Profit maximization by a private toll road with cars and trucks

This paper examines the profit maximizing behavior of a private firm which operates a toll road competing against a free alternative in presence of cars and trucks. Trucks differ from cars in value of time (VOT), congestion externality, pavement damage, and link travel time function. We find that the firm takes either a car-strategy or a truck-strategy for profit maximization. For a traffic mix with relatively large car volume and small truck volume, the car-strategy results in no trucks using the toll road, while the truck-strategy results in all trucks using the toll road. We derive the equilibrium flow pattern under any combination of car-toll and truck-toll, based on which we identify a profit-maximizing frontier and a strategy-switching frontier in the car-toll and truck-toll two-dimensional space. By geometrically comparing the two frontiers, we establish general conditions under which each strategy will be taken, which suggest that the truck-to-car VOT ratio, the total traffic demand, and the difference in travel distance between the two roads are critical in shaping the firm's strategy.     

The tax treatment of company cars, commuting and optimal congestion taxes

In Europe, the preferential tax treatment of company cars implies that many employees receive a company car as part of their compensation package. In this paper, we consider a model in which wages and the decision whether or not to provide a company car are the result of direct negotiation between employer and employee. Using this framework, we theoretically and numerically study first- and second-best optimal tax policies on labour and transport markets, focusing on the role of the tax treatment of company cars. We obtain the following results. First, higher labour taxes and a more favourable tax treatment of company cars raise the fraction employees that receives a company car; congestion and congestion tolls reduce it. Second, in countries that provide large implicit subsidies to company cars, eliminating the preferential tax treatment of company cars may be an imperfect but quite effective substitute for currently unavailable congestion tolls. The numerical illustration, calibrated using Belgian data, suggests that it yields about half the welfare gain attainable through optimal congestion taxes. Third, the favourable tax treatment of company cars justifies large public transport subsidies; the numerical results are consistent with zero public transport fares. Finally, we find that earlier models that ignored the preferential tax treatment of company cars may have substantially underestimated optimal congestion tolls in Europe. The numerical illustration suggests that about one third of the optimal congestion toll we obtain can be attributed to the current tax treatment of company cars.     

Autonomous cars: The tension between occupant experience and intersection capacity

Systems that enable high levels of vehicle-automation are now beginning to enter the commercial marketplace. Road vehicles capable of operating independently of real-time human control under an increasing set of circumstances will likely become more widely available in the near future. Such vehicles are expected to bring a variety of benefits. Two such anticipated advantages (relative to human-driver vehicle control) are said to be increased road network capacity and the freeing up of the driver-occupant’s time to engage in their choice of leisurely or economically-productive (non-driving) tasks.In this study we investigate the implications for intersection capacity and level-of-service of providing occupants of automated (without real-time human control), autonomously-operating (without vehicle-to-X communication) cars with ride quality that is equivalent (in terms of maximum rates of longitudinal and lateral acceleration) to two types of rail systems: [urban] light rail transit and [inter-urban] high-speed rail. The literature suggests that car passengers start experiencing discomfort at lower rates of acceleration than car drivers; it is therefore plausible that occupants of an autonomously-operating vehicle may wish to instruct their vehicle to maneuver in a way that provides them greater ride comfort than if the vehicle-control algorithm simply mimicked human-driving-operation.On the basis of traffic microsimulation analysis, we found that restricting the dynamics of autonomous cars to the acceleration/deceleration characteristics of both rail systems leads to reductions in a signalized intersection’s vehicle-processing capacity and increases in delay. The impacts were found to be larger when constraining the autonomous cars’ dynamics to the more-restrictive acceleration/deceleration profile of high-speed rail. The scenarios we analyzed must be viewed as boundary conditions, because autonomous cars’ dynamics were by definition never allowed to exceed the acceleration/deceleration constraints of the rail systems. Appropriate evidence regarding motorists’ preferences does not exist at present; establishing these preferences is an important item for the future research agenda.This paper concludes with a brief discussion of research needs to advance this line of inquiry.     

