A novel peer-to-peer congestion pricing marketplace enabled by vehicle-automation

This paper proposes a novel concept of congestion pricing based on voluntary peer-to-peer exchange of money between motorists in exchange for one ceding priority to another in a traffic stream. While in the classical congestion charging paradigm payments are compulsory and flow only towards the system operator, in the proposed marketplace participation is voluntary and motorists directly compensate each other. A particular motorist may find that he/she is a ‘payer’ at certain points in a given journey and a ‘payee’ at others.Humans would not be expected to successfully seek, negotiate and execute a continuous series of peer-to-peer trades involving micro-payments while also handling the cognitively-demanding task of driving; real-world implementation will therefore require vehicles operating under fully-automated control in both the longitudinal and lateral dimensions during the time periods that they seek and engage in trades. The automated vehicle control algorithms must be sufficiently intelligent and adaptable to enable alternative maneuvers on short timescales, given the inherent uncertainty of whether or not a potential trade will in fact be executed. The peer-to-peer trading would be executed algorithmically, subject to strategic-level guidance given by a vehicle’s occupant(s) regarding the occupant’s relative valuation of money and priority in the traffic stream.In this paper we detail the prospective marketplace and present a simple simulation model to expose its properties. We show that the proposed peer-to-peer marketplace could lead to both desirable and undesirable outcomes; which of these would be predominant is a matter requiring empirical study. The paper concludes with a discussion of further research needs to refine and develop these concepts into practice.     

Land Transport Policy and Public Transport in Singapore

Singapore has a sophisticated and efficient system of land transport to serve a growing demand for transportation. Constrained by limited space, a comprehensive set of land transport policies has been in place to balance the growth in transport demand and the effectiveness and efficiency of the land transport system. A multi-pronged approach has been used to achieve the objective of a world-class transportation system. These include integration of urban and transport planning, expansion of the road network and improvement of the transport infrastructure, harnessing the latest technology in network and traffic management, managing vehicle ownership and usage, and improvement and regulations of public transport (Ministry of Transport (MOT) (2003) Policy and Regulations, Land Transport, Available: www.mot.gov.sg, Date of Access: 15 September 2003). Singapore was the first country in the world to introduce various new techniques, notably the Area License Scheme (ALS) in 1975 and the Vehicle Quota System (VQS) in 1990. An Electronic Road Pricing (ERP) system replaced the ALS in 1998 to take the role of congestion management, the experience of which has also drawn particular attention from many large cities in the world. In 2003, the world’s first and only fully automatic heavy rail Mass Rapid Transit system was opened to the public, marking a new chapter in Singapore’s innovative approach to solving its land transport problem. This paper reviews the land transport policy implemented in Singapore and pays special emphasis to its public transportation systems.     

Distributional impacts of road pricing: The truth behind the myth

This paper shows that road pricing can be regressive, progressive or neutral, and refutes the generalised idea that road pricing is always regressive. The potential distributional impacts of a road pricing scheme are assessed in three English towns. It is found that impacts are town specific and depend on where people live, where people work and what mode of transport they use to go to work. Initial impacts may be progressive even before any compensation scheme for losers is taken into account. When the situation before the scheme is implemented is such that majority of drivers entering the area where the scheme would operate come from households with incomes above the average, it can be expected that, once the scheme is implemented, these drivers coming from rich households will continue to cross the cordon and will be prepared to pay the charge. In such a case the overall effect will be that on average, rich people will pay the toll and poor people will not.     

On the relationship between airport pricing models

Airport pricing papers can be divided into two approaches. In the traditional approach the demand for airport services depends on airport charges and on congestion costs of both passengers and airlines; the airline market is not formally modeled. In the vertical-structure approach instead, airports provide an input for an airline oligopoly and it is the equilibrium of this downstream market which determines the airports’ demand. We prove, analytically, that the traditional approach to airport pricing is valid if air carriers have no market power, i.e. airlines are atomistic or they behave as price takers (perfect competition) and have constant marginal operational costs. When carriers have market power, this approach may result in a surplus measure that falls short of giving a true measure of social surplus. Furthermore, its use prescribes a traffic level that is, for given capacity, smaller than the socially optimal level. When carriers have market power and consequently both airports and airlines behave strategically, a vertical-structure approach appears a more reasonable approach to airport pricing issues.     

