Category Archives: traffic

The real price of a toll

tollboothMark Thoma at Economist’s View takes an interesting look at this New York Times story about how tolls demonstrably rise sharply after the introduction of quick-payment technology like transponders:

After an electronic system is put in place, tolls start rising sharply. Take two tollbooths that charge the same fee and are in a similar setting — both on highways leading into a big city, for instance. A decade after one of them gets electronic tolls, it will be about 30 percent more expensive on average than a similar tollbooth without it. There are no shortage of examples: the Golden Gate Bridge, the George Washington Bridge and the Tappan Zee Bridge, among them.

The E-ZPass economy is indisputably more convenient. It saves time and frustration. But the old frustrations that came with cash also brought a hidden benefit: they forced you to notice that you were spending money. With electronic money, it’s much easier to be carefree.

Marketers understand this dynamic well, which is a big reason they promote refillable gift cards and other forms of money that don’t feel like money. Part of what’s so intriguing about Ms. Finkelstein’s work is that it suggests that government officials may be coming to understand the dynamic, too.

The writer, David Leonhardt, looks at it from the consumer-affairs angle and wonders whether governments that install these fancy electronic payment systems, rather than forcing drivers to stop and throw coins in a bin or hand bills to a worker in a tollbooth, jack up the prices as soon as drivers stop actively thinking about paying them.

But what if tolls people scarcely notice don’t achieve the desired effect of reducing traffic on a premium road? That’s Thoma’s hypothesis:

One thing to note is that after the E-ZPass system is installed, waiting times fall, frustration falls, and the inconvenience of not having correct (or any) change also falls. Thus, the economic cost is lower even if the dollar cost of the toll stays the same, and this would cause the quantity of trips demanded to increase.

It certainly fits with current thinking about the effect of roads on transportation happens: the basic assumption is that as many people will drive as can stand to — so if you widen a road because it’s clogged with cars, it’s only a matter of very little time before the damn thing is full up again. The cost of gasoline is a factor and the convenience of alternatives such as mass transit is a factor, too, but they’re not very important compared to the appeal of a big wide smooth road with nobody but you on it.

So while the dollar cost of a toll is an issue, perhaps a greater consideration for drivers is the inconvenience of paying it. Which, interestingly, is how Leonhardt gets into the story in the first place. This is his story’s second paragraph:

I spent a good part of my childhood summers at the Jersey Shore, and the tollbooths on the parkway always seemed to be a cruel final obstacle between me and the beach. Every 15 minutes or so, our car would have to stop yet again to drop a measly quarter in a bucket.

Maybe a nickel would have been enough.

(Photo credit: “Toll Road,” Flickr/billjacobus1)

What are gas taxes for?

Gaspump2The U.S. federal government is experimenting with ways of replacing some or all of its gasoline tax with a system that would charge drivers according to how many miles they drive, according to North Carolina’s News & Observer. About 450 drivers in its coverage area, which includes some extremely high-tech–savvy folks, will be participating in a technical test of a GPS system that’ll track their driving.

The problem, evidently, is that drivers are switching to high-efficiency cars, and road-construction costs are going up.

Lew Rentel of Morrisville drives one reason our road money is running low — a Toyota Prius.

Rentel, 69, used to drive a hulking Lincoln Aviator that burned up a gallon of gas every 13 miles. With 48.6 cents in state and federal taxes per gallon, he was paying the government 3.7 cents for every mile he drove.

But he ditched the luxury SUV for what he called patriotic reasons: to help fight global warming and cut our need for foreign oil. Now with a thrifty hybrid that gets 44 miles per gallon, Rentel has cut his tax payments to barely a penny per mile.

He realizes that people like him are doing less to help pay for the roads.

“Something’s going to have to be done,” said Rentel, a retired UPS executive. “You’re either going to tax by the mile, or you’re going to tax some other way.”

According to the News & Observer, the gap is so great that the federal Highway Trust Fund, which depends on gas taxes, is expected to go from an $8.9-billion surplus this year to a deficit by 2009. According to the Congressional Budget Office, it’s actually worse than that — a report from last March (PDF) seems to say pretty plainly that the fund has been in deficit since 2000 and is down to $9 billion, which in highway-construction terms is like being down to whatever cash is in your wallet right now.

