Income-Based 

Equity Impacts of 

Congestion Pricing

A Primer
Quality Assurance Statement

The Federal Highway Administration (FHWA) provides high quality 

information to serve Government, industry, and the public in a manner 

that promotes public understanding. Standards and policies are used to 

ensure and maximize the quality, objectivity, utility, and integrity of its 

information. FHWA periodically reviews quality issues and adjusts its 

programs and processes to ensure continuous quality improvement.
For more information, contact: 

Patrick DeCorla-Souza

Office of Innovative Program Delivery

Federal Highway Administration

U.S. Department of Transportation

1200 New Jersey Avenue, S.E.

Washington, DC 20590

Tel: 202-366-4076

E-mail: patrick.decorla-souza@dot.gov
Contents

The Primer Series and the Purpose of This Volume 2

Introduction 4

Review of the Literature 6

Issues 6

Impacts on Low-Income Groups 7

Public Opinion 8

Addressing Equity Concerns 9

Evidence From VPP Program Projects 10

Experience From “Partial” Pricing Projects 10

San Diego, CA 10

Denver, CO 11

Minneapolis, MN 11

Houston, TX 12

Seattle, WA 12

Orange County, CA 12

Experience From “Full Facility” Pricing Projects 13

Lee County, FL 13

New York, NY 13

Planning Studies Conducted Under the VPP Program 13

Fast and Intertwined Regular (FAIR) Lanes 13

“FAST Miles” 13

Network of Variably Priced Lanes in the Washington, DC, Metropolitan Area 13

Equity Implications of Urban Partnership Agreements 15

Miami, FL 15

San Francisco, CA 15

Seattle, WA 16

New York, NY 16

Geographic Equity 16

Income Equity 17

Conclusions 19

References 20
2 | C o n g e s t i o n P r i c i n g

The Primer Series and the Purpose of This Volume

States and local jurisdictions are increasingly discussing congestion pricing as a strategy for improving transportation system performance. In fact, 

many transportation experts believe that congestion pricing offers promising opportunities to costeffectively reduce traffic congestion, improve the 

reliability of highway system performance, and 

improve the quality of life for residents, many of 

whom are experiencing intolerable traffic congestion in regions across the country. 

Because congestion pricing is still a relatively 

new concept in the United States, the Federal 

Highway Administration (FHWA) is embarking 

on an outreach effort to introduce the various aspects of congestion pricing to decision-makers 

and transportation professionals. One element of 

FHWA’s congestion pricing outreach program is 

this Congestion Pricing Primer series. The aim of 

the primer series is not to promote congestion 

pricing or to provide an exhaustive discussion of 

the various technical and institutional issues one 

might encounter when implementing a particular 

project; rather the intent is to provide an overview of the key elements of congestion pricing, to 

illustrate the multidisciplinary aspects and skill 

sets required to analyze and implement congestion pricing, and to provide an entry point for 

practitioners and others interested in engaging in 

the congestion-pricing dialogue. 

The concept of tolling and congestion pricing 

is based on charging for access and use of our 

roadway network. It places responsibility for 

travel choices squarely in the hands of the individual traveler, where it can best be decided and 

managed. The car is often the most convenient 

means of transportation; however, with a little 

encouragement, people may find it attractive 

to change their travel habits, whether through 

consolidation of trips, car-sharing, by using public 

transportation, or by simply traveling at lesscongested times. The use of proven and practical 

demand-management pricing that we freely use 

and apply to every other utility is needed for 

transportation. 

About This Primer Series

The Congestion Pricing Primer Series is part of FHWA’s 

outreach efforts to introduce the various aspects of congestion pricing to decision-makers and transportation professionals in the United States. The primers are intended to lay out 

the underlying rationale for congestion pricing and some of 

the technical issues associated with its implementation in a 

manner that is accessible to non-specialists in the field. 

Titles in this series include:

•	 Congestion Pricing Overview.

•	 Economics: Pricing, Demand, and Economic Efficiency.

