2009-2010
Learning Economics through current issues (1)
Minibus accidents
Source 1
近日多宗小巴車禍，引起社會各界關注，有指小巴超速是不少嚴重交通意外的成因，
而這與小巴司機薪酬制度有直接關係。
小巴司機的薪酬制度包括日薪加津貼、拆帳、受薪或「計轉數」等形式，此等「多勞
多得」制是造成小巴司機超速的誘因。立法會議員王國興指出，小巴司機為希望「多
走幾轉」，賺取更多薪金，他們不惜超速趕路，最終導致意外發生。2009 年 8 月 4 日
於元朗公路釀成 4 死的小巴車禍，司機便是於二八分帳的形式下工作。
其實，運輸署於 2、3 年前已取締以不同形式支薪的舊制，要求營辦商以受薪制直接
聘請司機，惟現時仍有兩至三成小巴司機沿用舊制。運輸署承諾將加強對小巴的監
管，並計劃於明年底逐步引入小巴限速器。另外，運輸署亦計劃於未來兩個月收集小
巴司機薪酬制度的資料，分析司機薪酬及褔利與小巴意外增加有否關係。
資料來源：
以上的內容綜合自《蘋果日報》及《文匯報》2009 年 8 月 26 日的報道
Source 2
Motor vehicle involvements and involvement rates by selected class of motor vehicle (2008) (extract)
Public Bus
No. involved in accident
No. licensed (mid-year)
Minibus
2 463 No. involved in accident
12 803 No. licensed (mid-year)
1 080
4 346
Source:
Transport Development: Summary of Key Statistics (Table 3.1)
http://www.td.gov.hk/FileManager/EN/Content_2015/08fig3.1e.pdf
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Source 3
LCQ12: Safe driving is the proper attitude of PLB drivers
Following is a question by the Hon Lau Kong-wah and a written reply by the Secretary for
the Environment, Transport and Works, Dr Sarah Liao, at the Legislative Council meeting
today (February 22) :
Question :
Regarding the operation of green minibuses (GMBs), will the Government inform this
Council whether:
(a) it has statistics about the respective numbers of GMBs running on Hong Kong island, in
Kowloon and in the New Territories whose drivers are remunerated on a
“revenue-sharing” basis, and the percentage of such GMBs in all GMBs in Hong Kong
and the number of operators adopting this mode of operation;
(b) there are other wage systems for GMB drivers in addition to the “revenue-sharing” or
salaried modes; and
(c) it will consider standardising the wage systems for all GMB drivers in Hong Kong with
the salaried mode across the board as soon as possible so as to prevent GMB drivers
remunerated on a “revenue-sharing” basis from speeding and ignoring the safety of
passengers and other road users in the hope of maximising their passenger trips; if not,
the reasons for that?
Reply:
Madam President,
According to Section 27 of the Road Traffic Ordinance (Cap. 374), all green minibus
(GMB) service operators are required to obtain Passenger Service License (PSL) issued by
the Transport Department (TD) for operating the respective GMB route packages. A
condition of the PSL requires the operators to ensure effective monitoring of their services
by employing drivers for driving public light buses (PLBs) to provide the GMB services.
At present, there are 120 GMB operators operating 147 route packages across the territory.
Six (five per cent) of these operators remunerate their drivers on a solely “revenue-sharing”
basis and have not employed the drivers for driving the PLB to provide the GMB services.
These six operators are operating a total of six route packages, of which one is in Kowloon
and five are in the New Territories.
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Operators of the above route packages remunerate their drivers on a solely
“revenue-sharing” basis and have not complied with the requirement on employment of
drivers. The reasons are that they are unable to complete corporatisation procedures on time
before launching the service or during business re-organisation, or due to disagreement
among shareholders.
TD has been closely monitoring the above situation and urged all GMB operators to comply
strictly with the PSL condition on employment of drivers. Operators in question have
committed to complete the relevant procedures by mid 2006 with a view to complying with
the PSL condition.
TD understands that apart from remuneration on “revenue-sharing basis” or salaried modes,
some GMB drivers join the GMB operation as a partner of the company concerned.
Safe driving is the proper attitude all drivers should have, particularly the professional
drivers. Under all circumstances, professional drivers have the obligation to drive safely to
protect the safety of the passengers and other road users. The remuneration system for
GMB drivers should not be directly related to their driving behaviour. While operators are
required to comply with the above PSL condition for PLBs on employing drivers for
provision of GMB service, they should also enjoy the flexibility to make reasonable
remuneration arrangements for their drivers and adopt appropriate and effective measures to
monitor their conduct as well as service quality and safety. The government, therefore, have
no plans for standardising the remuneration system for all GMB drivers in Hong Kong.
As for the safety awareness and professional conduct of PLB drivers, we will continue our
efforts in various aspects including legislation, enhanced enforcement, education and
publicity in order to ensure the safety of PLB service.