So they’re trying to figure out what to do, and finding ways to make people pay by the mile is at the top of the list.

The Iowa researchers will outfit volunteers’ cars with computers and satellite gear to record where and how far they drive. Each month, the volunteers will receive sample bills for how many miles they have driven. Their mileage fees will be compared to the per-gallon taxes they pay now. Congress is considering a call to boost new-car fuel efficiency standards by about 40 percent, to an average of 35 mpg, by 2020. By then, some Americans will be driving cars that use no gas or diesel fuel — and pay no fuel taxes.

Taking gasoline consumption as a proxy for road usage was always questionable, though it was certainly convenient for quite a while there. The taxes have always sent a mixed message, though, particularly since gas taxes are always thrown into the “sin tax” category with liquor and cigarette taxes. Are they taxes on sin or user fees for the roads? What if the money goes to mass transit (as some of the trust fund actually does)? What, precisely, is the rationale behind the tax? If you’re a legislator levying a tax and you can’t give a specific answer to that last question, you’re eventually going to have problems.

This is a variation on the problem with giving hybrid cars access to high-occupancy vehicle lanes even if there’s only a driver in them — are HOV lanes a congestion-fighting measure or a way to reward the environmental benefits of carpooling? Don’t know? Better figure it out, or else your policy on who gets to use them isn’t going to make any sense.

It’s never made sense to charge people buying gasoline for their lawnmowers a fee to go for highway maintenance, just as it doesn’t make sense that cyclists get to use the roads for free (or at least only for the portion of their income and other taxes that go for road maintenance). These have been minor evils in a system whose efficiency has overriden those considerations, though. It hasn’t mattered till now, when a whole lot of people are looking for ways to use the roads in ways that happen to involve not paying for them, based on the system we’ve set up.

I think the lesson applies to another great big policy question: carbon taxes. I’m still vacillating on the usefulness of carbon taxes versus the other measures that are available for controlling greenhouse-gas emissions, but this gas-tax problem seems like a worrisome parallel: If using gas consumption as a proxy for road usage gets us into trouble eventually, what problems might we be setting ourselves up for if we use the purchase of carbon-based fuels as a proxy for greenhouse-gas emissions?

One is that if I’ve already paid a zillion bucks in tax for the coal that powers this generating plant I own, I don’t have a lot of incentives to sequester the carbon dioxide the thing emits. Heck, I’ve already paid for all that stuff, so why would I pay extra to keep it contained?

Unless there’s some separate incentive system — rebates on the tax if I sequester the carbon — in which case it seems to me that a carbon tax’s key selling point, its simplicity, is right out the window.

(Via Planetizen. Photo credit: “Gas pump,” Flickr/romulusnr.)

HOV confusion continues

HOV signTim Haab at Environmental Economics picks up on the problems with the growing dual uses of “high-occupancy vehicle” lanes on highways, which I wrote about in this post last month. The U.S. Environmental Protection Agency is setting federal standards for low-emissions/high-efficiency vehicles that could be permitted in HOV lanes regardless of how many passengers they carry.

Haab:

Correct me if I’m wrong, but wasn’t the original intent of HOV lanes to provide an economic incentive–decreased travel time and congestion–to drivers and passengers who voluntarily choose to reduce the number of cars on the road? The new fuel efficiency designation and HOV exemption seems to be at slight odds with this goal as it does not reduce the number of cars on the road and has the potential to increase congestion in HOV lanes.

He points out that HOV lanes have not been raging successes in many jurisdictions, so the overall impact might be minimal — it might be possible to add quite a lot of hybrids and low-emission vehicles to HOV lanes without congesting them significantly.

But if gas prices stay high and consumers start favouring smaller and more efficient cars for their own merits, I suspect that line of reasoning will go out the window. Solo drivers will get access to HOV lanes as a pleasant byproduct of choices made for other reasons, and the congestion problems HOV lanes were supposed to solve will come right back.

(Photo credit: “HOV Lanes,” Flickr/dherrera_96.)

Gérald Tremblay’s got the right idea

While Montreal Mayor Gérald Tremblay was announcing his vision (PDF, en français) for reworking his city’s whole approach to transportation, it’s very possible that I was — at that moment — sitting in traffic on the Métropolitain thinking, “God, what this place needs is a congestion charge.”