Understanding public response to a congestion charge: A random-effects ordered logit approach

Public acceptance is consistently listed as having an enormous impact on the implementation and success of a congestion charge scheme. This paper investigates public acceptance of such a scheme in Australia. Surveys were conducted in Brisbane and Melbourne, the two fastest growing Australian cities. Using an ordered logit modeling approach, the survey data including stated preferences were analyzed to pinpoint the important factors influencing people’s attitudes to a congestion charge and, in turn, to their transport mode choices. To accommodate the nature of, and to account for the resulting heterogeneity of the panel data, random effects were considered in the models. As expected, this study found that the amount of the congestion charge and the financial benefits of implementing it have a significant influence on respondents’ support for the charge and on the likelihood of their taking a bus to city areas. However, respondents’ current primary transport mode for travelling to the city areas has a more pronounced impact. Meanwhile, respondents’ perceptions of the congestion charge’s role in protecting the environment by reducing vehicle emissions, and of the extent to which the charge would mean that they travelled less frequently to the city for shopping or entertainment, also have a significant impact on their level of support for its implementation. We also found and explained notable differences across two cities. Finally, findings from this study have been fully discussed in relation to the literature.     

Nonlinear pricing on private roads with congestion and toll collection costs

Nonlinear pricing (a form of second-degree price discrimination) is widely used in transportation and other industries but it has been largely overlooked in the road-pricing literature. This paper explores the incentives for a profit-maximizing toll-road operator to adopt some simple nonlinear pricing schemes when there is congestion and collecting tolls is costly. Users are assumed to differ in their demands to use the road. Regardless of the severity of congestion, an access fee is always profitable to implement either as part of a two-part tariff or as an alternative to paying a toll. Use of access fees for profit maximization can increase or decrease welfare relative to usage-only pricing for profit maximization. Hence a ban on access fees could reduce welfare.     

Managing network mobility with tradable credits

A system of tradable travel credits is explored in a general network with homogeneous travelers. A social planner is assumed to initially distribute a certain number of travel credits to all eligible travelers, and then there are link-specific charges to travelers using that link. Free trading of credits among travelers is assumed. For a given credit distribution and credit charging scheme, the existence of a unique equilibrium link flow pattern is demonstrated with either fixed or elastic demand. It can be obtained by solving a standard traffic equilibrium model subject to a total credit consumption constraint. The credit price at equilibrium in the trading market is also conditionally unique. The appropriate distribution of credits among travelers and correct selection of link-specific rates is shown to lead to the most desirable network flow patterns in a revenue-neutral manner. Social optimum, Pareto-improving and revenue-neutral, and side-constrained traffic flow patterns are investigated.     

Modelling the effects of road pricing on traffic using ERP traffic data

Singapore’s Electronic Road Pricing (ERP) system involves time-variable charges which are intended to spread the morning traffic peak. The charges are revised every three months and thus induce regular motorists to re-think their travel decisions. ERP traffic data, captured by the system, provides a valuable source of information for studying motorists’ travel behaviour. This paper proposes a new modelling methodology for using these data to forecast short-term impacts of rate adjustment on peak period traffic volumes. Separate models are developed for different categories of vehicles which are segmented according to their demand elasticity with respect to road pricing. A method is proposed for estimating the maximum likelihood value of preferred arrival time (PAT) for each vehicle’s arrivals at a particular ERP gantry under different charging conditions. Iterative procedures are used in both model calibration and application. The proposed approach was tested using traffic datasets recorded in 2003 at a gantry located on Singapore’s Central Expressway (CTE). The model calibration and validation show satisfactory results.     

Transaction costs and tradable mobility credits

Artificial markets for mobility credits have been proposed as an alternative to conventional congestion pricing schemes. This paper examines the effects of transaction costs on two types of markets: an auction market and a negotiated market. In an auction market, users purchase all of the needed mobility credits through a competitive bidding process. In a negotiated market, the users initially receive certain amount of mobility credits from the government and trade with each other through negotiation to fulfill their needs. We assume that a brokerage service is built in both markets to facilitate transactions and accordingly, the users have to pay a commission fee proportional to the value of trade. The users are also given the option to purchase credits from the government if for some reasons they cannot use or wish to avoid the markets. Our analyses suggest that the auction market can achieve the desired equilibrium allocation of mobility credits as long as the government sets its price properly and the unit transaction cost is lower than the price that the market would reach in absence of transaction costs. However, in the negotiated market, transaction costs could divert the system from the desired equilibrium regardless of their magnitude. More importantly, the initial allocation of mobility credits may affect the final equilibrium even when marginal transaction costs are constant.     

Labour market effects in assessing the costs and benefits of road pricing

Traffic congestion and the policies used to combat it have been studied extensively. One area which has received less attention is the secondary impacts of such policies. This paper uses a micro-simulation framework to study the effect on labour markets of road pricing. The key benefit of our chosen methodology is that it allows a simultaneous consideration of both commuting and migration decisions. We show that while welfare gains can be achieved through optimal charging, this may come at the price of decreased integration. This may manifest through either greater centralisation tendencies in population, or through unemployment disparities between regions.