Ends/Wednesday, February 22, 2006
Issued at HKT 14:25
Source:
Legislative Council, Press Releases
http://www.info.gov.hk/gia/general/200602/22/P200602220195.htm
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Questions for discussion:
1. According to the above information, which types of remuneration system for green
minibus (GMB) drivers exist in Hong Kong?
Revenue-sharing basis, salaried modes, GMB drivers join the GMB operation as a
partner of the company, piece rates based on the trips they make, daily income plus
commission.
2.
Please name the economic terms of the above remuneration systems.
Daily income plus commission = basic salary plus commission
Salaried modes = time rate
Revenue-sharing basis, piece rates based on the trips they make = piece rate
GMB drivers join the GMB operation as a partner of the company = profit sharing
3.
Discuss the pros and cons of the above remuneration systems from the viewpoint of
minibus drivers and the minibus operators respectively.
From the viewpoint of minibus drivers:
Pros
Cons
Basic salary plus
commission
Hard working workers are
rewarded higher-income
Unstable income
Time rate
Stable regular income
Piece rate
Hard working workers are
rewarded higher-income
They will not get extra pay
even if they work harder.
Unstable income
Profit sharing
Hard working workers are
rewarded higher-income
Income of drivers depends
on the companies’ profit,
hence their income is
unstable.
From the viewpoint of minibus operators:
Pros
Cons
Basic salary plus
commission
The cost of supervision is
The cost of assessing drivers’
lower because drivers tend to work and calculating salaries
work hard to earn more
for the drivers is high.
commission.
Time rate
It is simple to measure the
salary hence the cost of
measuring drivers’ income
can be reduced.
Higher supervising cost is
needed to monitor drivers’
work.
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Piece rate
Profit sharing
Labour incentive will be
higher because drivers’
income directly depends on
their output (i.e. the number
of rides he can make).
The cost of monitoring the
quality is higher because
drivers may rush for more
output (number of rides) and
neglect the quality, more
traffic accidents will be
caused and thus, companies’
revenue may decrease.
The cost of supervision is
The cost of calculating
lower because drivers tend to salaries for the drivers is
work harder to get higher
high as this wage system is
income.
complicated.
When the business suffers
from loss, minibus
companies do not need to
pay the drivers.
4.
If you were a minibus driver, which remuneration system would you prefer? Why?
Free answer
5.
(i) Source 2 shows the number of involvements of selected public transports in 2008.
Which means of public transport, minibus or public bus, has a higher involvement
rate in traffic accidents?
With reference to source 2, minibus has a higher involvement rate (24.85%) than
that of public bus (19.24%) in 2008.
(ii) Suggest some reasons explaining the phenomenon in 5(i) by referring to Source
1-3.
The remuneration system may be one of the factors causing numerous fatal
minibus accidents. Compare with the public bus of which the drivers are paid by
time rate, minibus has a higher involvement rate than that of the public bus.
Because some minibus drivers are paid by piece rates i.e. their income is based on
the number of trips they make, they tend to drive fast to earn more and therefore
lead to careless or dangerous driving. This explains why many fatal traffic
accidents keep happening.
6.
Some suggested that standardizing the remuneration system with time rate for all
GMB drivers is the most effective way to reduce the number of traffic accidents. Do
you agree to this measure? Express your viewpoint.
Free answer
Yes, with the adoption of time rate, the salary of minibus drivers is fixed and would no
longer depends on the output (no. of trips they make). With time rate system, the
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intension of speeding is greatly reduced as the minibus drivers will not earn more even
if they drive faster and hence, there will be fewer accidents caused by speeding.
No, even with the adoption of time rate, if the driving behaviour and attitude of the
minibus drivers do not change, accidents will still happen. Like public bus drivers who
are paid by time rate, accidents also happen when they do not have proper driving
attitude.
7.
The Transport Department is going to collect the data about the remuneration system
of minibus drivers to analyze the correlation between the remuneration systems and
minibus accidents. Please follow the upcoming report and enrich your discussion in
Q6.
Free Answer
8.
Apart from regulating the remuneration system, can you suggest other possible
measures to curb dangerous driving of minibus driver?
Free Answer
9.

