Congestion pricing - the United States awakens

Singapore pioneered a basic form of urban congestion pricing in 1975, and introduced what is still the most sophisticated, economically rational and effective congestion pricing in the world in 1998, called ERP (Electronic Road Pricing).  In 2020 it is transitioning its operating technology to GNSS On Board Units (albeit to initially apply the same mix of corridor and cordon charging as applies today, but with the focus on delivering more information about pricing, traffic, parking and alternative modes through the system).

However, if you've been following the recent very public debates and commentaries about congestion pricing in the USA you'd be excused for thinking it is new and innovative.  Innovative it is, it is just that the US has come a bit late to the concept, but what is driving it is not so much congestion, but the desire to use congestion pricing to raise revenue - typically not for roads.

For many years congestion pricing in the USA has largely been referred to in the context of express/HOT/toll lanes. Although such lanes offer options to pay to bypass congestion on some highways, they are not "comprehensive" in addressing congestion and more importantly are not technically able to be implementing except on roads with limited access. In most cases they have been implemented by converting high occupancy vehicle lanes to HOT/toll lanes. It is rarely economic to build new lanes and charge just for them (because there is insufficient willingness to pay for the capital costs of new capacity, particularly when such capacity may only be utilised for short periods during weekdays), so HOT/toll lanes are rarely seen outside the USA.

The positive example of toll lanes is that they demonstrate that the instrument of price is effective in managing demand so that a road can operate in free flow conditions, but of course such lanes are not practical on most roads and they always have an unpriced alternative.  At best they offer an option in some cases, and demonstrate the concept.

So full congestion pricing has not been seen in the US to date. By that I don't mean having peak pricing on an existing toll road to spread demand on that road (this is seen on many crossings, such as the Golden Gate Bridge, E-407 Toronto and the Sydney Harbour Crossings), but rather pricing of a network or placing a cordon (either on its own or as an area charge) on a zone, with priced access at set times/days.

This isn't common as all. Although there are many low emission zones in European cities (which prohibit or heavily charge vehicles that don't meet low or ultra-low emission standards) and restricted access zones to cities (this is seen in many Italian cities, keen to preserve historic centres of cities ill suited to large volumes of vehicle traffic), the only cities that charge a network or a zone for access on a significant scale are:

- Singapore

- London

- Stockholm

- Gothenburg

- Milan

- Dubai

- Tehran.

There are a handful of smaller examples, Oslo transitioned from a cordon set up for revenue raising to one that has a congestion management purpose now, but by and large congestion pricing is hard to implement.  It's been investigated in multiple cities in the UK (Bristol, Cambridge, Leeds, Manchester, Edinburgh) and elsewhere in Europe (Dublin, Amsterdam, Copenhagen, Helsinki), but has always come up against one major issue - public opposition.


What has woken up the US?

How about the US then? Suddenly cities, states and the media have discovered congestion pricing because of one simple reason - New York is going to do it. This follows previous attempts to introduce it, most notably by former Mayor Michael Bloomberg, who had his proposal for a cordon on lower Manhattan vetoed by the State Legislature.

The New York Senate and Assembly have approved it, along with the State Governor. The details are to be worked out by a new Traffic Mobility Review Board, but it is essentially a cordon that starts at 60th St, excluding FDR Drive and the West Side Highway. All of the net revenue is to spent on the public transport network, specifically the subway, bus network, the Long Island RailRoad and Metro-North. Private cars are only to be charged once a day, whereas ridehailing/sharing and taxi services are already subject to a surcharge of between US$0.75-US$2.75 per trip, depending on the service since 2 February 2019.  Although Charles Komanoff indicates that the effects will be much less than promised (still a 2.5% increase in average traffic speeds is worthwhile).

