Nuride is Friendster for slugs, i.e. an internet based system for arranging car pools. Drivers input their travel plans online making it much easier to find someone who is going where you want to go at a time that is convenient for you. Why should drivers do this? They and their passengers are paid for their troubles. How does Nuride make a profit? Nuride is selling the reduction in congestion and pollution to local governments. Economists have long pointed out that drivers impose a cost on other travellers – the flip side is that car poolers create a benefit for other travellers. Thus, Nuride is providing a way for governments to implement the optimal Pigouvian subsidy/Coasian transfer.
So far, only a small-scale test of Nuride has been made with employees of AOL but they recently came to GMU to promote the idea and hope to have a fairly extensive Northern Virginia system operating soon. The plan sounds a bit BC (before crash) to me but I’m always happy to see more examples of entrepreneurial economics.
Thanks to Diego Aycinena for the pointer.