For whom the road tolls....

This series of blog posts started with a reflection on Ryanair’s model of providing cheaper air travel to people who were prepared to carry their own luggage on and off their planes.

This afternoon, I drove past Ryanair HQ on a trip from Swords Orthodontics in North Dublin to Galway. On the way, I went through 3 tolls - M50, M4 and M6. The M50 motorway toll gate was changed to barrier-free a few years ago. There are no more booths collecting money. You can have an electric tag in your car which debits the toll charge from your account when you go through the toll zone, or you can phone in and pay by credit card. Either way, big brother is watching and knows you went through the toll and if you don’t pay within a certain time, you have a surcharge or even a fine.

I have the electric tag thingie. I’d never remember otherwise. Once you have the electric tag, you can use the automatic barriers on the other toll roads. In one lane, you don’t even have to stop the car to pay, so it’s a few seconds faster.

Until I became a business owner, I never realised there were costs – direct and indirect –in handling cash. For a start, a bank charges you money to give money to them! It charges you money to have a business account, but if you give them cash beyond certain limits, there is a penalty for that. But before you even get to that stage, you have the difficulties in securely transporting it to the bank. For the payments a toll booth takes, this is much more of a problem as coins are more difficult to transport than notes to the same value.

If the payments are not automated – correct coins only, please, no change given – then a human being is employed to collect the toll and give change. That toll booth operator has to be kept warm in their booth and given appropriate breaks and replaced every few hours with a new toll booth operator as the booth needs to be occupied 24 hours a day, 365 days a year.

It costs the toll company money to deal in cash. I can’t see information in the public domain on the figures, but I can only presume they save money by letting drivers use automated, barrier-free tolls. But the toll is still the same. You actually pay a company money to “rent” (ie use) the electric tag. You might even have a bank charge to set up the direct debit. When the balance in your toll account goes below a certain amount, they automatically debit some more money from your bank account into your toll account so there is a buffer of cash to stop you owing them money.

In my first blog on this theme, I noticed that one airline cut its operating costs and provided a cheaper service to customers who carried their own luggage on and off planes and through airports, and the airline was so popular the other airlines had to do the same. In the second blog, I figured it was cheaper for supermarkets to have customers scan their own groceries and sooner or later one of them will incentivise this.

Since there aren’t a load of different companies operating toll roads, and it’s a very different business model as there are interactions with the government, I don’t see any reason why – if automated toll barriers are cheaper – that they would be in a rush to pass the reduced charges on to the drivers. But the drivers are helping them collect the money – and indirectly paying them to do it.

And what has this to do with orthodontics?