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Wednesday, January 07, 2009

Stupid Toll Agreement ?

I have mix feeling on this topic ...

Basically one of Malaysia Largest Toll Road agreement with Goverment is published.  One analyst found out that

The more people use the toll road,
the toll charges they have to pay !

As a consumer, I would be pretty pissed too !  Why should I let you earn more from me !

But if we think properly ... its actually perfect logic.  In an open business environment, price is determined by supply and demand.  'Supply' of a toll road is fix as the same road is there.  If more of us are using it, then the 'Demand' increases.  When Demand is more than Supply, the price goes UP !



Along with that principal, there are many 'excuses' can be easily found too.
Since there are more people using the roads, we need to 'upgrade' it, make more lanes to increase 'Supply' in order to bring the toll charge down.  However, in order to do that, we need money and therefore we have to increase toll charge first.

When more people use the roads, higher maintainence is needed.

There is a lifespan to everything.  As the road gets older, more money is needed to keep it alive !

Lets see if the toll companies can come up with smart answers like this ... the way they answer will determine how smart they are !

1 comment:

Anonymous said...

Good sharing :)

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