Roads in transition: Integrated modeling of a manufacturer-traveler-infrastructure system in a mixed autonomous/human driving environment

This paper develops an integrated model to characterize the market penetration of autonomous vehicles (AVs) in urban transportation networks. The model explicitly accounts for the interplay among the AV manufacturer, travelers with heterogeneous values of travel time (VOTT), and road infrastructure capacity. By making in-vehicle time use more leisurely or productive, AVs reduce travelers’ VOTT. In addition, AVs can move closer together than human-driven vehicles because of shorter safe reaction time, which leads to increased road capacity. On the other hand, the use of AV technologies means added manufacturing cost and higher price. Thus, traveler adoption of AVs will trade VOTT savings with additional out-of-pocket cost. The model is structured as a leader (AV manufacturer)-follower (traveler) game. Given the cost of producing AVs, the AV manufacturer sets AV price to maximize profit while anticipating AV market penetration. Given an AV price, the vehicle and routing choice of heterogeneous travelers are modeled by combining a multinomial logit model with multi-modal multi-class user equilibrium (UE). The overall problem is formulated as a mathematical program with complementarity constraints (MPCC), which is challenging to solve. We propose a solution approach based on piecewise linearization of the MPCC as a mixed-integer linear program (MILP) and solving the MILP to global optimality. Non-uniform distribution of breakpoints that delimit piecewise intervals and feasibility-based domain reduction are further employed to reduce the approximation error brought by linearization. The model is implemented in a simplified Singapore network with extensive sensitivity analyses and the Sioux Falls network. Computational results demonstrate the effectiveness and efficiency of the solution approach and yield valuable insights about transportation system performance in a mixed autonomous/human driving environment.     

Eliciting preferences for adoption of fully automated vehicles using best-worst analysis

Autonomous mobility is one of the rapidly evolving aspects of smart transportation which carries the potential of reshaping both demand and supply sides of transportation systems. While understanding public opinions about autonomous vehicles (AVs) is a compelling step towards their successful implementation, still little is known about to which extent people will embrace this new technology and how the vehicle features will affect their adoption decision. This study presents a new approach for modeling the adoption behavior of fully AVs using the profile-case best-worst scaling model. In this approach, an AV profile which is characterized in terms of the main vehicle attributes and their associated levels is presented to the decision maker and he/she is asked to select the most and the least attractive attributes. Further, a binary adoption question at the end of the choice task inquires if the respondent is willing to purchase the described AV. Utilizing this method, we can recognize the difference between the intrinsic impacts of the vehicle attributes and the impact of the attribute levels on the adoption decision. Results of the analysis indicate that people are much more sensitive to the purchase price and incentive policies such as taking liability away from the “driver” in case of accidents and provision of exclusive lanes for AVs compared to other factors such as fuel efficiency, safety, or environmental friendliness. Further, it is found that millennials with higher income, those who live in the downtown area, and the majority of people who have experienced an accident in the past have greater interests in adopting this technology.     

Modeling adoption timing of autonomous vehicles: innovation diffusion approach

Autonomous vehicles (AVs) are expected to act as an economically-disruptive transportation technology offering several benefits to the society and causing significant changes in travel behavior and network performance. However, one of the critical issues that policymakers are facing is the absence of a sound estimation of their market penetration. This study is an effort to quantify the effect of different drivers on the adoption timing of AVs. To this end, we develop an innovation diffusion model in which individuals’ propensities to adopt a new technology such as AVs takes influence from a desire to innovate and a need to imitate the rest of the society. It also captures various sources of inter-personal heterogeneity. We found that conditional on our assumptions regarding the changes in market price of AVs over time, their market penetration in our study region (Chicago metropolitan area) will eventually reach 71.3%. Further, model estimation results show that a wide range of socio-demographic factors, travel pattern indicators, technology awareness, and perceptions of AVs are influential in people’s AV adoption timing decision. For instance, frequent long-distance travelers are found to make the adoption decision more innovatively while those who have experienced an accident in their lifetime are found to be more influenced by word of mouth.     