•	 Non-Toll Pricing.

•	 Technologies That Enable Congestion Pricing.

•	 Technologies That Complement Congestion Pricing.

•	 Transit and Congestion Pricing.

•	 Income-Based Equity Impacts of Congestion Pricing.
IN C O me-Based E quity I m pa c ts of Congestion Pri c ing | 3

The application of tolling and road pricing to 

solve local transportation and sustainability problems provides the opportunity to solve transportation problems without federal or state funding. 

It could mean that further gas tax, sales tax, or 

motor vehicle registration fee increases are not 

necessary now, or in the future. The idea of congestion pricing is a conceptual first step, not a 

complete plan of action. It has to be coordinated 

with other policy measures and environmental 

measures for sustainability. 

Against this background, this equity primer 

was produced to examine the impacts of congestion pricing on low-income groups, public opinion as expressed by various income groups, and 

ways to mitigate the equity impacts of congestion pricing.
4 | C o n g e s t i o n P r i c i n g

There are three principal types of equity considerations that relate to the distribution of benefits and 

burdens of toll or congestion-pricing projects:

1. Income equity: Are low-income groups negatively 

affected? Is a system that places the burden of 

travel-behavior change disproportionally on lowincome individuals fair? 

2. Geographic equity: Are some parts of the region 

made worse off than other parts? Will traffic diversion from tolled routes negatively impact 

neighborhoods or reduce performance on alternative toll-free routes?

3. Modal equity: Are public perceptions with regard 

to encouragement of multi-modal transportation 

addressed? For example, some believe that it is 

not fair to offer the same travel-time savings to 

those who pay a toll as to those who “do the right 

thing” by carpooling or taking transit.

This primer focuses on the first type of equity—

income equity. Equity concerns with regard to income have often been raised about congestion pricing. The benefits of congestion pricing may not be 

distributed equally among all users. High-income 

users are more likely to remain on the highway, pay 

the congestion fee, and benefit from a faster trip. 

Low-income users may be worse off if they choose 

other less-expensive times, routes, or modes. When 

public use of infrastructure assets is deliberately 

made more expensive at certain times, low-income 

people and those concerned about their welfare 

may raise legitimate concerns about equity. 

Toll roads impact environmental justice in at least 

two ways: impacts from the alignment and impacts 

from the ability to take advantage of better service. 

This primer focuses on the second impact—the ability to take advantage of better service—because the 

focus is on congestion pricing as applied to existing 

facilities. This primer presents information on the 

low-income equity issue in three sections as follows: 

1. An overview of what is known about the lowincome equity issue on the basis of current literature, 

2. Results from studies conducted under the U.S. 

Department of Transportation’s (DOT’s) Value 

Pricing Pilot (VPP) Program, and 

3. What is known about the issue, at this point in 

time, from DOT’s urban partners funded under 

the Urban Partnership Agreement (UPA) Program and the Congestion Reduction Demonstration (CRD) Program. 

Introduction
IN C O me-Based E quity I m pa c ts of Congestion Pri c ing | 5

Map showing U.S. Department of Transporation urban partners under the Urban Partnership 

Agreement and Congestion Reduction Demonstration Programs.

Urban Partners

San Francisco

Atlanta

Miami

Seattle

Los Angeles

Minneapolis-St. Paul

★

★

★

★

★

★

The VPP Program was established by the U.S. 

Congress as the Congestion Pricing Pilot Program 

in 1991. It was subsequently renamed the VPP 

program under Section 1216 (a) of the Transportation Equity Act for the 21st Century (TEA-21) in 

1998, and continued through the 2005 Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU). 

