Queue Rage in the Eurozone on
1.1.2002?
A recent report on the risks of the euro cash changeover
that predicts exploding queue sizes, loss of revenue,
and anti-social behaviour in January 2002 has created
quite a stir in euro-informed circles. Gerard
Westerhof, the euro project manager of the Dutch railways,
argues that present thinking, that consumers can pay
in national currency in the first weeks of 2002, is
fundamentally flawed. This assumption, which has been
an integral part of national planning across the
eurozone for the last couple of years, turns out to
fail hopelessly when subjected to simulation analysis.
The Dutch Railways practiced giving change in
various scenarios and discovered that the increased
length of transaction time causes queue sizes to
explode. In reality, nobody will actually queue that long.
They will simply board the trains and even cash
collectors on board will be unable to process everyone
in time. Not only will that cause a loss of revenue to
the railways, it may encourage future delinquency if
commuters find they can get away without paying. This
is serious for businesses dealing with perishable
products or time-limited services; after all, you
cannot stockpile railway journeys and sell them
tomorrow!
For shopping scenarios where the customer must
wait for the item/service or do without, the loss of
turnover can be serious. The risks are lowest for
transactions that have a high value and take a long time,
but that is only about 25% of all cash transactions.
The increasing tendency observed in recent years of
people giving vent to irritation and frustration by
actions ranging from queue-jumping to actual violence
("rage") is a cause of serious social
concern.
The conclusion is that the
"frontloading" or priming of consumers with
coins and small denomination notes must be accelerated well
beyond the timid levels set out by the ECB, and much
closer to 100%.
The study describes scenarios for six different
kinds of retail business categorised by speed and size
of transaction. The Dutch Railways' internally
collected data shows at present on average a transaction
time of 30 seconds giving an queue size of six people
and therefore a waiting time of three minutes. A
computer study with the consultancy firm Twijnstra
Gudde was done on traveller movements, product demand at
different times of day, patterns of arrival of
travellers, and layout of sales points. It showed the
service time going to 60 seconds for euro-only payments to
120 seconds for mixed guilder and euro payments, with
a predicted queue size of 100 people in the morning
and 1200 (theoretically!) at night. If the queue size
stays at 6 and the rest just board the train, 15% of people
will travel without a ticket. For example, of the
23,000 transactions daily at Amsterdam Central
Station, about 3,500 people will travel without paying
- just from that station alone!
Nine different approaches were considered to
manage this, and only three were considered feasible.
Among the rejected six were ones I have heard proposed
as options, which may indicate that current superficial
thinking needs to be more closely examined.
Useful: Selling tickets in advance,
promoting vending machines, opening ticket windows all
day.
Not useful: Paying electronically at ticket
windows; deploying service staff on the ground; extra
ticket windows; communications discouraging dual
payments; separate guilder and euro ticket windows; money
changing windows.
The report has been presented to the European
Commission on January 8th at a meeting on practical
aspects of the transition. I recently enquired of an
academic mail list in Ireland whether any authorities in
Operational Research and Management Science for
decision making had been involved in any simulation
studies here. I received no replies. It appears to me that
a serious wake-up call is required here, and some
studies need to be commissioned by the Euro changeover
board and the retail industry bodies. After all, the
study above is for the Netherlands, a country with heavy
use of electronic transactions. But think of the
preponderance of cash usage in Ireland and other EU
countries such as Italy. And consider the coincidence
of the cash changeover with the period of highest usage of
cash in the year (Christmas spending spree followed by
the January sales). And we have a witches' brew of
trouble bubbling up.
Patrick O'Beirne, 14 Feb 2001.
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