Development of a kilometre-based rewards system to encourage safer driving practices

Abstract

There is growing interest in using kilometre-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 kilometres driven and the circumstances under which those kilometres are driven (time-of-day, day-of-week, road type, speeding etc). In this paper, we explore options for designing a kilometre-based rewards scheme that incentivises drivers to reduce their kilometres, night-time driving and speeding using recent accident data and travel survey data collected in the Sydney Greater Metropolitan Area (GMA). Results show that young drivers (17-30 year-olds) would be hardest hit by the proposed scheme with middle-aged drivers (31-65) faring the best. The impacts of the reward system are then assessed hypothetically using evidence from 125 motorists who have completed five weeks of driving in which their kilometres, night-time driving and speeds are monitored using the latest GPS technology. Various charging scenarios and hypothesised behavioural changes are implemented to assess both their incentive for change and the overall financial impact for the project. These results are used in conjunction with the theoretical and empirical justification outlined in this paper, to set the final charging regime rates based on the overall study budget.