Markets in law evasion? A fun example of “collective action” in Stockholm

A group in Sweden known as (rough translation: “”) believes that public transit should be financed through general taxes, not individual fares. Their rationale is that a greater share of the costs of public transit should be borne by affluent citizens and drivers. Moreover, according to this report in the (sexist?) NY Times, Planka has devised a creative strategy to beat the public transport system, so to speak. In sum, Planka requires its members to pool their resources (through a modest $15 monthly fee) and to evade paying the fare every time they use public transport (or “free riding” in the parlance of economics). If members keep their side of this bargain, Planka will cover any of the roughly $180 fines that might result (if the fare evader is ever caught). Spoiler alert: the reason why this model works is that free riders in Stockholm are rarely caught:

Every transit network has its fare beaters, the riders who view payment as either optional or prohibitively expensive. Many cities, most notably New York, view turnstile-jumpers as a top policing priority, reasoning that scofflaws might graduate to more serious crimes if left alone. But in Stockholm, the offenders seem to have defeated the system. * * * The group’s efficiency in evasion has created an enviable business model. Last year, the group took in more than twice as much money — more than $7,500 per month — as it paid out in fines, organizers said. * * * Since Planka’s founding 13 years ago, its legend and influence have grown. Though it has about 500 official members, the organization has helped lead many thousands more to simply stop paying fares on their own, according to transit officials. Mr. Pettersson said that about 15 million trips last year were not paid for — 3 percent of all rides. The Planka Facebook page has more than 30,000 “likes.”

Would this model work in New York City or Paris?

Free riding is fun, but why isn’t it legal?

About F. E. Guerra-Pujol

When I’m not blogging, I am a business law professor at the University of Central Florida.
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