Tuesday, May 6, 2008

Incentives of Ownership

A common sight on the roadsides in Lagos is an okada driver diligently cleaning his okada. However rarely seen are bus drivers doing the same. In a conversation with my former landlord about the crazy traffic situation in Lagos, I learnt something about the transport system which explained this phenomenah. The drivers of the small yellow buses-"danfoes" [my ride to and from office!] rent the bus from the owners. So after they buy fuel, pay rent to the owner and a "tax" to the taxi park where they load/ offload passengers what remains is their profit.

The bikes-"okadas" however, work on a "hire and purchase" system. As soon as the drivers of the okada earn and pay back the cost [with interest] of the okadas to the owners, the bikes are theirs.

The result: badly maintained, strained danfoes versus proudly owned, well-kept okadas! The ownership and the lack of it provides the incentive or disincentive to keep it in good shape. Thats the power of incentives!

1 comment:

Somnath said...

Compare the quality of upkeep of the ubiquitous auto-rickshaws in Ahmedabad and Delhi. Your findings are likely to be similar. The autos in A'bad are owned (mostly purchased through bank loans), while those in Delhi are rented by at least two drivers from owners who are mostly policemen. There is also a marked difference in the attitude and behaviour of the drivers.
Wonder why these are never noticed, much less studied?