Could we pay travellers not to use over-crowded trains?Posted: July 12, 2011
If you think crowding of trains in Australia’s capital cities is bad, have a look at this extraordinary video of how they cram passengers onto trains in Japan! John West could learn a thing or two! Peak crowding is uncomfortable for passengers and increases operating costs – more capacity is needed to handle the peak, but much of it is unused in the off-peak period. That extra capacity might take many forms, such as more carriages, more trains, more staff, etc.
There could potentially be big savings if some of this peak demand were shifted to earlier or later periods. This applies to trains, buses and roads and indeed to many activities that experience peaking e.g. cinemas, concerts. Apart from the disincentive of being treated like a sardine, the standard approach is to charge a higher price in peak periods relative to the off-peak. However political constraints mean public transport operators in Australia tend to conceive of differential pricing as an off-peak concession rather than as an active way of managing peak demand.
Here’s another way of approaching this problem. The Economist reports Singapore is planning a pilot scheme offering public transport passengers a greater chance of winning a prize if they choose to go off-peak. All travellers are entered into a pool with a chance to win cash in weekly lotteries, but those who travel off-peak will effectively get three times as many ‘tickets’. The principle is that small rewards will pay for themselves in lower capital and operating costs.
The Economist quotes Stanford University academic, Balaji Prabhakar, who says lotteries rely on the behavioural-economics insight that the average person is risk-seeking when stakes are small:
Offer individuals 20p to leave the house an hour earlier, and most will say no. But a 1-in-50 chance of winning £10 may seem more enticing. The risk-seeking effect is amplified in small networks: regularly hearing about other winners leads individuals to overestimate their own chances of success.
The idea of carrots rather than sticks is not new. For example, long-standing readers might recall this proposal to reward drivers who don’t speed with a cash reward. Fines from speeders are paid into a pot and redistributed randomly as prizes to motorists who are ‘caught’ by speed cameras driving within the designated limit. The Capital Bikeshare scheme in Washington DC offers prizes to riders who travel against the dominant flow, thus reducing the cost of rebalancing the (geographical) distribution of bikes. This study of the effectiveness of a lottery in reducing car travel found it had a positive effect, although it disappeared when the lottery was stopped (note very small sample size).
This is an approach that public transport operators should evaluate for possible implementation in Australian cities, although there are issues that need to be thought through. I suspect Australian CBD workers generally have more flexibility in their working hours than Singapore workers, but any lottery would work better if major employers were brought to the table – that would help to identify the range of potential time-shifting actions and where lotteries might be positioned within them.
It would have to be viewed as a more or less permanent offering because most of the change in behaviour would evaporate if the incentive were removed. Since the lottery works on the premise that the savings exceed the costs, that shouldn’t be an issue (and if they don’t the scheme could be abandoned). The real challenge would be in fine-tuning the frequency and size of rewards to optimise the incentive effect and avoid the “Flybuys” (i.e. why bother?) effect. The key thing, though, is that operators have a close look at the potential of this sort of initiative.
On a more general note, lotteries is one of a range of essentially behavioural actions that can be applied to various transport issues. The study I mentioned yesterday (by British epidemiologists Graham-Rowe et al) of 77 interventions directed at reducing car use, concluded that those which were methodologically strong (there were only 12, but they were all behavioural) showed a positive, if small, outcome could be achieved:
Overall, these studies suggests that such interventions can be effective in reducing driving but that effect sizes may be modest. For example, while uncontrolled workplace Personalised Travel Planning Interventions (PTPIs) have reported reductions in single car occupancy of up to 21%; other, controlled studies have reported smaller effects, for example, a 3% advantage in single car occupancy reduction in the intervention group compared to controls. PTPIs may be more effective if combined with campaigns which raise awareness of real improvements in alternative, public transport…….
It is worth noting that car-use reduction may be approached by delaying or reducing uptake of driving by young people. In an unusual study, Fujii provided various intervention groups with different forms of information about the negative aspects of car use including cost, risk of accidents and stress due to traffic. A randomised controlled trial showed that fewer participants had a driving licence eighteen months later in the intervention groups compared to a no-intervention control group.