The impact of private autonomous vehicles on vehicle ownership and unoccupied VMT generation

With 36 ventures testing autonomous vehicles (AVs) in the State of California, commercial deployment of this disruptive technology is almost around the corner (California Department of Transportation, 2016). Different business models of AVs, including Shared AVs (SAVs) and Private AVs (PAVs), will lead to significantly different changes in regional vehicle inventory and Vehicle Miles Travelled (VMT). Most prior studies have already explored the impact of SAVs on vehicle ownership and VMT generation. Limited understanding has been gained regarding vehicle ownership reduction and unoccupied VMT generation potentials in the era of PAVs. Motivated by such research gap, this study develops models to examine how much vehicle ownership reduction can be achieved once private conventional vehicles are replaced by AVs and the spatial distribution of unoccupied VMT accompanied with the vehicle reduction. The models are implemented using travel survey and synthesized trip profile from Atlanta Metropolitan Area. The results show that more than 18% of the households can reduce vehicles, while maintaining the current travel patterns. This can be translated into a 9.5% reduction in private vehicles in the study region. Meanwhile, 29.8 unoccupied VMT will be induced per day per reduced vehicles. A majority of the unoccupied VMT will be loaded on interstate highways and expressways and the largest percentage inflation in VMT will occur on minor local roads. The results can provide implications for evolving trends in household vehicles uses and the location of dedicated AV lanes in the PAV dominated future.     

Integrated models of land use and transportation for the autonomous vehicle revolution

ABSTRACT

The advent of the autonomous vehicle (AV) will affect not only the transportation system, but also future patterns of land development. Integrated land use and transportation models will be critical tools in assessing the path forward with this technology. Key questions with respect to land use impacts of AVs arise from potential changes in sensitivity to travel and reduced demand for parking. It is an open question whether AVs will induce urban sprawl, or whether spatial economies of agglomeration will mitigate any reductions in travel time sensitivity. The deployment of shared fleets of AVs would likely reduce parking demand, producing yet to be explored impacts on property development within existing urban footprints. We perform a critical assessment of currently operational models and their ability to represent the adoption of AVs. We identify the representation of time in such models as a vital component requiring additional development to model this new technology. Existing model applications have focused on the discrete addition of new infrastructure or policy at a fixed point in time, whereas AV adoption will occur incrementally through time. Stated adaptation surveys are recommended as tools to quantify preferences and develop relevant model inputs. It is argued that existing models that assume comparatively static equilibrium have been convenient in the past, but are insufficient to model technology adoption. In contrast, dynamic model frameworks lack sufficient structure to maintain reasonability under large perturbations from base conditions. The ongoing advancement of computing has allowed models to move away from being mechanistic aggregate tools, towards behaviourally rich depictions of individual persons and firms. However, much work remains to move from projections of existing conditions into the future, to the evolution of the spatial economy as it evolves through time in response to new technologies and exogenous stresses. Principles from complex and evolutionary systems theory will be important in the development of models with the capacity to consider such dynamics.     

Autonomous vehicles in mixed motorway traffic: capacity utilisation,impact and policy implications

In upcoming years, the introduction of autonomous vehicles (AVs) will reshape the transport system. The transition from a regular to an autonomous transport system, however, will take place over many years and lead to a long period with a mixed driving environment where AVs and regular vehicles (RVs) operate side by side. The purpose of this study is to investigate how the utilisation of the road capacity degrades as a function of heterogeneity in congested motorways. The analysis is based on a dedicated traffic simulator, which enables the investigation of complex dynamic spillback from congestion while allowing for different degrees of heterogeneity. The representation of autonomous vehicles is based on a modified intelligent driver model (IIDM) presented by Treiber et al. (Phys Rev E 62(2):1805–1824, 2000) and Treiber and Kesting (Traffic flow dynamics, Springer, Heidelberg, 2013), while the behaviour of drivers of RVs relies on a stochastic version of the IIDM. Three main conclusions stand out. Firstly, it is shown that in an idealised environment in which AVs operate alone, a substantially improved capacity utilisation can be attained. Secondly, when drivers of RVs are mixed with AVs, capacity utilisation degrades very fast as a function of the share of RVs. Thirdly, it is shown that the improved capacity utilisation of AVs comes in the form of reduced travel time and increased throughput, with indications that travel time reductions are the most important. From a strategical planning perspective, the results underline that dedicated lanes are preferable to attain the positive effects of AVs. Specifically, we compare a stylised situation with three lanes with a share of 33% AVs to a situation with two regular lanes and a single dedicated AV lane. The latter represents a tripling in consumer surplus all other things being equal.

