Without the help of an illegal moped driver, a neighbor of mine would have missed our home-bound shuttle bus at 6:10pm.

It was 6:06pm last Monday, as she emerged from the last stop on Metro Line 2 at East Xujing station in Qingpu District.

Normally, it takes around eight minutes to rush on foot to where our neighborhood shuttle bus parks. No doubt she would miss it even if she sprinted.

Luckily, there were quite a few underground moped drivers around - they bend the law to run a transport business.[Hong Kong company registration]

She snapped her fingers and jumped on a moped. In the blink of an eye, the driver rushed her through a thick crowd to the parking lot and she found herself heaving a sigh of relief as she reached the shuttle bus doors at 6:09pm. Beaming, she paid the moped driver 5 yuan (80 US cents).

You might say 5 yuan is no small deal to cover a distance that usually takes eight minutes, but if she missed our shuttle bus, she would have to pay around 50 yuan to get home by taxi, or she would have to wait another hour for the next shuttle bus on a cold winter night.

In this sense, illegal as they are, myriad mopeds do residents a service where regular or licensed transport vehicles are either unavailable or too expensive.

System D

These mopeds belong to what journalist Robert Neuwirth calls System D - a name for the world's unregulated, underground economy. "D" stands for the French word debrouillards, meaning hard-working hustlers and entrepreneurs who disdain regulation.

In his popular 2011 book, "The Stealth of Nations: The Global Rise of the Informal Economy," Neuwirth says System D is dynamic in developed as well as developing economies.

As he discovers, [Set Up Company Hong Kong]the United States is home to the world's largest underground economy.

"It makes no sense to talk of development, growth, sustainability or globalization without reckoning with System D," he says, citing OECD reports that about 1.8 billion people, or half the world's workforce, made their living in System D in 2009.

As a journalist whose work has appeared in The New York Times, the Washington Post and Fortune magazine, Neuwirth doesn't offer a moral judgment on System D.

What he does is to record life as it is and to help readers - including urban regulators - better understand the informal economy (unlicensed and untaxed) and how it interacts with the formal one (licensed and taxed).

Perhaps the best part of the book lies in the author's observation that System D serves a different clientele, who would never be absorbed into the formal economy.

In my neighbor's case, she would hardly take a taxi - which belongs to the formal economy - home even if underground mopeds were literally whisked off the roads. In other words, banning the informal economy may not always benefit the formal, because in many cases they are not mutually exclusive. They often co-exist.

As Neuwirth observes, the Brazilian street market shopper isn't weighing cheap sunglasses against US$200 Oakleys, [Hong Kong Company Formation]and the customer at a Nigerian street stand never even considered a US$400 Nokia phone.

Actually, a thriving informal economy can benefit the formal one, indirectly.