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ELECTRONIC ROAD PRICING

INTRODUCTION Road Pricing means that motorists pay directly for driving on a particular roadway or in a particular area. Value Pricing is a marketing term which emphasizes that road pricing can directly benefit motorists through reduced congestion or improved roadways. Economists have long advocated Road Pricing as an efficient and equitable way to pay roadway costs, Fund Transportation Programs, and encourage more efficient transportation (Market Principles). Road Pricing has two general objectives: revenue generation and congestion management. They differ in several ways, as compared in the table below. Table 1 Comparing Road Pricing Objectives Revenue Generation Congestion Management • Reduces peak-period • Generates funds. vehicle traffic. • Rates set to maximize revenues or recover • Is a TDM strategy. specific costs. • Revenue not dedicated • Revenue often dedicated to roadway projects. to roadway projects. • Requires variable rates • Shifts to other routes (higher during congested and modes not desired periods). (because this reduces • Travel shifts to other revenues). modes and times considered desirable.

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Different types of Road Pricing Different types of Road Pricing are described below. Road Tolls Tolls are a common way to fund highway and bridge improvements. Such tolls are a fee-for-service, with revenues dedicated to roadway project costs. This is considered more equitable and economically efficient than other roadway improvement funding options which cause non-users to help pay for improvements (Metschies, 2001). Tolling is often proposed in conjunction with road privatization (i.e., highways built by private companies and funded by tolls). Tolls are often structured to maximize revenues and success is measured in terms of project cost recovery. Tolling authorities may discourage development of alternative routes or modes. Congestion Pricing Congestion Pricing (also called Value Pricing) refers to variable road tolls (higher prices under congested conditions and lower prices at less congested times and locations) intended to reduce peak-period traffic volumes to optimal levels. Tolls can vary based on a fixed schedule, or they can be dynamic, meaning that rates change depending on the level of congestion that exists at a particular time. It can be implemented when road tolls are implemented to raise revenue, or on existing roadways as a demand management strategy to avoid the need to add capacity. Some highways have a combination of unpriced lanes and Value Priced lanes, allowing motorists to choose between driving in congestion and paying a toll for an uncongested trip. This is a type off Responsive Pricing, meaning that it is intended to change consumption patterns (Vickrey, 1994).

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Cordon (Area) Tolls Cordon tolls are fees paid by motorists to drive in a particular area, usually a city center. Some cordon tolls only apply during peak periods, such as weekdays. This can be done by simply requiring vehicles driven within the area to display a pass, or by tolling at each entrance to the area. HOT Lanes High Occupancy Toll (HOT) lanes are High Occupancy Vehicle (HOV) lanes that also allow use by a limited number of low occupancy vehicles if they pay a toll (Stockton and Daniels, 2000; Poole and Orski, 2001). It is a type of Managed Lane (WSDOT, 2001; Goodin, 2005). This allows more vehicles to use HOV lanes while maintaining an incentive for mode shifting, and raises revenue. HOT lanes are often proposed as a compromise between HOV lanes and Road Pricing. Vehicle Use Fees Distance-Based Charges such as mileage fees can be used to fund roadways or reduce traffic impacts, including congestion, pollution and accident risk. A proposal by the UK Commission for Integrated Transport (CFIT, 2002) proposes that existing vehicle registration fees and fuel taxes be replaced by a variable road user charge using GPS-based Pricing Methods, as a way to reduce traffic congestion and more equitably reflect the roadway costs imposed by each vehicle. Pay-As-You-Drive Vehicle Insurance, prorates premiums by mileage so vehicle insurance becomes a variable cost, which gives motorists an incentive to reduce traffic impacts, but provides no additional revenue. Road Space Rationing DEPT OF E&I

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A variation of road pricing is to ration peak period vehicle-trips or vehicle-miles using a revenue-neutral creditbased system. For example, each resident in a region could receive credits for 100 peak-period vehicle-miles each or $20 worth of congestion fees each month (Viegas, 2001; Kockelman and Kalmanje, 2004; Kalmanje and Kockelman, 2004). Residents can use the credits themselves, or trade or sell them to somebody else. The result is a form of congestion pricing in which the benefits are captured by residents rather than road owners or governments. Table 2 summarizes these different categories of road pricing and their objectives. Some provide revenues, some reduce peak-period congestion, some reduce total traffic impacts (congestion, pollution, accident risks, road and parking facility costs, etc.), and some help achieve a combination of objectives. Table 2 Road Pricing Categories Name Description A fixed fee for driving on a Road toll particular road. (fixed rates) A fee that is higher under Congestion congested conditions than pricing uncontested conditions, (timeintended to shift some variable) vehicle traffic to other routes, times and modes. Cordon Fees charged for driving in fees a particular area.

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Objectives To raise revenues. To raise revenues and reduce traffic congestion. To reduce congestion in major urban centers.

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To favor HOVs compared with a generalpurpose lane, and to raise revenues compared with an HOV lane. DistanceA vehicle use fee based on To raise based fees how many miles a vehicle revenues and is driven. reduce various traffic problems. To reduce Prorates premiums by Pay-Asvarious traffic mileage so vehicle You-Drive problems, insurance becomes a insurance particularly variable cost. accidents. To reduce Road space Revenue-neutral credits congestion on rationing used to ration peak-period major roadway capacity. roadways or urban centers. This table summarizes the major categories of road pricing. HOT lanes

A high-occupant-vehicle lane that accommodates a limited number of loweroccupant vehicles for a fee.

