Effects of alternative road pricing systems on network performance

Four road pricing systems, with charges based on cordons crossed, distance travelled, time spent travelling and time spent in congestion, have been tested using the congested assignment network model SATURN and its elastic assignment demand response routine, SATEASY. All tests have been based on a SATURN application of the city of Cambridge, with charges imposed inside an appropriate ring of bypasses. While initial results showed that congestion pricing achieved the greatest increase in average speed in the charged area, later analysis cast doubt on its superiority. Congestion pricing is able to distinguish more effectively the extent to which different types of journey contribute to congestion and achieves given reductions in travel at lower levels of charge. However, it is much less effective in reducing distance travelled and, by encouraging use of minor roads, may achieve far smaller environmental benefits. Time-based pricing performs better than the other systems on most indicators. Generally, the results suggest that when rerouting effects are included in the predictive modelling process the benefits of road pricing may be significantly smaller than previously expected.     

The acceptability of road pricing in Vienna: the preference patterns of car drivers

The acceptability of road pricing has attracted considerable attention among researchers over the last decade, as is evident in the amount of literature about transport and environmental economics. The general conclusion from these studies has been that there is low acceptability for road pricing among car users. In this paper, we add more knowledge to the existing literature by conducting an acceptability study of road pricing in Vienna, where such a study has never been conducted before. We used a replication study approach where a previous approach used in the EU research project AFFORD (acceptability of fiscal and financial measures and organisational requirements for demand management) was replicated for Vienna and further supplemented with a conjoint analysis. In order to examining whether the Vienna study confirms previous findings. We investigated the acceptability of two concrete policy packages factors influencing this acceptability, and preference patterns that can be used in designing a road pricing policy for Vienna. The survey reveals a higher acceptability if road pricing schemes lead to perceived personal benefits. According to the multivariate analyses, the “personal outcome expectations”, “social norm” and “perceived effectiveness” variables account for more than 50 % of the criterion variance and therefore these are the most influential factors. Road pricing schemes can be an effective transport management instrument for a city particularly if they are associated with direct investment in public transport and public infrastructure. Thus, personal benefits can be perceived more easily and direct effects can be expected.     

Road pricing: The right solution for the right problem?

Road-pricing theory asserts that the optimal speed of a road network is that where vehicles pay the marginal social cost of their journey, rather than an average private cost if no price is imposed. This paper aims to show that this is misconceived. In big congested cities, the running speed of the road network is set by the direct journey speed achieved on the appropriate mass-transit network, both within and to the city centre. After dividing by the appropriate route factors to convert running speed to direct speed and allowing for access to convert kerb-to-kerb to door-to-door speed, the average direct journey speeds by car are identical to those on the mass-transit system for equivalent journeys when there is suppressed demand for car travel. Road pricing should thus be seen, not as a tool for increasing road speeds, which it cannot do whilst sufficient suppressed demand exists, but as a tool for estimating the socially desirable demand level on the roads as opposed to on the mass-transit systems. Road speeds in big, congested cities can only be increased by increasing the direct speeds of the mass-transit systems. Methods of achieving such increases are discussed.     

Nonlinear pricing in linear cities with elastic demands

Nonlinear road pricing charges each traveler based on his/her trip’s corresponding particular attribute level. In order to help authorities in designing road pricing systems at a strategic level, this paper attempts to address two fundamental questions: (i) what is the value of pricing’s nonlinearity for mitigating traffic congestion? (ii) if a nonlinear toll function is implemented, should it be convex, concave or other shape? Specifically, we consider distance-based pricing in linear cities. For linear monocentric cities with heterogeneous travelers, we show that the system optimal distance-based pricing indeed exhibits nonlinearity. It is proved that: (i) the cost-based system optimal toll function is monotonically increasing and concave with respect to the traveled distance; (ii) the time-based system optimal toll function always exists and is unique. If the initial proportion of each traveler group is invariant along a corridor and the demand function is of exponential type, then the time-based system optimal toll function enables the travelers, living further away from a city center, to face a lower toll level per unit distance. For a linear polycentric city, we demonstrate: (i) there always exists the system optimal differentiated (in terms of city centers) toll functions; (ii) it is highly possible that the system optimal non-differentiated toll function does not exist. Hence, we further propose an optimal toll design model, prove the Lipschitz continuity of its objective and adopt a global-optimization algorithm to solve it.     

