Would you pay a premium tax (toll) to get out of rush hour traffic?
The traffic is so bad in Austin, Texas that the town has finally decided to do something about it – they’re building a new lane in each direction. Here’s the catch: It’s a toll lane. But not just any toll lane, it’s a toll lane that changes its rates. The rates, however, aren’t based on day of the week or time of the day, but rather on the average speed in the ‘express’ toll lane.
It took me a second to figure this one out, but the price goes up when the average speed drops below 50 mph.
Chew on that for a second. The slower this new exclusive lane goes, the more it costs to get in it. In economic terms it’s called peak-load pricing and it got me thinking – what other things are priced that way? What other areas of our finances do we trade money for time so that others (those who don’t pay anything) get a better experience (in this case less traffic in the ‘free’ lanes)?
What this means is important: A tool more often used becomes more valuable.
I’m reading a book called Talent is Overrated. It describes a concept I’ve understood more and more as I’ve aged. The idea called “talent” means little when compared to another factor: time perfecting the job.
Notice I didn’t say “time on the job.” That’s seniority, which is irrelevant. You can sit and bullshit while being paid for thirty years and learn zippo at your chosen career. As you spend time actually honing your skills you improve. Talent is what brings you to the task….it’s more fittingly thought of as “aptitude.” Because you enjoy a particular activity, you’re more willing to spend the time it’ll take to practice. Want to be a better golfer? Practice golf perfectly for a few hours a day. Want to write better? Read and practice writing activities to create perfect sentences and paragraphs. Soon you’ll be among the best. That guy whacking a bucket of balls? He’s wasting his time. The woman churning out another crappy blog post on how to make your own computer from tractor parts? It’ll be as bad as the one on why you don’t need to hire an electrician.
When it comes to your main breadwinning activities, spend your time wisely honing your skills. When it comes to everything else, like riding down the highway, trade money for time, but only if this time will be used to practice more. The sooner you tackle your unique ability, the more your wallet is going to thank you. Soon you will find, that like Austin expressways, your fees are going up because your skills are being used more frequently.
The less time you save, the more money you spend? weird pricing! And it has to be hard to estimate over a 20 miles ride. Can’t remember a time when I paid so that other people get a great experience, but I guess landscaping your yard or buying expensive fireworks that the whole neighborhood can enjoy would apply, except you enjoy it too.
I can’t think anything in particular that is priced that way…but I do know that time is way more important than money to me. I will pay more for things that save time for me so that I can spend that time doing something else.
I’m with you, Holly. Time is your biggest asset. If I can trade a little money to use that time and make more, it’s a great trade.
You can’t think of anything where the price increases with demand?
If you wanted a specific example, Houston has done this exact thing for years on their Katy Freeway.
At this point I can’t really afford to “buy” more time, though I definitely agree that it should be HIGHLY valued because it’s the most valuable commodity of them all. That’s why I am focusing on increasing income so that I can outsource things and pay for more free time.
DC, the more time you buy, the quicker you’ll reach your goal. As long as you use the time for your end product advancement.
That’s a really interesting idea. Some mornings I can waste 40-50 minutes driving to work (same trip on the weekend take 10 – 15 minutes). I don’t think I would use a pay road on the way to work but it certainly interests me for my trip home.
That’s funny, Glen. On the way home is when I wouldn’t use it, unless I was going to earn money there or practice my unique ability.
That is an interesting idea. Sure, having lots of money is great…but I’d much rather have time. I definitely would consider spending more on something that would save me considerable time.
I’m there with you, John! If I can have time to focus on those key tasks…I’ll pay to get the B.S. jobs done right now.
Hmmm this is very interesting! I wonder how it’ll work out and how much money it’ll bring in.
I am in agreement with everyone else. That pricing is pretty screwy. I would however pay it. I have little to no patience and traffic annoys me more than anything.
Interesting toll. We noticed they were finishing up a toll expressway outside of DC last week when we were there. In this case, probably worth the cash to get the extra time…IMO.
I am really trying to hire out and delegate more!! It’s tought for me to implement befcause there is so much I like to do!!! But, like you implied, there’s only so much time :)I like the metric to focus on what you are trying to perfect.
Holy shit! Someone’s going to comment on the actual point of the article? I thought we were going to debate toll lanes all night long! I have the same problem, Barb. I found when I was planning that by hiring out the stuff that others could do nearly as well (actually the projections!), and by doing my core tasks myself (the meetings and strategies) I was able to increase the value of my company many times over.
There are a decent number of cities with lanes like that, but I always understood them as when the “regular lanes” get slow, it costs more to get in the “express lane”. Which makes perfect sense, economically speaking. The smaller the gain in speed you get by moving to the express lane, the smaller the cost. The bigger the gain in speed you get (ie. when the regular lanes are the slowest), the more it will cost.
We call ’em Lexus lanes and I think they’re a great idea. When you need to get somewhere in a hurry, you can. And you help pay for the lane construction that provided it.
Man, as if I needed another reason to like where I live? Not enough traffic for toll lanes!
I trade time for money all the time. I am very bad at doing DIY projects so I use inexpensive repair people. I am much better at negotiating great prices.
That’s great! Not only can you hire out things that you aren’t great at, but you get them at a lower price. Excellent! It seems like studying negotiating might be a great way to reach that middle ground for many of us who aren’t skilled negotiators.
In my county, a toll fee was implemented in in the car pool lane. I haven’t used it since it doesn’t save too much time.
You could just move to the boonies like me. The only time I have to stop in traffic is for avalanche control or a cattle drive!
Funny. When we moved to Texarkana I asked about rush hour. My friend said, “We don’t have rush hour as much as we have rush intersection. If you stay away from Rochester Road and I-30 between 5 and 5:30, you’re good.”
Time and money move have a funny relationship where they push apart from each other like magnets. If you find an equation where time and money both increase–I’m all ears!
I think if you look at the really good success studies, they show that if you focus on your unique talent and hire away everything else, you’ll find both time and money increase.
I certainly don’t do this enough… or even think about it. When I stop and think about it, I would usually choose time over money – but not always. It depends on the situation and my priorities at the time.
I’m curious where that line is, Jason. How much a priority at the time makes you say, “Let’s pay to have this done?”
Loving the analogy! I’d hate to drive in Austin. We have a free HOV lane on one of our four major highways here. It’s funny because it’s on the one highway that is least congested. But it is kind of amazing. Our traffic here isn’t bad enough yet to start charging fees.
I agree that experience is key in getting paid more. But if your reputation is bad (ie the quality of your work,) then all the experience in the world is worth nothing.
Sounds like a way to encourage accidents.