     

Integrated planning of static and dynamic charging infrastructure for electric vehicles

This paper investigates the optimal deployment of static and dynamic charging infrastructure considering the interdependency between transportation and power networks. Static infrastructure means plug-in charging stations, while the dynamic counterpart refers to electrified roads or charging lanes enabled by charging-while-driving technology. A network equilibrium model is first developed to capture the interactions among battery electric vehicles’ (BEVs) route choices, charging plans, and the prices of electricity. A mixed-integer bi-level program is then formulated to determine the deployment plan of charging infrastructure to minimize the total social cost of the coupled networks. Numerical examples are provided to demonstrate travel and charging plans of BEV drivers and the competitiveness of static and dynamic charging infrastructure. The numerical results on three networks suggest that (1) for individual BEV drivers, the choice between using charging lanes and charging stations is more sensitive to parameters including value of travel time, service fee markup, and battery size, but less sensitive to the charging rates and travel demand; (2) deploying more charging lanes is favorable for transportation networks with sparser topology while more charging stations can be more preferable for those denser networks.     

Shared versus private mobility: Modeling public interest in autonomous vehicles accounting for latent attitudes

Emerging autonomous vehicles (AVs) and shared mobility systems per se will transform urban passenger transportation. Coupled together, shared AVs (SAVs) can facilitate widespread use of shared mobility services by providing flexible public travel modes comparable to private AV. Hence, it may be conjectured that future urban mobility is likely an on-demand service and AV private ownership is unappealing. Nonetheless, it is still unclear what observable and latent factors will drive public interest in (S)AVs, the answer to which will have important implications on transportation system performance. This paper aims to jointly model public interest in private AVs and multiple SAV configurations (carsharing, ridesourcing, ridesharing, and access/egress mode) in daily and commute travels with explicit treatment of the correlations across the (S)AV types. To this end, multivariate ordered outcome models with latent variables are employed, whereby latent attitudes and preferences describing traveler safety concern about AV, green travel pattern, and mobility-on-demand savviness are accounted for using structural and measurement equations. Drawing from a stated preference survey in the State of Washington, important insights are gained into the potential user groups based on the socio-economic, built environment, and daily/commute travel behavior attributes. Key policies are also offered to promote public interest in (S)AVs by scrutinizing the marginal effects of the latent variables.     

Dynamic autonomous vehicle fleet operations: Optimization-based strategies to assign AVs to immediate traveler demand requests

Motivated by the growth of ridesourcing services and the expected advent of fully-autonomous vehicles (AVs), this paper defines, models, and compares assignment strategies for a shared-use AV mobility service (SAMS). Specifically, the paper presents the on-demand SAMS with no shared rides, defined as a fleet of AVs, controlled by a central operator, that provides direct origin-to-destination service to travelers who request rides via a mobile application and expect to be picked up within a few minutes. The underlying operational problem associated with the on-demand SAMS with no shared rides is a sequential (i.e. dynamic or time-dependent) stochastic control problem. The AV fleet operator must assign AVs to open traveler requests in real-time as traveler requests enter the system dynamically and stochastically. As there is likely no optimal policy for this sequential stochastic control problem, this paper presents and compares six AV-traveler assignment strategies (i.e. control policies). An agent-based simulation tool is employed to model the dynamic system of AVs, travelers, and the intelligent SAMS fleet operator, as well as, to compare assignment strategies across various scenarios. The results show that optimization-based AV-traveler assignment strategies, strategies that allow en-route pickup AVs to be diverted to new traveler requests, and strategies that incorporate en-route drop-off AVs in the assignment problem, reduce fleet miles and decrease traveler wait times. The more-sophisticated AV-traveler assignment strategies significantly improve operational efficiency when fleet utilization is high (e.g. during the morning or evening peak); conversely, when fleet utilization is low, simply assigning traveler requests sequentially to the nearest idle AV is comparable to more-advanced strategies. Simulation results also indicate that the spatial distribution of traveler requests significantly impacts the empty fleet miles generated by the on-demand SAMS.     

Optimal deployment of charging lanes for electric vehicles in transportation networks

Given the rapid development of charging-while-driving technology, we envision that charging lanes for electric vehicles can be deployed in regional or even urban road networks in the future and thus attempt to optimize their deployment in this paper. We first develop a new user equilibrium model to describe the equilibrium flow distribution across a road network where charging lanes are deployed. Drivers of electric vehicles, when traveling between their origins and destinations, are assumed to select routes and decide battery recharging plans to minimize their trip times while ensuring to complete their trips without running out of charge. The battery recharging plan will dictate which charging lane to use, how long to charge and at what speed to operate an electric vehicle. The speed will affect the amount of energy recharged as well as travel time. With the established user equilibrium conditions, we further formulate the deployment of charging lanes as a mathematical program with complementarity constraints. Both the network equilibrium and design models are solved by effective solution algorithms and demonstrated with numerical examples.     