Minibus drivers are mandated to attend a driving improvement course run by the
Transport Department

Follow European Union’s example by limiting the maximum daily working hours
of the drivers and set a monitoring device to measure the daily mileage of the
vehicles.

Installing speed limiters. A maximum speed limit will be set in the regulators. The
regulating devices will cut off fuel supplies when the speed limit is exceeded.


Installing “black box”, a travelling recorder to record travel-pattern data.
Increasing the penalties of dangerous driving e.g restricting the licensing system.
For more information, teachers can refer to the following news:
「烽火台：借市場力量 禁亡命小巴」，太陽日報，2009 年 7 月 29 日。(P.14)
Apart from the remuneration system, what factors may lead to minibus accidents?
Explain your answer.
Free answer
working hours of minibus drivers, working attitude of minibus drivers, design and
safety of road conditions in Hong Kong etc.
10. In your opinion, which of the factors mentioned in Q.9 is the main cause of the
repeated minibus accidents?
Free answer
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Extended Part
Apart from the discussion on remuneration system, numerous fatal accidents involving
speeding minibuses over the years also lead to a significant rise in insurance premium.
Please read the following article and discuss the questions below.
立法會保險界議員陳健波指出，近月接二連三發生多宗小巴車禍，保費勢掀加價
潮。他指出，上月兩宗共釀成 6 死的小巴車禍，估計保險索償共需 4000 萬元，即
相等於全行一年保費八成。
根據香港九龍新界公共專線小型巴士聯合總商會主席梁雄表示，保費的高低一般是
根據某路線的事故率而定，但由於多條小巴路線意外頻生，導致一些較低意外事故
的路線也受牽連，令整體保費上揚。
陳健波議員估計，「亡命小巴」之名愈響，保費攀升幅度將愈快。當小巴經營成本
不停上漲時，車資亦會因此而調升，最終導致保險公司、小巴營辦商及乘客三輸的
局面。他認為，要擺脫三輸的情況，業界應採取積極的措施以減低意外率。建議的
措施包括：要求營辦商檢討小巴司機的作息時間、薪酬及賞罰制度，遏止司機為獲
取額外收入而危險駕駛；在每輛小巴安裝類似「黑盒」的車速記錄儀，監察車速；
約束司機的駕駛態度，防止意外發生。
資料整理自：
「保險蝕本 保費飈六成」，明報，2009 年 7 月 28 日。
11. Explain why the dangerous driving of minibus drivers will cause the loss to insurance
company, minibus operators and passengers.

Insurance Company: the insurance compensation for the traffic accidents in a
year exceeds the annual insurance premium, insurance companies have suffered a
great loss in recent years and some of them even went bankrupt.

Minibus Operators: frequent traffic accidents caused by minibuses will drive up
the cost of insurance premium. Also, the Transport Department requests the
minibus operators to shoulder the cost of installing the speed limiters. These
increase the operation cost of minibus operators.

