Societal Design Problem

That's my take. This morning over at CC, Flexo highlights an article discussing an economist's solution to dealing with traffic congestion. The solution? Price discovery, of course.

SoCal traffic problems are worse than anybody imagines. The last 5 years, I've personally experienced the following changes:

LA San Diego on Saturday morning:

• Was 1.5 hours
• Is 5 hours

LA to Santa Barbara on Friday night:

• Was 2 hours
• Is 4 hours

Santa Barbara to LA on Sunday afternoon:

• Was 2.5 hours
• Is 5 hours

This morning, my husband left the house at 5:30 am to drive 19 miles up the 405 to work in Santa Monica. If he leaves at any later than that, it's a 1.5 hour drive. No joke. My commute is just as bad, and as I sit in traffic each day I often wonder how the Mayor goes to sleep at night. How does a person leading a city, sleep at night when this life -- a life of sitting in traffic -- is the reality of the citizenry? It just seems weird.

Then I remembered the 1984 Olympics. They were here in LA, if you're old enough to remember. There was a guy -- his name's Peter Ueberroth -- in charge of the organization effort. I didn't live here then, but when I talk to locals, they all seem to remember "how great it was during the Olympics." Evidently, Mr. U didn't want traffic problems snarling up the Olympic schedule.

What'd he do? He talked all major employers into a staggerred work schedule. Simple. Yet here we are, 20 years later and still going to work at a time when telecommuting could easily eliminate 20% of the traffic out there today. Why? The age-old-corporate-ladder-climbing-metric known as face-time. Or as I like to refer to it, seat-warming. When I talk later about Your Money or Your Life, there's some interesting math behind this idoitic phenomenon.

Anyway, back to the economist and price discovery. Lane #1 on I5 at 4:30 = $7, Lane #5 on 805 at 10:30 = $3. Seems to me this idea needs a little more fleshing out. Lots of markets have price discovery mechanisms, yet still manage to fail. The stock market fails the individual investor when some people know what others don't. That's the problem known as imperfect information. The stock market fails the institutional investor when news of a large trade causes the value to take a nose dive in front of the trade. That's a problem called market impact. Where the stock market does a good job, is in the area of transparency -- it's easy to know what the prices are right now, and what they were last week, last month, last year. In theory, this helps market participants make decisions.

So the way I see it, for this to function as a true market system:
1) Drivers will need to know when and where everyone else is driving. Firms will undertake research, make forecasts, publish reports and charge you $50 for the trouble. Or, you can risk it. Be a maverick. Obtain hot tips from neighbors. Or friends. Or the guy on the corner with a sister who knows someone with a friend at the city transportation department.
2) Drivers will want to know ahead of time when a bizarre event such as unusually light traffic is about to occur, thereby driving down the price of their lane, potentially causing them to take advantage of the situation and make a trip that was heretofore unplanned.
3) Drivers, armed with solid pricing history of all traffic in all lanes and freeways at all times, will run regression and create predictive models enabling them to optimize their traffic spend through hearty quantitative analysis.

Just think, we'll all be saved by choosing when! And where! And at what time to drive!

This of course assumes, people can choose when and where and at what time to drive.

UPDATE: Someone shares my position on relationship between societal design and transporation.

ANOTHER: Of course! Who can ever beat this guy to the punch! I honestly believe our friend Mr. Reynolds somehow ported my grey matter overnight.

*sigh* I feel so hip, so relevant, so in-the-know, so "plugged in." Faith Popcorn, watch out.