28.1.08

INCENTIVES MATTER. There's an organized hitchhikers' market in greater Washington, D.C.
Slugging is an informal carpool system that sprung up in Northern Virginia in response to the construction of High Occupancy Vehicle lanes, which may only be used by cars containing multiple passengers. At various points along the highway, folks heading into the city line up each morning and wait for drivers going into the city to swing by. Swing by they do, and once loaded up with an appropriate number of people, the cars jet into the HOV lanes and bypass the heavy traffic going downtown. In the evenings, similar lines form downtown for the ride home. It’s a nice little system, and all the more interesting because it has evolved on its own.
Emergence, forsooth! Now comes a new system of property rights that makes hitchhikers into cash crops.
Northern Virginia is preparing to widen and extend the HOV lanes and turn them into High Occupancy Toll lanes. These lanes will still be free to multiple passenger vehicles, but individual drivers will also be able to use them by paying a variable toll, the size of which will change with traffic in order to maintain a steady flow. Studies analyzing the proposed system have speculated that the toll for an average rush hour trip will be about $6, but the system’s mandate to keep traffic flowing freely at all times means that one-way costs could potentially much higher.
Which puts the driver in the interesting position of hiring hitch-hikers?
You see, the prevailing toll rate will be flashed on signs along the highway, constantly updated, so slugs will know the exact financial value of their presence in a carpooling automobile. Drive alone, pay $10. Pick up slugs, go free. I suspect that the display of a tangible value for slugs may alter the dynamics of the system.
And if so, the value of owning a toll-road concession?
Right? Am I missing something? Because if that’s the case, why would companies pay $800 million for the rights to build and collect tolls on these lanes?
Could be a paper in this.

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