Hoo’s Driving, Hoo’s Free-Riding?

A few weeks ago, I took a trip to New York. I planned on catching a carpool to DC with the Hoo’s Riding Facebook group previously discussed in Sano’s amazing blog post, and transferring to a bus to NYC. On the day in question I got in the car and realized I only had 3.5 hours until my bus was scheduled to depart. This posed a problem for me, given that it generally takes about that long to get from Charlottesville to DC to the bus station. It looked like we would be cutting it close.

Early in the trip, I realized the driver was also under a time constraint: she was trying to catch a flight out of DCA. Because she was also trying to make a connection, she took liberties with the speed limit — consistently breaking it by about 10 MPH. Sitting in the passenger seat, I realized that I benefited from her speeding. Importantly, this choice was not costless for her. Route 29 is notoriously treacherous for speeders, and she was running the risk of getting pulled over and incurring a costly ticket (the probability of which increases with each MPH over the speed limit). On the other hand, I as a passenger was not liable. Because the speed at which she chose to travel applied to both of us, it was in some way a public good — one I was free-riding off of (literally). Because of this free-riding problem, there is the potential that the speed we traveled was not the efficient level.

MPH over limit	MB Driver	MB Passenger	SMB	MC
5	100	75	175	25
10	75	50	125	50
15	50	25	75	75
20	25	0	25	100

Take for example the table above. Assume decreasing returns to speed, so that each MPH over the speed limit increases the probability of making a connection on time, but we derive no benefit from arriving earlier than is necessary. Also assume the marginal costs are a function of the expected value of a lump-sum speeding ticket (i.e. the value of the penalty doesn’t vary with speed), given the probability of getting a ticket increases as speed increases. If these costs are borne only by the driver, the travel speed will be below the allocatively efficient level of 15 MPH over the speed limit. We could have easily moved to the allocatively efficient level if I had offered to pay her for each MPH she went over the speed limit, but I was more than happy to simply free ride off of her speeding, rather than contribute my fair share. On the other hand, if she was in the mood for a leisurely drive, and only I had been in a hurry, I would have been far more inclined to offer her money to speed, rather than be stuck with her low speed.