As I briefly mentioned last week, I think road pricing is a discussion that’s only going to increase in Auckland in the future. Len Brown has been talking about it for some time and Mayoral Candidate Phil Goff has already said he supports some form of road charging. We also know that road pricing is being considered as part of the ATAP process. With this post I wanted to look into it a bit more.

At a high level there are two main goals in the push behind road pricing. One is a desire to manage demand for roads thereby improving their efficiency, which can deliver a mix of benefits such as reducing congestion and potentially the need for expensive and increasingly contentious projects. In this situation the aim is to use road pricing tools to change individuals behaviour. The second main goal is a desire to use road pricing as tool to supplement fuel taxes and/or raise additional money which can then be fed back to spend on more transport projects. In this situation the aim is to collect as much money as cheaply as possible.

The ATAP process is looking at road pricing from a demand management point of view while the mayor’s Consensus Building Group and subsequent Long Term Plan discussion were examples of a revenue gathering focus. In the recent discussion the tool of choice for revenue gathering has been motorway tolling where people are charged for entering the motorway but there are other solutions too:

  • Cordon pricing charges people for driving past a certain point and Auckland with it’s natural and man-made boundaries is almost uniquely set up for that.
  • A slightly more advanced version and like what happens in London is an area charge whereby there is a cordon inside of which are a number of checkpoints to pick up trips made within the cordon.

As an example the two maps below from a report into road pricing in Auckland from 2008 show the difference – in this case using a double cordon.

Road Pricing options

There appear to be a are a couple of major problems with many of these solutions.

  • Tolling just the motorways opens up the issue of diversion where drivers shift to non-motorway routes – as has already been seen without road pricing and if motorway tolling was turned on I imagine it would only amplify.
  • Cordons can have significant boundary effects, in the example above those living in the inner suburbs, the ones who might have the most alternative options, pay nothing for driving within the area but those further out will pay for travelling over a line.
  • The area charging is a little fairer on the boundary effects due to the scattered checkpoints to pick up on inter-area travel but as we also know, congestion isn’t limited to the city centre and a central area charge won’t stop Manukau from clogging up.

One of the problems with all of these technologies is they can be very expensive to install with multiple sites needing to be set up and maintained to capture the details of all passing vehicles. As a result, collection costs are normally quite high. In the case of the Northern Gateway Toll Road collection costs usually eat up 25-30% of the toll collected and reports indicate similar levels would be expected in these situations. In addition to just how revenue is collected there is also the issue of just how much is charged. Flat tolls can still leave roads busy and congested at peak times.

The holy grail of road pricing these days appears to be to use GPS to deliver dynamic road pricing. With it, people can be charged for how far they travel, where they travel, when they travel and just how busy the roads they travel on are. If the roads you want to travel on are busy then it will cost you more to join in and travel at the same time.

Interestingly some places are already starting to look at using GPS based road pricing to better manage their road systems. Singapore has been at the forefront of road pricing and was one of the first cities to implement it. They currently use a network of around 80 gantries located around the city that record passing vehicles.

Singapore ERP Gantry
An ERP gantry in Singapore

Just over a month ago, Singapore announced it had awarded a tender to replace their current gantry set-up with a GPS based one in 2020. The new system will cost about NZ $600 million and the cost and difficulty of maintaining the current system was listed as one of the reasons for doing so.

This next-generation ERP system will allow for more flexibility in managing traffic congestion through distance-based road pricing, where motorists are charged according to the distance travelled on congested roads, which would be fairer to motorists. It will also be able to overcome the constraints of physical gantries, which are costly and take up land space. In addition, off-peak car users can look forward to new policies which LTA is considering, which may allow them to pay only for using their vehicles for short periods rather than the whole day, or for using them only on uncongested roads. A new On-Board Unit (OBU) will replace the existing In-Vehicle Unit (IU), which can also be used to deliver additional services to motorists. For example, LTA will be able to disseminate traffic advisories through the OBU. The OBU can also be used to pay for parking, checkpoint tolls, and usage of off-peak cars electronically.