Some of the details to be worked out include:

· Charge rates (will they vary by vehicle type)

· Area charge (will vehicles be charged for circulating within the cordon as well as or separately from crossing the cordon)

· Direction of charge (will there be a charge for entering AND exiting the cordon)

· Time of operation

· Variation of charge by time of day

· Discounts and exemptions (it might be fair to assume that emergency vehicles and NYC transit vehicles might be exempt, but will the ride hail/share surcharge liable vehicles be exempt too)

· How those entering lower Manhattan on tolled crossings will be treated

New York is basically implementing a simple charge, primarily to raise revenue for other modes, so it will be interesting to see what impact it has and whether it is designed to spread demand by time of day, as much as it is to raise revenue. It will clearly be a trailblazer, although it is unlikely that other US city has either the density of public transport or geography to lend itself to a relatively simple cordon as the solution.

What about the rest of the US?

San Francisco has studied charging before, and looks like pursuing it again. The San Francisco County Transportation Board Authority voted earlier this year to spend US$0.5m on a study of downtown congestion pricing, suggesting that it has already decided that a downtown cordon is worth pursuing. It will be interesting to see what impacts that might have, and particularly how boundary issues are addressed. The San Francisco Mobility Trends report indicated that "vehicular traffic entering San Francisco grew 27% since 2010, although public transport use also rose 5% and cycling by 6%, on a 9% population increase (indicating that the growth in population is pushing a big increase in driving), with a decrease in private car travel speeds by 23%. It's hardly surprising that pricing access to downtown is a priority, although hopefully it will mean pricing that varies by time of day.

Los Angeles has already had a study released by Southern California Association of Governments (SCAG) which proposed a pilot cordon at Westside LA, for a number of reasons (see page 94 of the below report).

Proposed Westside LA cordon from SCAG study

 The Mobility Go Zone and Pricing Feasibility Study indicated that it could result in a 19% drop in private cars entering charged zones, and a 9% mode shift to public transit, with 7% each to walking and cycling. Whilst this might be a good place to start, LA is going to need a much more comprehensive solution to address congestion across the region. LA Metro is about to launch a study that looks more widely at options, with the intention that pricing would support a package of improvements to public transport and active modes.

Boston, Portland, Seattle and Washington DC are all considering congestion pricing, which has to be welcome. The US has gone through a couple of eras in urban transport policy, from the 1940s to the 1970s the focus was almost entirely on building roads to meet demand. That has tailed off, with a focus from the 1970s of building (mostly rail-based) public transport infrastructure to try to attract motorists from their cars, in other words supplying alternatives. More recently, cycling has had a boost in some cities, but the primary argument in all cities is one of what to supply, rather than how to manage existing demand and supply.

News briefs - Indonesia, North Carolina, Washington DC

Indonesia - Jakarta to get six new urban toll roads

Jakarta has serious congestion, which is estimated to cost RP46 trillion (US$4.7 billion) a year in delays, wasted fuel and vehicle wear and tear, with fuel being the biggest cost (no doubt because the value of time in the city is relatively low on a per person basis).  The city is developing bus rapid transit, has plans for a metro and is widening existing corridors, but its most ambitious plan is to build six new urban toll roads.  The intention is for them to be tolled, not just to pay for the high capital costs, but to manage demand, so that the inexorable demand for road space is tempered by having to pay for it.

However, it is controversial as the Jakarta Transportation Council, an advisory body, says it will have "no positive effect" on traffic, according to the Jakarta Post.   The projects will cost RP42 trillion (US$4.1 billion).  Objectors say it will encourage sprawl and pollution, harming the environment and public health, although it is entirely plausible that the roads could be priced and managed to minimise this.  Some argue that as the new roads are being built above existing railways or roads, that the railways should be expanded instead.   The project was advanced by the previous Governor, with one argument made that the city has a small proportion of land dedicated to roads at 6.2%, when the target is 12%.

I'm hardly in a position to judge on this, particularly as it is easy for middle income people in wealthy countries to pontificate about what is good for developing countries, and also because I am technologically neutral.  Roads are simply transport corridors, and as long as they are priced correctly, and the corridor managed well, there is no reason for them not to be positive for public transport, and to allow road space on the routes bypassed to be given over to pedestrians, cyclists, carts, and to properly regulate parking.

The six roads are shown on this Jakarta Post map:

The first phase of construction will include the 17.8-kilometer route from Semanan, West Jakarta, to Sunter, North Jakarta, and the 11-kilometer route from Sunter to Bekasi.