Deployment of stationary and dynamic charging infrastructure for electric vehicles along traffic corridors

As charging-while-driving (CWD) technology advances, charging lanes can be deployed in the near future to charge electric vehicles (EVs) while in motion. Since charging lanes will be costly to deploy, this paper investigates the deployment of two types of charging facilities, namely charging lanes and charging stations, along a long traffic corridor to explore the competitiveness of charging lanes. Given the charging infrastructure supply, i.e., the number of charging stations, the number of chargers installed at each station, the length of charging lanes, and the charging prices at charging stations and lanes, we analyze the charging-facility-choice equilibrium of EVs. We then discuss the optimal deployment of charging infrastructure considering either the public or private provision. In the former, a government agency builds and operates both charging lanes and stations to minimize social cost, while in the latter, charging lanes and stations are assumed to be built and operated by two competing private companies to maximize their own profits. Numerical experiments based on currently available empirical data suggest that charging lanes are competitive in both cases for attracting drivers and generating revenue.     

What drives people to accept automated vehicles? Findings from a field experiment

This field study aims at understanding the influence of direct experience of an automated vehicle (AV, Level 3) and explaining and predicting public acceptance of AVs through a psychological model. The model includes behavioral intention (BI) to use self-driving vehicles (SDVs, Level 5), willingness to re-ride (WTR) in our AV (Level 3), and their four potential determinants, namely perceived usefulness (PU), perceived ease of use (PEU), trust related to SDVs, and perceived safety (PS) while riding in our AV. The last two determinants are largely ignored, but we consider them critical in the context of AVs. Three-hundred students were invited as participants (passengers) to experience the AV. The trust, PU, PEU, and BI of the participants were recorded prior to their experiencing the AV; after this experience, all the constructs of the psychological model were recorded. The participants’ experience with the AV was found to increase their trust, PU and PEU (but not BI), the consistency between PU/PEU and BI, and the explanatory power of BI. The model explained 55% of the variance in BI and 40% in WTR. PU, trust, and PS were found to be steady and direct predictors of both the acceptance measures; PEU predicted BI only after the participants’ AV experience. Mediation analysis showed that trust also can indirectly affect AV acceptance through other determinants. Out-of-sample prediction confirmed the model’s predictive capability for AV acceptance. The theoretical contributions and practical implications of the findings are discussed.     

An equilibrium analysis of commuter parking in the era of autonomous vehicles

This study is the first in the literature to model the joint equilibrium of departure time and parking location choices when commuters travel with autonomous vehicles (AVs). With AVs, walking from parking spaces to the work location is not needed. Instead, AVs will drop off the commuters at the workplace and then drive themselves to the parking spaces. In this context, the equilibrium departure/arrival profile is different from the literature with non-autonomous vehicles (non-AVs). Besides modeling the commuting equilibrium, this study further develops the first-best time-dependent congestion tolling scheme to achieve the system optimum. Also, a location-dependent parking pricing scheme is developed to replace the tolling scheme. Furthermore, this study discusses the optimal parking supply to minimize the total system cost (including both the travel cost and the social cost of parking supply) under either user equilibrium or system optimum traffic flow pattern. It is found that the optimal planning of parking can be different from the non-AV situation, since the vehicles can drive themselves to parking spaces that are further away from the city center and walking of commuters is avoided. This paper sheds light on future parking supply planning and traffic management.     

Governing autonomous vehicles: emerging responses for safety,liability, privacy,cybersecurity, and industry risks

ABSTRACT

The benefits of autonomous vehicles (AVs) are widely acknowledged, but there are concerns about the extent of these benefits and AV risks and unintended consequences. In this article, we first examine AVs and different categories of the technological risks associated with them. We then explore strategies that can be adopted to address these risks, and explore emerging responses by governments for addressing AV risks. Our analyses reveal that, thus far, governments have in most instances avoided stringent measures in order to promote AV developments and the majority of responses are non-binding and focus on creating councils or working groups to better explore AV implications. The US has been active in introducing legislations to address issues related to privacy and cybersecurity. The UK and Germany, in particular, have enacted laws to address liability issues; other countries mostly acknowledge these issues, but have yet to implement specific strategies. To address privacy and cybersecurity risks strategies ranging from introduction or amendment of non-AV specific legislation to creating working groups have been adopted. Much less attention has been paid to issues such as environmental and employment risks, although a few governments have begun programmes to retrain workers who might be negatively affected.     