In my view, if we’re going to go to the cost and trouble of implementing a road pricing solution – and on the surface at least there seems a valid case to do so – it seems we might a swell skip the gantry phase and move straight to a GPS solution

Another interesting recent system is OReGO in Oregon. While not time of use pricing, it does introduce distance based pricing using a small device that plugs in most relatively modern vehicles. The basic version only charges based on distance and rebates users for the amount of fuel taxes they would have paid however 3rd parties offer GPS tracking and other features. It wouldn’t be a stretch to have versions in the future which enable time of day pricing.

One of the challenges of road pricing is whether it’s only needed in Auckland of if the solution is something that needs to be rolled out to the entire country. OReGO also gives an idea as to how GPS based road pricing could be implemented in NZ – this is also based on a post by Stu back in 2011.

  1. People can get approved GPS tracking devices from AT/NZTA or third parties to install in their cars.  These devices record time/distance/location, for which users pay differential rates.
  2. Users that sign up to the time-of-use pricing scheme would then be exempt from fuel taxes (there would need to be some verification and/or refund process).
  3. People who did not want to participate in the scheme would remain with the current system.  So fuel taxes would operate alongside the GPS scheme but prices would be adjusted over time to encourage the use of GPS tracking.

A voluntary system might not have the immediate impacts on congestion as turning on motorway tolls but ultimately it’s an approach that be required to get public buy in.

What are your thoughts on road pricing and would you sign up it (for those times you’re not on PT or walking/cycling).

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  1. I buy a GPS unit, install it in my car, then put some sort of EM-opaque material around it – what happens?

    1. You get caught when you go get a warrant and the mechanic compares the odometer reading to your gps tracked kilometres.

      Similar to how RUCs are enforced.

      1. RUCs compared by checking the odometer vs. the in-wheel odometer right?
        How would the mechanic know whether I was opted-in or out – vs. a heavy vehicle that can’t opt out?

        i.e. opt-in, cover GPS, remove GPS when visiting mechanic

        (without turning it into a police state)

        1. There would be a database of those who opted in – perhaps vua a different coloured licence label. That doesnt seem difficult to get around.

        2. All odometer readings are always recorded at every warrant already. You simply keep doing that.

  2. It would work in Singapore where the rules to even get a car on the road are strict and enforced rigourously.

    Here in NZ?

    How would that work, what happens if I refuse to have a GPS device or OBU or whatever its called in my car?

    You’d still need gantries to take photos of the offenders, so how is that getting away from overhead gantries and related expenses?

    Or are we just going to treat it like a giant HOP implementation, and target the 90% or so who will follow the rules and let the other 10% freeload forever?

    1. I think Matt’s point is that if you can come up with a workable scheme that allows people to choose which system to use (flat fuel tax or variable gps based pricing) then the issue you raise goes away.

      You don’t want a gps in your car (for whatever reason)? Fine, you’re on the high but flat per litre fuel tax system.

      Those who do opt for the variable pricing will, however, benefit from lower average charges.

      1. I agree that Matts point is “if” you can come with a workable scheme.
        And I mean workable in a NZ context.
        i.e. that cost effective, and allows for a fleet that is average age of 13+ years and getting older and for which many of those older cars are not warranted or registered, and the last official owner e.g. for chasing up unpaid fines/bills etc was 3 or more owners ago.

        Yeah if you can and also cover off the other issues with it then sure lets have it ASAP.

        But I reckon, the politicians, lawyers and planners still be having this discussion still in 15+ years – with no further progress on getting a working solution to the actual problem that road pricing is trying to solve any closer than it is today.

        1. Greg N –

          If 15 years of discussion is required to help to identify the optimal features of such a scheme then I don’t see what the problem is? Personally don’t have an issue with long public debates on important issues, much like NZ has had on super over the last 10-20 years. Sometimes a good informed and even lengthy public conversation is exactly what is needed. It’s something that countries like the Netherlands and Sweden seem to specialize in: Rather than gung-ho adoption of newfangled ideas, they sit back and have a good ol’d chin-wag. Arguably the recent flag referendum is an example of what happens when there is insufficient allowance for substantive public debate prior to a decision being made: My gut feeling is that most NZers wanted to change the flag, but had some issues with proposals/process.