Road pricing impacts vary depending on various factors, including the type of pricing, how it is structured, and the transportation and geographic conditions in which it is implemented. For example, a fixed road toll may do little to reduce congestion if alternative routes and modes are poor, but it may provide significant congestion reductions if transportation alternatives (such as ridesharing, transit and telecommuting) are relatively attractive, and so a modest fee will cause a relatively large mode shift. In some situations, pricing will shift traffic and congestion problems to other routes or areas. Table 3 summarizes the benefits of various pricing DEPT OF E&I

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strategies. Actual impacts will vary depending on circumstances. For example, in some situations HOT lanes will have greater congestion reduction impacts than others. The point is that these differences should be considered when evaluating and selecting pricing option Table 3 Road Pricing Benefits Increas Polluti Congesti Strateg Revenu ed on on y e Safety Reducti Reducti Genera ons on tion 3 2 1 1 Road toll (fixed rates) 2 3 2 1 Congesti on pricing (timevariable ) HOT 1 2 1 0 lanes Cordon 2 3 1 1 fees 3 2 2 2 Distanc e-based fees 0 2 2 3 Pay-AsYouDrive insuran ce 0 3 1 1 Road Space Rationi ng Rating from 3 (very beneficial) to –3 (very harmful). A 0 indicates no impact or mixed impacts. DEPT OF E&I

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How it is Implemented Road Pricing is usually implemented by public or private highway agencies or local authorities as part of transportation project funding packages, for transportation demand management, or through privatization of highway construction and operations. Implementation may require approval of other levels of government (for example, U.S. federal law restricts tolling on the Interstate Highway System). Road Pricing can be implemented at various scales: • Point: Pricing a particular point in the road network, such as a bridge or a tunnel. • Facility: Pricing a roadway section. • Corridor: Pricing all roadways in a corridor. • Cordon: Pricing all roads in an area, such as a central business district. • Regional: Pricing roadways at regional centers or throughout a region. A variety of Pricing Methods can be used to collect fees, as summarized in Table 5. Newer electronic pricing systems tend to have lower costs, greater user convenience, and more price adjustability, making Road Pricing more feasible.

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Type

Pass

Toll Booths

Electro nic Tolling

Optica l Vehicl e DEPT OF E&I

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Pric e Adj ustabil ity Poor to medi um.

Descri pt-ion

Equi pment Costs

Oper at-ing Costs

User Incon venience

Motori sts must purcha se a pass to enter a cordon ed area. Motori sts stop and pay at a booth. An electro nic system bills users as they pass a point in the road system. An optical system bills

Low

Low

Mediu m

High

High

High

Medi um to high.

High

Mediu m

Low

High

High

Mediu m

Low

High

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Recog nition

GPS

users as they pass a point in the road system. GPS is used to track vehicle locatio n. Data are automa tically transm itted to a central comput er that bills users.

ELECTRONIC ROAD PRICING

High

Mediu m

Low

High

Table 5 Summary of Fee Collection Options (Pricing Methods) This table summarizes various pricing methods. Newer methods tend to have lower costs, greater convenience and price adjustability, making them more cost effective and politically acceptable. Road pricing should be implemented in conjunction with improved transportation options, so consumers have viable alternatives. For example, congestion pricing can be implemented with Transit and Rideshare and Flextime improvements so motorists have more ways to avoid driving on the priced road. This reduces user inconvenience, reduces the DEPT OF E&I

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fee needed to achieve a given reduction in vehicle traffic, and increases its effectiveness at reducing traffic congestion.

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Travel Impacts The travel impacts of Road Pricing depend on the type and magnitude of fees, where it is applied, what alternative routes and modes are available, and what is assumed to be the alternative or Base Case (TDM Evaluation). • Pricing roads that would otherwise be free can shift vehicle travel to unpriced routes, alternative modes and closer destinations, and reduce vehicle trip frequency. • Congestion Pricing (i.e., higher rates during peak periods) can cause vehicle trips to shift from peak to off-peak periods. • If Road Pricing is used to fund roadway capacity expansion that would not otherwise occur, it may increase total vehicle travel (Rebound Effect). • Road Pricing reduces total vehicle travel if used to fund roadway capacity expansion that would otherwise be unpriced (funded through other taxes). • The better the travel alternatives (transit, ridesharing and cycling), the more Road Pricing will cause mode shifts. The travel impact of HOT lanes depends on the price structure used. If the price is too low, the facility will experience congestion, reducing the performance for both singleoccupant vehicle users and HOV users, resulting in reduced transit and ridesharing. It is therefore important for the sake of overall transportation system efficiency that HOT facilities be managed to favor HOV performance. Several studies have investigated the sensitivity of vehicle travel to road tolls (Transport Elasticities). These indicate a price DEPT OF E&I

