Development of a Kilometer-Based Rewards System to Encourage Safer Driving Practices

Interest is growing in the use of kilometer-based financial mechanisms to encourage safer driving practices and reduce accident claims. The rationale behind such an approach is that, in addition to driver characteristics such as age and gender, crash risk is intrinsically a function of both the kilometers driven and the circumstances under which those kilometers are driven (e.g., time of day, day of week, road type, speed). Using recent accident data and travel survey data collected in the Sydney, Australia, greater metropolitan area, options were explored to design a kilometer-based reward scheme that incentivized drivers to reduce their kilometers traveled, nighttime driving, and speeding. Results show that young drivers (17 to 30 years old) would be hardest hit by the proposed scheme, and middle-aged drivers (31 to 65) would fare best. The impacts of the rewards system were assessed hypothetically by using evidence from 125 motorists who completed 5 weeks of driving in which their kilometers traveled, nighttime driving, and speeds were monitored with the latest Global Positioning System technology. Various charging scenarios and hypothesized behavioral changes were implemented to assess both their incentive for change and the overall financial impact of the project. These results were used in conjunction with the theoretical and empirical justification outlined in this paper to set the final charging regime rates on the basis of the overall study budget.


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  • Accession Number: 01153417
  • Record Type: Publication
  • ISBN: 9780309160537
  • Report/Paper Numbers: 10-0783
  • Files: TRIS, TRB, ATRI
  • Created Date: Jan 25 2010 10:22AM