• 04.19.12

Combating Congestion With Cash And Games

Stanford is employing a new trick to eliminate the post-work rush hour. Let people win (small) prizes if they arrive or leave outside of rush hour. Get to the office early, and you could make enough for a free lunch.

In the battle against congestion, traffic authorities have tried all kinds of things: penalties and extra charges for driving at peak times, allowing only certain license plates on different days, and of course, investing in public transit to entice people away from their cars.


But Balaji Prabhakar thinks there’s an easier and more efficient method: nudging a relatively small number of drivers to change their habits in small ways, using relatively small amounts of cash.

Having already successfully put his theory into practice in Bangalore and Singapore, Prabhakar, a professor at Stanford, is now trying to fix the university’s peak-hour bottlenecks. The scheme, launched this month, incentivizes off-peak driving by rewarding drivers who arrive or leave campus outside peak hours (8 to 9 in the morning, and 5 to 6 at night).

Each time drivers cooperate, they get a credit, which they can either redeem for a nominal amount, or use in a raffle to win a bigger prize. The rewards–which are allocated randomly–range from $2 to $50, and drivers can theoretically win as many times as they enter.

A $50 incentive may not sound like a lot in the big scheme of things, but Prabhakar says you need to look at it in context. “You have to look at it as a percentage of their commuting expense. Parking permits are $300, or more. If you get $50 a year, it accrues to something interesting.”

Also, the university is not asking for much. The scheme is voluntary; drivers can opt-out any day by taking off the RFID tag from their windshield; and complying often means nothing more than leaving home 15 minutes early, or leaving campus 15 minutes later. “The reward is proportional to the effort, and it’s a substantial percent of your commuting expense,” Prabhakar says.

From the organizers point of view, success has a relatively low bar. Prabhakar says he has to convince only 10% to 15% of the driving population to do things differently, and then only occasionally.

In the program’s first week, 1,381 drivers had signed up, out of a possible 8,000. Later this summer, the scheme will expand by a further 6,000 people, when hospital staff are added. Drivers also get credits for parking in less desirable parking lots, and for getting colleagues on Facebook to join in the scheme.


The project is currently funded by the Department of Transportation. But the aim is for it to be more self-financing. Later this year, the university will look for local businesses to sponsor prizes–-which total $3,000 to 5,0000 a week at the moment.

Prabhakar says the beauty of positive inducement, rather than penalizing people for bad behavior, is that it can set up a virtuous cycle. Drivers tend to want to display their good deeds, advertising the fact to others, and encouraging them to join too.

Prabhakar is also working on a similar project in Singapore, which has already signed up 10,000 drivers, and increased off-peak driving by 10%. The project in Bangalore, which dates from 2008, involved 14,000 employees of Infosys (PDF). Over a six month period, the proportion of off-peak drivers rose from about 20% to about 40%.

“It’s the most efficient way of dealing with the problem,” says Prabhakar, “because you only need to pay off a relatively small percentage of users.” A little, in other words, can go a long way.

About the author

Ben Schiller is a New York staff writer for Fast Company. Previously, he edited a European management magazine and was a reporter in San Francisco, Prague, and Brussels.