Equity effects of congestion pricing: Quantitative methodology and a case study for Stockholm

It is widely recognised that congestion pricing could be an effective measure to solve environmental and congestion problems in urban areas—a reform that normally also would generate a net welfare surplus. Despite this the implementation of congestion pricing has been very slow. One reason for a low public and political acceptance could be that equity impacts have not been given enough concern. In studies of distributional impacts of congestion pricing it has often been claimed that the reform is regressive rather than progressive even if there are studies claiming the opposite. We develop a method for detailed, quantitative assessment of equity effects of road pricing and apply it to a real-world example, namely a proposed congestion-charging scheme for Stockholm. The method simultaneously takes into account differences in travel behaviour, in preferences (such as values of time) and in supply of travel possibilities (car ownership, public transport level-of-service etc.). We conclude that the two most important factors for the net impact of congestion pricing are the initial travel patterns and how revenues are used. Differences in these respects dwarf differences in other factors such as values of time. This is accentuated by the fact that the total collected charges are more than three times as large as the net benefits. With respect to different groups, we find that men, high-income groups and residents in the central parts of the city will be affected the most. If revenues are used for improving public transport, this will benefit women and low-income groups the most. If revenues are used for tax cuts, the net benefits will be about equal for men and women on the average, while it naturally will benefit high-income groups. Given that it is likely that the revenues will be used to some extent to improve the public transport system, we conclude that the proposed congestion-charging scheme for Stockholm is progressive rather than regressive.     

The residential parking rent price elasticity of car ownership in Japan

By using household-level micro data captured through the National Survey of Family Income and Expenditure for 2004, this study evaluates the residential parking rent price elasticity of car ownership in Japan. It analyzes the number of cars owned by a household, using various attributes including expenditure for renting a parking space on a monthly basis. The estimation results derived from the IV-ordered probit model show that the absolute value of parking rent price elasticity of car ownership is, at most, 0.48, which is fairly small (i.e., inelastic). The elasticity value varies depending on city size; for megacities, elasticity is always negative for car ownership, whereas for middle-sized or small cities, towns, and villages, elasticity is positive for one-car ownership and negative for the ownership of more than one car. Hence, when the price of parking increases, some people may switch from more than one car to one car and some people in megacities may switch from one to zero cars. Indeed, the net effect of a price increase may be that non-car ownership increases in megacities and one-car ownership increases in other cities.     

Accounting for travel time variability in the optimal pricing of cars and buses

A number of studies have shown that in addition to travel time and cost as the common influences on mode, route and departure time choices, travel time variability plays an increasingly important role, especially in the presence of traffic congestion on roads and crowding on public transport. The dominant focus of modelling and implementation of optimal pricing that incorporates trip time variability has been in the context of road pricing for cars. The main objective of this paper is to introduce a non-trivial extension to the existing literature on optimal pricing in a multimodal setting, building in the role of travel time variability as a source of disutility for car and bus users. We estimate the effect of variability in travel time and bus headway on optimal prices (i.e., tolls for cars and fares for buses) and optimal bus capacity (i.e., frequencies and size) accounting for crowding on buses, under a social welfare maximisation framework. Travel time variability is included by adopting the well-known mean–variance model, using an empirical relationship between the mean and standard deviation of travel times. We illustrate our model with an application to a highly congested corridor with cars, buses and walking as travel alternatives in Sydney, Australia. There are three main findings that have immediate policy implications: (i) including travel time variability results in higher optimal car tolls and substantial increases in toll revenue, while optimal bus fares remain almost unchanged; (ii) when bus headways are variable, the inclusion of travel time variability as a source of disutility for users yields higher optimal bus frequencies; and (iii) including both travel time variability and crowding discomfort leads to higher optimal bus sizes.     

E-commerce and traffic congestion: An economic and policy analysis

E-commerce, due to its ability to re-direct consumers from physical stores to online, can potentially alleviate traffic congestion. In this paper, we set up a theoretic model to analyze interactions between a firm’s distribution strategy and traffic congestion. In an unregulated economy, we first characterize the private firm’s optimal strategy concerning e-commerce under the influence of traffic congestion. We then examine a centralized economy where the firm is publicly owned and derive the distribution strategy that maximizes social welfare. Comparing the two cases, we show that the private firm’s incentives may deviate from the socially optimal decisions, which leads to inefficiency. We identify two effects, i.e., monopoly effect and congestion externality effect, which drive the private firm to deviate from the social optimum. Based on our analysis, we propose a differentiated tolls/rebates policy to achieve maximum social welfare. Under such a policy, the firm will not only adopt the socially optimal distribution strategy but offer the socially optimal quantities.     

