Scooters seem to be a romantic, practical, and useful vehicle. They are highly convenient, mobile, and individually-unique. More over, some might even suggest that there is a symbolic role of scooters in Taiwan's economic success over the past several decades. No matter it's a rainy, windy, or sunny day, it hardly effects people's determination of using a scooter as their commuting tool. Taiwanese are extremely endured and tolerant of a tough life.
As a Taiwanese, I have no doubt with the illustration above. But there is only one problem: It's time to make a change.
What's wrong with the vast amount of scooters in Taipei? There are at least two main issues with which we should address very seriously here in Taiwan, congestion and pollution. As the authors of Freaknomics, Steven Levitt and Stephen Dubner noticed in the article Not-So-Free Ride, "this is not a political or moral argument; it is an economic one. "
There are as many costs associated with driving that the actual driver doesn't pay, and this condition is called negative externality in economics when the behavior of Person A damages the welfare of Person B, but B has little or no control over A's actions. If A wants to drive extra 100 kms more, he doesn't need to ask B; he just hops in the car and steps on the gas. Because A doesn't pay the true cost of his driving, he drives too much.
When personal marginal benefit is larger than societal marginal benefit, individuals tend to over consume the products.
The negative externalities of driving? Congestion, pollution, and traffic accidents. According to some analyses done by U.S. transportation institutions, the annual societal costs of congestion, pollution, and traffic accident in the U.S. are $20billion, $78billion, and $220billion, respectively. That is to say; each driver should pay more money based on a system that can truely reflect people's driving behavior.
In the article, the authors mentioned several ways to solve the problems, such as congestion pricing, which of course has been a hot-debated issue in New York City and turned out to be a fiasco (here and here). And the result of congestion pricing based on the popularities and crowdedness of streets is usually referred to nothing no more than a new creative tax on people who cannot afford to live in those luxurious districts.
The next possible solution is automobile insurance. Under current known or famous policy of insurance, if driver A and driver B live in the same city and engage in the same insurance risk pool (similar age etc.), the driver A who drives 30,000 kms per year probably pays the company same amount of money with driver B who only drives 3,000 kms per year. The meaning? With the extra 27,000 kms A drives each year, he got subsidized by B for every kilometer he drives.
It's not only about negative externalities. It has more to do with social justice.
This imbalance soon resulted in the new pricing system of Pay-As-You-Drive (PAYD) insurance that charges customers based on the distance they actually drive and also how they drive by adding a small electronic device which can detect their location and speed. The invention of this system needs more than the idea itself. It requires people's openness to the issue of privacy and the development of tracking technology, both of which are getting more and more clear over the last several years. And the only one thing left is insurance companies' financial evaluation on its possibility of being a big strike.
Bottom Line:
Reading this news reminded me of one of the good insurance we have done in Taiwan. The third party insurance (第三責任險). It is aimed to solve the problem of traffic accident by enforcing vehicle users to buy extra insurance in case of anything bad happens on the road. It has been done for many years. And it's an ingenuous one.
The sociability indicated by people's lives on the scale of a city is really fascinating.
