Who Pays the Price?
Over the last 10 years the federal government has
dramatically increased the number of regulations pertaining to transportation
safety and security. Two such regulations are presented below. Review them and
answer the case questions.
Transportation Safety—December 18, 2017, is set as
the implementation day for electronic logging devices (ELD) in trucks. ELDs
will replace paper logbooks for truck drivers to provide better control over
their compliance with Hours of Service regulations that are designed to combat
driver fatigue. It is believed that paper logbooks are subject to fraud and
allow drivers to exceed 11 hours of driving time per day and more than 60 hours
in a seven-day period. On the other hand, drivers will not be able to easily
exceed the limits as ELDs are not easily manipulated. The cost of ELD purchase,
installation, and operation is the responsibility of the trucking company or
the independent truck driver.
ELD critics believe that, at a cost of up to $2,500 per
unit, the expense of ELD adoption is excessive for small companies and
independent truckers. They also project productivity decreases of 15 percent
fewer miles traveled per day and nominal rate increases of 5 to 10 percent for
loads booked on the spot market. Proponents indicate that ELDs will improve the
accuracy of HOS logs, improve Hours of Service compliance, reduce falsification
that occurs with paper logbooks, and reduce crashes by over 1,800 annually.
Transportation Security—After the terrorist attack on
the United States on September 11, 2001, the Transportation Security
Administration (TSA) was established and tasked with implementing regulations
to protect the safety of passengers using the U.S. airline industry. TSA
manages Secure Flight, a risk-based prescreening program to identify high-risk
passengers; conducts passenger screening for illegal items before they enter
the secure area of airports; and screens checked bags for explosives and other
dangerous items. TSA has implemented congressionally mandated security fees to
help finance the increased cost of securing the nation’s aviation transportation
system. This passenger paid fee was increased to $11.20 per round trip ticket
Critics of TSA screening programs complain that these
policies increase travel time, invade privacy, are of limited effectiveness,
and increase costs for passengers and airlines. Proponents of these policies
argue that the safety of air passengers is more important than delays or
1. In each of the scenarios presented in the case, opponents
and proponents have divergent views of government regulations. One view is on
the public benefit, the other is on the cost to individuals and/or private
industry. How can you decide which view to accept?
2. In each of the scenarios earlier, identify the benefits
versus the costs for both viewpoints.
3. Should the government intervene in setting regulations to
increase transportation safety and security? Or should private industry take on
this role? Discuss.