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elasticity of –0.1 to –0.4 for urban highways (i.e., a 10% increase in toll rates reduces vehicle use by 1-4%), although this can vary depending on the type of toll, type of traveler and other factors (TCRP, 2003). Mekky (1999) finds that traffic volumes and trip lengths decline significantly if tolls exceed 10¢ per vehicle kilometer (Canadian dollars). A statepreference survey of suburban automobile long-distance commuters indicates that financial incentives are the most effective strategy for reducing automobile trips. A US$3.00 per round-trip road toll is predicted to reduce automobile commuting by 25% (Washbroo, 2002). One study estimates that congestion pricing can reduce up to 5.7% of VMT and up to 4.2% of vehicle trips in a region (Apogee, 1994). Table 6 Estimated Fee To Reduce Vehicle Trips 10% (May and Milne, 2000) Type of Road Fee Required to Pricing Reduce Trips 10% Cordon (pence per 45 crossing) Distance (pence per 20 kilometer) Time (pence per 11 minute) Congestion (pence 200 per minute delay) Road pricing impacts and benefits depend on the price structure. Ubbels and Verhoef (2006) predict that road pricing in The Netherlands would reduce car trips by 6% to 15%. A flat kilometre fee primarily affects social trips and tends to cause total trips to decline and shifts to nonmotorized modes. A peak-period fee primarily affects commute trips, and tends to cause a combination of shifts in time and mode, and working at home. May and Milne (2000) used an urban traffic model to compare the impacts of cordon tolls, distance pricing, time pricing and congestion pricing. They found significant DEPT OF E&I

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differences in the effectiveness that particular size fee would have in achieving TDM objectives. Table 6 shows the estimated price level required to achieve a 10% reduction in regional vehicle trips. They conclude that time-based pricing provides the greatest overall benefits, followed by distancebased pricing, congestion pricing and cordon pricing. Table 7 Impacts of Congestion Pricing, Year 2010 (Harvey and Deakin, 1997, Table B.6) Reve R Tri Del F V Regio A nue O ps ay ue M n vg G l T . Fe e $2,27 Bay 13 4 6.9 8. 27. 2.7 Area ¢ 2.8 % 3 0% % % % $443 Sacram 8¢ 3.9 4. 16. 1.4 ento 1.5 % 8 5% % % % $896 San 9¢ 4.2 5. 18. 1.6 Diego 1.7 % 4 5% % % % $7,34 South 19 3 8.1 9. 32. 3.1 Coast ¢ 3.3 % 6 0% % % % Avg. Fee = average congestion fee per mile applied to vehicle travel on congested roads. VMT = change in total vehicle mileage. Trips = change in total vehicle trips. Delay = change in congestion delay. Fuel = change in fuel consumption. ROG = a criteria air pollutant. Revenue = annual revenue in millions of 1996 U.S. dollars. See report for additional notes and data.

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A small reduction in urban-peak traffic volumes can provide a large reduction in congestion delays. Deakin and Harvey (1997) model the effect of congestion pricing on transportation impacts in four major urban regions in California. Table 7 summarizes their results for the year 2010. It indicates, for example, that in the South Coast (Los Angeles) region, a fee averaging 19¢ per mile driven in congested conditions would reduce total vehicle trips by about 3.3%, but congestion delay would decline by 32%. In an experiment involving time- and mileage-based pricing O’Mahony, Geraghty and Humphreys (2000) found that motorists reduced peak-period trips by 22%, and total trips by 6%, peak mileage by 25% and total mileage by 12%. Table 8 Travel Impact Summary Congestion Toll Travel Pricing Road Impact Fundin g 1 2 Reduces total traffic.

Reduces peak period traffic.

2

3

Shifts peak to off-peak periods.

0

3

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Comments Impacts on total travel depend on the price structure and the quality of alternatives. Fixed tolls cause moderate peak reductions. Fixed tolls provide no incentive to shift.

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Shifts automobile travel to alternative modes.

2

3

Improves access, reduces the need for travel.

-1

0

Increased ridesharin g.

2

3

Increased public transit.

2

3

Increased cycling.

1

2

Increased walking.

1

2

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Congestion pricing supports use of travel alternatives, toll roads do not. Additional roadway capacity can encourage low-density urban expansion. Encourages ridesharing and may fund rideshare programs. Encourages transit use and may fund transit improvement s. Encourages cycling and may fund cycling improvement s. Encourages walking and may fund pedestrian improvement s.

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Increased 1 2 Encourages Telework. telework. 1 1 May have Reduced some effect. freight traffic. Rating from 3 (very beneficial) to –3 (very harmful). A 0 indicates no impact or mixed impacts. Benefits and Costs: Road Pricing benefits and costs vary depending on travel impacts, what is assumed to be the alternative, and other factors (Pricing Evaluation). Congestion Pricing is a particularly effective Congestion Reduction strategy. Many economists consider urban traffic congestion virtually unsolvable without some sort of congestion pricing (Goodwin, 1997). Shifting vehicle traffic to other routes or time provides few other benefits, causes spillover impacts (increased traffic on other roads), and may increase crash costs (Shefer and Rietvald, 1997). Road Pricing that reduces total vehicle travel can reduce road and parking facility costs, increase road safety, protect the environment, encourage more efficient land use, and improve community Livability. The central London congestion charging scheme resulted in a 12% reduction in total vehicle– kilometres, and a 30% reduction in car traffic, with a 28% reduction in crashes (Richards, 2006). Moped and motorbike journeys increased 10-15%, while crashes decreased 4%, and pedestrian crash injuries declined by 6%. Road Pricing that funds additional highway capacity can increase total automobile travel (Rebound Effects), and so may increase downstream traffic congestion, parking costs, crashes, pollution, and sprawl. Expanding highway size and traffic volumes tends to reduce the livability of communities that it cuts through (Levine and Garb, 2000). Ragazzi (2006) DEPT OF E&I

