Friday, November 12, 2010

Small Nudge, Big Benefits: Arlington's Hybrid Taxis

As I was walking out of the East Falls Church Metro station in Arlington tonight, I noticed three of the four cabs at the taxi stand were hybrids.

If you just moved to Arlington, you might not think that was a big deal. But just three years ago, there were literally zero hybrid cabs in Arlington. Couldn't get one if you tried.

Then the Arlington County Board approved a small fleet of EnviroCab hybrid taxis. Arlington residents liked being able to cut the carbon pollution of their cab ride for the same price, while drivers liked cutting their fuel costs by nearly half.

Today, it's hard to find a taxi stand in Arlington without a hybrid waiting. And hybrids are clearly a marketing tool -- Red Top & Yellow Top hybrids have HYBRID TAXI written in huge letters on every side to make sure you don't pass them by for an EnviroCab.

Amazing that such a relatively small nudge (85 cabs in a fleet of over 700) delivered such huge benefits -- more profits for drivers, more satisfied customers, cleaner air & reduced oil use. After all, we're always hearing from conservatives that the free market is perfect & that if there was any demand for something, the invisible hand would deliver it. Have the demands of the market completely flipped in just three years? In this case, the market was failing to meet demand until it got a nudge from regulation.

Reality doesn't always fit with purist free market theory. The market is run by people, who may be resistant to change.

Look at Virginia's smoking ban in bars & restaurants. In the "free market" world, a lot of people were unhappy & forced to accept the unwanted cost of dirty air. The smoking ban took years to pass over opposition from business & free market conservatives who screamed nanny state & predicted economic ruin. Then it took effect & you never heard another word about it -- a lot more people are happier & healthier at an extremely low (if any) cost.

So when conservatives say we shouldn't provide nudges on things ranging from clean energy, efficient technologies because if they were worth doing the free market would already be doing them ... I have to wonder if their purist theory is supported by reality. And that's before you consider that new environmental regulations almost always cost less than predicted.
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