Transport reviews prize

The transport problems that urban centres now face (as regard congestion, the environment and public deficits) have led to an examination of competition in the sector. Some countries have moved towards the deregulation or privatization of urban public transport, influenced by developments in the theory of contestable markets. These analyses could potentially provide a means of increasing the efficiency of public services and, hence, public transport. However, the authors do not feel that they can deal with the full extent of the problem. Particularly in urban areas, there is a need nowadays to examine the issue of competition between the passenger car and public transport, especially from the pricing angle. In France, decades of policy strongly influenced by a preference for the car have prevented this problem from being a central concern for researchers and decision-makers. The approach to the problem has mainly been centred on increasing urban supply to meet demand better. However, a failure to consider pricing, and the subsidization phenomena that can occur as a result, affects the shape of supply systems. Pricing, through its action on demand, acts on supply by increasing or reducing its potential profitability. 'Snowball' effects can, therefore, mean that slight underpricing results in the domination of one transport mode. These effects have been revealed in particular by work in the new field of network economics. The example of the Lyon conurbation shall be used to illustrate the case, which is that car travel is underpriced. The basis of the exposé will be a detailed analysis of the externalities associated with the car, i.e. the costs of car use and the revenue it raises for the community. The second part of the paper is a study of several urban travel policies in Europe (France, UK, Switzerland, Italy) to show the 'effects' of this underpricing. Where supply has followed the pressure of demand, the dominance of the car has been reinforced. However, in cities, particularly in Switzerland, where supply has been restricted, this dominance has been considerably moderated. On the other hand, it can be seen from the French example that taking strong action to improve public transport is not in itself sufficient to increase usage. Several lessons can be learnt from this work. First, it is shown, if it was still necessary to do so, that the problems of urban travel require a comprehensive and coherent approach. Modal policy must, therefore, be assessed with reference to the entire transport system. Next, in connection with the issue of regulation, it is important to consider the issue of competition in urban areas, and not only competition between public transport operators, but also (and even above all) competition within the entire system of personal and public transport. Finally, with regard to pricing, the ratchet effects that benefit the car as a result of its underpricing in urban areas need to be studied.     

Discussing the “positive utilities” of autonomous vehicles: will travellers really use their time productively?

ABSTRACT

Autonomous vehicles (AVs) are expected to reshape travel behaviour and demand in part by enabling productive uses of travel time—a primary component of the “positive utility of travel” concept—thus reducing subjective values of travel time savings (VOT). Many studies from industry and academia have assumed significant increases in travel time use and reductions in VOT for AVs. In this position paper, I argue that AVs’ VOT impacts may be more modest than anticipated and derive from a different source. Vehicle designs and operations may limit activity engagement during travel, with AV users feeling more like car passengers than train riders. Furthermore, shared AVs may attenuate travel time use benefits, and productivity gains could be limited to long-distance trips. Although AV riders will likely have greater activity participation during travel, many in-vehicle activities today may be more about coping with commuting burdens than productively using travel time. Instead, VOT reductions may be more likely to arise from a different “positive utility”—subjective well-being improvements through reduced stresses of driving or the ability to relax and mentally transition. Given high uncertainty, further empirical research on the experiential, time use, and VOT impacts of AVs is needed.     

Welfare evaluation with a road capacity constraint

Severe traffic congestion in and around many cities across the world has resulted in programmes of extensive road building and other capacity increasing projects. But traffic congestion has often not fallen in the long run and neither has journey speed increased. Demand for peak period road travel, particularly by car, has grown so strongly that increases in road capacity have been quickly matched by increased road use. This paper develops a model of a road network characterised by insatiable road passenger (car and bus) demand. The model parameters are calibrated on a typical urban road network, and a number of simulations conducted to determine social welfare after the introduction of a road capacity constraint into the optimisation process. The empirical results have an important policy implication for the evaluation of projects that increase road capacity, namely that standard methods of cost-benefit analysis may tend to overestimate the net benefits of such projects by a significant amount. Although the model is developed in the context of roads and road traffic congestion, it could also be applied to air travel.     

