The future of urban transportation
While Washington debates the economic mayhem surrounding bailouts and foreclosures, a more mundane phenomenon quietly imposes tremendous economic costs on America’s urban areas: traffic jams. The Texas Transportation Institute estimates that urban traffic congestion causes a $78 billion annual drain on the economy, in the form of 4.2 billion lost hours and 2.9 billion gallons of wasted fuel. The government clearly has a responsibility to alleviate this economic and environmental hazard, but most current policies do not provide a disincentive to driving on congested roads. The advantage to congestion pricing, a scheme in which motorists must pay a variable toll for access to a particular road, is that it can alter the times and routes motorists use as well as the overall amount they drive, thus more effectively encouraging the use of existing public transportation. Though congestion pricing remains politically unpopular in the United States, it is likely to gain greater acceptance as inner city congestion worsens and tax revenues diminish.
A Better Use of Resources
Distinct from simple toll roads, which charge a flat user fee at all times, a congestion priced road or lane charges higher prices during peak congestion periods while lowering fees or granting free access during relatively un-congested hours. Traffic congestion, as associate research scientist David Ungemah of the Texas Transportation Institute explained in a recent interview with HPR, results primarily from the fact that “low-value trips are given the exact same priority as high-value trips,” meaning a family taking a leisurely weekend drive has no incentive to yield to a commuter hurrying to work. Congestion pricing, unlike a gasoline tax, corrects this problem by encouraging travelers to use alternative routes or drive during less congested hours.
There are currently eight congestion pricing facilities in American cities, all of which are high-occupancy toll lanes, or “HOT lanes.” These high-occupancy vehicle lanes — major highway lanes that normally grant access only to cars with a minimum number of passengers — may be used by low-occupancy cars willing to pay a variable fee based on the amount of congestion. HOT lanes are modest endeavors compared to the kind of congestion pricing used abroad. The most famous example, implemented in central London in early 2003, resulted in a 27 percent decrease in the number of private cars, vans, and trucks and a 12 percent decrease in the total number of vehicles traveling through downtown London, as well as a 17 percent increase in vehicle speeds. This shift occurred even though the vast majority of commuters already used public transportation.
The two logistical aspects of congestion pricing, as Harvard Kennedy School Professor José Gomez-Ibanez explains, are fee collection and enforcement, both of which have proven feasible in the British experiment and elsewhere. Though the tollbooth is the most obvious payment mechanism, London motorists may pay at retail outlets, at city kiosks, on the Internet, by phone, or by text message. The professor noted that enforcement mechanisms have ranged from a simple paper license in the windscreen to London’s sophisticated camera surveillance.
Regressive or Smart Revenue?
Opponents charge that congestion pricing hurts low-income drivers, who would have to either pay the same fee as the wealthy or adjust their driving habits to benefit those who can better afford to pay. Indeed, HOT lanes were initially decried as “Lexus lanes” because of the fear that only the rich would benefit from faster travel. In reality, notes Gomez-Ibanez, HOT lanes are used by a broad cross-section of motorists. According to Ungemah, empirical evidence suggests that congestion pricing actually benefits the poor because they tend to value their trips more than the middle class. Though little research exists to indicate why this is the case, he suspects low-income drivers may often have out-of-pocket costs to arriving late that equal or exceed the toll, such as an inflexible work schedule or a late fee for picking up a child in daycare.
Additionally, one must consider the use of toll revenue before condemning congestion pricing as regressive. One major asset of the concept, as Jonathan Bowles, director of the Center for an Urban Future in New York City, noted in a recent interview with HPR, is the fact that the revenues collected can be invested in public transportation to further reduce traffic. London’s system, for example, raised a net £68 million in 2003-2004 and £97 million in 2004-2005, the vast majority of which was spent on bus network improvements. Alternatively, congestion pricing can be made revenue neutral: Gomez-Ibanez cites a proposal for a Hong Kong system in which vehicle registration fees would be reduced to compensate for the additional revenue. Such a system would theoretically require those who used the congestion priced roads to indirectly compensate all other drivers for their inconvenience.
Overcoming Political Obstacles
Despite the success of congestion pricing abroad, its unpopularity in the United States has restricted its implementation to a handful of HOT lanes. Though Ungemah notes that projects are sometimes defeated by bureaucrats with a vested interest in the status quo, the ultimate obstacle to the congestion pricing appears to be a lack of public acceptance. Last year’s high-profile effort to charge drivers to enter Manhattan during peak congestion hours was defeated by the New York legislature. A recent attempt to convert a toll road to a congestion priced road in Harris County, Texas, was rescinded within three days due to a massive public outcry.
Ungemah suggests the popular aversion to congestion pricing may spring from the instinctive unwillingness of individuals to pay an out-of-pocket fee to use a roadway, even when doing so makes economic sense. Despite public transportation improvements or vehicle fee reductions, those who do not value their trips enough to pay the toll will inevitably be inconvenienced. Gomez-Ibanez notes that one reason the London experiment was politically viable was that so many people already used public transportation and were therefore unaffected.
Congestion pricing is unlikely to suddenly become wildly popular, but it may gradually expand for two compelling reasons. First, as Gomez-Ibanez suggests, the concept may become attractive to politicians as gas tax receipts decline due to electric cars and other fuel conservation technology. Second, and more fundamentally, congestion pricing is likely to gain greater acceptance among urban populations weary of choosing between traffic jams and costly new roads. As populations grow and demands on inner city transportation systems increase, roads and public transit can only be expanded to a certain extent and at significant costs to taxpayers. Given its record abroad, congestion pricing seems likely to become more prevalent in the United States as a reluctant public accepts it as a necessary and efficient way to manage the challenge of urban congestion.