          The benefits of such debates are especially useful when the alternatives are 1) forcing rapid change on people, e.g. road pricing and/or 2) passively accepting monstrously inefficient outcomes, e.g. current transport pricing. Personally in this context an ongoing debate about road pricing, and how it might be implemented would be a good thing! And indeed there’s lots of gnarly issues to work through:
          – Technology
          – Optional versus mandatory
          – Management of revenues
          – Distributional impacts (and how adverse impacts can be mitigated)

          Hell even the risk of such a scheme being implemented might encourage people and firms to make more efficient land use and transport decisions.

  3. Some sort of alternative is inevitable to fuel tax as we move to electric powered vehicles. And it can’t, therefore, be a partial system, only charging for some geographies and not others. Certainly different rates can be set at different places and times but it can’t be as clumsy as a cordon, or just the motorways. So it won’t just be Auckland, and there will have to be some sort of in-vehicle device fitted to all cars in the country, which of of course is already the case with all trucks.

    There will be privacy concerns, but those will simply have to be accepted as the cost of driving. It will also inevitably be more expensive to collect than fuel tax which is an extremely easy and cheap to run system.

    The great opportunity, as Matt points out, is the chance to change the rate by the time and place of travel; congestion charging, paying more to cause congestion, and little or nothing at other times and places.

    Other cities, for example Stockholm, have found as much as 20% of trips simply disappear once charged for even at the relatively low sum of 1 or 2 euros. That is huge, and has immediate benefits for the drivers that remain and the pressure on the networks to be constantly and expensively expanded.

    1. Electric cars will just pay RUC once the current RUC waiver subsidy expires. No need for a complicated extra device, electric cars will have odometers and pay RUC at $6.20/100km just like diesel cars.

    2. I like the idea of privatising the roading system, it would fix a whole lot of issues in this country.
      The government don’t supply power, food, housing (well they are trying not to) – why do they provide roads?

        1. But if you think roads should be public, then you must think power, communications, housing, etc should all be public too? Or is there some kind of difference I’m missing?

        2. Air and water are not excludable and arguably non-rivalrous to a degree (at least in NZ), hence they tend to be managed as public goods.

          Motorized transport is both rivalrous and excludable, so wouldn’t seem to qualify as a good that should be publicly provided.

          The main barrier to privatization of transport, however, is that transport networks and services experience economies of scale/density. This means that under private ownership you would be expected to see monopolistic/oligopolistic market structures emerging, which in turn would result in market power and inefficient (high) prices.

          I’d argue that public ownership of transport networks (ala Transpower) is a good response. Provided that private ownership, e.g. private roads and transport companies, are able to provide services where/when it is efficient for them to do so.

          But I would like to see a greater distance between NZTA and government so as to reduce political interference and improve price signals. Maybe an SOE for transport would be a good approach …

  4. Wouldn’t a swiss style vignette be an easier, cheaper method? If you wish to drive in the inner city/isthmus you need to buy a sticker say $400 a year, $100 a month or $10 a day, with the cost of not having one greatly outweigh the price of having one say $1000 dollars with a third offence impoundment/sale of the vehicle. This would also mean that people that live and work in the inner city/isthmus aren’t unfairly advantaged

    You could even set it up so police cameras/red light cameras would recognize if you car has one.

    The problem with GPS and gantries is that they are so expensive as they try to catch everyone, where in practice you just have to ensure compliance for most people.

    1. See comments above: i think its fairly obvious that if we opt for road pricing then it’ll 1) be a gps based system and 2) optional, i.e. will run in parallel with fuel tax system. Similar to what RUC does now except the gos won’t just record kms driven, but kms driven in certain parts of the network in peak times.

      I think the sticker system sounds regressive, as it charges people per vehicle rather than per km driven.

      1. Yes but the cost of the GPS system is huge singapore is looking at $600,000,000 according to the above and Auckland has nearly twice the number of cars. Gantries are also hugely expensive and an eye sore. Sticker system, easy and cheap, not perfect but no system is.

