The issue of road pricing in Auckland has been talking about recently as a way of raising additional funding to pay for transport projects. The government has so far not been very supportive of the idea however they have said they would consider funding options once they have a transport accord agreed with the council. One of the stated benefits of road pricing is that it enables us to better manage demand. A key issue with road pricing that we’ve long suggested is that as things stand right now, far too many people don’t have good alternatives to driving.
We know that giving realistic alternatives is key to changing travel behaviour. Services like those that use the Northern Busway show that when good quality and time competitive options are provided that people will use them in droves. That’s not to say that everyone will or must use those alternatives but at least the option is there. However even when alternatives exist I wonder how many still stick to driving simply because of one type of journey they make. It’s a scenario that’s certainly happened to me a few times. I usually commute to work via PT or by cycling yet every now and then I have something on that means I need to drive – ironically it’s occasionally when I have a meeting or event related to the blog.
An article I saw a few months ago made me wonder that if we were to introduce proper road pricing (rather than just revenue gathering), whether we could use it to create a more multi-modal future. It idea came from Atlanta and a pilot programme they are running with their High Occupancy Toll (HOT) express lanes. The express lanes are lanes on the freeway that can be used by buses, T3, motorbikes and a few other vehicles for free but that also allow those that don’t qualify – e.g. single occupant vehicles – to use the lane if they pay a toll. The toll is dynamic and ranges between US.01 cents per mile and US.90 cents per mile and changes based on demand in order to keep journey times reliable i.e. if it’s busy you’ll pay more to use the lane but if it’s quiet you won’t pay much. The lanes are 16 miles in length meaning prices range from US$0.16 to US$14.40.
The segment below highlights how Atlanta are encouraging multi-modality.
The pilot program is offering northeastern metro Atlanta commuters $2 in toll credits for every transit trip — on lines with routes that include I-85 — with a maximum of $10 a month and $60 over a six-month period, reports the the Atlanta Journal-Constitution. This means that commuters willing to kick back for their commute five days a month could underwrite much of their driving the rest of the month. To get the credits, drivers have to register and connect their bus pass with the highway express lane mechanism, called the Peach Pass.
So far Auckland isn’t talking about HOT lanes or dynamic pricing but instead a toll toll charged each time you enter the motorway. It has been promoted as changing depending on the time of day but it’s not truly demand responsive like the example above is. Even so I think the overall idea could still apply here. The basic idea is that you would have your car numberplate hooked up to your HOP card and if you use a certain amount of PT you get a credit to use on the toll road for those occasional times that you really need to drive. The exact details would have to be worked out but it’s something that might take some of the concern about road pricing away. Of course rewards type system for PT would also be needed – although as AT have already been making noises about it I’d expect that to occur long before we ever had motorway tolling or road pricing.
The impact road pricing could have on patronage is enormous. Currently Auckland averages just over 50 trips per person per year on PT. If from tomorrow we could get all 1.5 million Aucklanders to on average use PT for just one day a week i.e. to work and back – it would double patronage to almost 160 million trips. Of course as it stands now there is no way the system could cope with that many extra passengers at once.
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I still say a small regional tax fuel. Its simple to apply and universal and directly related to the amount of driving one does and the real thinking can be put into how to distribute these funds fairly.
Owning and running a car is already very expensive in NZ. What pain point will you all be happy with in the anti-car threads I read on this blog site? PT simply has to prove itself. Carrots instead of sticks is the smartest way. If PT is seen to be such a bargain, efficient, timely and suited to more users then it will catch on, all by itself. Continually sticking it to car users shows no imagination whatsoever. Any fool can raise taxes and charges to suit their obsession. Maybe one day there will be lots of cyclists and some bright spark might think they take up too much room and introduce tolling and registration charges. Where does this all end? PT simply has to shine on its own.
Who said anything about raising taxes, we’ve long suggested that road proving should be brought in as revenue neutral by reducing fuel taxes by the same amount as raised by road pricing. Key is to get better use of the road resource we have and road pricing does that better than fuel tax
All those failed toll roads show that road pricing will drive (excuse the pun) behaviour. Personally I’d like to see the car licensing reduce as I have a car that sits at home that I have to spend money on to license.
What I find interesting is there are two different prices for roads. One if you want to maximise the revenue you harvest where usually you charge a low price to a lot of people. And the second is where you charge a high price to fewer people to reduce congestion. The second type is more efficient. But you need to set it up so the free flowing road is the goal not the money. The money is a happy bye product that you can then spend on other modes. In our case a toll on the CBD ring would make the most sense with the cash used to improve rail and buses.