We went to Quebec City for a few days, and to get there, drove Autoroute 40 through Montreal. A section of it is an elevated “expressway,” the Met. Depending on the time of day, it’s either a parking lot or a white-knuckle roller-coaster ride of terror. Six lanes of traffic on a road that’s really only wide enough for four, no shoulders to speak of, and everybody bumper-to-bumper whether they’re moving or not. At one point I was going 100 in a 70 zone, moving with traffic, and was aggressively tailgated by a jerk in a white minivan who turned out — when he passed me using a hole in traffic about six inches longer than his vehicle — to be a cop. A supervisor, indeed.

Not that I’m complaining about Montreal drivers. They’re awful, but predictably so, and I like that they give no quarter. You know where you stand with them, whether you’re sharing the road as a pedestrian, cyclist or driver. You get your chance when you take it, and not a second before — in certain other cities, look vaguely interested in turning a corner and everyone screeches to a halt until you’ve made up your mind. It’s awful.

But the Met is a road at the outside edge of its capacity. Even drivers fearless enough to roar along at 120 kilometres an hour in quarters close enough to touch the cars on all sides of them can’t keep the thing flowing. It can’t be made wider. Any redesigned interchanges would certainly just funnel more traffic on, particularly at the Décarie. It’s potholed and crumbling, too; repairs would mean closing lanes, since there are no shoulders to reroute traffic onto.

The Métropolitain is probably the worst road in Montreal — in strong contention for the worst in Canada — but almost every artery gets almost as bad at rush hour. The city can’t take more cars. There’s nowhere for them to go.

So Tremblay is proposing some gutsy changes. In a $5.1-billion proposal, he includes about $400 million for new and improved roads, but the vast bulk of his plan is for bike lanes and new buses and trams and expansions of the Métro (a staggeringly expensive proposition, taking up $3.8 billion of the proposed budget, but I’m not sure what the alternative is in a city already so dependent on its subway).

The gutsy part isn’t the wish-list, though. Everybody has one of those. It’s in how Tremblay proposes to pay for the thing.

Yes, he wants vast sums of money from the Quebec and federal governments, but he also wants to soak drivers. Tolls on the bridges onto the Island of Montreal. A $1-a-space tax on paid parking lots (generating $120 million from an industry whose total revenues, according to the City of Montreal’s information are only $193 million a year). Possibly tolls — congestion charges, really — for cars using the island’s highway network ( “Le péage pour les déplacements en voiture sur le réseau autoroutier de l’Île de Montréal serait également envisageable.”), which the Gazette‘s economics writer Peter Hadekel supports.

And specifically, Tremblay proposes a 10-cent tax on every litre of gas sold in Montreal, up from the current 1.5 cents a litre (unchanged, the city says, since 1996).

While I’m not sure it’s right to link driving charges to funding public transportation — tolls and other fees should simply be for services consumed, independent of the city’s other spending priorities — I like Tremblay’s honesty about the problem. People can’t drive into Montreal more than they are now. It’s wrecking the place:

Montréal reconnaît que l’automobile n’est pas un moyen de déplacement durable. La place occupée par le réseau routier et le stationnement, la pollution, les nuisances de la circulation, etc., en sont autant d’indicateurs.

Montreal recognizes that the automobile isn’t a sustainable means of transportation. The space taken up by the road network and parking, pollution, the nuisances of traffic, etc., are many indicators.

There’s a long way to go before any of this becomes reality (the Gazette reports deep skepticism on Montreal city council that Tremblay can get any of the money for this stuff), but the mayor is pointing out the right problem, and good on him.

Devising a middle-class transit system

Despite the Santa Clara County bus system’s having lost about 30 per cent of its riders in the past few years, most local governments would still be pretty pleased to have a transit system on the financial footing of the Valley Transit Authority. According to the San Jose Mercury News (free registration required), the VTA has “nearly broken even” for several years despite the pounding taken by Silicon Valley’s economy and a plunge in ridership from about 150,000 a day to 100,000.

Still, in the interests of attracting more riders again, the VTA is hoping for political support for a plan to cut its prices.

Among the lost riders: a 25 percent drop in the number of youths taking the bus and a 35 percent drop in elderly and disabled passengers.

That decline led to a task force of transit advocates, elected officials and riders that concluded lowering fares would be the best way to attract people back on buses.

