The Hindu Business Line : Traffic jams can take a toll

Consider this. An unexpected traffic jam delays your meeting by 20 minutes and you lose business worth Rs 10 lakh. All of us experience frustration from getting stuck in traffic everyday. What do you do?

You just wish that everyone stops driving a car! Of course, everyone else feels the same way too. The fact is all of us contribute to the traffic jam and pay a price.

Ask an economist and she will tell you the cost of getting stuck in traffic. Suppose you earn Rs 100 per hour. Sitting inside a car for two hours in a traffic jam would cost you Rs 200. Add the time you wasted in traffic during a year and the cost is huge.

Should you take the car?

So, in 2003, the Mayor of London levied a toll on vehicles that plied in the central district during peak hours. Suppose you earn Rs 100 per hour. Assume it takes two hours to reach the office by bus whereas it takes just an hour by car.

If the toll is less than Rs 100, you will continue to use the car. Why? You can go to work an hour early and earn Rs 100. If the toll is higher than Rs 100, you may prefer the bus. But, of course, tolls are not fixed that way, unless an economist is the project manager! So, why should traffic drop even if the toll is considerably less than Rs 100?

None of us like to pay even Rs 50 for a service that was free till yesterday. And that is what happens when the government suddenly tolls a road that was otherwise free. Understandably, traffic in the central district also declined.

(The author is based in Surrey, BC in Canada)

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