A statistical analysis of consumer perceptions towards automated vehicles and their intended adoption

ABSTRACT

While automated vehicle (AV) development continues to progress rapidly, how the public will accept and adopt automated vehicles remains an open question. Using extensive survey data, we apply cluster analysis to better understand consumer perceptions toward potential benefits and concerns related to AVs with regard to factors influencing their AV adoption likelihood. Four market segments are identified – ‘benefits-dominated,’ ‘concerns-dominated,’ ‘uncertain,’ and ‘well-informed.’ A random parameters multinomial logit model is then estimated to identify factors influencing the probability of respondents belonging to one of these four market segments. Among other influences (such as socio-economic and current travel characteristics), it is found that ‘Millennials’ have a higher probability of belonging to the well-informed market segment, ‘Gen-Xers’ with a lower probability to the uncertain market segment, and ‘Baby Boomers’ with a higher probability to the concerns-dominated market (relative to the ‘Great Generation’). We also study the individuals’ expressed likelihood of AV adoption using separate random parameters ordered probit estimations for each of the four market segments. The substantial and statistically significant differences across each AV consumer market segment underscore the potentially large impact that different consumer demographics may have on AV adoption and the need for targeted marketing to achieve better market-penetration outcomes.     

Fully autonomous vehicles: analyzing transportation network performance and operating scenarios in the Greater Toronto Area,Canada

Fully autonomous vehicles (AVs) have the potential to considerably change urban mobility in the future. This study simulates potential AV operating scenarios in the Greater Toronto Area (GTA), Canada, and assesses transportation system performance on a regional level. For each scenario, the base capacities of certain types of road links are modified to simulate the theoretical increase in throughput enabled by AV driving behavior. Another scenario examines driverless parking operations in downtown Toronto. Simulation results indicate that the increased attractiveness of freeways relative to other routes leads to slightly increased average travel distance as vehicles divert to access higher capacity road links. Average travel time is found to decrease by up to one-fifth at the 90% AV market penetration level. Concurrently, localized increases in congestion suggest that proactive transportation planning will be needed to mitigate negative consequences of AV adoption, especially in relation to induced demand for personal automobile travel.     

Parents’ perspectives on using autonomous vehicles to enhance children’s mobility

Prior research has estimated the impact of an autonomous vehicle (AV) environment on the mobility of underserved populations such as adult non-drivers. What is currently unknown is the impact of AVs on enhancing the mobility of children who are also mobility disadvantaged, as child passengers are likely part of AV ridership scenarios in the perceivable future. To address this question, our study collected perceived benefits and concerns of AVs from a US convenience sample of parents whose children relied on them for mobility. We found that parents’ intentions to travel in AV and their technology readiness as well as parent (sex, residence area) and child (age, restraint system) demographic profiles were important determinants of potential AV acceptance and impact. In addition, two groups of potential AV users emerged from the data: the curious and the practical. This study addresses a gap in the literature by assessing parents’ perspectives on using AVs to transport children. The results have great potentials to guide the design of mobility features, safety evaluations, and implementation policies, as a decline in public interest in AVs has been recently documented.     

Automated vehicles: exploring possible consequences of government (non)intervention for congestion and accessibility

ABSTRACT

Academic research on automated vehicles (AVs) has to date been dominated by the fields of engineering and computer science. Questions of how this potentially transformative technology should be governed remain under-researched and tend to concentrate on governing the technology’s early development. We respond in this paper by exploring the possible longer-term effect of government (lack of) intervention.

The paper tests the hypothesis that a “laissez-faire” governance approach is likely to produce less desirable outcomes in a scenario of mass uptake of AVs than would a well-planned set of government interventions. This is done using two prominent themes in transport policy – traffic flow and accessibility – in a scenario of high market penetration of Level-5 automated vehicles in capitalist market economies. The evidence used is drawn from a literature review and from the findings of a set of workshops with stakeholders.

We suggest that a laissez-faire approach will lead to an increase in traffic volume as a result of a growing population of “drivers” and a probable increase in kilometres driven per passenger. At the same time, the hoped-for increases in network efficiency commonly claimed are not guaranteed to come about without appropriate government intervention. The likely consequence is an increase in congestion. And, with respect to accessibility, it is likely that the benefits of AVs will be enjoyed by wealthier individuals and that the wider impacts of AV use (including sprawl) may lead to a deterioration in accessibility for those who depend on walking, cycling or collective transport.

