CHAPTER
11
Pay as You Slow
Road Pricing to Reduce Traffic Congestion
Sir, we recommend that you urge Congress to authorize a program that would encourage state and municipal authorities to implement road-pricing mechanisms by removing a variety of legal obstacles to converting high-occupancy vehicle (HOV) lanes into high-occupancy/toll (HOT) lanes and, more generally, by helping pay start-up costs of road-pricing initiatives. Congestion pricing increasingly is being recognized as the only really effective way to alleviate the problem of ever-worsening traffic gridlock in the nation’s cities, and its time for implementation has arrived with recent developments in electronic payment technology.
The Case for Congestion Pricing
Traffic congestion imposes substantial costs on society. According to recent studies by the Texas Transportation Institute, travel delays and the resulting extra fuel combustion now cost the nation about $70 billion each year. The average time per year an urban motorist loses to congestion during peak hours has grown from 16 hours in 1982 to 62 hours in 2000. Although detailed methodologies used to compute travel delays and to monetize them are not unanimously accepted by all researchers, those numbers provide an idea of the magnitude of the problem. And congestion is likely to become even worse in upcoming years, with continued growth in vehicle ownership and the demand for driving. Meanwhile, environmental constraints, neighborhood opposition, and budgetary limitations are making it ever more difficult to build new roads to accommodate increasing demand.
Typically, it takes only a modest reduction in the number of drivers to unclog a congested road and get the traffic moving faster. Charging people for driving on busy roads at peak periods is the best way to achieve this; such charges encourage some people to drive earlier or later to avoid the rush hour peak, to take less congested routes into town, to car pool, to use mass transit, or to reduce the number of trips, such as by working at home or by combining several errands into one trip.
Other policy approaches are far less effective at reducing traffic congestion. Increased subsidies for mass transit may help lure some people away from driving on busy roads. But this policy can be partially self-defeating: if roads become less congested at peak period because more people are using transit, this attracts onto the roads some people who were not previously driving at peak period because of high congestion. In short, the roads may just fill up with traffic again; this is not the case under road pricing, however, as the charges discourage people from getting back into the car as congestion falls. The same phenomenon tends to undermine other approaches that do not raise the cost of driving, such as expanding cycle access or promoting telecommuting. And higher fuel taxes, which raise the costs of all driving, whether it is in urban or rural areas or occurs during peak or off-peak periods, are an extremely blunt way to reduce traffic jams; before the recent introduction of road pricing, driving in central London was not much faster than walking, despite gasoline taxes seven times as large as those in the United States.
Forms of Road Pricing
Over the last two decades, a considerable amount of money has been invested in adding high-occupancy vehicle (HOV) lanes to urban freeways to try to induce more carpooling; more than 2,000 lane miles were added at a cost of nearly $9 billion. The results have not been encouraging. Nationwide, the share of carpooling in work trips actually fell between 1990 and 2000, from 13.4 to 11.2 percent, while the share of single-occupant vehicles in work trips increased from 72.7 to 75.7 percent, with slightly declining shares of transit and nonmotorized trips making up the balance.
Nationwide, the share of carpooling in work trips actually fell between 1990 and 2000, from 13.4 to 11.2 percent, while the share of single-occupant vehicles in work trips increased from 72.7 to 75.7 percent.
HOV lanes, at least those currently with traffic flows well below those on parallel, unrestricted lanes, result in underuse of scarce road capacity at peak period. Converting them into HOT lanes by allowing their use by single-occupant vehicles in exchange for a fee while continuing to permit high-occupancy vehicles to use the lanes for free, would benefit many motorists. Those who value the travel time savings enough to pay the fee would benefit, while those who continue to use unpriced lanes may benefit from reduced congestion as some drivers switch to the premium lane. Carpoolers who were already using the HOV lane may be slightly worse off as more vehicles join premium lanes, but ideally the fees would be variable and set at levels to maintain free-flowing traffic, even at the height of rush hour. Tolls would be deducted electronically from accounts linked to transponders as vehicles pass under overhead meters; carpoolers would pass by a manned booth where the vehicle occupancy is briefly checked.
Over time, urban centers could develop a network of linked HOT lanes giving drivers access to any part of the region without major holdups, and allowing local authorities to provide express bus service throughout the region, thereby reducing the need for constructing costly express light rail systems.
To date, only three examples of freeways with HOT lanes exist in the United States: one in Los Angeles, another in San Diego, and a third in Houston. However, serious efforts are under way on HOT lane projects in many other urban centers with severe congestion problems. And many motorists are used to paying tolls that were initially designed to pay for the costs of road construction; it is conceivable that these tolls could be made to vary with the level of congestion.
A number of popular objections to road pricing have been raised; a more detailed discussion of this topic is presented in . But none of those objections really seem to hold much water for HOT lane proposals. One objection is that motorists are opposed to paying for something that they previously used for free. However, under the HOT lane scheme, drivers will not be forced to pay tolls, as they can always use the parallel, unpriced freeway lanes.
For the same reason, it is not true that low-income families, who are least able to afford new taxes, will be driven off the roads; they actually may benefit from reduced congestion on unpriced roads. And, in fact, evidence suggests that it is not the rich who exclusively use premium lanes; in California, people of all income levels use HOT lanes when saving time is important to them. It therefore seems unnecessary to give discounts for low-income drivers using HOT lanes (as required by the recent House bill H.R. 3550), as that undermines the effectiveness of HOT lanes in providing free-flowing traffic.
