Exploratory Advanced Research . . . Next Generation Transportation Solutions

The Exploratory Advanced Research Program Fact Sheet

With the cost of congestion in the 

United States estimated to be 

in the order of $121 billion,1

transportation planners are under 

increasing pressure to improve

conditions and meet projected demand 

increases. Harnessing emerging

technologies to develop an entirely new 

type of decentralized transportation 

system to help meet this challenge is 

the goal of “Engineering Tomorrow’s 

Transportation Market,” a Federal 

Highway Administration (FHWA) Exploratory 

Advanced Research (EAR) Program 

study awarded to the University of 

Southern California.

Tomorrow’s Transportation Market

Developing an Innovative, Seamless Transportation System

Making Use of Unused Capacity 

Many significant advances have been made to 

provide real-time traffic information that can be 

used to effectively control transportation 

systems; however, this information has been 

applied with limited success to centralized 

transit system design and operation. As the 

workplace continues to move further away from 

core central business districts, the need to 

develop a decentralized system to supply 

transportation services becomes essential to 

meet the changing demands. 

 This project examines innovative 

technologies that can be used to develop such 

a decentralized transportation system, referred 

to here as the “Transportation Market.” This 

integrated system would place a value on idle and 

unused transportation resources and offer realtime allocation of resources in response to 

shifting demand.1

1 “2012 Urban Mobility Report,” Lomax, T., Schrank, 

D., Eisele, B., Texas A&M Transportation Institute, 2012 

(http://mobility.tamu.edu/ums/report/).

Market Goals

The primary goals of the Transportation Market 

are to: (1) radically transform transportation 

systems by more efficiently utilizing available 

transportation resources; (2) reduce congestion 

and pollution by increasing the average number 

of passengers per vehicle; (3) make more 

transportation options available to consumers; 

(4) and increase the number of transportation 

providers by facilitating entrance into the 

market. To demonstrate how these goals might 

be reached, the project researchers are 

creating a real-time distributed system for 

negotiating routes and prices between 

consumers and transportation providers 

(companies or private citizens) who are willing 

to offer available capacity in the Transportation 

Market.

Emerging Technologies 

The Transportation Market system will be based 

on single-item auction mechanisms and 

game theoretic models (used to study 

decisionmaking) that exploit the wealth of 

available traffic data and computational 

models. Consumers and providers will remotely 

access the Transportation Market and either 

request a specific trip or provide competing 

offers for a particular route, as shown in Figure 

1. The system makes use of several emerging 

information technologies, particularly focusing 

on the rapidly growing information infrastructure 

and development of intelligent transportation 

systems. Real-time information will be utilized 

to dynamically price the transportation options 

that form the basis of the market. As 

transportation infrastructure and vehicles 

become equipped with more sensors, 

interconnected data systems, multiway 

communication devices, and on-board computers, 

a wealth of new real-time and dynamic data 

about traffic conditions will become available.
Market Complications

Several complex modeling, implementation, and 

computational issues must be resolved before 

the Transportation Market can be implemented 

successfully. Determining the appropriate fare 

for multiple passengers has led to extensive 

research into the following areas: market-based 

mechanisms, autonomous agents, and 

computational and planning tools. These 

different components must all interact properly 

and result in a platform for the Transportation 

Market that can deliver short and cheap travel, 

show a profit for vehicles in a system with a 

large number of riders and vehicles, and handle 

multiple modes of transportation and different 

types of trips.

Market Simulation 

The project is developing a simulator with 

modules that replicate the Transportation 

Market and are able to model a future 

transportation system based on the market. The 

software will be open access so that other 

researchers and companies can use it as a basis 

for their own work and eventually for 

commercialization and market implementation. 

Over the duration of the project, this simulation 

framework will gradually be scaled up so that 

researchers will be better equipped to analyze 

an increasingly complex transportation market. 

Several outreach activities are planned, including 

conference participation and an invitational 

workshop with leaders in the field of dynamic 

ridesharing. These will help share the team’s 

research findings and provide the team with the 

most current information about the state of 

practice in dynamic transportation markets.

In the short term, the Transportation Market 

could be used to supplement the current public 

transit system as a transportation alternative to 

increase mobility and ride sharing. In the long 

term the Transportation Market may be able to 

replace the current public transit system and 

reshape the transportation landscape. “A fully 

implemented Transportation Market could 

greatly increase the capacity and efficiency of 

our transportation system and substantially 

reduce urban congestion,” said Jeremy Raw at 

FHWA. “In the near term, the lessons learned in 

this EAR Program project will contribute to the 

What Is the Exploratory 

Advanced Research Program?

FHWA’s Exploratory Advanced Research 

(EAR) Program focuses on long-term, 

high-risk research with a high payoff 

potential. The program addresses 

underlying gaps faced by applied highway 

research programs, anticipates emerging 

issues with national implications, and 

reflects broad transportation industry 

goals and objectives. 

To learn more about the EAR Program, 

visit the Exploratory Advanced Research 

Web site at www.fhwa.dot.gov/

advancedresearch. The site features 

information on research solicitations, updates 

on ongoing research, links to published 

materials, summaries of past EAR Program 

events, and details on upcoming events. 

For additional information, contact David 

Kuehn at FHWA, 202-493-3414 

(email: david.kuehn@dot.gov), or Terry 

Halkyard at FHWA, 202-493-3467 

(email: terry.halkyard@dot.gov). 

continuing emergence of innovative marketbased options for urban mobility,” he added.

Learn More

For more information on this EAR Program project, 

contact Jeremy Raw, FHWA Office of Planning, at 

202-366- 0986 (email: jeremy.raw@dot.gov).

Publication No. 

FHWA-HRT-13-058

HRTM-30/04-13(1M)E

Tomorrow’s Transportation Market 

Developing an Innovative, Seamless Transportation System

Image other side: 

www.istockphoto.com/ 

RapidEye Collection

Figure 1. The Transportation Market structure.

© University of Southern California