Paying Commuters to Bike

A few weeks ago, the city of Milan, Italy decided to try a radically new scheme to fight the serious pollution problem they facing. They want to pay people to cycle to work.*1

A similar approach was tried in 2014 in France, where employees were paid 25 cents per kilometre they pedalled to work. The scheme had modest results: out of more than 8,000 people who were eligible, only around 400 people signed up.*2

    Major problems for this type of schema are:
  • cheap or free parking: if exists, it’s usually counter-productive
  • commuting habits: these are very hard to change
  • polluted environment: people are unwilling to spend more time outdoors, if the air is toxic
  • offered company cars alongside a cycle-to-work scheme
  • traffic safety
  • availability of bike paths
  • secure parking
  • showers
  • biking incentive amount

All of these could affect a person’s willingness to cycle to work.

Photo source: "Bicycle at Venice Beach" by Michael

Additionally, there is one more issue for the government: cheating. One way to tackle this issue would be that participants have to use an app that will keep track of people cycling to work, although the software is not flawless. By monitoring a person’s travelling speed and distance, it would be possible to determine whether they are really cycling to work. Even with all this, it would be hard to catch one person biking with multiple phones; although a pattern will be recognisable, we would still need more precise GPS apps.

As it is not possible to solve pollution and congestion with cycling only, other approaches are necessary, and it would be best if we could combine them. In the case of Milan, city hall also introduced a reduced day ticket for public transport. This approach wouldn’t help with cycling but surely could help tackling pollution.

While reading the article, I remembered another one: a few years ago, the city of Stockholm used a different approach to pollution: they started charging a congestion tax*3 *5 on most vehicles entering and exiting the city centre. Now, a fully implemented, it’s showing very good results.

“The road charging system had an immediate impact on congestion and overall quality of life for the citizens of Stockholm. By the end of the trial, traffic was down nearly 25%, and train and transit passengers increased by 40,000 a day.

What’s more, the reduction in traffic led to a drop in emissions from road traffic by 8 to 14 % in the inner city; and greenhouse gasses such as carbon dioxide fell by 40% in the city.

In the face of local scepticism about the project, the authorities decided to implement road pricing for one year—on a trial basis—and then allow citizens to decide via a referendum whether to make it permanent.” *4

Maybe the best approach would be to implement both schemas at the same time. Just imagine, if those who are driving would have to pay those who are cycling. I am curious to find out what kind of combined effect that would produce.

Recently, by asking the following question, I got one more idea: what would happen if we would calculate a price of fuel per "passenger mile per gallon" vehicle efficiency?

Imagine if we could calculate a price on how efficiently fuel was burned, so that every car/driver would get a different price, depending on type of his car, efficiency of the car’s engine, driving style, and number of people or goods transferred with that car. Those who drive alone in big and inefficient SUVs would pay a higher price per gallon of fuel. Although this looks like a very difficult thing to calculate, as it would be prone to different fuel manipulations, we have all necessary technology to make this possible.

The question is: would that nudge people to change their habits?

Would they buy more efficient cars or shift to busses, trains, bikes, or consider anything else that is more efficient in “passenger mile per gallon” terms?

After the French biking schema trials, when they asked cyclists about their main reason for cycling, the majority said that it’s quick and easy. A smaller portion said it is because of the exercise, and just a very small percent of people said that they are motivated by environmental concerns.

We rarely think about ecology, pollution, or what is good for the planet; most of the time, we are just busy with our life and job. We tend to think about what is cheaper, what is a quicker, more comfortable, and less stressful way of commuting.

Having that in mind, the best solution is the one that is designed in such way that, instead telling people what they should do, we just need to nudge them in right direction. By putting incentives and charges into place, the social system will organise itself. There is no need to tell people how to adapt; if we nudge them away from bad options, they will do the rest.

What we are trying to do with Basic Tax Control and Universal Basic income is similar. No one can grasp the details of a large social system. Rather than planning and controlling every single element of a complex system; by nudging system in a desired direction it will organize on its own.

This approach is a good example of solving problems by design: where no one is in charge, but the system still works and usually outperforms control-freak type of management.

Notes & References:

1. Cash for cycling? Polluted Milan wants to pay commuters to bike to work

2. The Problem With Paying People to Bike to Work

3. Stockholm congestion tax

4. How it Works: the Stockholm Road Charging System: April 2007

5. Swedish Road Administration

6. Stockholm Congestion Tax - It must be perfect from day one

7. Congestion: Jonas Eliasson at TEDxKTH