The UPA Program was announced by U.S. DOT 

in May 2006 and was followed by the CRD 

Program, initiated in 2007. Both programs were 

designed to address congestion problems, with 

particular emphasis on establishing partnerships 

with major urban areas to make significant reductions in roadway congestion by using congestion 

pricing as a key strategy. There are currently six 

urban partner cities—Miami, FL; Atlanta, GA; 

Minneapolis, MN; Seattle, WA; San Francisco, CA; 

and Los Angeles, CA. New York, NY, was originally designated an urban partner but lost its 

urban partner status in April 2008 after it failed 

to obtain the legislative authority needed to implement congestion pricing. 
6 | C o n g e s t i o n P r i c i n g

Issues

The “fairness” question may be viewed within the 

context of the overall highway financing system, in 

which, in the absence of congestion fees, the costs 

of providing peak-period highway service are borne 

by all highway users, not just by those who travel 

during congested periods or on congested routes. In 

this context, placing more of the burden of paying 

for peak-period highway service on those who make 

use of peak highway capacity is being increasingly 

viewed as an equity improvement.

A well-designed value-pricing plan can be less 

burdensome to low-income citizens than current 

systems that are based on regressive taxes, such as 

car-registration fees, sales taxes, and the gas tax. For 

example, low-income drivers usually drive older vehicles that are not as fuel-efficient as newer models. 

They therefore must purchase more fuel per mile 

driven and consequently pay higher fuel taxes for 

each mile driven than do those who own newer 

fuel-efficient models.

A report by the U.S. Congressional Budget Office (1990) found that the tax on motor fuels was 

regressive relative to annual income. In addition, 

Schweitzer and Taylor (2008) noted in one study 

that most forms of transportation finance—fuel 

taxes, sales taxes, and tolls—are regressive forms of 

taxation in that they burden the poor more than 

they do the rich. Schweitzer and Taylor (2008) stated that, “Using sales taxes to fund roadways creates 

substantial savings to drivers by shifting some of the 

costs of driving from drivers to consumers at large, 

and in the process disproportionally favors the more 

affluent at the expense of the impoverished.” 

Another equity concern is that congestion pricing 

may make it too difficult or too expensive for lowskilled workers to get to their jobs. Entry-level and 

unskilled jobs are often not well served by public 

transit. Even if service routes exist for jobs of this 

type, the work hours for such jobs often require travel during off-peak service times, making public transit 

use less appealing as an option. Many low-skilled 

workers need to drive to retain their jobs; however, 

any congestion-pricing system can be sensitive to the 

issue of affordability, as discussed later in this primer. 

When congestion pricing relies on an electronic 

cashless technology, households that do not have 

credit cards, bank accounts, or cannot afford large deposits may be unable to set up toll accounts, which 

may limit their use of these facilities. The Auto Express System in Puerto Rico mitigates many of these 

barriers by allowing users to purchase transponders 

and replenish their accounts by using cash at numerous retail and convenience stores without the need 

to provide a checking account or a credit card number. A light on the tag indicates when funds in the 

prepaid account are running low. Customers then 

have the option of replenishing their accounts at any 

number of locations, including gas stations. In Texas, 

TxTag accounts may be opened with cash. Those replenishing depleted accounts with cash must currently do so at a customer service center, but TxDOT 

is working with retailers to make TxTag services 

available at many retail outlets.

Another equity concern is that most tolled facilities that use electronic toll collection offer discounted tolls to those who use transponders rather 

than using video tolling or booth tolling. In situations in which the purchase of a transponder presents a significant economic barrier, low-income 

Review of the Literature
IN C O me-Based E quity I m pa c ts of Congestion Pri c ing | 7

Equity implications of hypothetical Los Angeles 

5-cent vehicle-miles-traveled (VMT) fee, 1991. 

35%

30%

25%

20%

15%

10%

5%

0%

Quintile 1 Quintile 2 Quintile 3 Quintile 4 Quintile 5

Share of Financial Burden

Reduction in Daily VMT

travelers who cannot afford a transponder will face 

a regressive toll schedule. It is estimated that between 10 and 20 percent of the population is unable to overcome these barriers to transponder 

ownership (Parkany, 2005).

IMPacts on Low-Income Groups

Congestion-priced facilities currently in operation 

in the United States include tollways and tolled water crossings with variable tolls and priced lanes 

along major transportation corridors that experience high levels of congestion (U.S. DOT, 2008). 

