congestion pricing could change the way we travel

This story first appeared in the november issue of evtalk – CLICK HERE to download the magazine FREE

It has been estimated that the average Aucklander spends 40 minutes daily delayed by traffic.

Assuming a conservative 240 workdays a year, that amounts to 160 hours annually wasted.

Now, multiply that times your hourly wage and let’s call this your personalised “traffic tax”.

Even at minimum wage, that is almost $3000 annually. And don’t forget, on top of your “traffic tax”, there are other costs and taxes such as those on fuel. That is the cost of driving on our roads today.

Many ideas are being explored to reduce congestion, one of the most controversial yet effective methods (in theory anyway) is congestion pricing.

There is a relationship between supply and demand, namely – the more the demand, the higher the price – the higher the price, the more supply. In this case, the good is the use of the road. On any given day, supply is limited. If demand exceeds supply, we end up with congestion and the increased cost is covered by all of us with our “traffic tax”.

Congestion pricing attempts to change this dynamic by increasing the cost of road use when demand is high. Instead of paying with our time, we would pay with money.

This cost will lower demand by pushing some users to alternate routes, to wait until the demand is lower, or through using alternative forms of transport.

The result (in theory) is less congestion, less “traffic tax”.

Most implementation of congestion charging attempted in other countries have been in urban environments and include not only congestion on single roadways but congestion in specific areas of cities such as city centres.

This implementation is called “cordon area congestion pricing” and is a method of demand management to relieve traffic, parking, or even the number of people in an area. In the future, systems such as this could even be implemented dynamically, triggered by any number of conditions to promote efficiency, sustainability, or even safety.

So, does the evidence show congestion pricing works? Sort of. In most places that have implemented congestion charging, it has led to 10-30% improvements in decongestion and positive tangential externalities such as improved air quality.

The question then becomes, what will this cost us? It will have to be balanced, enough to influence consumer demand, enough to decrease congestion, but not enough to drive demand below the maximal capacity of the roadway. It also needs to be less than the “traffic tax”.

Of course, not everyone can simply decide to travel at a different time (when there is lower congestion pricing), so options must be available to those who choose to travel via alternative routes or different modes.

One thing I expect congestion pricing will do is drive up the use of ridesharing.

To make congestion pricing possible, a way to track vehicles on the road network is a necessity.

This requirement, however, might soon become a reality. The Ministry of Transport is exploring options around road use and cost equity by moving all vehicles to a unified road user charge (RUC) system.

Since EVs don’t pay for roads via taxes on petrol like internal combustion engine (ICE) vehicles, RUC will become mandatory for EVs in 2021. That charge will amount to about $600 per vehicle annually.

This capability will lead to other options that we should consider, such as automated enforcement. Imagine if the government (namely, the police) had access to all your vehicle’s travel data, where, when, and even how fast. The process of identifying traffic violations and penalties would be a matter of simple analytics. In fact, it could be entirely automated.

The way speeding fines are calculated might be changed; it might become a product of speed over the limit multiplied by the distance travelled. Then this would be further adjusted by special multipliers such as violations that occur around schools or other public locations. Parked in a no parking zone? Fines are automatically applied.

There are other concerns that need to be addressed. If congestion pricing pushes road or parking use outside of restricted areas, it will increase usage of adjacent areas. Are those roads suitable for the increased usage? Is there enough parking?

Finally, there is the privacy concern. I realise many policymakers see the increase in social media as evidence that people no longer care about their privacy, but I think they will find that it is not the case.

Congestion pricing has the potential to change road usage. We can use it to change road use in positive ways, but only if we are prepared to handle the change.