The Smeed Report 50 years on: a role for the workplace parking levy?

Fifty years ago, Reuben Smeed chaired a study and produced a Report on the Economic and Technical Possibilities of Road Pricing. This report was to consider different methods of charging, including road pricing, to see if different pricing methods could reduce the problems associated with congestion as opposed to the traditional methods in place such as fuel tax. Since that time, various attempts have been made to introduce road pricing schemes but with only modest success so far. By contrast parking policies, a second-best alternative to road pricing, have been extensively used by local authorities as a means of managing congestion. The effectiveness of such policies, however, has been limited by an increase in the proportion of privately owned non-residential parking which is not under the control of local authorities. The aim of this paper is to present the results of an early-stage, post-implementation study of the Nottingham Workplace Parking Levy (WPL) – a measure that charges employers for the number of parking spaces they provide for their staff. Particular emphasis is placed on why a WPL was seen as being favourable compared to a road pricing alternative. The reason for this was that it could be introduced in a shorter time frame and at a lower cost, thus making it a lower risk option when compared with road pricing.     

Road pricing — an outsider's view of American experiences

Abstract

Substantial changes in urban transport policy have taken place over the past decade. The concern with expanding infrastructure and the preoccupation with providing sufficient road capacity to meet the increasing demand of unrestricted car use, which characterized transport policy in the 1950s and 1960s, has gradually given way to the idea that there is a need to restrain motor traffic if urban society is to function efficiently. A variety of restrictive physical traffic management, land use planning and economic policies have, in consequence, been pursued. One option which has attracted considerable attention in the academic literature, but which has been received more cooly by policy‐makers, is the possibility of optimizing urban traffic congestion through the imposition of road pricing. The introduction and relative success of the area licensing scheme in Singapore has added fuel to the arguments of the advocates of such a policy. This review is not directly concerned with either the experiment with road pricing in Singapore nor the theoretical debates which have taken place concerning the potential merits and defects of such policies but rather looks at the applied work in the United States which has looked into the practical implications of road pricing for its cities. Further, it seeks to explore, again drawing on American experiences, just why there has been so much opposition to the employment of economic pricing principles in the urban road transport market. The author presents the results of an SSRC sponsored study into the practical problems of introducing road pricing to cities in the United States.     

Time-dependent congestion pricing system for large networks: Integrating departure time choice,dynamic traffic assignment and regional travel surveys in the Greater Toronto Area

Congestion pricing is one of the widely contemplated methods to manage traffic congestion. The purpose of congestion pricing is to manage traffic demand generation and supply allocation by charging fees (i.e., tolling) for the use of certain roads in order to distribute traffic demand more evenly over time and space. This study presents a framework for large-scale variable congestion pricing policy determination and evaluation. The proposed framework integrates departure time choice and route choice models within a regional dynamic traffic assignment (DTA) simulation environment. The framework addresses the impact of tolling on: (1) road traffic congestion (supply side), and (2) travelers’ choice dimensions including departure time and route choices (demand side). The framework is applied to a simulation-based case study of tolling a major freeway in Toronto while capturing the regional effects across the Greater Toronto Area (GTA). The models are developed and calibrated using regional household travel survey data that reflect the heterogeneity of travelers’ attributes. The DTA model is calibrated using actual traffic counts from the Ontario Ministry of Transportation and the City of Toronto. The case study examined two tolling scenarios: flat and variable tolling. The results indicate that: (1) more benefits are attained from variable pricing, that mirrors temporal congestion patterns, due to departure time rescheduling as opposed to predominantly re-routing only in the case of flat tolling, (2) widespread spatial and temporal re-distributions of traffic demand are observed across the regional network in response to tolling a significant, yet relatively short, expressway serving Downtown Toronto, and (3) flat tolling causes major and counterproductive rerouting patterns during peak hours, which was observed to block access to the tolled facility itself.     