Yes two different reasons for pricing, revenue gathering (which council are focused on) and demand management which is what they should be focused on. Disagree that a fixed cordon around the CBD is the right way to solve the issue though as likely to have perverse land use impacts and much of the congestion is not CBD related
If you just toll the motorways then drivers would simply overload other routes into the CBD and you would have a free flow motorway and everything else worse than before. Imagine the north western running well and all the other arterials in completely blocked up causing grief for local people. The advantage of tolling cordons starting with the CBD is you get a bullet proof justification for channeling the cash into public transport rather than spending it all on new and bigger motorways. Also the CBD is a major employment zone so PT can easily be used as an alternative from almost anywhere. The motorway carries other trips that are more difficult to ‘price off’. In the jargon they have different elasticities.
Cordons are distortionary as Matt says. So are motorway only tolls. The best option is therefore a comprehensive pricing system on all roads.
Every policy action is distortionary. The beauty of a cordon approach is you can target the trips with the lowest opportunity cost. Office workers in the CBD travelling every day to and from the same place suffer the lowest cost in changing mode. I hate riding PT but even I used it when I worked in the CBD. If you target just the motorways you hit people with little choice making trips that are harder to cater for with PT. That is a good goal if you want to maximise tolls as you have less effect on the quantity demanded but it isnt so smart if you are actually trying to reduce the quantity demanded and encourage substitution. Pricing every road removes distortions but adds significantly to costs.
A comprehensive system will be the most effective in reducing the need for new capital investment by managing demand across the whole network.
All CBD trips aren’t necesarilly easily substituable. Some will be, some won’t. Similarly lots of other trips will be substituable, if not via mode, then via time or even via not taking the trip at all.
There is no inherent conflict between revenue maximising and demand management. The optimal toll is a dynamic toll that is set to achieve maximum traffic flow. The price that maximises traffic flow will also maximise revenue. (A higher price would result in less vehicles using the road and because demand is elastic, the revenue will be less. A lower price would result in the demand exceeding the capacity of the road – as well as resulting in congestion, this would mean less vehicles at lower prices so less revenue).
I don’t think that is quite correct. The goal isn’t to maximise vehicles as you would set the toll at $0 to do that. The volume capacity curve isn’t straight but curves steeply so you get a choice. If you set a low toll and accept more congestion you maximise revenue but if you set a true congestion charge then you price higher to get travel times down. It depends what you want to optimise $ collected or the travel.
Even if the volume curve slopes downwards it doesnt mean you wont maximise revenue with a market clearing price that mitgates congestion.
In most monopoly markets the standard assumption is that a revenue maximising monopoly will set the price above the market clearing level to maximise revenue.
It all depends on the shape of the demand curve.
The issue is that excess delay is an externality. Any time we interact other than by price it’s an externality by definition. The volume delay function defines the impact one person has on another which at the top end is severe for the marginal trip and even at level of service E still significant (even though that might maximise flow and potentially revenue depending on opportunity costs). There is no reason to assume that the price that is sufficient to deal with the public good inefficiency is sufficient to mitigate the external effects of the marginal road user and no reason to assume a monopolist will get that right either. Any authority that brings in pricing faces a choice of what to optimise, they can price based on marginal cost to fund the road, they can price at marginal revenue to get economic profits or they can price as a true congestion charge so those who use the road pay the full cost of their trip. The third one is the way to get people to make efficient choices that reflect the impacts they have.
Your introductory comment makes the point that road pricing in Auckland is being discussed in the context of raising revenue for big projects rather than as a means of managing the network. Any sort of tax on motor vehicles could be used to raise revenue to support public transport (or new sports stadia or anything else for that matter). It will always be opposed, and rightly so. I very much support your contention that it should instead be seen as a means of managing the network. If we set prices to manage the network efficiently, we will deliver much higher benefits and we will also raise the money we need to provide the network. We will not need to fund alternatives to driving – an efficient congestion free road network will carry more cars during the peaks than travel now, while private bus operators will have the commercial incentive to invest in more vehicles.
I would hope that re-directing the discussion from what is seen in some circles as taxing motorists to pay for Len’s trainset, to road user charges to maximise network efficiency, would make finding an accord easier. I hope so, but I am not holding my breath. It needs a change of focus so that toll options are not unnecessarily constrained.
ctd …As for the Atlanta example, while I would applaud any mechanism that increases the acceptability of road pricing – and Lexus lanes in the US do seem to be reasonably successful in this regard – it does all sound a bit over-complicated. The best tolling system would be totally dynamic and would levy a charge proportional to the difference between the actual travel time and the free-flow time – with a rebate equal to the petrol tax that has been paid. This could be done on a HOT lane – it would also work on an area basis for example for the Auckland isthmus.
