Mitigating and minimising thedistributional impact of roadpricing
Scott Wilson, Director – 30 November 2017, Auckland© D’Artagnan Pacific Pty Ltd

Time/location based charging context➤ Arguably only nine major cities internationally haveintroduced urban road pricing on existing roads.
➤ Excluding urban access control schemes, purely
environmental charges (which still allow full accessby electric cars). Excluding very small charging
schemes (Valetta, Durham).
➤ Excluding network based heavy vehicle charging.
➤ Excluding US piloting full network charging of lightvehicles to replace fuel tax (Oregon, California,Washington).

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Major urban pricing schemes
BergenOslo

LondonStockholm
Gothenburg
Milan
Valetta

TehranDubai
Singapore© D’Artagnan Pacific Pty Ltd2

Urban road pricing schemes have three
primary impacts
1. Shift travel by time of day (lower charge periods,uncharged periods).
2. Shift travel by mode (public transport and activemodes).
3. Shift travel by route (to uncharged bypass or parallelroutes).
4. Consolidate or reduce total travel demand.
Evidence on mode and route shift easy to obtain, time of
day less obvious, total trip suppression may not be easy tofully understand.
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Fundamental challenge of urban roadpricing is benefits vs. what is paid

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Some users pay regardless of no net
benefits➤ Conventional BCR averages value of time, so commercial users havenet benefits, others may not.
➤ Imputed values of time are not “real”, in practice some are willing topay for travel time savings based on specific trip characteristics(urgency, comfort, scarcity of time). US toll lanes demonstrated this.
➤ Scheme design can mean some pay with no net benefits, because
uncongested locations/times are charged. All schemes except
Singapore have this limitation to some extent.

➤ Simple schemes will tend to overprice shorter trips over charging
points compared to longer trips, particularly if scheme is designed
spatially for operational rather than policy reasons.

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Gothenburg charges many uncongestedtrips
 Congestion focused onnorth-eastern area in thepeaks.
 Cordon designed muchlarger for revenue generation
targets

 Scheme operates all day
long with peak and off-peakcharging.
 Little evidence of a need offpeak© D’Artagnan Pacific Pty Ltd

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No income group in Gothenburg has had
net economic benefits
 Scheme resembles a tax that has particularly regressive impacts.
 Major transport scheme to be funded by scheme are not yet completed.

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7Of those who don’t pay concern is aroundlost trips➤ Modal, route and time of day shifts that produce modest
losses to users are treated as acceptable.
➤ Key focus is to remove discretionary trips attimes/locations of peak congestion, because they shouldhave a relatively low economic loss compared to thebenefits in improving mobility for others.

➤ However, major concern around some affected bypricing have no reasonable alternative for essential trips,
particularly during initial years.

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Four main mitigation approachesRefine scheme design: Target the problem, minimise
charging routes, directions and times that are notcongested. Singapore easily the best example of this todate.
Enhance supply of alternatives: Public transport, activemodes, bypass routes, encourage time shift.
Targeted discounts and exemptions for those particularlydisadvantaged.
Reduce other forms of charges or taxation (e.g. carownership taxes).
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9What schemes adopt which measures Singapore most focused on targeting locations and times of day for eachpoint on the network being charged.
 Most schemes put considerable effort into alternatives.
 London has high proportion of discounted/exempt vehicles, but this appears
largely to not be for distributional purposes.
 Only Singapore has reduced other charges in exchange for introducing
urban road pricing© D’Artagnan Pacific Pty Ltd

10What worked and what didn’t?
 Singapore and Gothenburg are almost opposites in terms of targetingthe problem. The more refined the scheme, the fewer users will be
inadvertently charged for little to no travel time savings for them.
 Most schemes to date have focused on radial trips to central areas,so public transport alternatives have been important. Importance ofbypass routes depend on scheme geography, non-radial trips havefewer modal alternatives.
 Discounts and exemptions can be highly effective in targeting small,easy to define/control groups (e.g. disabled), but care to minimise riskof fraud or undermining scheme objectives.
 Little experience in offsetting other charges/taxes. Closer parallel is
the US piloting of distance charging to replace fuel tax (on equity andrevenue sustainability grounds)© D’Artagnan Pacific Pty Ltd11

Unintended consequences Targeting of congestion inevitably has dynamic impacts. Time of dayand charge levels need to change regularly to maintain benefits.
 Supply of alternatives can take away road space from those paying,
reducing benefits to them. E.g. London cycle and bus lanes.

 Around 50% of London zone trips now by discounted/exempt
vehicles. Their behaviour is not effectively managed. Those paying
are now experiencing pre-charge levels of congestion
 Discounts and exemptions can create precedence for more throughlobbying (Manchester project), and have considerable scope forfraud.

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Would these strategies work elsewhere?
➤ Each city is different and complex. Need to understand geography,demography, trip patterns and economic, social equity issues.
➤ Technology capability and cost are enabling scheme design to be moretargeted.

➤ Public transport alternatives crucial for schemes focused major attractors, but
unlikely to be important for wider corridor or network schemes. Lower density,
decentralised metropolitan environments less likely to be able to offer manyusers useful modal choices.
➤ Discounts and exemptions useful, but should distinguish between those that arelong term and those that are transitional (targeted discounts accepting longer
term changes in land use patterns and user choices).
➤ Limited experience in using urban road pricing to replace other charges/taxes,
likely to be considerable merits in exploring this further.
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Thank You!

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