"In every deliberation we must consider the impact on the seventh generation”
—Great Law of the Iroquois
This old Iroquois adage is sound advice considering that transportation decisions made today will affect people for at least the next 50 to 100 years. However, we, the authors, maintain that historically, American transportation planners have rarely given thought to even the next generation. This lack of foresight has left us with the seemingly intractable problem of traffic congestion in virtually every large city in America.
Government officials have tried just about everything to solve the traffic problem in the U.S., but conditions continue to get worse. So, why not try what Americans have always used to solve problems of a scarce resource: free-market capitalism? Arch-conservatives and flaming liberals, from New York’s conservative Manhattan Institute to the radical transport group Transportation Alternatives, are at last finding common ground on which to stand. Finally, the Bush administration and the Democratic leadership are in agreement. In fact, on Aug. 14, U.S. Secretary of Transportation Mary Peters named five major metropolitan areas (Miami, the Minneapolis area, New York City, San Francisco and the Seattle area) that will share up to $1.2 billion to develop pricing strategies and transit plans to fight gridlock.
In this article we will examine two of the winning proposals. But first, we offer a little history and a primer on a market-based approach to traffic: congestion pricing (CP).
CP around for decades
Many segments of the transportation industry have been pricing congestion for years. Airlines price their tickets based on season, available seating and distance traveled. Many public transportation systems, such as the Metro in Washington, D.C., or the New Jersey Transit, charge riders based on how far they travel and, in the case of NJ Transit, whether or not they are traveling during the peak commuting hours.
In 1952, Nobel Laureate William Vickrey of Columbia University pioneered CP first for transit and then for traffic. His theory was that traffic jams occur when drivers are not charged the full costs they impose on others.
If we look backward before Vickrey’s time, we find an even earlier example of CP: the parking meter. Many don’t think of paid parking as a form of CP, but where space is a valuable resource, such as in any city’s business district, parking fees have become a commonplace way of controlling demand. In 1935, Oklahoma City introduced the country’s first parking meters, much to the dismay of its citizens. Many cried out that parking meters were un-American, illegal or just another tax—sounds like the CP opponents of today.
Over the decades, off-street parking in a central business district has become big business with a market-based approach to pricing in which people are charged by location, time of day, day of the week and even season—a true CP program. So, if we have learned to accept CP when our cars are parked, then why not accept it when they are in motion? We are confident that after the successes in London and Stockholm and with good public education programs, CP will find its way into major American cities and people will come to accept CP as a necessary and practical part of driving their cars into congested areas.
A primer on CP
The following is a primer, providing an overview of the many facets of CP.
Pricing strategies
- Flat charges: Flat charges are tolls set for a particular roadway or area, remaining constant regardless of time of day or other roadway conditions;
- Variable charges: Variable charges are tolls that fluctuate based on time of day, day of the week and even season or roadway segment; and
- Dynamic charges: Of the three charging strategies, dynamic charges are the most efficient at managing congestion. Under a dynamic charging system, up-to-the-minute congestion data is continuously analyzed, resulting in the frequent setting and resetting of prices.
Lane pricing
Lane pricing usually takes the form of one or two tolled lanes that provide paying drivers with a faster trip due to free-flowing traffic. Tolled lanes can be reserved either exclusively for paying vehicles or for the shared use of paying vehicles and other vehicle types, for example high-occupancy vehicles.
Cordon pricing
A cordon line is drawn around a particularly congested area, usually a city center, and drivers are charged to drive into or within the cordon. Cordon pricing is currently implemented in the central business districts of London, Stockholm, Singapore and several other cities outside of the U.S.
The London example: flat cordon pricing
CP was introduced in London in February 2003. Originally, drivers were charged a flat £5 to enter the cordon zone anytime between 7 a.m. and 6:30 p.m. Monday through Friday. The effect at the start was significant: about a 15% reduction in traffic and a 20% improvement in speeds. But over time, traffic levels crept up, requiring a price adjustment to £8. Because of the success of the program, London recently expanded the charging zone with considerable public support.
The Stockholm example: variable cordon pricing
Beginning in January 2006, Stockholm ran a six-month trial of CP. Unlike in London, the Stockholm system varies based on time of entry. The charge is in effect weekdays between 6:30 a.m. and 6:30 p.m., with the highest charge set at 20 kronor (about $3) during the morning and afternoon peak hours and the lowest charge set at 10 kronor during the least-congested hours. Within the first month, improvements in traffic flow were noticeable.
By the end of the six months, the trial had reduced traffic by about 22%, improved mobility and accessibility, reduced carbon emissions, increased public transportation usage and resulted in overall public approval of the program. In a voter referendum last September, Stockholm residents approved the plan for a full-blown CP program by a vote of 52% to 48%. The program was reinstated Aug. 1.