    2. Because you want people to pay for the marginal cost of their decision to go on a congested road. An annual sticker doesn’t do that. Once you have paid for a sticker then its an all you can eat deal and there is just no transport benefit to that.

    3. One of the benefits of a cordon or area system is you can allocate the funds straight back to that area through bus subsidies or building an LRT line. It has to be easier to sell a fee if people know their own area/neighbours/family benefit.

  5. Ultimately a congestion clearing road price system is where we want to get to. The question is – is there an incremental path that gets us there or so we need to make a quantum leap. The issue with road pricing at levels below that required to prevent congestion is you get a lot of the cost without the main benefit.

    I could possibly see a voluntary system working by having people who can change their behaviour and save money take it up (ie by becoming an off peak only driver). This “peeling off” of the low cost users would push up the price of the petrol tax or other incumbent system (based on the idea that the incumbent system chargs the average cost for the group of people using it). The end result is only heavy peak time users end up on the incumbent system which is by then expensive at which point the end result is just about acheived.

    I dont know if it could work like that, but I cant see a fatal flaw?

    1. Define ‘we’? I’m sure there are a lot of poor people in Auckland who can’t pay more for their commute to work – do they wan’t congestion charging?
      Does congestion charging stop ‘less important trips’ or ‘less important people’?

      1. 1. It will make PT travel way better for lots of people. 2. It will make commuting cheaper for off peak travellers 3. We can compensate poor people via welfare system with surplus.

        1. It will only make PT better if the purpose is for revenue grabbing. If the purpose is solely to incentivise off peak travel (as has been suggested), then the profit should be refunded in terms of lower fuel taxes.

        2. PT will be massively improved because buses wont get affected by congestion, and mode shift will enable better frequency and coverage without additional subsidy.

    2. Fatal flaw with any of these pricing approaches is how they disadvantage poorer people who cannot avoid peak or longer-distance driving from the sprawl suburbs they can afford to live in to the work locations they have no control of, along routes with weak public transit options.

      1. How large is that group? They can be compensated if necessary as there will be a surplus due to massive efficiency gains. As noted above lits of poor people will be better off

        1. Id disagree with that. Remember that PT will improve dramatically with road pricing. Overall the is a net gain so even at an extreme wnd you couldnt have anywhere near half the pop being disadvantaged.

      2. But Sacha the current system imposes high cost on those least able to afford it, both by mandating car ownership and by enforcing sprawl which reduces access. Road pricing does indeed need to be designed to help address these inequalities, and can help especially in the necessary improvement in the alternatives.

      3. Sacha did you read the post? I’m not sure how it can be a fatal flaw of a voluntary scheme, given that optional road pricing gives people the option to continue paying as they do now.

        Or, if they’re better off they can switch to GPS based pricing.

  6. You could take a hybrid approach and mandate that all electric vehicles must have GPS unit for RUC collection and pricing, even if portions are zero rated. Next set a a date and transition time that all diesel vehicles move to GPS to replace hub odometers, this would also then allow validation of compliance for heavy loads vehicles and potentially off peak RUC for freight. In time you would mandate all new registrations to NZ must have a GPS.

    1. Because there is absolutely zero possibility that collecting the locations of cars in a central database could ever be used for any purpose other than congestion charging, right?

      Day One: 500 warrants from NZ police arrive

      1. So what? You use your vehicle on public infrastructure and the authorities get the ability to know where you’re going. Do you actually think they don’t already?

        It would be great if the GPS data was used for other purposes such as enforcing speed limits. A very effective way of doing it.

        1. Sending out millions of speeding tickets every day would make NZ Post hugely profitable, but you would need a hugely powerful computer system to handle the volume if you pinged every time the GPS triggered an overspeed alert (who amongst us can guarantee they never exceed the speed limit accelerating away from speed bumps or traffic lights). Mind you, having the GPS set the speed on your adaptive cruise control would make life a little bit easier. 🙂

        2. Except that the police already over-enforce speed and under-enforce other types of road crime.

          Funny how the modern generation have absolutely no qualms handing over power to the arms of the state. Those a bit older realise what can happen. 2 legs bad. 4 legs good.

