements, adding that the current method of measuring operator performance, the Public Performance Measure, should be abandoned and replaced with a performance measure that better reflects the reality of the passenger experience.
The report was published as Southern services were returning to normal after a three day strike by the Rail, Maritime and Transport union (RMT) in a bitter dispute over the role of conductors.
A further 11 days of strikes are planned until early December, threatening more travel chaos for hundreds of thousands of passengers.
The MPs took evidence from rail passengers, saying it was dominated by problems faced by Southern's owners Govia Thameslink Railway (GTR) for more than a year, as well as "poor management" and inadequate staffing.
The report considers whether Govia is now in default of its contractual obligations, saying the number of train cancellations was "substantially" more than the default level.
"In normal circumstances, this would be grounds for termination of the contract," the report stated.
The MPs said that if the company was in default, the Department for Transport must take the opportunity to restructure or terminate the agreement and deliver services more effectively.
The department's claim that no other operator could do a better job in the circumstances was no longer credible, the committee said.
It added that its scrutiny of Govia's performance was made more difficult by lack of access to essential information.
The report said that on parts of the rail network, passengers struggled to get the service they deserved on a daily basis.
Lack of access for disabled passengers, overcrowding, delays, complex ticketing, poor deals for part-time commuters, a lack of timely information on delays or updates available through websites, apps or wi-fi services, added to the "misery" of passengers.
Louise Ellman, who chairs the committee, said: " Passengers must be furious - and rightly so.
"While the number of passenger journeys on the railway has more than doubled over the last two decades, the size of the physical network has barely increased at all.
"Passengers now contribute more than 70% of the industry's real income, but in too many places, passengers are badly serviced by train operating companies.
"The individual voices of customers suffering woeful service on Southern Railway, in particular, came through loud and clear during our inquiry.
"GTR, RMT and the Government are all culpable to some extent for the prolonged dispute, but passengers have borne the brunt."
Mick Cash, RMT general secretary, said: "This report is an indictment of the failure of rail privatisation and the Government's record on Southern railways which have resulted in daily chaos and misery for passengers.
"The report rightly argues that in any normal circumstances there would be grounds for GTR to have its contract terminated and RMT is calling again for this failed franchise to be taken into public ownership as soon as possible."
Manuel Cortes, general secretary of the Transport Salaried Staffs Association, said: "The frank honesty with which the report details the numerous GTR management failings on Southern vindicates all we've said about aggressive and brutal management strategies designed to cream profits from passengers without any commitment to guarantee them either train services or protect their customer service standards.
"It is clear now to everyone reading this report that GTR management have deliberately maligned rail unions and bashed our members for the problems of their making.
"They have even gone so far as to accuse my members of causing delays by being deliberately sick."
A Department for Transport spokesman said: "We monitor closely the performance of all rail franchises and each franchise agreement contains clear penalty regimes for repeated poor performance.
"Improving rail services for Southern passengers is a priority for the Government and for the operator, and we are committed to a railway that delivers the modern, accessible and reliable service passengers expect.
"Simply changing the management or taking the franchise from GTR would not address the issues and would only create uncertainty and cause further disruption. It could also delay the introduction of modern, more spacious trains by Southern."
Jacqueline Starr, of the Rail Delivery Group, representing train companies, said: "Train companies are already giving customers better information, particularly when there is disruption, and developing smarter types of ticket that are simpler to buy and use, but we know that we have to do more for our passengers.
"It's important to remember that we have a successful railway - Europe's safest and fastest growing - with thousands more services and passenger numbers having doubled in the last 20 years."
Charles Horton, chief executive of Govia said: "Clearly, we've not got everything right in the past two years, but we've committed to making things better and our passengers have already seen 400 new vehicles on our network in the past two years across the GTR franchise, extended smart card technology across our network and delivered nearly 250 of our obligations under our franchise agreement.
"While performance is still way below where we want it to be, it's good that the constraints of the redevelopment of London Bridge have been acknowledged and, also, the fact that performance was beginning to improve before the start of the dispute with the RMT. "
RMG general secretary Mick Cash said: "There is a growing political drive for Govia Thameslink Railway to be stripped of their franchise.
"The Mayor should be insisting on full public ownership, as well as public accountability, and should not be handing over rail operations to private racketeers like Arriva who are due to take over London Overground next month.
"RMT is also seeking a cast-iron guarantee that the Mayor will keep the guards on the trains if rail is devolved on services like Southern, South West Trains and Southeastern. We want safety, access and an end to profiteering to be right at the top of the agenda."
Southern services were disrupted this morning despite the end of the strike as electrical rail problems affected trains between Epsom and Dorking.