Such congestion-pricing projects are operating in 

California, Minnesota, Washington, Colorado, Utah, 

Florida, Texas, New Jersey, and New York. The data 

from priced lanes have shown that a wide range of 

income groups use the lanes at different levels of 

frequency of use.

The use of congestion-priced lanes by both highand low-income users appears to be selective. If use 

of priced facilities was solely dependent on income, 

then low-income travelers would never use such facilities. Studies have indicated that roughly half of 

the users of congestion-priced lanes do so once a 

week or less. Weinstein and Sciara (2004) suggested 

that the impacts of congestion pricing are not necessarily related to income and can also be based on 

flexibility of time and routes available to users. 

A paper by the Rand Corporation and Volpe National Transportation Systems Center (2007) indicated that household surveys suggest that rush-hour 

travelers who travel in the busier direction—and 

thus are more likely to pay congestion charges—are 

the most affluent group within the larger category 

of street and highway users.

Congestion pricing clearly will create economic 

hardship for some households. Svadlenak and Jones 

(1998) found that of adult residents in the Portland, 

OR, area who travel during peak hours in singleoccupant vehicles, approximately 3 percent are 

low-income commuters. Of all Portland-area commuters, 38 percent travel during peak hours in single-occupant vehicles and have relatively high incomes. Svadlenak and Jones (1998) suggested that 

of this 38 percent, most can afford tolls and would 

welcome tolls if they resulted in a commensurate 

improvement in travel time. 

Deakin and Harvey (1996) found that, if a 5-cent 

vehicle-miles-traveled fee were to be imposed in 

Los Angeles, CA, the lowest income quintile (i.e., 20 

percent of users) would bear only 7 percent of the 

financial burden, whereas the highest income quintile would bear 35 percent of the financial burden.

Safirova et al. (2003) estimated the impacts of a 

high-occupancy toll (HOT) lane network in the 

Washington, DC, area. They found that the lowest 

income quartile would pay 5.2 percent of tolls, 

whereas the highest income quartile would pay 

50.3 percent of tolls.

Commuting pattern by income group in the Portland, OR, area.

Less Than 100%–200% More Than

Poverty of Poverty 400% of Poverty

 Guideline Guideline Guideline

 Not Employed 58.7% 43.2% 16.7% 

 SOV-Peak 17.1% 14.6% 35.4% 

 SOV-Off-Peak 4.3% 13.4% 19.2% 

 Carpool-Peak 5.7% 7.2% 9.8% 

 Carpool-Off-Peak 5.7% 2.3% 2.2% 

 All Other Modes 8.5% 19.2% 16.6% 

 Total 100.0% 100.0% 100.0%

 Number of Cases 109 229 575

 Missing Cases* (16) (21) (63)

*Missing data concerning mode of travel were allocated proportionately across five 

commuter categories.

SOV = single-occupancy vehicle.
8 | C o n g e s t i o n P r i c i n g

Transek (2006) found that, in the case of the 

Stockholm city center congestion-pricing scheme, 

affluent men in the inner city pay the most in congestion-pricing charges. Because high-income individuals use their cars more frequently, it was found 

that high-income households were more likely to 

incur the congestion charge compared with the average household. This analysis indicates that, if the 

revenues are used for public transportation, those 

who gain the most from the pricing scheme are 

young people, low-income individuals, single people, women, and residents of the inner suburbs. 

These groups pay relatively little in congestion 

charges on average and use public transportation 

more often than do other groups.

Public Opinion

Taniguchi (2008) provided results from a survey of 

public opinion on paying for transportation infrastructure with tolls versus taxes. The survey found 

that support for tolls was higher among low-income 

individuals (58 percent support for tolls) than 

among high-income individuals (42 percent support for tolls). Support for taxes was 32 percent for 

low-income individuals compared with 45 percent 

for high-income individuals. 