        3. I don’t think I count as the “modern generation”. But in any case, the idea of there being a slippery slope from traffic monitoring towards a police state is utter nonsense. Monstrous oppressive regimes don’t happen as a result of having the tools of surveillance and control available to them, they happen because of having monstrous oppressive leaders that use whatever tools they have, and if they don’t have them, get them.

          In our democratic society where our leaders are accountable at the ballot box, the only way that the monitoring and control apparatus causes you problems is when you break the law. Fair enough.

        4. Actually Nick, the NZ Police are already well on their way down the slippery slope (partially/primarily) as a result of their over-zealous enforcement of speed compared to any other form of road “crime” and especially considering that resolution rates of actual crime such as burglary are below 10%!!!
          The general public in NZ has a whole lot less respect for the Police than they did a decade ago which itself was down from where it was prior to that.

        5. I don’t have a problem with GPS monitoring of vehicles, but again this would be an advantage of deploying an optional GPS based road pricing scheme: People who are concerned with privacy can opt for the current fuel tax system.

      2. “Because there is absolutely zero possibility that collecting the locations of cars in a central database could ever be used for any purpose other than congestion charging, right?”

        Doesn’t necessarily have to be a centralised approach. Decentralised models do exist. Indeed, they may even be the more useful approach in this situation.

  7. I doubt there are a whole lot of people making worthless trips in congested traffic – wouldn’t they just do it off peak when it will be much quicker.
    All congestion charging will do is force poor people to take alternatives such as public transport – but our PT system is hardly great for a lot of people, which would mean it will probably make poor people take even longer to get to work. But at least the rich will get to work quicker!

    1. No-one ever makes worthless trips, clearly they always find some worth in it. There are a lot of people making low value trips however, for example all parents dropping their children off to school.

      1. I doubt they are going to stop dropping their little angel off at Epsom Grammar because of a congestion charge. It will just be the poor driving to work that will be affected.

        1. Its very easy to dismiss something by pulling out a far extreme as going “look,a billionaire being chauffeured in a porche won’t change so none of it will every do anything”. It’s also just as easy to dismiss something with the other extreme by saying “its only the poor that you’re going to shove onto the streets begging for scraps”.

          The reality is most Aucklanders are neither so wealthy that they can completely disregard transport costs, nor so poor that their lives will be ruined if they have to pay for the problems they create. The middle 80% of the population is both price sensitive and the main cause of the problem.

        2. Easier solution… as GPS will record start:finish, just turn off the charges for anybody coming from a poor neighbourhood and double it for people from Remuera etc.

        3. EC you can’t assume that everyone who lives in Remuera is rich and vice versa.

          A cursory analysis of census data shows that low-income households can be found all other Auckland, in every suburb. Especially the older inner city suburbs which have a historical legacy of a more diverse housing stock, such as apartments, units, townhouses etc.

          Much better would be to charge the same price to everyone, but then develop policies to redistribute revenue raised in a progressive way, e.g. you could offer a rebate scheme where people on low incomes can claim their road charges back. Similar to how the rates rebate scheme works now.

        4. Lol. I drop my kid at school (low decile btw-hold your judgement). Why? Because she is 7 (cant train or bus on her own) can’t ride her bike (Aucklanders can’t drive), so she gets dropped on my way to work. Would I love to drop her using the train/bus etc? Yes, but I can’t because there are no trains or buses that go near my work (unless I spend 3 hrs p day commuting).

          So, I reckon you should consider that many/most parents drop their kids at school because it is the only thing that works in the backwards city!

        5. I walked to school when I was 7, like almost every other child. But that was in the days when kids went to their local school, and walked there together.

        6. My children attend a school with near 100% in zone attendance. That zone is more or less a 3km circle around the school (ie the longest walk would be 1.5km). There is a constant train smash of cars outside school at the beginning and end of day. How does that fit in with your ‘So, I reckon you should consider that many/most parents drop their kids at school because it is the only thing that works in the backwards city!’

        7. Bryan, it’s hard for kids to walk these days. My daughter would have to cross a major road that has no pedestrian crossing. Also, just last year a class mate if hers was struck by a car as she crossed on green (different side of school). Sorry but as a parent I truly believe that a 7 year old is not equipt with the skills to navigate Auckland drivers in this day and age.