Will a driving restriction policy reduce car trips?—The case study of Beijing,China

A driving restriction policy, as one of the control-and-command rationing measures, is a politically acceptable policy tool to address traffic congestion and air pollution in some countries and cities in the world. Beijing is the first city in China to implement this policy. A one-day-a-week driving restriction scheme was expected to take 20% of cars off the road every week day. Using household survey and travel diary data, we analyze the short-term effect of this driving restriction policy on individual travel mode choice. The data also allow us to identify which demographic groups are more likely to break the restriction rule. The estimates reveal that the restriction policy in Beijing does not have significant influence on individuals’ decisions to drive, as compared with the policy’s influence on public transit. The rule-breaking behavior is constant and pervasive. We found that 47.8% of the regulated car owners didn’t follow the restriction rules, and drove “illegally” to their destination places. On average, car owners who traveled during peak hours and/or for work trips, and whose destinations were farther away from the city center or subway stations, were more likely to break the driving restriction rules. Therefore, Beijing is probably in need of more comprehensive and palatable policy instruments (e.g., a combination of congestion tolls, parking fees, fuel taxes, and high-speed transit facilities) to effectively alleviate traffic congestion and air pollution.     

Maximum car ownership under constraints of road capacity and parking space

This paper presents a model for determining the maximum number of cars by zones in view of the capacity of the road network and the number of parking spaces available. In other words, the proposed model is to examine whether existing road network and parking supply is capable of accommodating future zonal car ownership growth (or the reserve capacity in each zone); i.e. the potential maximum zonal car ownership growth that generates the road traffic within the network capacity and parking space constraints. In the proposed model, the vehicular trip production and attraction are dependent on the car ownership, available parking spaces and the accessibility measures by traffic zones. The model is formulated as a bi-level programming problem. The lower-level problem is an equilibrium trip distribution/assignment problem, while the upper-level problem is to maximize the sum of zonal car ownership by considering travellers’ route and destination choice behaviour and satisfying the network capacity and parking space constraints. A sensitivity analysis based heuristic algorithm is developed to solve the proposed bi-level car ownership problem and is illustrated with a numerical example.     

A dynamic stochastic model for evaluating congestion and crowding effects in transit systems

One of the most common motivations for public transport investments is to reduce congestion and increase capacity. Public transport congestion leads to crowding discomfort, denied boardings and lower service reliability. However, transit assignment models and appraisal methodologies usually do not account for the dynamics of public transport congestion and crowding and thus potentially underestimate the related benefits.This study develops a method to capture the benefits of increased capacity by using a dynamic and stochastic transit assignment model. Using an agent-based public transport simulation model, we dynamically model the evolution of network reliability and on-board crowding. The model is embedded in a comprehensive framework for project appraisal.A case study of a metro extension that partially replaces an overloaded bus network in Stockholm demonstrates that congestion effects may account for a substantial share of the expected benefits. A cost-benefit analysis based on a conventional static model will miss more than a third of the benefits. This suggests that failure to represent dynamic congestion effects may substantially underestimate the benefits of projects, especially if they are primarily intended to increase capacity rather than to reduce travel times.     

Attitudes of Hong Kong residents to cars and public transport: Some policy implications

Hong Kong currently has low levels of car ownership and use due to a combination of good public transport, high population densities and high private transport costs. However, levels are rising, contributing to congestion and environmental problems. A major response by the government is to seek to increase rail's share of public transport journeys from its current level of 33% to 45% by 2016. After reviewing the transport situation in Hong Kong, the paper discusses the appropriateness of these targets as well as questioning whether they are achievable. The results of a questionnaire survey of 595 residents of Hong Kong, designed to elicit people's attitudes to cars and public transport, are analysed. It is concluded that unless the government does more to curb car ownership and use, rail targets will have little chance of being achieved.     