We consider the range of possible government intervention in five categories: Planning/land-use; Regulation/policy; Infrastructure/technology; Service provision; and Economic instruments. For each category, we set out a series of interventions that might be used by governments (at city, region or state level) to manage congestion or protect accessibility in the AV scenario described. Many of these (e.g. road pricing) are already part of the policy mix but some (e.g. ban empty running of AVs) would be new. We find that all interventions applicable to the management of traffic flow would also be expected to contribute to the management of accessibility; we define a small number of additional interventions aimed at protecting the accessibility of priority groups.

Our general finding is that the adoption of a package of these interventions could be expected to lead to better performance against generic traffic-flow and accessibility objectives than would a laissez-faire approach, though questions of extent of application remain.

In our conclusions, we contrast laissez-faire with both anticipatory governance and “precautionary” governance and acknowledge the political difficulty associated with acting in the context of uncertainty. We point out that AVs do not represent the first emerging technology to offer both opportunities and risks and challenge governments at all levels to acknowledge the extent of their potential influence and, in particular, to examine methodically the options available to them and the potential consequences of pursuing them.     

Transit-oriented autonomous vehicle operation with integrated demand-supply interaction

Autonomous vehicles (AVs) represent potentially disruptive and innovative changes to public transportation (PT) systems. However, the exact interplay between AV and PT is understudied in existing research. This paper proposes a systematic approach to the design, simulation, and evaluation of integrated autonomous vehicle and public transportation (AV + PT) systems. Two features distinguish this research from the state of the art in the literature: the first is the transit-oriented AV operation with the purpose of supporting existing PT modes; the second is the explicit modeling of the interaction between demand and supply.We highlight the transit-orientation by identifying the synergistic opportunities between AV and PT, which makes AVs more acceptable to all the stakeholders and respects the social-purpose considerations such as maintaining service availability and ensuring equity. Specifically, AV is designed to serve first-mile connections to rail stations and provide efficient shared mobility in low-density suburban areas. The interaction between demand and supply is modeled using a set of system dynamics equations and solved as a fixed-point problem through an iterative simulation procedure. We develop an agent-based simulation platform of service and a discrete choice model of demand as two subproblems. Using a feedback loop between supply and demand, we capture the interaction between the decisions of the service operator and those of the travelers and model the choices of both parties. Considering uncertainties in demand prediction and stochasticity in simulation, we also evaluate the robustness of our fixed-point solution and demonstrate the convergence of the proposed method empirically.We test our approach in a major European city, simulating scenarios with various fleet sizes, vehicle capacities, fare schemes, and hailing strategies such as in-advance requests. Scenarios are evaluated from the perspectives of passengers, AV operators, PT operators, and urban mobility system. Results show the trade off between the level of service and the operational cost, providing insight for fleet sizing to reach the optimal balance. Our simulated experiments show that encouraging ride-sharing, allowing in-advance requests, and combining fare with transit help enable service integration and encourage sustainable travel. Both the transit-oriented AV operation and the demand-supply interaction are essential components for defining and assessing the roles of the AV technology in our future transportation systems, especially those with ample and robust transit networks.     

A model for optimizing electronic toll collection systems

This paper examines the deployment of electronic toll collection (ETC) and develops a model to maximize social welfare associated with a toll plaza. A payment choice model estimates the share of traffic using ETC as a function of delay, price, and a fixed cost of acquiring the in-vehicle transponder. Delay in turn depends on the relative number of ETC and manual collection lanes. Price depends on the discount given to users of the ETC lanes. The fixed cost of acquiring the transponder (not simply a monetary cost, but also the effort involved in signing up for the program) is a key factor in the model. Once a traveler acquires the transponder, the cost of choosing ETC in the future declines significantly. Welfare depends on the market share of ETC, and includes delay and gasoline consumption, toll collection costs, and social costs such as air pollution. This work examines the best combination of ETC lanes and toll discount to maximize welfare. Too many ETC lanes cause excessive delay to non-equipped users. Too high a discount costs the highway agency revenue needed to operate the facility. The model is applied to California’s Carquinez Bridge, and recommendations are made concerning the number of dedicated ETC lanes and the appropriate ETC discount.