Transport policy prioritisation for Dublin

Internalisation of the external costs of transport is currently the subject of much debate. Estimation of costs such as those of pollution and congestion is a primary element in any strategy involving policies for use in the internalisation of these costs. The objective of the TRENEN II STRAN project, funded by the EU, was to develop a methodology for estimation of the marginal external costs of transport. The model developed during the project was used in a series of case studies. One of the case studies, that conducted for Dublin, is reported in this paper. A brief summary of the TRENEN approach is presented followed by the results for Dublin produced from policies such as Do Nothing, Uniform pricing (internalising external costs by means of fuel taxation), Congestion Pricing (cordon pricing) and a first-best policy, the Full Optimum where one assumes that the policy maker has perfect pricing instruments available. As one would expect, the model shows that the greatest reduction in traffic level and external costs would occur if it were possible to introduce a highly differentiated and sophisticated pricing system. Increased taxation on fuel is not an efficient policy as it does not address the marginal external costs of congestion in a way that time-differentiated road-use pricing would. The results from testing of the different measures are interesting particularly those relating to parking and the way in which residents within the CBD and commuters to the CBD are dealt with. This revised version was published online in June 2006 with corrections to the Cover Date.     

Road pricing — should and might it happen?

This article discusses recent attempts to implement a federally sponsored road pricing demonstration in the United States. It examines reasons for the attempts, pointing to several enduring traffic related problems; the greater effectiveness and flexibility of road pricing compared to other measures; and the proven feasibility of area licenses as in Singapore. The generally negative reaction of city decision-makers to road pricing is specified, particularly concerns about harm to businesses, interference with the right to travel and discrimination against the poor. Some lessons for further attempts at implementation of road pricing include more attention to contingency planning for worst possible outcomes; the design of parking permit programs which might lead the way to road pricing; and the selection of recreational rather than downtown sites for first attempts at innovative parking permit and road pricing schemes.     

Traffic congestion pricing methodologies and technologies

This paper reviews the methods and technologies for congestion pricing of roads. Congestion tolls can be implemented at scales ranging from individual lanes on single links to national road networks. Tolls can be differentiated by time of day, road type and vehicle characteristics, and even set in real time according to current traffic conditions. Conventional toll booths have largely given way to electronic toll collection technologies. The main technology categories are roadside-only systems employing digital photography, tag & beacon systems that use short-range microwave technology, and in-vehicle-only systems based on either satellite or cellular network communications. The best technology choice depends on the application. The rate at which congestion pricing is implemented, and its ultimate scope, will depend on what technology is used and on what other functions and services it can perform.     

Marginal cost congestion pricing based on the network fundamental diagram

Congestion pricing schemes have been traditionally derived based on analytical representations of travel demand and traffic flows, such as in bottleneck models. A major limitation of these models, especially when applied to urban networks, is the inconsistency with traffic dynamics and related phenomena such as hysteresis and the capacity drop. In this study we propose a new method to derive time-varying tolling schemes using the concept of the Network Fundamental Diagram (NFD). The adopted method is based on marginal cost pricing, while it also enables to account realistically for the dynamics of large and heterogeneous traffic networks. We derive two alternative cordon tolls using network-aggregated traffic flow conditions: a step toll that neglects the spatial distribution of traffic by simply associating the marginal costs of any decrease in production within the NFD to the surplus of traffic; and a step toll that explicitly accounts for how network performance is also influenced by the spatial variance in a 3D-NFD. This pricing framework is implemented in the agent-based simulation model MATSim and applied to a case study of the city of Zurich. The tolling schemes are compared with a uniform toll, and they highlight how the inhomogeneous distribution of traffic may compromise the effectiveness of cordon tolls.     