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argues that highway privatization can result in fragmented planning and inefficient pricing. Value Pricing and HOT lanes can increase Transportation Options. On unpriced roads, travelers have no alternative to being delayed by congestion. Value Pricing and HOT lanes allow travelers to choose between driving in congestion, avoiding congestion by ridesharing, or avoiding congestion by paying a toll. This lets individual consumers choose the option that best meets their needs for a particular trip. It also tends to improve transportation choice indirectly by increasing demand for ridesharing and transit services (Kain, 1994). Road Pricing increases motorists’ direct costs, but these are economic transfers; payments by motorists are offset by revenues to the tolling agency or government (Evaluating Pricing). Overall consumer impacts from Road Pricing depend on how revenues are used. If returned as rebates or reductions in other taxes, or used in other ways that consumers value, consumers may be no worse of financially. Resource costs are primarily the transaction costs of collecting fees, including costs to highway agencies and to users. Toll collection costs range from about 10% of total tolling revenue for electronic toll collection, up to 40% for tollbooths. Toll collection that requires motorists to stop at booths causes motorists delays and increases energy consumption and air pollution. New electronic tolling can reduce these transaction costs (Pricing Methods). Table 9 Benefit Summary – Toll Funded Roads Objective Rating Comments Congestion 3 Increases road capacity and Reduction reduces demand. -2 Increases total vehicle travel Road & and facility costs. Parking Savings Consumer -1 Increases direct consumer DEPT OF E&I

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Savings

costs, but reduces indirect road costs. Transport 1 Increases motorists’ choice if Choice untolled roads are also available or if pricing improves travel alternatives. Road Safety -1 Induced travel and higher traffic speeds can increase crash costs. Environmental -1 Induced travel increases Protection emissions. Efficient Land -1 Induced travel can increase Use sprawl. Community -1 New urban highways may have Livability negative impacts. Rating from 3 (very beneficial) to –3 (very harmful). A 0 indicates no impact or mixed impacts. Equity Impacts: Road Pricing has a variety of equity impacts. It tends to increase horizontal equity by charging users for the roadway costs they impose, and reducing cross subsidies among motorists (from those who don’t drive during peak periods to those who do). Some critics argue that Road Pricing represents “double taxation” since motorists pay road user fees such as fuel taxes and vehicle registration fees. However, existing road user charges in North America are insufficient to cover total roadway costs (FHWA, 1997). Such fees are far lower than the marginal cost of driving under urban-peak conditions. Increasing urban highway capacity typically costs 10-50¢ per peak-period vehicle-mile (Transportation Costs). Direct user fees are generally the most equitable way to fund improvements because they can represent the actual cost of providing capacity on a particular stretch of roadway, and so DEPT OF E&I

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avoid cross-subsidies from motorists who do not drive under such conditions. Road Pricing can impose a financial burden on motorists dependent on that roadway. This impact generally declines over time as consumers adjust to new prices, and can be minimized if Road Pricing implementation is predictable and gradual. For example, if it became public policy that all new suburban highway capacity expansion projects will be paid through user tolls, people could take that into account when considering whether to purchase a home that would require frequent highway trips. Road tolls represent a greater financial burden on lowerincome motorists than on higher-income motorists, but they are not necessarily more regressive than other road funding options, such as fuel taxes or general taxes. Whether a toll is regressive overall depends on how much lower-income consumers drive on such highways, the quality of travel alternatives, and how revenues are used (Giuliano, 1994; Litman, 1996). If Affordability is a major concern, Road Pricing programs can include discounts or a certain number of free passes provided to lower-income households. There is a long history of incorporating vertical equity objectives into transportation policies (i.e., insuring that lower income people have Basic Access). Adam Smith, one of the founders of modern economics, wrote that, “When the toll upon carriages of luxury coaches, post chaises, &c. is made somewhat higher in proportion to their weight than upon carriages of necessary use, such as carts, wagons, and the indolence and vanity of the rich is made to contribute in a very easy manner to the relief of the poor, by rendering cheaper the transportation of heavy goods to all the different parts of the country.” (Smith, 1776, chapter 5). Rajé (2003) examines the equity impacts of road pricing and workplace parking levies with focus groups of vulnerable groups (low income, elderly, disabled, urban residents) and DEPT OF E&I