Empty freight car dispatching model under freight car pool concept

In the last few years, growing attention has been given to the cost savings potential of the specialized freight car pool concept. Under this concept, a fleet of single-purpose freight cars are pooled at many loading points, and the cars emptied at unloading terminals can be sent back to any loading point in order to reduce empty car miles and time. As part of a continuing effort to improve the car dispatching method for this concept, this paper offers an improvement to the traditional linear programming transportation problem approach, incorporating daily variations of empty car supply and demand characteristics in the model. The proposed method, therefore, allocates cars between supply and demand points with the dispatching date specified, enabling the dispatcher to make daily car disposition decisions. It can incorporate both the travel distance cost and inventory cost of empty cars at terminals in the objective. If the holding of empty vehicles at the terminals for future dispatch is allowed, the problem is structured as a transshipment problem in which the overnight storage is the transshipment point.     

A multiclass cell transmission model for shared human and autonomous vehicle roads

Autonomous vehicles have the potential to improve link and intersection traffic behavior. Computer reaction times may admit reduced following headways and increase capacity and backwards wave speed. The degree of these improvements will depend on the proportion of autonomous vehicles in the network. To model arbitrary shared road scenarios, we develop a multiclass cell transmission model that admits variations in capacity and backwards wave speed in response to class proportions within each cell. The multiclass cell transmission model is shown to be consistent with the hydrodynamic theory. This paper then develops a car following model incorporating driver reaction time to predict capacity and backwards wave speed for multiclass scenarios. For intersection modeling, we adapt the legacy early method for intelligent traffic management (Bento et al., 2013) to general simulation-based dynamic traffic assignment models. Empirical results on a city network show that intersection controls are a major bottleneck in the model, and that the legacy early method improves over traffic signals when the autonomous vehicle proportion is sufficiently high.     

Optimal driving for single-vehicle fuel economy

This study uses fuel consumption simulators for 15 late-model automobiles to determine how one ought to drive to maximize fuel economy. The simulation is based on extensive on-road and dynamometer testing of the 15 cars. Dynamic programming is used to determine the optimal way to accelerate from rest to cruising speed, to drive a block between stop signs, and to cruise on hilly terrain while maintaining a given average speed. The dependence of fuel economy on cruising speed is also characterized for various road grades. Findings include that optimal speeds are generally higher for larger cars and higher on downgrades than on upgrades, and that the relative fuel penalty for exceeding the speed limit is no worse for small cars than large cars. Optimal control for accelerate-and-cruise and for driving between stop signs varies considerably from car to car; in the latter case fuel economy is much improved by achieving a rather low peak speed. Optimal control on hills is consistent from car to car and can achieve fuel economy 7% to 30% better than that of constant-speed driving on 3% to 6% grades. Results that appear generalizable to other cars are reduced to advice for the fuel-conscious driver.     

User preferences regarding autonomous vehicles

This study gains insight into individual motivations for choosing to own and use autonomous vehicles and develops a model for autonomous vehicle long-term choice decisions. A stated preference questionnaire is distributed to 721 individuals living across Israel and North America. Based on the characteristics of their current commutes, individuals are presented with various scenarios and asked to choose the car they would use for their commute. A vehicle choice model which includes three options is estimated:

• (1)Continue to commute using a regular car that you have in your possession.
• (2)Buy and shift to commuting using a privately-owned autonomous vehicle (PAV).
• (3)Shift to using a shared-autonomous vehicle (SAV), from a fleet of on-demand cars for your commute.

A factor analysis determined five relevant latent variables describing the individuals’ attitudes: technology interest, environmental concern, enjoy driving, public transit attitude, and pro-AV sentiments. The effects that the characteristics of the individual and the autonomous vehicle have on use and acceptance are quantified through random utility models including logit kernel model taking into account panel effects.Currently, large overall hesitations towards autonomous vehicle adoption exist, with 44% of choice decisions remaining regular vehicles. Early AV adopters will likely be young, students, more educated, and spend more time in vehicles. Even if the SAV service were to be completely free, only 75% of individuals would currently be willing to use SAVs. The study also found various differences regarding the preferences of individuals in Israel and North America, namely that Israelis are overall more likely to shift to autonomous vehicles.Methods to encourage SAV use include increasing the costs for regular cars as well as educating the public about the benefits of shared autonomous vehicles.