Morallos (2006) found that, although limited, 

evidence from the successfully operating VPP projects clearly demonstrates that the most valued feature in tolling and pricing projects is that of providing people with a choice of whether to use priced 

lanes. Studies have shown that lower income individuals face the greatest financial harm when they 

are denied adequate travel choices. Lack of choice 

to pay a toll in exchange for reliable travel times can 

result in lost wages or late fees for daycare that 

could have been avoided. 

Even when priced lanes are seen to be used more 

heavily by high-income users than by low-income 

users, a broad spectrum of income groups still express approval of the projects (as documented later 

in this primer) because they are given the choice of 

choosing the tolled route, an alternative free route, 

Welfare changes and equity impacts by income group under high-occupancy-toll (HOT) lane network policy in 

the Washington, DC, area.

 Tolls paid by Percentage of Welfare Percentage of Welfare change

 income group tolls paid by change* welfare change as percentage

 Quartile ($000/year) income group ($000/year) accruing to quartile of income

1 3,412 5.2 3,047 2.9 0.028 

2 7,822 12.0 12,172 11.5 0.037

3 21,073 32.4 32,717 30.9 0.050

4 32,728 50.3 57,935 54.7 0.042

Total 65,035 100.0 105,870 100.0 0.045

*Before counting the value of toll revenues.

Source: Welfare and Distributional Effects of Road Pricing Schemes for Metropolitan Washington, DC. Elena Safirova, Kenneth Gillingham,

Ian Parry, Peter Nelson, Winston Harrington, and David Mason, October 2003—Discussion Paper 03-57.

<$35K $35K–$55K $55K–$100K >$100K

58%

32%

36%

51%

45%

41% 42%

45%

9%

13% 14% 12%

Tolls Taxes No Answer

Support for tolls versus taxes in King County, 

Washington. Low-income households prefer 

tolls over taxes. 
IN C O me-Based E quity I m pa c ts of Congestion Pri c ing | 9

or a different transportation mode. Although highincome motorists do use the priced lanes more often, all income groups value the choice of a reliable 

trip travel time that is now available to them, serving their needs when they absolutely have to get to 

their destinations on time (e.g., getting to a daycare 

center before late fees kick in). 

ADDRESSING EQUITY CONCERNS

Research has identified strategies for addressing equity concerns through redistribution of toll revenues. These include distributing rebates or credits, 

or revenue transfer to transit and carpooling services in the priced corridor. To ensure that at least 

some surplus toll revenue is used to improve transit, 

some areas have passed legislation to dedicate a 

portion of the surplus revenue to transit, whereas 

others have created special transit accounts. 

A particularly important consideration in evaluating congestion-pricing options and their equity 

implications is the use of revenues generated by 

tolls. Toll revenues can be used to compensate those 

who might otherwise consider themselves “losers” 

as a result of congestion pricing. Compensation can 

come in a variety of forms. Toll revenues may be 

used to finance highway improvements (particularly in the corridor where the tolls are levied) or to 

pay for improvements in transit service. In cases in 

which effects on low-income drivers are felt to be 

particularly severe, toll exemptions or toll rebates 

may be offered to eligible drivers, or other forms of 

monetary compensation may be offered, such as tax 

rebates that provide reimbursment for tolls paid or 

income supplements. 

Each of these approaches has been used or considered for use in congestion-pricing programs. For 

example, revenues from area pricing in Central 

London were used in part to improve bus service 

into the priced area, thereby enhancing transportation services to low-income groups and other users 

of those systems. The statutes in California mandate 

that 18 percent of toll revenues from the Bay Area 

Toll Authority be transferred into three accounts 

controlled by the Metropolitan Transportation 

Commission, a multimodal planning agency for the 

region. The Port Authority of New York and New 

Jersey likewise uses surplus toll revenue to subsidize transit services. When New York City considered a cordon-pricing scheme, it proposed a tax rebate for drivers who qualified for the federal-earned 

income tax credit. In the case of a proposed congestion-pricing scheme on the San Francisco Bay 

Bridge, tolls were to be raised from $1 to $3 per 

trip, but the proposal called for a reduced “lifeline” 

toll rate of $1 for low-income users. 