Do you mean tolling the motorway section that tings the CBD, or the on-ramps and off-ramps that lead to the CBD.
The reason I ask is that the through traffic often has little alternative, however it could be argued that CBD bound SOV traffic has the best alternatives and probably will do into the future.
Any tolling would need to be clear in it’s stated aim and have some form of measurement to ensure it was meeting it’s stated goal, otherwise the changes would need to be rolled back, in much the same way as a failed experiment.
Judging by the photo supplied this appears to be an ineffective option for reducing road reliance! Despite the cropping that motorway looks jam packed.
I also fail to see why motorway travel should be the sole domain of those who are able to absorb extra charges.
They only have one lane tolled, the rest are normal motorway lanes
Look at the before and after photos from this TED talk on the Stockholm congestion pricing:
http://www.ted.com/talks/jonas_eliasson_how_to_solve_traffic_jams?language=en
I don’t have a source to cite, but from memory, the main users of the touted “Lexus Lanes” were the less advantaged people who had to hold down two or three jobs and were therefore time poor. They were prepared to pay the premium to be able to get to their next job on time. A perverse result?
Time variable charging across all lanes will do much more to increase network efficiency than HOT lanes. Perhaps one really expensive lane would work out well for commercial traffic; their time being much more valuable than most of the other 77% private vehicles that cause the congestion….?
I doubt there is much that we really want to copy from Atalanta’s transport systems judging by the outcomes!
I had a conversation with a senior NZTA figure who said they prefers tolling off-ramps only. It wasn’t clear if they meant selected ones or all those in the Auckland region. So this would mean that those who drive through Auckland, or whose journey starts in Auckland but is completed elsewhere remain un-tolled. Quite odd I thought. Does this mean they simply want those making intra-region journeys off the network? And/or that they see longer interregional trips as already funded or to be especially incentivised? Or is it just that old traffic engineer dislike of all entering and exiting the system [friction!] because of the disturbance to flow?
Perhaps this would lead to exits just outside the boundary of the charging area getting over worked, along with local roads…? Really not sure of this one.
As Matt points out above, the worst outcome would be if this gets utilised as an attempt to slow CBD growth and encourage sprawl by only charging at CBD exit-ramps.
I favour charging off ramps where the streets are congested. The goal is to produce a congestion free network. Parking charges should also be aimed at making sure that short term parking is available for those doing business with the businesses not those running the business. All AC parking aimed to have 15% empty spaces by increasing the charges after the second hour to maintain the 15% vacancy rate.
Further we should reduce the motorway speed limt to ensure the vehicles travel closer with safety and smooth the flow.
have you driven on an Auckland motorway Ted? Few vehicles travel anywhere near the limit and random lane changing is the norm.
Ted, motorways are already over subscribed. Speed limits of any sort are pretty much irrelevant most days. Intelligent works are called for instead to raise actual real speeds and improve flows. One item in all motorists craws is the ridiculous 3 -2-3 lanes both ways at Mt Wellington, which stalls all vehicles with the flow on effect of a crawl from that point on, impacting all those joining or leaving heading cityward especially from that point on. There are some simply dumb designs made regarding flows.
this view is because they seem to have a bias towards the throigh function over the access function, it sticks on their throats that Aucklanders view the motorways as big arterials rather than as the link between Hamilton and Whangarei
Yes couldn’t a case be made for the reverse? Taxing those that use our region to get somewhere else? Would work even better for the Waikato say; charge those Aucklanders heading south and not helping their economy at all…?
Regional fuel taxes are a simple and efficient way of helping to manage demand on the network because it is user pays and won’t distort the road network by moving congestion from the motorway to the arterial roads. The problem with road pricing is the significant administration costs of running the system. For example, in London the administration costs are nearly100 million pounds p.a and revenue is just over 200 million pounds p.a.
http://roadpricing.blogspot.co.nz/2013/02/10-years-of-londons-congestion-charge.html.
From a political perspective, I don’t see Aucklanders being too happy knowing that a significant portion of the road pricing that they choose to pay being taken up by administration costs (I’m thinking how the media has whipped up a frenzy about the number of staff at Auckland Council and the yearly salary expenditure).
The London scheme is to cut congestion, not make money. The fact it is nicely profitable is a bonus.
Privatize the motorways instead so the government can put money save towards public transport
How about local Councils simply get to charge Rates on all that land use? After all the gov adds gst to the Council’s Transport Levy. Good for the goose….