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travel survey analysis. The results indicate that automobile pricing impacts depend on how revenues are used, how prices are structured and priced areas are defined; and the quality of travel options available, and that citizen support for road pricing increases if they feel that these equity concerns are addressed. Even lower-income motorists are sometimes willing to pay for time savings, indicating that pricing strategies that prioritize trips can provide a transportation choice that is valued by motorists of all income levels. For example, user surveys of the SR 91 Value Priced lanes, in which motorist can pay a premium to drive on a less congested lane, show that about a quarter of the lowest-income class of motorist (less than $25,000 annual income) use the lanes on a frequent basis (Sullivan, 1998). Paying such a toll may be worthwhile to allow a working parent to avoid fines at their childcare center or to reach an urgent appointment (Giuliano, 1994). Even if a particular motorist seldom uses such an option, its existence may be highly valued, just as ship passengers value having lifeboats that they have will never actually be used (Evaluating Transportation Diversity). Road Pricing can also benefit transportationdisadvantaged people by reducing the subsidies they pay toward highways and by increasing their travel choices (Kain, 1994). HOT lanes in particular can provide equity benefits by improving mobility options for transit and rideshare users (Levine and Garb, 2000). Congestion pricing and HOT facilities can improve basic mobility by giving priority to high value trips. Table 11 Equity Summary – Toll Funded Roads Criteria Rating Comments Treats everybody -1 Mixed. Impacts some equally. people more than others. 3 Yes. Charges users directly Individuals bear for their road costs. the costs they impose. DEPT OF E&I

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Progressive with respect to income.

-1

Benefits transportation disadvantaged. Improves basic mobility.

1

Regressive, but not necessarily more regressive than other funding options. Depends on travel alternatives. May improve travel alternatives.

2

Improves access by automobile and other modes. Rating from 3 (very beneficial) to –3 (very harmful). A 0 indicates no impact or mixed impacts Applications: Toll funding is appropriate for any major bridge or highway improvement (Samuel, 2000), particularly if the improvements primarily benefit higher-income households, so there is little equity justification for subsidies. However, several studies suggest that the potential market for private toll roads is limited (Muller, 2001; GAO, 2004). Congestion pricing and HOT facilities are justified on any roadway that experiences congestion, such as urban highways and major commercial centers. Table 13 Application Summary - Toll Roads Geographic Ratin Organization g Large urban 3 Federal region. government. High-density, 3 State/provincial urban. government. Medium-density, 3 Regional urban/suburban. government. Town. 2 Municipal/local government. Low-density, 2 Business DEPT OF E&I

Funded Ratin g 3 3 3 2 1

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rural. Commercial center. Residential neighborhood. Resort/recreatio n area.

2 1

Associations/TM A. Individual business. Developer.

1 1

Neighborhood 0 association. Campus. 0 Ratings range from 0 (not appropriate) to 3 (very appropriate).

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2

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Electronic toll collection Electronic Toll Collection (ETC), an adaptation of military "identification friend or foe" technology, aims to eliminate the delay on toll roads. It is a technological implementation of a road pricing concept. It determines whether the cars passing are enrolled in the program, alerts enforcers for those that are not, and debits electronically the accounts of registered cars without their stopping, or even opening a window. Norway has been the world's pioneer in the widespread implementation of this technology. ETC was first introduced in Bergen, in 1986, operating together with traditional tollbooths. In 1991, Trondheim introduced the world's first use of 100% full speed unaided electronic tolling. Today Norway has 25 toll roads operating with EFC (Electronic Fee Collection), as the Norwegian technology is called (see AutoPASS). The United States is the other country with widespread use of ETC in several states, but always mantaining the option of manual collection. Overview In some urban settings, automated gates are in use in electronic-toll lanes, with 5 mph (8 km/h) legal limits on speed (and 2 to 3 times that as practical limits even with practice and extreme concentration); in other settings, 20 mph (35 km/h) legal limits are not uncommon. However, in other areas such as Dallas, Texas, the Garden State Parkway in New Jersey, and at various locations in Florida, cars can travel through electronic lanes at full speed. Illinois' Open Road Tolling program features 274 contigous miles of barrier-free roadways, where I-PASS or EZ Pass users continue to travel at highway speeds through toll plazas, while cash payers pull off the main roadway to pay at tollbooths. Currently over 75% of Illinois' 1.4 million daily drivers use an I-PASS.

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Enforcement is accomplished by a combination of a camera which takes a picture of the car and a radio frequency keyed computer which searches for a drivers window/bumper mounted transponder to verify & collect payment. The system sends a notice and fine to cars that pass through without having an active account or paying a toll. Factors hindering full-speed electronic collection include: significant non-participation, entailing lines in manual lanes and disorderly traffic patterns as the electronic- and manual- collection cars "sort themselves out" into their respective lanes • problems with pursuing toll evaders • need, in at least some current (barrier) systems, to confine vehicles in lanes, while interacting with the collection devices, and the dangers of high-speed collisions with the confinement structures • vehicle hazards to toll employees present in some electronic-collection areas • in some areas at some times, long lines form even to pass through the electronic-collection lanes • costs and other issues raised when retrofitting existing toll collection facilities •

Even if line lengths are the same in electronic lanes as in manual ones, electronic tolls save registered cars time: eliminating the stop at a window or toll machine, between successive cars passing the collection machine, means a fixedlength stretch of their journey past it is travelled at a higher average speed, and in a lower time. This is at least a psychological improvement, even if the length of the lines in automated lanes is sufficient to make the no-stop-to-pay savings insignificant compared to time still lost due waiting in line to pass the toll gate. Despite these limitations, however, it is important to recognize that throughput increases if delay at the toll gate is reduced (i.e. if the tollbooth can serve more vehicles per hour). The greater the throughput of any toll lane, the fewer DEPT OF E&I