Responses to complex pricing signals: Theory,evidence and implications for road pricing

There is a potential tension between the theoretical desirability of highly differentiated tariff structures and the ability of consumers to respond effectively to them. Evidence from studies of road pricing schemes and tolls, from other transport modes, and from other industries (notably telecommunications), is reviewed and its transferability assessed. Relevant models of human decision making (notably Prospect Theory, Risk Aversion, Ambiguity Avoidance and Bounded Rationality) are explored, and the use and efficiency of heuristics to deal with complex situations is discussed.It is concluded that people have a strong preference for simple tariffs but that they are able to respond to quite complex tariffs provided that they have a clear and logical structure. However, people’s difficulties in estimating distance will severely limit the accuracy of their estimates of distance-based charges and their response to complex pricing signals will be influenced by their attitude to the fairness of the charge. These conclusions are summarised in a general model of response to complex prices.The paper, which reports and extends a study conducted for the UK Department for Transport, concludes by considering the implications for the design and performance of road pricing schemes (an inherent problem being that the theoretically optimum, first-best, pricing structure might be so complicated and dynamically variable that it would be unreasonable to expect road users to predict, let alone respond to, the prices on any given road at any given time – a simpler pricing structure might therefore yield a better overall result).     

Road pricing for congestion control with unknown demand and cost functions

It is widely recognized that precise estimation of road tolls for various pricing schemes requires a few pieces of information such as origin–destination demand functions, link travel time functions and users’ valuations of travel time savings, which are, however, not all readily available in practice. To circumvent this difficulty, we develop a convergent trial-and-error implementation method for a particular pricing scheme for effective congestion control when both the link travel time functions and demand functions are unknown. The congestion control problem of interest is also known as the traffic restraint and road pricing problem, which aims at finding a set of effective link toll patterns to reduce link flows to below a desirable target level. For the generalized traffic equilibrium problem formulated as variational inequalities, we propose an iterative two-stage approach with a self-adaptive step size to update the link toll pattern based on the observed link flows and given flow restraint levels. Link travel time and demand functions and users’ value of time are not needed. The convergence of the iterative toll adjustment algorithm is established theoretically and demonstrated on a set of numerical examples.     

Fumbling toward the edge of history: California's quest for a road-pricing experiment

California has a tradition of innovation in transport policy but has yet to initiate a policy of road pricing. This paper examines the various efforts which have been made to introduce measures of fiscal restraint on car use since the early 1970s. In particular it looks at the arguments put forward for introducing road pricing and critically examines the reasons why they have not been accepted by the decision makers. While some of these reasons appear of universal relevance, others stem from the specific nature U.S. institutions and the U.S. political system. Examination of current trends in political attitudes in California suggest that road pricing is unlikely to materialize there in the immediate future.     

Responses to differentiated road pricing schemes

Reducing traffic-related problems is an important issue that requires changes in travel behavior. It is argued that road pricing is an effective tool but that it would be more effective if charges are differentiated. A laboratory experiment employing a heterogeneous sample (n = 155) examined effects of differentiated road pricing schemes on understanding and behavioral change intentions. The results show that difficulties are experienced in calculating the charges for road pricing schemes differentiated with respect to both place and time. Suggesting learning effects, if presented with degree of differentiation gradually increasing compared to random orders, the highly differentiated schemes were evaluated faster, as more comprehensible, and perceived difficulty decreased. Elderly were less flexible than young people in indicating how they would respond, women were more flexible than men, and frequent drivers less flexible than non-frequent drivers. A distance-based road pricing scheme with a fixed charge per kilometer was on average ranked highest on preference compared to several other conceivable road pricing alternatives.     