“We questioned how much ridership would drop off when fares were hiked,” said Dolly Sandoval, a VTA board member from Cupertino, recalling the decision to raise rates. “Unfortunately, we did not expect such a large number of riders would drop off.

“If we want people to ride our system, we not only need to make it more convenient, we need to make it economically feasible.”

Comparisons of this sort of thing are difficult because populations and geography don’t match, but for reference, Santa Clara County has a population of about 1.6 million; Ottawa’s transit system (which is mostly buses) carries about 350,000 people a day on a population of about 800,000; and Edmonton’s ETS carries about 120,000 out of 1 million or so in greater Edmonton, so despite its almost breaking even, the VTA is not an enormous transportation success.

The price cut is not what you’d call significant: a day pass for an adult will go from $5.25 to $5, and a monthly pass for an elderly or disabled person from $26 to $20. Twelve-and-a-half cents per commute seems an incentive unlikely to get them flocking onto the VTA’s buses like they did in the old days.

Here in Ottawa, the city is financially strapped thanks to Ontario’s messed-up system of putting social programs on municipalities’ tabs and a public unwillingness to pay any higher taxes (Mayor Larry O’Brien was elected partly on the strength of one slogan: “Zero means zero”), and the transit system is in the midst of a five-year program to hike fares by something approaching 50 per cent. The theory, according to the city manager, is that the system’s biggest problem isn’t price, it’s quality of service.

As a bus-rider myself, I’ve whiled away many minutes waiting at bus stops in the bitter cold and grinding my teeth while the noise bleeding from some guy’s earphones half-deafens me, calculating just how much cheaper this single ride is compared to what it would cost if I were driving myself. Roughly speaking, I spend $900 a year on tickets, maybe an eighth of the typical cost of ownership of the Mazda 3 I test-drove a few summers ago. There’s really no comparison, and it’d get worse if drivers paid any significant fraction of the cost of the public roads they use. Price is pretty definitely not the issue, especially for the middle-class riders who get to and from work in private cars in droves. They’re happy to pay a hell of a lot more for the convenience and comfort of their own vehicles.

If the reader comments on the Merc story are anything to by, Santa Clara County has much the same challenge. I suspect they’d be a lot better off if they stuffed the fare cut and invested the money they kept in improved service. The objection to that, of course, is that public transit isn’t just a means of saving on the public cost of roads, but also of helping people with less money get around the sprawling municipalities that are the result of cheap oil, free road travel, and loose zoning codes.

My solution, assuming that tightening up density requirements and charging private drivers for the convenience of using public roads aren’t options, is a two-tier transit service. It’s virtually impossible to turn a profit on a transit line except in the densest development (and even then, only at limited times of the day), but let private companies have those concessions, and let them operate intra-city transit the way they do inter-city motor coaches: let them charge whatever they can get away with, but provide comfortable middle-class-level service in exchange.

A candidate in Ottawa’s municipal election proposed almost exactly this last fall and a disappointing number of people found the idea laughable. Even if transit exists partly to serve those too poor and/or young to buy cars, if you run a system as though they’re the target market, they’re the only riders you’re going to get.

(Via Planetizen.)

Subsidizing sprawl

That government subsidies meant to attract large employers also appear to contribute to sprawl should come as no great surprise. If you’re looking for a place to put your business and a critical feature is that the place be cheap, you’re going to want land that’s as inexpensive as possible, architecture that’s as inexpensive as possible (what’s cheaper than a one- or two-storey building with concrete tilt-up walls?), and a bare minimum of amenities for your employees and their community (a couple of acres of surface parking should just about do it. Of course you’re going to locate as far as you can from an urban core.

Here’s Neal Peirce of the Washington Post Writers Group:

Of 86 subsidized corporate relocations in Minnesota between 1999 and 2003, involving 8,200 jobs and more than $90 million in government payouts, four-fifths were outbound from the Minneapolis-St. Paul urban core. People of color and transit-dependent workers lost out; more affluent, less racially diverse areas gained, registering increases in jobs that were five times that of the central cities.

The map of subsidized job shifts in the Twin Cities area, says Greg LeRoy, Good Jobs First’s founder-leader, resembles an “evacuation plan.”

