Congestion Relief through Road User Pricing

Deloitte Research released what looks to be a practical and helpful new study today on road user pricing and the promise it offers for reducing urban congestion and improving mobility. From the executive summary:

Road user pricing links travelers’ driving choices to the actual costs imposed on the traffic system. User pricing sets tangible prices associated with one’s decision to drive and thus encourages people to use the roadways more efficiently by taking alternative modes of transportation, consolidating trips, or traveling during off-peak periods. The result: reduced traffic congestion. An added bonus: user pricing enables jurisdictions to raise millions of dollars in revenues that they can reinvest in road infrastructure and public transportation programs to benefit users directly. Until recently, most of the action with road pricing occurred overseas, with cities like London and Stockholm and countries like Singapore and Germany taking the lead. This trend is changing. The success with congestion pricing in London and the increased urgency to do something about America’s awful congestion problems has created serious interest in road pricing in the United States. Chicago, Los Angeles, New York City, Minneapolis, San Francisco, Seattle, and other cities have started to explore road user pricing systems, spurred on by U.S. Department of Transportation pilot programs such as the Urban Partnership Agreement and the Congestion Reduction Demonstration Program. Meanwhile Colorado, Nevada, Oregon, and other states are beginning to lay the groundwork for road user pricing by conducting pilot programs or commissioning blue ribbon panels and feasibility studies. While interest in road user pricing in America has soared, most of the experience with road user pricing systems remains overseas, meaning transportation departments here have limited knowledge of how to successfully design, implement and operate these complex systems. Moreover, most of the urban road pricing systems elsewhere are modeled on spatial and traffic patterns far different than those in the United States. Americans tend to be very car dependent, while our cities tend to be far more spread out with a much smaller fraction of commuters traveling each day into a core urban center. This leaves American policymakers interested in road pricing with two critical questions to consider. First, how would road user pricing work in the United States given the differences in transportation patterns between here and overseas. Second, what lessons from existing projects are applicable for achieving success in America, and what is unlikely to work here? This study aims to answer these and other critical questions. The study describes not only why road user pricing can help to address America’s congestion problems but also how to design and implement road pricing systems to best meet the unique characteristics of U.S. metropolitan areas.

The full study is available here. Reason’s Surface Transportation Research and Commentary

Leonard Gilroy is Senior Managing Director of the Pension Integrity Project at Reason Foundation, a nonprofit think tank advancing free minds and free markets. The Pension Integrity Project assists policymakers and other stakeholders in designing, analyzing and implementing public sector pension reforms.