The second phase includes roads from Duri Pulo, Central Jakarta, to Kampung Melayu, East Jakarta, and from Kampung Melayu to Kemayoran, East Jakarta.

The third construction phase will link Ulujami, South Jakarta, to Tanah Abang, Central Jakarta and the fourth will connect Pasar Minggu, South Jakarta, to the Casablanca area in South Jakarta.

The state company PT Jakarta Tollroad Development is owned by multiple local companies, "city-owned enterprises collectively hold the majority of shares in JTD, namely, PT Jaya Real Property (22,5 percent), PT Pembangunan Jaya Ancol (20 percent), PT Jaya Konstruksi (16 percent), PT Pembangunan Jaya (9 percent), PT Jakarta Propertindo (7 percent) and PT Jaya Land (3.5 percent)."

Jakarta is also planning an electronic road pricing system to manage congestion, with legal approval for introduction reached in October 2012.   I will write more on that later.  However, I would hope that before that happens, that all toll roads in the city get converted to electronic free flow systems, which will be necessary for any form of congestion pricing in any case.

In any case, the Jakarta Post reports that it is now up to current Governor, Joko “Jokowi” Widodo, to decide on starting any of the new toll road projects.   

North Carolina toll road faces double billing controversy

According to the Charlotte Observer:

At least 800 drivers on the Triangle Expressway have been double-billed this month, paying electronic tolls twice for every trip, the N.C. Turnpike Authority says.

The problem is fairly obvious, motorists travelling with two tags both of which are getting recognised and generating a bill.  The NCTA has its own "Quickpass" as its product, but some motorists also have the EZ Pass tag, used across 14 states.

You see the Expressway is fully electronic free flow, but as of the start of 2013, it has been interoperable with EZ Pass, so there are customers with both units, and so are being billed twice.

The NCTA blames motorists for this, because the terms and conditions for its contract with customers using Quickpass is for only one tag/sticker to be in a vehicle at any one time.   However, as true as this may be, the system should have avoided this problem in its architecture.

For the system architecture should not allow two chargeable events to be attributed to the same number plate.  This isn't hard to manage, as the system ought to reconcile these sorts of events (and indeed this will become more common over time), so that while motorists should only use one device at a time, the system should not charge an identifed vehicle more than once in a specific interval.

Washington DC sceptical about congestion pricing but it's hardly surprising

There have been various reports of what is essentially a public opinion survey about transport policy, that came to the conclusion that people in Washington DC are most accepting of tolled lanes, and least accepting of distance based road pricing.  Really? It took money to figure that out?  The Brookings Institute research is interesting in as far as it shows considerable support (60%) for toll lanes - but beyond that it isn't anything that any expert in this area could not have expected.

There have been surveys about road pricing for many years in many countries, and the conclusion is pretty much always the same. The majority oppose paying more to use existing roads, and the more complicated the proposal they more resistant they are.   They like it better if more money (whose?) is spent on more public transport and other alternative modes.  

The acceptance of toll lanes is obvious, as they are optional.  The lesser support for some sort of cordon based pricing is because it would not be, and distance based pricing is always clumsily sold as some sort of tracking system, and there are no explanations made of how much people pay now with fuel taxes.

The errors in this work look like (from the reports) to be:

1.     It provided details with little rationale as to what the merits of them are;

2.     It gave people little confidence in what any of the options would deliver (why would anyone support paying more without understanding or believing that conditions could improve);

3.     It provided options without reference to replacing the gas tax;

4.     Those undertaking the survey appeared to be unable to answer core criticisms of the public, such as thinking that a cordon creates congestion just outside it.

It was undertaken using public forums.  Maybe the 20th century would like to get it survey technique back.  The busiest people or those with the least flexibility are unable to participate in such a manner.

Now I am pleased these issues are being discussed in the United States, it has taken long enough, as only eight years nobody talked about pricing existing roads.  However, it would be good for the debate for surveys like this to not occur.  