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.     

Capturing value of reliability through road pricing in congested traffic under uncertainty

Empirical studies showed that travel time reliability, usually measured by travel time variance, is strongly correlated with travel time itself. Travel time is highly volatile when the demand approaches or exceeds the capacity. Travel time variability is associated with the level of congestion, and could represent additional costs for travelers who prefer punctual arrivals. Although many studies propose to use road pricing as a tool to capture the value of travel time (VOT) savings and to induce better road usage patterns, the role of the value of reliability (VOR) in designing road pricing schemes has rarely been studied. By using road pricing as a tool to spread out the peak demand, traffic management agencies could improve the utility of travelers who prefer punctual arrivals under traffic congestion and stochastic network conditions. Therefore, we could capture the value of travel time reliability using road pricing, which is rarely discussed in the literature. To quantify the value of travel time reliability (or reliability improvement), we need to integrate trip scheduling, endogenous traffic congestion, travel time uncertainty, and pricing strategies in one modeling framework. This paper developed such a model to capture the impact of pricing on various costs components that affect travel choices, and the role of travel time reliability in shaping departure patterns, queuing process, and the choice of optimal pricing. The model also shows the benefits of improving travel time reliability in various ways. Findings from this paper could help to expand the scope of road pricing, and to develop more comprehensive travel demand management schemes.     

A forecast air pollution model applied to a hypothetical urban road pricing scheme: An empirical study in Madrid

Reducing the air pollution from increases in traffic congestion in large cities and their surroundings is an important problem that requires changes in travel behavior. Road pricing is an effective tool for reducing air pollution, as reflected currently urban road pricing outcomes (Singapore, London, Stockholm and Milan). A survey was conducted based on establishing a hypothetical urban road pricing system in Madrid (a random sample size n = 1298). We developed a forecast air pollution model with time series analysis to evaluate the consequences of possible air pollution decreases in Madrid. Results reveal that the hypothetical road pricing for Madrid could have highly significant effects on decreasing air pollution outside of the city and in the inner city during the peak operating time periods of maximum congestion (morning peak hours from 7:00 to 10:00 and evening peak hours from 18:00 to 20:00). Furthermore, this system could have significant positive effects on a shift toward using public transport and non-motorized modes inside the hypothetical toll zone. This reveals that the system has a high capacity to motivate a decrease in air pollution and impose more sustainable behavior for public transport users.     

Road pricing: An international perspective

This paper reviews experience with road pricing in Europe and Asia. It considers the objectives of road pricing, and demonstrates that differences in objectives lead to differences in scheme design and performance. It reviews the criteria for design of road pricing systems, and the development of charging structures and technologies to meet those criteria. In particular it discusses the relative merits of pre-determined and congestion-dependent charging structures, and of off-vehicle and on-vehicle charging systems. It assesses the performance of road pricing systems to date, discusses objections to road pricing and demonstrates that the role of road pricing within a wider transport strategy and the use made of the revenue generated, will be important determinants of public acceptability. Finally it assesses the relative merits of alternative approaches to implementation and argues that these will need to pay as much regard to public acceptability as to technical performance.     

Exploring low carbon transition pathways for the UK road transport sector

This paper uses an analytical framework of multi-level and multi-phase perspectives to explore low carbon transition pathways for the UK road transport system. The work draws on the impact made by the national (UK) and regional (EU) low carbon policy instruments on the UK road sector. The results show that the transformation pathway, which is at the take-off phase on a large scale, is the only fully active pathway. The transformation is mainly characterized by the adoption of biofuel blends and hybrid electric vehicles, as well as niche technologies. For the emergence of an ideal low carbon road system in the UK, it is shown that the transformation pathway is insufficient and the likely pathway sequence to full decarbonization will be transformation-substitution-de-alignment/re-alignment. However, the dynamics that can favour a smooth process of this sequence will demand a range of active niche technologies and strong government intervention.