It is not true that low-income families, who are least able to afford new taxes, will be driven off the roads; they actually may benefit from reduced congestion on unpriced roads.
Another impediment is simply unfamiliarity with the concept of road pricing and skepticism about its effectiveness. For this reason, it makes sense to introduce pricing incrementally, increasing the number of priced lane segments as their success in alleviating congestion becomes evident to the general public. California’s two HOT lanes, which have been operating for several years, have demonstrated the ability of variable electronic pricing to maintain free-flowing traffic, and surveys in California now show widespread public acceptance of the HOT lane concept. And despite many predictions that it was doomed to fail, the introduction of road pricing in central London has reduced congestion delays by around 30 percent.
Other forms of road pricing exist as well. Outside of the United States, a number of area (cordon) pricing schemes have successfully reduced congestion in city centers, including London, Rome, Trondheim in Norway, and Singapore. Area pricing makes sense when, as in many old European cities, the central business district is dominated by a maze of narrow, winding streets, making pricing of individual roads impractical. In contrast, congestion in many U.S. cities is concentrated on wide highways and large arterial roads feeding into the center, and in this case, pricing of individual highways and arterials makes more sense. But area pricing still could play a useful role in areas such as Manhattan, where downtown streets are severely congested and people can get around by transit or walking if they are unwilling to pay area fees.
Other schemes might involve pricing of particular elements of the transportation infrastructure, including time-varying tolls on bridges. Such tolls currently exist on bridges over the Hudson River, connecting New Jersey and New York City, and on bridges in Lee County, Florida. Other applications might include fees for access to national parks that currently are congested during peak visiting hours.
These alternative-pricing schemes likely would be met with more political opposition than HOT lane conversions, as motorists are left with no option but to pay if they wish to keep using the same roads. They also are more vulnerable to the criticism that poor people might be forced off the roads. Nonetheless, toll revenues might be used in ways to help the poor, such as by spending it on projects to extend transit access to low-income neighborhoods.
Recommendations
Although decisions about urban road pricing are ultimately the responsibility of metropolitan planning organizations, any of a number of initiatives could be taken at the federal level to jump-start its implementation.
■ Remove the ban on the imposition of tolls on interstate highways. Most road networks in metropolitan areas include portions of the interstate highway system, and to the extent that these roads are congested, they need to be priced if a locality is to deal effectively with regionwide traffic jams. Although in principle the Transportation Equity Act for the 21st Century (TEA-21) allows tolling on highway segments as part of the pilot program, to date no state has successfully applied for this authority. The pilot program requires the local authority to show that funds from the state’s apportionment and allocations would never be sufficient to pay for maintenance and improvements of the road in question over time, which is very difficult to demonstrate. Alternatively, states can impose tolls on interstate highways if they pay back the federal government for funds already invested in the highway in question. The TEA-21 should be amended to allow local tolling on interstates, without these highly cumbersome restrictions.
■ Allow all HOV lanes to be converted to HOT lanes. Again, provisions in TEA-21 prevent localities from converting HOV lanes to HOT lanes unless those lanes are in the Value Pricing Pilot Program (VPPP); most HOV lanes currently are excluded from the VPPP, as it is limited to only 15 congestion pricing projects in the entire nation. The TEA-21 should be amended to permit local authorities to convert any HOV lanes to HOT lanes, whether or not they are currently covered by the VPPP.
■ Federal aid for start-up costs of road-pricing initiatives. Introducing pricing on existing roads involves various set-up costs, including costs of installing monitoring technologies and barriers to separate priced and unpriced lanes. And the creation of HOT lane networks in metropolitan areas would require the construction of many additional lanes to link up the existing fragmented systems of HOV lanes, implying a substantial amount of new investment (adding one lane mile costs on average $4 million in right-of-way purchase, labor, and material costs). Toll revenues could cover many of these costs; a study by the Reason Foundation finds that about two-thirds of the necessary investment costs for constructing fully integrated HOT lane networks for the nation’s eight most crowded urban centers could be funded by using toll revenues to finance taxexempt bonds. But extra funding through the federal aid transportation program, such as the VPPP, could help to kick-start road-pricing initiatives.
■ Introduce legislation to address privacy issues. Another impediment to the implementation of congestion pricing is the uncertain legal basis for electronic toll collection. Many drivers will be reluctant to have transponders in their vehicles until specific legislation has been enacted establishing for what purposes information collected on driving habits can and cannot be used. This concern will become more pressing with increasing use of Global Positioning Systems (GPS) to make electronic payments.
■ Establish a national standard for electronic-tolling technology. At present, different technologies exist for electronic tolling, including the EZ-Pass, which dominates northeastern states, and the Fastrak, established on the West Coast. Incompatibility between these two systems imposes an additional burden on long-distance road users, particularly trucks, and for a segment of tourist travelers, as vehicles need to be fitted with more than one transponder, and different transponders might interfere with each other. Legislation to establish a national standard for electronic-tolling technology, before road pricing becomes more prevalent in U.S. cities, would help avoid unnecessary duplication of technology installation costs and facilitate a nationally integrated pricing network.
If the government were to adopt these types of initiatives, we might at last begin to reverse the trend of ever-increasing urban congestion.
I.P.
E.S.