        8. Conan it works because these days Aucklanders can’t drive and you’d be crazy to let a child anywhere near Auckland traffic, on foot or otherwise. Until (i might add) your child is cognitively developed enough to approach all traffic in a defensive manner.

        9. I disagree, my eldest daughter has been walking around the neighbourhood (by herself!) since she was 8 and she’s still with us. Sure there is a risk, but there’s also a risk attached to being driven everywhere. We’ve weighed up those risks and decided we are fine with them on balance.

          However the 6yo is too young to be aware of the road fully, so she takes the walking school bus to school.

    2. That is the inherent problem. A rich dude might get little extra utility from driving and a poor working single mum might get a lot of utility from driving but a cash toll of any form will price out the poor person first. A toll based on money can be inefficient. Money is a normal good so has diminishing marginal utility. The only answer I see to it is to try use the money raised from tolls in a way that benefits poorer people in a progressive way. But even that doesn’t address the issue at an individual level. Maybe the answer is use the money as an extra transfer payment kind of like working for families.

  8. Singaporeans know ERP as ‘everyday robbing people.’ They laugh but no one really complains about it. It should be noted that even with ERP they still have really, really bad traffic, I shudder to think how bad it would be without the rest of their network and vehicle costs. But they have amazing public transport that only really started to be built in the 1990’s – Mass Rapid Transit. Maybe tolling system could kickstart rapid transit? But a lot of people openly against charging motorists for PT works.

    How would this sort of system effect someone driving from Hamilton to Northland? Do they avoid both the regional fuel tax and the gps system?

  9. I can’t support road pricing unless its regressive-tax impacts are fixed. By which I mean: given that working people increasingly can’t afford to live on the Isthmus – and the local councillors want to keep it that way, thanks Mike and Cathy – road pricing is a tax on people who can’t afford to live near where they work; and a tax on people from the outer suburbs visiting the isthmus, which of course makes a nonsense of wanting to turn away from the bad old days of sprawl and decentralization. But can’t those people use PT? Well no, if you’re a night-cleaner in the CBD or Newmarket who has to commute in from Manurewa or Glen Eden.

    1. I would have thought the current situation where these working people who can’t afford to live on the isthmus thus travel further to their shift work jobs have to pay more in fuel tax than someone commuting from Remuera to the City on peak hour, this seems more regressive to me.

    2. If it is applied as a congestion charge then there would be no reason to charge it at night or very early in the morning. You would charge most at the times when PT is at its best. The problem is proponents always focus on what they want to fund with it rather than keeping it purely as a means to control traffic demand. There is no reason the money raised couldn’t be used to fund improved public transport, (or even school lunches, or doctors or a tax break for low waged people, but I guess it wouldn’t.) The important point is to price out of their cars the people who have the least to lose by changing mode.

  10. Thanks for the piece Matt, a good introduction.
    Time-of-day road pricing (ie congestion pricing) is the only sustainable way to avoid congestion. The $600 million for Singapore sounds a lot, but compare it with the avoidable cost of congestion – which Ian Wallis and I estimated a few years back at $250 million a year – and it looks like a good investment. Compare it with the cost of building Waterview or the CRL where the decongestion effects will be a lot more limited. Besides, building motorways and subsidising public transport encourage people to commute long distances. Charging for road use encourages people to take the real cost of transport into account in their decisions.
    The best congestion pricing scheme would be to charge for excess minutes – the difference between the actual travel time and the free flow time, with the cost per excess minute set so that the roads operate close to maximum flow (the criteria used in Singapore). This enables the motorist to seek out the less congested routes or times of day. It comes the closest to the theoretically optimum charge. With GPS systems it is already possible to get forward estimates of the travel time so people could make informed decisions before they depart.
    Of course cordon systems do work. They are just that much cruder and thus not as effective. A time based system could be implemented relatively cheaply using a credit card and a Uber taxi style app. However such a system would probably need to be ‘opt-in’. What might work and be relatively inexpensive to implement is a very simple cordon pricing scheme based on daily or monthly area licenses together with a time based opt-in system. The rates would be set so that there would be an expected benefit from opting in. Enforcement should be self-funding.
    I believe most opposition to congestion pricing arises because it is seen as an additional tax. New Zealanders by and large already pay for their roads – why should they pay more? The answer is that they shouldn’t. But at the moment there is a big subsidy from ordinary motorists to those who travel in metropolitan areas in the peak. Ideally the revenue from congestion pricing would be used to reduce the fuel levy and the rates burden for people living in the congestion-pricing area. That way the little old ladies and the South Auckland workers will actually be better off.