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lanes required, so expensive construction can be deferred. Specifically, the toll-collecting authorities have incentives to resist pressure to limit the fraction of electronic lanes in order to limit the length of manual-lane lines. In the short term, the greater the fraction of automated lanes, the lower the cost of operation (once the capital costs of automating are amortized). In the long term, the greater the relative advantage that registering and turning one's vehicle into an electronic-toll one provides, the faster cars will be converted from manual-toll use to electronic-toll use, and therefore the fewer manual-toll cars will drag down average speed and thus capacity. In some countries, some toll-collection companies who use similar technology have set up or are setting up roaming arrangements between each other. This permits one to drive a vehicle on another operator's tolled road with the tolls that are incurred on that road being charged to the driver's toll-payment account that they have with their home operator. An example is the United States E-ZPass tag, which is accepted on toll roads, bridges and tunnels in over a dozen states from Virginia to Maine. Another is in Australia where a vehicle that has a CityLink e-Tag device can be driven to Sydney along of Sydney's motorways, such as the M5 South Western Motorway and pass through the toll barrier smoothly and quickly while that M5 toll is debited to the CityLink account. There is a similar device in France, called Liber-T, to pass through the toll barrier of almost every payroads of the country. These factors herald more, and more effective, use of electronic tolls.

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FIG. THE ERP

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Use in Urban Areas and Congestion pricing The most revolutionary application of ETC is in the urban context of congested cities, allowing charging tolls without vehicles having to slow down. This application made feasible to concession to the private sector the construction and operation of urban freeways, as well as the introduction or improvement of "congestion pricing", as a policy to restrict auto travel in downtown areas. In 2006, Santiago (Chile) implemented the world's first 100% full speed electronic tolling with transponders crossing through the city's core (CBD) in a stretch of a concessioned urban freeway (Costanera Norte). Similar schemes were previously implemented but only on bypass or outer ring urban freeways in several cities around the world: Toronto in 1997 (407 ETR), several roads in Norway (Auto PASS), Melbourne in 2000 (City Link), and Tel Aviv also in 2000 (Highway 6). Congestion charging schemes were implemented to enter the downtown area using ETC technology and/or cameras and video recognition technology to get the plate numbers in several cities around the world: Norway's three major cities (see Urban Tolling in Norway): Bergen (1986), Oslo (1990), and Trondheim (1991), Singapore in 1998 (see Electronic Road Pricing, as an upgrade to the world's first congestion pricing scheme implemented with manual control in 1975 - see also Area Licensing Scheme), London in 2003 and extended in 2007 (see London congestion charge), and Stockholm between 2006 and 2007 (see Stockholm congestion tax).

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SEMINAR REPORT 08

ELECTRONIC ROAD PRICING

Technologies Electronic toll collection systems rely on four major components, namely Automated Vehicle Identification, Automated Vehicle Classification, Transaction Processing, and Violation Enforcement. This section discusses each of these further. The four components are somewhat independent, and, in fact, some toll agencies have contracted out functions separately. In some cases, this division of functions has resulted in difficulties. In one notable example, the New Jersey E-ZPass regional consortium's Violation Enforcement contractor did not have access to the Violation Processing contractor's database of customers. This, together with installation problems in the Automated Vehicle Identification system, led to many customers receiving erroneous violation notices, and a violation system whose net income, after expenses, was negative, as well as customer dissatisfaction. Automated Vehicle Identification Automated Vehicle Identification (AVI) is the process of determining the identity of a vehicle subject to tolls. The majority of toll facilities record the passage of vehicles through a limited number of toll gates. At such facilities, the task is then to identify the vehicle in the gate area. Some early AVI systems used barcodes affixed to each vehicle, to be read optically at the toll booth. Optical systems proved to have poor reading reliability, especially when faced with inclement weather and dirty vehicles. Most current AVI systems rely on radio-frequency identification (RFID), where an antenna at the toll gate communicates with a transponder on the vehicle via Dedicated Short Range Communications (DSRC). RFID tags have proved to have excellent accuracy, and can be read at highway speeds. The DEPT OF E&I

G.P.T.C KORATTY

SEMINAR REPORT 08

ELECTRONIC ROAD PRICING

major disadvantage is the cost of equipping each vehicle with a transponder, which can be a major start-up expense, if paid by the toll agency, or a strong customer deterrent, if paid by the customer. To avoid the need for transponders, some systems, notably the 407 ETR (Electronic Toll Route) near Toronto, use automatic number plate recognition. Here, a system of cameras captures images of vehicles passing through tolled areas, and the image of the number plate is extracted and used to identify the vehicle. This allows customers to use the facility without any advance interaction with the toll agency. The disadvantage is that fully automatic recognition has a significant error rate, leading to billing errors and the cost of transaction processing (which requires locating and corresponding with the customer) can be significant. Systems that incorporate a manual review stage have much lower error rates, but require a continuing staffing expense. A few toll facilities cover a very wide area, making fixed toll gates impractical. The most notable of these is a truck tolling system in Germany. This system instead uses Global Positioning System location information to identify when a vehicle is located on a tolled Autobahn. Implementation of this system turned out to be far lengthier and more costly than expected. Automated Vehicle Classification Automated Vehicle Classification (AVC) is closely related to Automated Vehicle Identification (AVI). Most toll facilities charge different rates for different types of vehicles, making it necessary to distinguish the vehicles passing through the toll facility. The simplest method is to store the vehicle class in the customer record, and use the AVI data to look up the vehicle class. This is low-cost, but limits user flexibility, in such cases as the automobile owner who occasionally tows a trailer.