Area pricing
Vehicles within an outlined area are charged different fees for the use of different roadway segments. Each roadway segment is priced based on either its history of congestion (flat or variable pricing) or its current conditions (dynamic pricing). There are currently no area pricing systems in existence. However, a trial has been conducted in Seattle, and other areas are considering it.
Toll collection
The simplest collection method is license plate photography, which is in use in London. The Eastern seaboard, as well as many pockets of the U.S., uses electronic transponders affixed to windshields. On the drawing boards are GPS systems that can measure distance traveled, time in motion and time parked in any particular area or on any street. Cell phone signals with triangulation also are being considered as a match or supplement to GPS. Privacy issues have been raised with all systems but have not blocked their implementation anywhere.
Transit
CP cannot succeed without good transit. In both London and Stockholm the transit systems were prepared beforehand for anticipated additional loads. Hundreds of buses were added, and priority treatments for transit vehicles were introduced. New York City is planning an ambitious network of bus rapid transit (BRT) routes as well as more subway service in anticipation of a 2009 start date for CP.
Case studies: Seattle and New York
Seattle, New York, Miami, Minneapolis and San Francisco collectively will be receiving more than $1 billion under the U.S. DOT’s National Strategy to Reduce Congestion on America’s Transportation Network program, which emphasizes reducing congestion and improving public transportation in U.S. cities. Under the program, cities could enter into an urban partnership agreement (UPA), which will provide funding for congestion solutions with a focus on rush-hour pricing. We have chosen two of these city programs for discussion.
Lake Washington Urban Partnership
Critical to the Seattle metropolitan area’s transportation system are the S.R. 520 Bridge and the parallel I-90 Bridge, which span Lake Washington, connecting Seattle’s eastern suburbs with its business district. The existing S.R. 520 Bridge is in urgent need of replacement because of its vulnerability to earthquakes and windstorms. Further, the rapidly increasing demands of downtown Seattle businesses, as well as of employers such as Boeing and Microsoft, are intensifying congestion, thereby reducing the effective capacity of the two bridges during their busiest hours. Currently, there is insufficient funding to finance the replacement and improvement of the bridges.
Backed by the willing public and supportive politicians who have already raised $540 million for Seattle’s Bridging the Gap initiative, the Seattle metropolitan region has formed the Lake Washington Urban Partnership in competition for UPA support. UPA aid would be used to fund the replacement and tolling of the S.R. 520 Bridge as well as a potential toll on the I-90 Bridge. By introducing additional services and a BRT program, the partnership seeks to increase projected transit ridership across the bridges from 15% to 35%, while meeting the increased automobile demand once tolling is in place.
NYC proposal
On April 22 (Earth Day), Mayor Michael Bloomberg unveiled his PlaNYC, which spotlighted greenhouse gas-reducing initiatives, including a three-year pilot CP program to cover all of Manhattan below 86th Street. The system would be in effect between 6 a.m. and 6 p.m. Monday through Friday and would charge cars $8 to enter the zone while trucks would pay $21. Taxis, transit vehicles, emergency vehicles and vehicles with handicap plates would be exempt. The NYC CP system would use a combination of in-vehicle transponder technology and cameras that would capture the license plates of vehicles without electronic tolling tags.
Like pre-CP London and Oklahoma City circa 1935, critics have labeled the plan a tax on the poor and detrimental to commerce. In fact, we maintain the opposite: NYC car drivers average $15,000-20,000 more in annual income than transit riders. CP is a Robin Hood-like program where these wealthier car drivers who produce negative externalities on the environment subsidize the less wealthy in their use of greener modes of transportation. Furthermore, the London and Stockholm examples have shown commerce to flourish under a plan that enhances the environment in the central city. Residents have expressed concern that the border areas, for example 86th Street in Manhattan or the Brooklyn side of the Brooklyn Bridge, will become parking lots for those that would have driven into Manhattan but wish to avoid paying the charge. It has been suggested that parking in these neighborhoods be restricted to residents in order to avoid this problem.
As a compromise, the state legislature has formed a commission to weigh CP versus other strategies. But these other strategies must be able to demonstrate that they can reduce traffic by over 6%, the estimated reduction of the NYC CP plan.
Time is up
We are convinced that CP is a strategy whose time has come for large cities like New York City. We also have learned from other cities’ examples: Good transit alternatives and a widespread public education program with perhaps a public referendum are essential for success.
We also find it puzzling that the American public accepts CP when their cars are parked but not when they are moving. In fact, Americans, with their free-market-based approach to issues, should be embracing the concept. We are confident that with a widespread public education program, the majority of New Yorkers will support a trial followed by a referendum. Once the Big Apple introduces CP it is only a matter of time before Chicago, Toronto, San Francisco and other large North American cities with good transit follow suit.
The 21st century is a watershed era for the human race. We can greedily consume the natural resources, continue to pollute our air and accelerate the warming of our planet, or we can take steps toward a more sustainable future. CP is one of the most promising strategies that planners may use to pay respect to ourselves and to the seventh generation.
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