Research Rest-Stop │ The Impacts of Congestion Pricing

Every Wednesday, the Mayor’s Office of Transportation and Utilities (MOTU) highlights some interesting research related to or innovations in transportation, sustainability, or energy.

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Congestion pricing has been a widely discussed topic over the past few years. This pricing strategy works by charging automobile drivers traveling along certain roads of a transportation network during a particular time of day when the roads are typically most congested. Congestion pricing serves as a way to manage congestion without building more roads or expanding the transportation network. Many European cities like Stockholm, Milan, Singapore have explored implementing congestion pricing or are running pilot programs, while London and Paris have systems in place. In the United States, efforts to implement High-Occupancy Toll (HOT) lanes, which charge single drivers to travel in carpool lanes, or peak-period pricing projects, which allow travel on tolled roads, bridges, and tunnels at a discounted rate during off-peak hours, are underway in several states, including California, Virginia, and Washington. According to the U.S. Department of Transportation (USDOT), the presence of traffic congestion costs the United States $200 billion annually. Congestion pricing is thus seen as one way to reduce the negative impacts of congestion.

While congestion pricing helps to manage congestion without additional road construction, it also adds another cost for users. This then brings the issue of equity into consideration. “Road Pricing Can Help Reduce Congestion, but Equity Concerns May Grow,” a recent report on traffic congestion from the U.S. Government Accountability Office (US GAO), looks into the relationship between congestion pricing and equity further. The report finds that pricing can generally help to reduce congestion and further investigates the impacts of pricing on equity.

In performing its evaluation, the study looked at how the projects have impacted congestion rates according to five performance measures:

  • Travel time and speed (how quickly vehicles travel and the time it takes for them to travel the length of the HOT lanes)
  • Throughput (how many vehicles travel through the HOT lanes)
  • Off-peak travel (whether congestion pricing encourages drivers to travel during off-peak hours when prices are lower)
  • Transit ridership (whether drivers switch modes to take transit instead)
  • Equity (how the benefits of congestion pricing revenues are spread among commuters of all income levels in a given transportation corridor [income equity] and whether drivers are likely to switch to an alternative, untolled route [geographic equity]).

Adding equity as a performance measure in the report demonstrates the holistic view that is being taken in regards to congestion pricing proposals. The report first looked at the issue of income equity in the congestion pricing projects. It found that, for SR 91 in Orange County, I-394 in Minneapolis, and SR 167 in San Diego, “drivers of all incomes used the HOT lanes, but high-income drivers used them more often than low-income drivers.” The report notes, however, that, since the sample sizes of the surveys performed were limited, “the results may not provide reliable estimates for the various subgroups they measured.”

The report also evaluated the geographic equity impacts of congestion pricing. The goal in performing this evaluation was to see if traffic on alternative, untolled routes would increase with the implementation of a congestion pricing system on an adjacent route. Of the cases studied, only a few evaluated traffic diversion to see if drivers would change their routes to avoid paying a congestion pricing fee.

As congestion pricing becomes more popular as a way to reduce congestion, its impacts on income and geographic equity will continue to grow as areas that require attention. Higher tolls will likely impact drivers of various income levels differently, and these impacts will need to be explored in greater detail before tolls are implemented or, in some cases, increased. The report specifically notes that “these concerns may be particularly acute in the future for projects designed to use pricing not only to manage congestion but also to meet toll revenue targets.” Developing strategies and implementing programs to reduce the impacts of congestion pricing on drivers of lower income will be crucial to ensure that equity remains a primary consideration in these congestion pricing projects.

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