Urban Road Pricing From Theory to Practice

8/3/2019 Urban Road Pricing From Theory to Practice

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URBAN ROAD PRICING: FROMTHEORY TO PRACTICE

Sittha Jaensirisak (PhD)Assistant Professor / Head of departmentDepartment of Civil Engineering

Ubon-Ratchathani University, Ubon-Ratchathani, Thailand


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Road pricing, in general, is a transport policy forcharging motorists a fee for using theirvehicles within specific areas or on specific roads.

Other names:

Road user charging

Congestion charging Congestion pricing

Other specific terms e.g. road tolling, valuepricing, variable pricing and peak period pricing

Introduction


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Why road pricing is interested

New sources of revenue for transport projects Failure of alternative policies to cope with the growth of

traffic congestion

SO

Road pricing is widely accepted as an effective tool for:

alleviating traffic congestion,

reducing environmental impacts,

generating revenue to finance transport improvements

BUT there are a number of barriers in implementation,e.g. questions on public acceptability and practicability.


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Background (1)

Adam Smith (1776), a Scottish economist, mentionedthe principles of efficient provision of public good

Dupuit (1844), a French engineer, by using a simple

example of the imposition of a toll on a footbridge,demonstrated efficiency of pricing

Pigou (1920) and Knight (1924) introduced the simpletwo-road example

Walters (1954) suggested that motor taxation shouldbe levied so that the marginal private cost of vehicleoperation is brought nearer to the marginal social costsand the degree of congestion on our roads is reduced.


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Background (2)

Vickrey (1955) stated that marginal cost should beconcerned in an elaboration of any scheme of prices inorder to achieve the efficient utilisation of facilities. Hebelieved that in no other major area are pricing

practices so irrational, so out of date, and soconducive to waste as in urban transportation

The Smeed report (Ministry of Transport, 1964), in the

UK, was the first full contribution of the theory of roadpricing to policy implementation


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Economic background

Demand

Price

Marginal personal cost

Marginal social cost

Q0Q*

P0

P*

Pigouvian tax

Deadweight lost

due to miss price

Demand curve


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Implementation

In Singapore in 1975 - the Area Licensing Scheme(ALS) and replaced by Electronic Road Pricing(ERP) in 1998

In Norway - toll rings were installed to raise revenue

Bergen in 1986 Oslo in 1990

Trondheim in 1991

In London on 17 February 2003

Interest

Hong Kong, Netherlands, Sweden, USA, AUS, andother cities in Britain e.g. Leeds, Bristol, Edinburgh,

Derby, Durham, Leicester ect.

Experiences


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Singapore was the first country to introduce urban roaduser charging.

the objective was to restrict traffic at peak periods into theCentral Business District in order to alleviate congestion.

Initially, the system applied was Area-Licensing Scheme

(ALS).

In 1998, the ALS was replaced by Electronic Road Pricing(ERP).

The tolls would be varied according to the average speed

on the network. Prices applied under ERP are subject to maintain traffic

speeds of 45-65 km/h on expressways and 20-30 km/h onarterial roads.

Singapores road pricing


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Singapores road pricing


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Norwegians cordon systems

Cordon pricing schemes Bergen in 1986

Oslo in 1990

Trondheim in 1991

The main objective of the toll rings was to raiserevenue to finance road projects and, to a lesserextent, public transport.

The scheme was not designed to reduce traffic.

Nevertheless, some impacts on travel behaviour andtraffic volume were found.

The lesson from Oslo shows that acceptance hasincreased over time after implementation.


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London Congestion Charging

Started on 17 February 2003

Objectives reduce traffic congestion

increase journey time reliability

decrease of air pollution


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The History (1)

In the early 1960s, Smeed report - the technical feasibilityof various methods for pricing systems.

In the 1970s, the Greater London Council (GLC) proposedthe charging system called supplementary licensing.

In the 1980s the London Planning Advisor Committee(LPAC) concluded that improvement of public transport byitself was not seen as sufficient; there was a need for directmeasures to restraint road traffic and to obtain a betterbalance between the demand and supply of road space.

Congestion charging was seen as the most favourable.

During the early 1990s, The London Congestion Charging

Research Programme was sponsored by the Department

of Transport to study various charging systems.


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The History (2)

In 1998, Road Charging Options for London (ROCOL)study forms the basis for the today London CongestionCharging Scheme.

In 1999, the Greater London Authority (GLA) Act

provides full powers for the Mayor to introducecongestion charging schemes in Greater London.

In May 2000, Mr. Ken Livingstone was elected to bethe Mayor of London on the basis of a manifesto whichincluded a promise to introduce a congestion chargingscheme in central London.

Finally, the congestion charging scheme went live on17th February 2003.


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See Transport for London Web site(www.tfl.gov.uk)

Bounded by the Inner Ring

Road

7am-6:30pm, Mon.-Fri.excluding Public Holidays

5 per vehicle per day (8

from 4 June 2005) Discount for e.g. residents

who live in the zone,disabled people, taxis,coaches and minibuses

Exempt for e.g. emergencyservices on behalf of theNHS, police, fire,ambulance



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Proposed area ofenlarged zone


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Impacts- 15 % traffic reduction

- 30% congestion reduction

- 12% pollution reduction (NOx, PM10)

- Journeys had become more reliable

- Buses significantly gain in reliability

- Substantial reductions in road traffic accidents

- No evidence that increased average traffic speeds havehad any noticeable effect on the severity of casualties

- No evidence of any significant adverse traffic impacts from

the scheme outside the zone


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Impacts

- Neutral impact on the economy of central London

- Small Impacts on individual business sectors, including

retail

- Around 50 million of net transport benefit for the first year,mainly through quicker and more reliable journeys for road

and bus users.

- Net revenue for the first year is about 68 million and over

90 million in 2004/5, which have been spent largely onimproved bus services

- 68 percent of respondents said that they had gained

overall from the scheme or that it had made no difference

to them.


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Factors that helped success

built and maintained public support

integrated with other policies(e.g. publicinformation, bus lane, revised traffic signal,banned turn, access control, and improvementon bus service)

delivered the scheme quickly so that benefits canbe seen as soon as possible


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Hong Kong

Netherlands

Stockholm, Sweden

.. .

Other road pricing schemes


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Public acceptability

Charge for something which is free before

Unfair and favour the rich

Possible economic and land use impact

No alternative

Political leadership and acceptability

Legislation and institutional framework (inappropriate

legislation and organisation structures, and contradictorypolicies elsewhere)

Time dimension (the temporal development of policyfrom conceptualisation and planning, through decision-making, to implementation and operation)

Barrier to the implementation

Learning from the experiences(1)


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Existing circumstance. Congestion and pollution mustbe bad enough.

Benefits and objectives System characteristics

Revenue allocation

Equity issues

Alternative means of travel

Technology

Communication and marketing strategy

Learning from the experiences(2)Making road pricing work


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Way forward

Need political leadership (e.g. London Mayor)

Need clear objective and trust

Public consultation and involvement

Provision of alternatives to road (improve public transport)

See road pricing as a tool in integrated transport policy

Learning from the experiences(3)


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Conclusions

Road pricing is efficient and environmentally beneficial

available tool for congested cities.

However, road pricing cannot by itself deal with thetransport problems.

It must be seen as a part of comprehensive policypackage, which includes substantial improvements topublic transport and other alternative modes,environmental enhancements, and in the long term,new approaches to land use planning and more

usages of intelligent transport systems.

Moreover, objectives and benefits of charging need tobe clear to the public. On the other hand, they shouldbe convinced that society as a whole will be better off.

Documents

Urban Road Pricing From Theory to Practice