The High Cost of Traffic Jams

Traffic jams have become a norm in every country of the world. Be it cities like Los Angeles which are part of the developed world or cities like Bangalore which are part of the developing world everyone faces rush hour traffic.

Traffic jams were considered to be a positive sign. This is because the presence of rush hour traffic indicated that people had jobs that they wanted to get too! However, in the recent past, traffic jams have become a menace. The ability of these jams to stress out and frustrate individuals is well known. However, now these traffic snarls have also started negatively impacting the economies of nations. In this article, we will have a closer look at the high cost of traffic jams. Also, we will suggest some possible alternatives that may help in solving this problem.

The Cost of Traffic Jams

Traffic jams levy a wide variety of direct and indirect costs on the nation. The most prominent types of costs have been listed below.

  • Lost Productivity: Rush hour traffic is a significant problem in many cities. Many times workers have to spend three to four hours every day commuting to and from work. This is an absolute wastage of productivity. People wasting their time wringing their hands in traffic jams do not contribute much to the economy. Instead, most of these people turn up to work late leading to lost productivity. Traffic jams also trend to cause tremendous stress amongst people. Hence, many employees are stressed out even before they reach work. Once again this leads to lost productivity in the short run. Also, if this stress is sustained in the long run, it causes employees to fall sick. The expenditure on medical health increases whereas the well-being of the worker is jeopardized.

  • Increase in Transportation Costs: Traffic jams force transport companies to utilize more fuel to transport products to their destination. This is because a lot of fuel is wasted while waiting in traffic jams. The problem here is twofold. Firstly, higher fuel costs get added up into every product. Hence traffic jams cause inflation in the economy. Also, higher fuel consumption causes increased demand for fuel. Since the supply is inelastic, the high demand causes a price increase. Hence, if a way were found out to contain traffic jams, it would also help stabilize fuel prices across the globe.

  • Carbon Emissions: Burning of fuel at traffic jams also causes a lot of fuel wastage. This wastage also harms the environment in the form of increased carbon emissions. About 60% of all carbon emissions are from automobiles. Hence, if a way is found to reduce these emissions by reducing traffic jams, the environment and the people in it will be much better off.

Possible Solutions

Although, traffic jams pose complex and multi-faceted problems, but some of the solutions are obvious and known. These probable solutions have been listed down below.

  • Ridesharing: It is no secret that cars waste a lot of road space. If there is only one passenger sitting in a car, he/she is occupying thirty times more road space than the passenger on the bus. As a result, people in the bus are being unnecessarily penalized. To solve the problem of traffic jams, ridesharing must be encouraged. If a substantial number of people start using carpools, then traffic jams and the problems associated with it will reduce dramatically.

  • Internet of Things: Many new cars are being equipped with modern technology. One such technology is the internet of things (IoT). This technology allows cars to communicate with one another. Hence, if the car knows the route that is being traveled, it can talk to other cars on that route. It can find out about the traffic situation and take alternative routes. The Internet of Things technology is a much-improved version compared to the navigation software which is used now.

  • Raise Parking Rates: Cities and countries need to discourage people from using private vehicles. They can do so by raising the parking rates. The city of London is already using this concept successfully. Every car that enters the financial district in London has to pay a toll. The idea is to ensure that people realize the toll that their vehicles are putting on the roads and other infrastructure. Obviously this works because the city of London has a good public transport system.

  • Remote Working: Another simple solution is allowing workers to conduct their activities remotely. Most people are now connected because of internet and teleconferencing facilities. Hence, it does not matter whether they work from home or from office. Companies should allow their employees to work remotely. This leads to more convenience for the employee. It costs the employer less money and also the society, in general, is saved from the economic perils which accompany long commutes. If remote working is not an option, corporations should at least consider having staggered working hours. This will cause a considerable reduction in peak hour traffic.

To sum it up, traffic jams are not only a social menace but also an economic one. It is in everyone’s best interest to eradicate this problem.

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The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.


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