Good Jobs First, which provided Peirce with his data, is on an excellent campaign to tie subsidies like this to requirements that companies receiving subsidies like free land or buildings or waived development charges locate their operations near transit or on brownfields or in troubled but inhabited districts.

As they point out, there’s absolutely no point giving a company a one-shot subsidy to move into your town if its arrival puts permanent pressure on your infrastructure that eats up any financial benefit it delivers.

In many cities, it’s a dirty secret that growth doesn’t pay for itself even if it’s not subsidized. So why on earth would a thoughtful government use taxpayers’ money to make things even worse?

(Via Planetizen.)

Bloomberg’s congestion charge: a step toward fairness

Brooklyn BridgeOn the heels of the New York City Parks Department’s effort to put a value on its trees comes a massive new sustainability plan out of the office of Mayor Michael Bloomberg. Here’s the mayor’s speech introducing the thing, on Earth Day 2007. In a nutshell:

Our strategies focus on the five key dimensions of the city’s environment: land, air, water, energy, and transportation, so that we can absorb the coming growth – while continuing to strengthen our economy, our public health, and the quality of life in our neighborhoods.

That’s our vision: a city that finds creative solutions to the need for more housing and parks. That has much cleaner air – the cleanest of any large city in the nation that protects the purity of its drinking water – and opens virtually all of our rivers and creeks and coastal waters to recreation.

“Plan” is probably the wrong word, though it’s officially called “Planyc” (“Plan Y-C,” I think it’s pronounced). Despite the acres of text and graphics emitted by Bloomberg’s office, and the sweep of his speech, almost everything in the plan amounts to a promise to do all the things that the city government is supposed to do but doesn’t — or at least doesn’t do very well — because they’re hard and expensive. Consider the bullet points of the subsection of the plan for housing:

  1. Pursue transit-oriented development
  2. Reclaim underutilized waterfronts
  3. Increase transit options to spur development
  4. Expand co-locations with government agencies [that is, share municipal office space with the state and federal governments]
  5. Adapt outdated buildings to new uses
  6. Develop underused areas to knit neighbourhoods together

and so on to 11. You get the idea: all fine principles, with many, many devils slouching around in the details.

So it’s no wonder that the thing everybody’s grabbed hold of is the single most concrete of the dozens of points in Planyc, the plan to charge an $8 congestion fee to enter the southern half of Manhattan between 6 a.m. and 6 p.m. on weekdays. New Yorkers outside the affected area, fearing that there’ll be traffic jams and new demand for parking lots on the edges of “the Zone,” are less than thrilled.

But an important component of the plan is that the congestion charge is to be deducted from the tolls commuters pay to drive the bridges and tunnels onto and off Manhattan, which vary quite a bit but are generally either about $6 one-way onto the island or about $4.50 each way. Commuters taking a toll bridge or tunnel are to pay only the difference between the toll and $8, effectively just raising the tolls to $8 everywhere.

(People who get it in the shorts are those who live north of 86th Street, the northern edge of the Zone, and have driven south for free. Of course, people who do that are in the best position to take transit — the ones who are really screwed are those who live in the Zone and drive out of it for work. Not that there are likely a lot of them; Bloomberg’s supporting documentation says only 4.6 per cent of New Yorkers drive into the Zone for work, and doesn’t even mention that there’s anyone who drives out.)

Despite the objections, a congestion charge is the only policy option that makes sense when you have roads that are absolutely crammed full and no prospect for widening them. (Widening a road is just about always a bad idea, but apparently it takes densities like those in the densest part of New York City to convince people that widening is literally not possible.) Access to a smooth-flowing road is a good not everyone can have, so it’s only fair to restrict it to the people to whom it’s worth the most. The New York City plan contends that delivery drivers, for instance, will spend less time in traffic and will make more than $8 a day in improved business. And the proceeds, which Bloomberg’s office estimates at a stunning $400 million a year, are to be plowed into public transit.

Indeed, if someone could come up with a system for doing it that didn’t collapse under its own complexity, charging for access to any public road would be the fairest way to distribute access. What we have now is a peculiar form of rationing, in which everyone who pays taxes kicks in to build and maintain roads, but access is restricted to those who can afford cars. Doesn’t really make sense. Bloomberg’s congestion fee is just a first gross-scale step in the direction of fairness.

Photo credit: Flickr/Squeaky Marmot.