I was reminded of this post this morning while listening to my local public radio station. They had a story on the light rail in LA which uses the honor system. They had a study which said that 11% of patrons routinely do not pay. I don't know what the methodology was but for the sake of argument I'll just accept it as accurate as well as their estimated loss from this behavior of $5.5M. To combat this, they are proposing to install turnstiles at the cost of $30M with an estimated $1M of annual maintenance. This seems so ludicrous to me. Even if you assume that 11% will remain customers once they force people to pay and you will indeed recover that $5.5M and not lose any of the remaining 89% of honest paying customers when you make things slower and tougher for them, the cost really doesn't balance especially when you consider these capital "improvements" are normally done with bond money. Even if they paid cash, the break even point is around 6.5 years. What's the lifespan of the turnstiles? What other improvement could the money be used for? How many of those 11% would be too poor to afford the ticket? It could be a social benefit to allow them free access. It's like the DRM-mentality in so many ways. They just see the fact that someone's getting something for free, not the fact that they may be throwing $10 at a $1 problem and hurting their own product in the process.
Quote:
Originally Posted by jasonkchapman
From a content producer's point of view, this is the only viable option. I wonder if there are any solid figures on any of the "honor system" mass transit systems in Europe, because there seem to be a lot of parallels. If you hop tram in Prague without paying for it, you're violating the law. However, if you're taking a spot that would otherwise have gone empty, you're not costing the system any additional expense. It's relatively easy to "get away with it," but enforcement does exist and some people do get caught by random inspectors. (Setting aside, for the moment, that there are a lot of reports of abuse in the inspection system.)
The NYC subway, on the other hand, has a more obtrusive "DRM" system (Digital Rider Management?). If you don't pay, you don't get on. The card system and the turnstiles and the gate infrastructure costs a lot of time, effort, and money to maintain, and still people hop the turnstiles.
So. Does the honor system work more often than not? Enough, that the savings from the light-weight "DRM" system balances any losses?
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