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G.P.T.C KORATTY

SEMINAR REPORT 08

ELECTRONIC ROAD PRICING

More complex systems use a variety of sensors. Inductive sensors embedded in the road surface can determine the gaps between vehicles, to provide basic information on the presence of a vehicle. Treadles permit counting the number of axles as a vehicle passes over them and, with offset-treadle installations, also detect dual-tire vehicles. Light-curtain laser profilers record the shape of the vehicle, which can help distinguish trucks and trailers. Transaction Processing Transaction Processing deals with maintaining customer accounts, posting toll transactions and customer payments to the accounts, and handling customer inquiries. The transaction processing component of some systems is referred to as a "Customer Service Center". In many respects, the Transaction Processing function resembles banking, and several toll agencies have contracted out transaction processing to a bank. Customer accounts may be postpaid, where toll transactions are periodically billed to the customer, or prepaid, where the customer funds a balance in the account which is then depleted as toll transactions occur. The prepaid system is more common, as the small amounts of most tolls makes pursuit of uncollected debts uneconomic. Most postpaid accounts deal with this issue by requiring a security deposit, effectively rendering the account a prepaid one. Violation enforcement A Violation Enforcement System (VES) is useful in reducing unpaid tolls, as an unmanned toll gate otherwise represents a tempting target for toll evasion. Several methods can be used to deter toll violators. Police patrols at toll gates can be highly effective, as being stopped by the police is quite memorable for the violator. In addition, in most jurisdictions, the legal framework is already in DEPT OF E&I

G.P.T.C KORATTY

SEMINAR REPORT 08

ELECTRONIC ROAD PRICING

place for punishing toll evasion as a traffic infraction. However, the expense of police patrols makes their use on a continuous basis impractical, such that the probability of being stopped is likely to be low enough as to be an insufficient deterrent. A physical barrier, such as a gate arm, ensures that all vehicles passing through the toll booth have paid a toll. Violators are identified immediately, as the barrier will not permit the violator to proceed. However, barriers also force authorized customers, which are the vast majority of vehicles passing through, to slow to a near-stop at the toll gate, negating much of the speed and capacity benefits of electronic tolling. Automatic number plate recognition: While rarely used as the primary vehicle identification method, is more commonly used in violation enforcement. In the VES context, the number of images collected is much smaller than in the AVI context. This makes manual review, with its greater accuracy over fully automated methods, practical. However, many jurisdictions require legislative action to permit this type of enforcement, as the number plate identifies only the vehicle, not its operator, and many traffic enforcement regulations require identifying the operator in order to issue an infraction. The system The scheme consists of ERP gantries located at all roads linking into Singapore's central business district - areas within the Central Area such as the Downtown Core. They may also be located along the expressways and arterial roads with heavy traffic to discourage usage during peak hours. A device known as an In-vehicle Unit (IU) is affixed on the lower right corner of the front windscreen within sight of the driver, in which a stored-value card, the CashCard, is inserted for payment of the road usage charges. It is mandatory for all Singaporean vehicles to be fitted with an IU if they wish to use

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SEMINAR REPORT 08

ELECTRONIC ROAD PRICING

the priced roads. Foreigners driving foreign-registered cars on priced roads, during the ERP operating hours, could choose to either rent an IU or pay a daily flat fee of S$5. The gantry system is actually a system of sensors on 2 gantries, one in front of the other. Cameras are also attached to the gantries to capture the rear license plate numbers of vehicles which do not have sufficient funds in their CashCards. When a vehicle equipped with an IU passes under an ERP gantry, a road usage charge is deducted from the Cashcard. Sensors installed on the gantries communicate with the IU via a dedicated short-range communication system, and the deducted amount is displayed to the driver on an LCD screen of the IU. The deducted amount is dependent on the time and location (varying from S$0.25 to S$4.00 for passenger cars). No ERP charge is imposed during off-peak hours. Mitsubishi Heavy Industries Ltd sold this technology to Singapore, and the project was spearheaded by a Consortium comprising Philips Singapore Pte Ltd, Mitsubishi Heavy Industries Ltd, Miyoshi Electronic Corporation and CEI Systems and Engineering (now known as CSE Global Ltd) in 1995 through an open tender.

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SEMINAR REPORT 08

ELECTRONIC ROAD PRICING

FIG. THE IU UNIT

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SEMINAR REPORT 08

ELECTRONIC ROAD PRICING

FIG. THE ERP ON OPERATION

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G.P.T.C KORATTY

SEMINAR REPORT 08

ELECTRONIC ROAD PRICING

Advantages of Electronic Road Pricing 1. Raises Revenue for the Government. If the government gets more tax revenue it can mean either: a. other taxes can fall, • b. the government can spend more on public transport • c. or the budget deficit can reduce. Nobody likes new taxes, but whether money is collected from new or old taxes makes no difference to the disposable income of the tax payer. 2. Increase social efficiency. In a free market the consumption of cars are over consumed. When driving people ignore the negative externalities of congestion and pollution. The social cost is much greater than the private cost. Therefore it makes sense for the government to charge a much higher price of driving in congested areas. •

3. Congestion is Inefficient Congestion costs the UK economy over £20 billion a year in lost output and wasted time. This should be tackled. 4. Reduce pollution and global warming. Pollution from cars is a significant contributor to CO2 emissions in the UK. Road charging should encourage people to look for other forms of transport which don’t pollute as much. 5. Save Journey Time - If you earn £15 an hour, why would you not like the idea of paying £7 to get home an hour earlier? Who enjoys sitting in a traffic jam?

