Dear Economist

What’s the best way of sharing the petrol bill?

My sister and I both use the same car. When we started to share, we were both students and never had more than £10 to pay for petrol. Now that neither of us are students, we still only put a tenner’s worth of petrol in because we figure, “What is the point of one filling the car up for the other to get the benefit of driving it?” – commonly known as “sisterly love”. Of course, this means that we are endlessly having to stop to put in petrol.

Is there an optimal amount to put in the car in our situation, or, perhaps, a better way to deal with the predicament, bar getting a car each?
Lucy

Dear Lucy,

It might sound strange, but your letter reminded me of Somalia. Your method of ensuring equitable payment for fuel works, but is quite a hassle. Living in a quintessential failed state, Somali entrepreneurs also have to go to great lengths to ensure payment in a situation where the rule of law has broken down.

For example, electricity is locally generated using second-hand equipment from Dubai. The suppliers offer a simple menu of choices: daytime (good for businesses), evening or 24-hour electricity. They charge per light bulb. The costs of collecting payment are probably as high as the costs of producing the electricity, but at least the lights tend to stay on.

Clearly there is a superior solution for the two of you: leave a notepad and pen in the glove compartment, and each of you note both your mileage and your petrol expenditure. If the two fall out of sync with each other, the heavy driver can compensate the heavy filler. This is time-consuming, but not as time-consuming as incessantly stopping for petrol.

This system assumes that you and your sister would not lie to each other. Perhaps this is not true, and family tensions call to mind downtown Mogadishu. If so, it is time to buy another car.

Also published at ft.com.

1st of November, 2008Dear Economist • Comments off