Wednesday, May 05, 2010

Bay Area casual carpool - an experiment in market dynamics

For the last year I have been using the "casual carpool" that has evolved on its own here in the Bay Area. It costs $4.00 to cross the bridge, and $3.50 to take BART into San Francisco. The bridge is also always jammed.

However, if you have a carpool of three people, you get a special lane through the bridge tolls, and there is no charge. As a natural law of the free market, the casual carpool developed. There are agreed upon locations, and there is a line of people and a line of cars. Two people get into a car, and together you go across the bridge for no charge and faster than both BART or driving alone. Perfect!

Now CalTrans has thrown a wrench into a beautifully running machine: as of June they will be charging $2.50 for carpools to go across the bridge. Ugh. They could at least have made it $3 so it would be easy to split amongst three people.

So what happens? Do people stop doing casual carpool? If not, do riders pay, or does the driver eat the cost? Do we have competition in the lines, with people jockeying for the front of the line if they're willing to pay more to get into the car? What happens when there is a line of cars and no people? Do cars willing to take riders for no charge get precedence? Do they stick a sign out of their window saying "will take riders no charge?" Does each car have a sign on the window saying how much you have to pay to ride? What happens if one rider pays and the next rider to get in refuses to pay?

As a driver, I think I would just take whatever people are willing to pay me.

As a rider, I would pay what I feel is my fair share and also an amount to maintain good will - I value good will a lot when riding in someone's car :). So I'll probably be prepared to pay $1, regardless of what the other rider pays. I am not interested in haggling with either the driver or the other rider - this just creates unnecessary tension, which is not worth it for me in my daily commute.

How this will ultimately evolve, I'm not sure, but it will be a very interesting experiment in market forces.

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