  11. I respectfully disagree. Congestion pricing is crude and expensive. Is it worth it? Congestion is a deterrent to travelling by car. Alleviating congestion for cars increases the incentive to use individual transport rather than shared transient. Surely, the most effective method would be to increase the price of petrol, combined _with_ greater congestion for single person vehicles?

        1. And in Stockholm a small charge, varying between 10 – 20 SEK [NZD 1.79-3.58], was sufficient to make 20% of traffic disappear. Not theory but practice:

          ‘Congestion charges were introduced in Stockholm in 2006 as a seven‐month trial, followed by a referendum where a majority voted in favour of the charges. This led to the reintroduction of congestion charges in August 2007, and they have been operational since then. The charging system consists of a cordon around the inner city, with a time‐differentiated toll being charged in each direction. Traffic across the cordon was reduced by around 20%, leading to substantial congestion reductions in and around the city.’

        2. Yes great example their one, good TedX talk on YouTube I saw a year or two ago, with the referendum and all, the public wanted it in the end.

        3. Forgive me if i’m an idiot, but why is increased government revenue a benefit? Surely the customer surplus + externalities is the “real” CBA?

        4. EC – typically benefit costs analysis compares the costs of government investment to the benefits of a scheme. User revenues reduces the costs side of the equation. i.e. it’s not a benefit but it does reduce the costs of intervention. The difference between costs and revenues is then (hopefully) smaller than the benefits of the intervention.

        5. A broader answer Early is that moneys paid to the Government are not lost to the economy they are just transferred from individuals to the Crown. Social benefit cost analysis has to look at losses and gains to society.

        6. So the scheme itself creates direct benefits, but also allows the government to purchase other benefits with that 804mn?

  12. There has been an american analysis of congestion pricing in New York; I can’t find the link immediately, sorry. However, the conclusion was that you needed to tax cars _a lot_ (from memory ~ 90$/day), and then use that money to make buses essentially free on the basis that you could put in unlimited numbers of buses. Similarly, I remember that not so long ago, a study of travel incentives (reported I think by captain transit?), concluded that you could not expect much from say supporting bikes/mass transit, unless you reciprocally made car parking et al much more expensive. ie things are much less effective if done in isolation…

        1. Thanks for that, great work, and not nonsense, but then he is suggesting charges varying between 3 and 9 USD, which while a lot more than the Stockholm example is still not insane.

          But we know why no system was installed; the suburbs voted down the urbs at State level. I think it certainly would have been smarter to start with a less perfect proposal in order to get it in gradually.

          Also I would say that in general US bus systems need more priority before free fares, as even a free trip is of little use if it is also stuck in the same congestion.

  13. A GPS based pricing system sure is a more pure way we could do this, but would takes decades to implement trying to get political & technical agreement. We can barely get a bus lane in Queen St, imagine trying to convince Auckland drivers to install these in our cars?! I’m still not convinced that with the nature of our CMJ & motorway system in general in Auckland, that a few ugly gantries on a few key places on our already ugly motorways using the Northern Gateway Toll Road system with a $1 or $2 charge would not work wonders. Cheapest & quickest to implement. Politically set forth as a means of congestion control in the very busiest areas, not for revenue gathering.

    1. Cheap and cheerful might be the best to begin with. But there are developments out there that could be a lot better and might not be as hard as you think to implement. Worth looking at.

