Sunday, August 3, 2014

A Toll Road. A Very SHORT Toll Road

There was a rockslide.  Not a very big rockslide.  But the state being the state, it was expected to take 8 months to clear it.

So, the guy who owned the property on one side of the road built a bypass around the rockslide.

And, as Joni Mitchell said, "charged all the people, a dollar and a half just to see it."  Actually, he charged 2 pounds (this being England) just to use it.

Is he exploiting people desperate to avoid the long detour?  Or providing a legitimate service? 


A British businessman who has grown tired of council works closing off a road near his home has built his own detour, and is now charging motorists £2 each to use it. 

Mike Watts, 62, was forced to drive around a section of the A431 between Bath and Bristol because a landslide had closed the road in February. Council works were due to carry on until the end of the year. 

Not wanting to wait that long, Watts employed his own crew of road workers and built a 365m-long bypass in the field next to the closed-off section. 

An interesting problem.  Because the marginal cost of letting people use the road is close to zero.  No congestion (I assume), and not much wear and tear on the road itself.  Is Mr. Watts exploiting people by charging the monopoly price, much higher than marginal cost? 

1 comment:

  1. Cost of building ~360.000 pounds
    Cost of staffing ~20,000 pounds
    -> needs one thousand cars per day to break even
    ~ 1 car every 80 seconds
    he will lose money unless it is a very busy road
    --people have a choice


Do you have suggestions on where we could find more examples of this phenomenon?