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G.P.T.C KORATTY

SEMINAR REPORT 08

ELECTRONIC ROAD PRICING

Arguments against Road Pricing that are no good 1. It is an intrusion on liberty. To drive you need countless documents. When you use electricity the electric companies measure exactly how much electricity you use. When you make a telephone call the telecom company know exactly whom you ring and charge accordingly. Why should driving be any different. 2. Govt is just using it to raise money. Is that not a purpose of income tax, VAT and every other type of tax? Raising money from a new tax enables other taxes to be lowered or spending to be increased. 3. Economic output is more important than Global warming. We shouldn’t worry about the future, the most important thing is keeping taxes low for the current motorist. Read the Stern Report. 4. Increases Inequality. This is true to an extent. A road pricing charge is a higher % of tax for those on low incomes. But so is the cost of buying a car and petrol. If concern about equality of distribution is an issue the govt can alter other taxes and benefits. A tax which increases efficiency need not be stopped on equality grounds. It is always possible to compensate the effects to others.

DEPT OF E&I

G.P.T.C KORATTY

SEMINAR REPORT 08

ELECTRONIC ROAD PRICING

Issues relating to implementation A number of issues were raised during the implementation process which were resolved during the course of the project. A major task of the ERP trial was the installation of equipment on the highway, which required the design, commissioning and installation of two purpose-built gantries to hold the microwave reader beacons for the ARR sites. Gantries are not widely used in the UK and existing structures (e.g. bridges) were only suitable for the M32 site. The successful design and installation of the gantries (see figures below) meant overcoming a number of regulatory and safety issues, ranging from planning consent to traffic management works during installation and highway engineering. Obtaining a specification for the gantries which was acceptable in both engineering and safety terms proved a difficult task. In terms of visual intrusion the original preferred method was to attach brackets to lamp columns to mount the microwave beacons on gallows at the Avon Ring Road sites (shown schematically below as Option 1). However the lamp columns were not of sufficient strength to accommodate the broad span required for a dual carriageway location. The second option was to design and install a purpose built gantry supported on both sides of the carriageway (Option 2). However, owing to the speed limit on this route (80kmh) any structure situated in the central reservation needed to be protected by barriers, so that in the event of vehicular collision the gantry would not collapse. The introduction of such barriers was not a cost effective option owing to the engineering works required.

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SEMINAR REPORT 08

ELECTRONIC ROAD PRICING

Ultimately it was decided to design and manufacture a purpose built cantilever gantry in tubular steel (Option 3). As the supporting column was located in the highway verge (rather than central reservation) it was possible to allow sufficient distance from the edge of the carriageway to overcome this safety issue. The specification and tender documents for the planned ERP system requested a design that operated with integrated smart cards. It had been planned that smart cards could be used in a reader at a P&R site to enable participants to obtain a reduced charge when using this facility. Unfortunately, none of the tenders received from system suppliers were able to offer this integration of in-vehicle unit (IVU) and smart card. A revised design was planned whereby smart cards would be used solely in the P&R reader. However not only would this option require a more complicated system architecture, but it would also be less user-friendly for participants in requiring them to use the smart card in addition to fitting an in-vehicle unit. This was exacerbated by the layout of the P&R site which is a multi-storey structure, and in order to provide ease of access a number of smart card readers would have been required. It was decided therefore to install a further beacon at the entrance to the P&R site to provide a seamless system design which required fewer actions from participants. As a result a revised system architecture was implemented (shown in Figure 3.13) from that documented in D5.1.

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G.P.T.C KORATTY

SEMINAR REPORT 08

ELECTRONIC ROAD PRICING

Owing to the location of the roadside sites and duration of the trial it was considered more cost and time effective to use GSM communications rather than landline, the latter being the charging system contractor’s normal method. This link between roadside sites and the Central Control Station proved to be occasionally unreliable which meant that data stored in the beacons often did not get automatically transferred to the server PC. However, the beacons were able to store a large amount of data and there was therefore no problem of loss of transaction data. Once GSM communications were restored, through re-booting the beacons, the data was transferred to the server PC. It was found during the verification and subsequent system operation that the IVUs were sensitive to placement on the car windscreen. Not only was the angle of the windscreen (and hence IVU mounted upon it) important, but an anti-glare coating also appeared to cause problems with transmission. For the small number of participants who experienced problems with their IVUs exception reports were completed to ensure that the system was correctly recording all journeys. Overall, these implementation issues were overcome which meant not only that the system and trial generated data for evaluation purposes, but that real-life experience of system installation, management and operation was gained together with useful lessons for the future development of such telematic applications.

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SEMINAR REPORT 08

ELECTRONIC ROAD PRICING

FIG. THE CONSTRUCTION OF THE ERP

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