  14. As a Singaporean currently living in NZ, let me offer some history and perspective: in the 1970s, we had an Area Licensing Scheme, whereby vehicles have to paste a sticker on the front windshield to show that they have paid for the ‘right’ to enter the CBD. Around year 2000, it was replaced by the ERP, whereby every car in SG had to be refitted with an Integrated Unit. A driver has to ensure that a Cashcard or an EZLink card (similar to AT HOP card) has to be inserted before passing underneath the gantry. The IU actually does double-duty – not only does it pay for ERP, you can use it for public and private carparks, so no hunting around the building for ticket machines when you’re about to leave. I think the refitting thing works because cars in SG are rarely more than 10 years old, and being a small city state it is easy to track down cars which refuse to install the IU.
    It’s true that even with the ERP, traffic can still slow to a crawl. As mentioned by another poster, the public transport is decent enough that we don’t think much about not driving to the CBD. Taxis are relatively cheap too, and the ERP cost is tacked on to your taxi fare at the end of the trip.

  15. You know what the rest of NZs gonna tell ya to do with your GPS units installed for the sake of a bit of Auckland congestion, dont cha?

    Here’s a clue. It starts like this,
    Stick it up your…

    1. Hence why an optional GPS based pricing scheme might be the best approach.

      The rest of NZ (and anyone who prefers the current system) can continue to do exactly what they do now, while those who stand to benefit from variable GPS-based pricing can switch. And to be honest, outside of Auckland, Wellington, Christchurch, and (perhaps) Tauranga there’s less to gain from variable road pricing.

      1. It depends how you set it up, but variable pricing based on GPS would presumably be a *better* deal for anyone outside the main centres. Since you’d be paying at the lowest (uncongested) rate everywhere!

        That’s one of the problems with having it be optional, really. The people who would have to pay the most under road pricing will just stick with petrol tax. So it’s precisely the people who it needs to target who will avoid it.

        1. Unless you implement an optional variable priced scheme and then raise the fuel tax to make the variable scheme more attractive.

  16. Probably have to take a lesson from trucks, which are SLOWLY doing away with hubodometers and going for electronic units — they are the little black boxes that sit at the lower left of the windscreen with an orange and green light (on the trucks that are fitted with them) – no hubbo or electronic unit, no COF, in fact your vehicle will probably be impounded at the testing station. The whole problem with money for roading is that the local bodies, which provide all of the roading outside the state highway network, receive very little, if any, money from the fuel and other taxes that motorists are required to pay towards roading. There needs to be a new system whereby the local authorities receive their fair share of the money that is paid by the motorists, even if it means the fuel taxes going up, which would be offset by rates coming down.

    1. really good point. It’s also a nice example of how variable road pricing could be implemented/adopted slowly and in a way that does not necessarily negatively impact on people. Move commercial vehicles over to the system first so as to develop systems/processes, before then opening it up to personal vehicles.

  17. Making drivers pay to sit in traffic or waiting for overloaded PT is not going to reduce congestion. Drivers have already modified their behaviours such that AM/PM peak times are now 4 hours long each and PT capacity is overloaded.

    The focus for road pricing has to be clearly on reducing traffic congestion not moving drivers to overloaded PT, incomplete cycle networks or funding expensive/lengthy/disruptive decade long road building projects.

    Mobility as a Service technologies is where the immediate focus and investment needs to be.

    1. How an earth do you think getting everyone out of their own car, and into a taxi car is going to reduce congestion? If anything the taxi/mobility-as-a-service is going to increase congestion as you have all the taxis travelling counter peak to pickup their next passenger. You are going to make peak flow in both directions instead of one. How will that work on the harbour bridge?

      And why do you suggest that moving people out of cars and onto PT or cycling will not reduce congestion? Every person out of a car an onto the bus is one less car of congestion.

  18. Big Brother wants to put GPS units into our own private motor vehicles as an easy way to charge us for using them, just think of all the other uses authorities will find for such mass data gathering .Whos is going to pay for the installation of the GPS units ? Sounds like a breach of my private space to me ,and to those who talk about a optional buy ,over time the pressure will increase more and more on those who choose not to partake.

    1. Who pays for the installation of the odometer in my car so that the government can charge me for using my car? Me!

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