Passengers: The risk of taking minibus increases as numerous fatal accidents
occurred during the year. Also, due to the increment in insurance premium, the
operation cost for minibus operators increases a lot. There is pressure of raising
minibus fares.
12. What are the private cost and private benefit of dangerous driving to the minibus
drivers under the piece rate system (i.e. minibus drivers are paid according to the
number of trips they make)?
Private benefit: the expected increment in marginal income/extra amount earned from
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additional trips.
Private cost: fines and imprisonment due to dangerous driving, injury or death of the
driver caused by the traffic accident and the loss of income during the period he gets
injured.
13. What is the external cost of dangerous driving?
The loss of life, the loss of property and injury of the third party involved (e.g.
passengers of the minibus/other road users) and, the time cost in traffic congestion
caused by the traffic accident.
14. Since minibus drivers only concern their private cost and private benefit, they tend to
drive dangerously. Do you think an increase in insurance premium can curb dangerous
driving?
The insurance premium can reduce dangerous driving only when:
1. The private benefit of minibus drivers links with minibus operators.
If the minibus drivers are paid, for example, on the profit sharing basis, the rise in
insurance premium will decrease their incentive to drive carelessly.
Under the above wage payment scheme, the income of the drivers depends on the
profit of minibus operators. If the operation cost increases, the profit of minibus
operators will reduce and, the income which drivers can share will reduce too.
Once the operating cost of minibus drivers rises due to the increase of insurance
premium, the income shared by the drivers will reduce and the amount of
reduction in income is the private cost borne by the drivers then their MPC
increase eventually. As dangerous driving will directly affect the interest (i.e. the
income) of minibus drivers, the incentive of speeding will be reduced and hence,
accidents involving minibus will decrease.
2. It is possible to transfer the insurance premium to minibus drivers.
If the minibus operators can transfer the cost of increase in insurance premium to
the minibus drivers, the external cost will then be internalized. The private cost of
minibus drivers will increase, their intention for speeding will decrease in return.
Eventually, the number of traffic accidents will reduce.
15. Due to the frequent accidents, insurance companies increase the insurance premium of
minibus. Meanwhile, the Transport Department aims to have all minibuses installed
with speed limiters by the end of next year, with the cost borne by the minibus
operators. How would these measures affect the minibus operators?
The operation cost of minibus operators will increase significantly.
16. Facing the upcoming increase in operation cost, what can a minibus operator do?
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Transfer the cost to consumers (passengers): increase minibus fares
Transfer the cost to minibus drivers: wage cut
17. If all the minibus drivers are paid in time rate and, the installation of speed limiters
will be implemented.
(a) How would you expect the future minibus accident rates?
The above measures would significantly reduce the minibus casualty rates. Firstly,
if all the minibus operators adopt the time rate basis, the problem of speeding will
be curbed. Under time rate system, the intention of speeding will be reduced as
no matter how fast the drivers drive, they still receive a fixed amount of income.
This greatly reduce their incentive of dangerous driving, many accidents can be
prevented.
Moreover, when the minibuses are installed with speed limiters, the limiter would
force a vehicle to a halt if the driver tries to exceed the limited speed. This would
simply stop the driver from over-speeding. Thus, the traffic accidents involving
speeding will reduce a lot.
To conclude, the above measures have positive effects on the reduction of
minibus accidents.
(b) Refer to 17(a), how would you expect the future insurance premium of minibus?
The change in insurance premium depends on each year’s accident rates. If the
number of claims/accidents reduces, the insurance premium will also decrease. As
discussed in 17(a), after the adoption of the measures, fewer accidents are
expected. Holding other things constant, the future insurance premium of minibus
will reduce.
(c) Based on the measures mentioned above, try to predict the change in future
minibus fares.
We can analyze this issue on the supply and demand side respectively.
On supply side, time rate reduces the working incentive of minibus drivers, this
reduces the revenue of minibus operators accordingly. Also, minibus operators
need to shoulder the cost of installing the limiters. These would increase the
operation cost of minibus operators, the supply of minibus services will decrease.
On demand side, as the problem of dangerous driving would be alleviated by the
above measures, it will restore passengers’ confidence in taking minibus. The
demand for minibus will increase.
To conclude, there is room for an increase in minibus fares.
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Report:
After the discussion, students are advised to write a 400-word essay. They can write
anything related to this issue or refer to the following aspects. Student’s discussion and
analysis should be on Economics basis and follow Economics principles.
1.
Summary Report 專題文章：
-Discuss the relationship between frequent minibus accidents and the remuneration
system of minibus drivers.
-Suggest the most effective way to curb dangerous driving and analyze the costs of
that method.
2.
News commentary/editorial:
-Time rate should be adopted to curb dangerous driving.
-A significant rise in insurance premium of minibus is the best way to minimize
minibus accidents..
Reference：
Anita Lam “First speed limiters on minibuses this week”, South China Morning Post,
August 26, 2009.
Adele Wong, “Putting brakes on mishaps”, The Standards, August 26, 2009.
Anita Lam, “Speed limiters on 2 minibuses for three years”, South China Morning Post,
August 5, 2009.
Tanna Chong, “Speed limiters dangerous, say minibus drivers”, South China Morning Post
August 4, 2009
Anita Lam, “More minibus drivers shun speed alerts: poll”, South China Morning Post,
July 17, 2009.
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