Are surveys undertaken about taxation policy, health policy, how to manage the electricity or telecommunications networks?  No.  Why would anyone presume that the general public - who can attend such meetings - are sufficiently well informed to react intelligently to what is presented to them?  More importantly, why aren't the lessons learnt from those who have tried to do this actually being applied in describing options and managing such processes?

Washington Examiner damns plan to "nationalise" Dulles Greenway

In a local editorial, the Washington Examiner describes plans to socialise/nationalise the Dulles Greenway as one that will "saddle Virginia taxpayers with this white elephant".  The plan comes from Virginia House Transportation Committee Chairman Joe May, (R-Leesburg).  So yes it is a Republican wanting the government to take over a private business, ostensibly to subsidise the users of that business. The report states the road loses US$25 million a year, which would effectively be transferred to taxpayers.  

The private owner, Macquarie Atlas Roads, would of course seek to maximise the price that it would extract from a willing buyer, and the continuing unprofitable nature of the road would be hidden in the state's public debt and general taxation.

It all seems absurd.  The whole point of private road concessions is to transfer risk, which is what has been done in this case.  The road has been built, the tolls are relatively high, but increases are capped by the concession, and the continued losses are born by the investors.   Far better for the motorists on the road to be effectively subsidised by the private owners (which is a transfer into the state from foreign investors) than from taxpayers.

ead more here: http://www.charlotteobserver.com/2013/01/31/3823197/nc-turnpike-authority-double-bills.html#storylink=cpy

Macquarie Atlas Roads revenue up in June 2012 quarter

The Herald Sun of Melbourne reports that toll road concessionaire Macquarie Atlas Roads has stated that toll revenue across its investments increased 1% in the latest quarter, despite a weighted average toll volume reduction by 1.7%.  The headline results are reported by MAR as follows:

• In 6 months to 30 June 2012, weighted average toll revenue is up 0.9% compared to the same period the previous year.
• Autoroutes Paris-Rhin-Rhone (France) has seen a 0.5% reduction in revenue in the past 6 months compared to the previous, reflecting a 5.2% reduction in heavy vehicle traffic and 2% reduction in light traffic.  This was put down to the weak economy, reduction in workdays (negative for trucks, but the positive effect on cars was offset by poor weather) and high fuel prices.
• Dulles Greenway (DC) has seen a 8.3% increase in revenue in the past 6 months compared to the previous, with a 0.3% increase in total trips.  Revenue increased due to an average 8% increase in pricing on 1 January 2012 approved by the Virginia State Corporation Commission, indicating very low demand elasticity relative to pricing.
• M6 Toll (UK) has seen a 3.1% increase in revenue in the past 6 months compared to the previous, with a 0.6% increase in trips (although this involves a 1.8% increase in workday trips, but 3% reduction on weekends and public holidays).  The proportion of cash transactions (indicating more occasional users) increased by 1.7% of all transactions.  Revenue increased due to changes in pricing on 1 March 2012 and increased demand.
• Chicago Skyway (IL) has seen a 4.9% increase in revenue in the past 6 months compared to the previous, with a 1.1% increase in trips (comprising a 2.6% increase on workdays but a 1.6% decrease on weekends/public holidays).   Revenue and trip increases were driven by a 18.9% increase in heavy vehicle volumes, offsetting the 0.9% decrease in light traffic.
• Indiana Toll Road has seen a 7.7% increase in revenue in the past 6 months compared to the previous.  Traffic was up 2.6%.  Most notable is an 18.7% increase in heavy vehicle traffic paying using manual collection rather than account based transactions, this compares with only a 2.2% increase in traffic for all light vehicles, and heavy vehicles with accounts.  Toll rates were revised in 1 July 2011 which also contributed to higher revenues.
• Warnow Tunnel (Germany) saw a 7.1% decrease in revenue in the past 6 months compared to the previous.  This followed a 12.2% decrease in total trips.  The primary reason is that roadworks on the “competing” untolled route ceased in October 2011, resulting in a diversion back to the no longer disrupted untolled option.  Toll rate increases on 1 November 2011 and 1 May 2012 partly offset this reduction in demand, although it would not be surprising if the November 2011 increase induced a greater shift in demand as the tolled route was seen as even less competitive on price and travel time.