Schweitzer and Taylor (2008) suggested that if 

policymakers are worried about low-income, peakperiod commuters paying tolls, one way to address 

this would be to provide discounted “lifeline” pricing based on income levels, as is done by utility 

companies for qualifying customers. As an alternative, they could provide travel credits to low-income 

commuters. 
10 | C o n g e s t i o n P r i c i n g

Evidence From VPP Program Projects

The perception that value pricing is “unfair” to lowand perhaps even middle-income drivers has been a 

concern for many VPP program projects. Since the 

inception of the VPP program, equity has been a 

key issue of interest, with particular attention given 

to mitigating possible adverse effects of projects on 

low-income drivers. Project experiences are summarized in FHWA’s report on lessons learned from 

the program (KT Analytics and Cambridge Systematics, Inc., 2008). Project experience has shown, 

particularly for the most common projects funded 

under the early phases of the program (e.g., HOT 

lanes), that the perception of unfairness may be exaggerated. Data from the various cities that have 

implemented projects or have projects underway 

are discussed below. Most of the data have been obtained from projects involving “partial” pricing on 

one or more lanes of a freeway facility. Equity impacts relating to income have not been evaluated in 

the case of “full facility” pricing projects, such as 

those implemented on tollways and tolled water 

crossings. Overall, the perception that congestion 

pricing is an inequitable way of responding to the 

problem of traffic congestion does not appear to be 

borne out by experience.

Experience From “Partial” 

Pricing Projects

San Diego, CA

For the I-15 HOT lanes in San Diego, CA, user and 

stakeholder concerns about the potential elitist character of the project arose in the first year but 

diminished with time as users across income groups 

used the facility. By the final evaluation, such concerns were minimal. In the case of the planned 

expansion and extension of the I-15 HOT lanes, a 

telephone survey of all facility users of I-15 found 

that most consider the extension fair to regular-lane 

users (71 percent approval) and to HOT-lane users 

(75 percent approval). There were very few differences in attitudes about the fairness of the lanes based 

on ethnicity or income; however, half of respondents 

felt that tolling solo drivers was an unfair double taxation. HOT-lane users paying tolls were less likely to 

feel that way than were other corridor users. 

When considering the statement, “People who 

drive alone should be able to use the I-15 express 

lanes for a fee,” 80 percent of the lowest income 

motorists using the I-15 corridor agreed with it, and 

People who drive alone should be able to use 

the HOV lanes for a fee—agree or disagree?

100

90

80

70

60

50

40

30

20

10

0

White <40 40–70

Percent Agree

Ethnicity Income ($000s)

All Hispanic Asian 70–100 100+

Public acceptance of I-15 high-occupancy toll lanes 

by income group and ethnicity. There is wide support 

for value-pricing concepts, which are viewed as 

“buying time” for a premium level of service. 
IN C O me-Based E quity I m pa c ts of Congestion Pri c ing | 11

80%

70%

60%

50%

40%

30%

20%

10%

0%

Higher Income Middle Income Lower Income

79%

70%

55%

low-income users were more likely to support the 

statement than were the highest income users. 

Users of San Diego’s I-15 HOT lanes were 

more likely to have higher incomes than were 

drivers in regular lanes, but lower income drivers 

sometimes did use the HOT lanes. I-15 drivers 

showed a broad approval of the HOT-lane program and felt that it was fair and had reduced 

congestion. Equity issues are addressed by dedicating the HOT-lane revenues to bus service in 

the corridor. I-15 was the first project to demonstrate that implementing tolls as a demand-management measure can play a major role in paying 

for transit and reducing the negative impact of 

this strategy on low-income individuals.

Denver, CO

For the I-25/US-36 HOT lanes in Denver, CO, public outreach leading to implementation of HOT 

lanes did not uncover critical concerns regarding 

equity or other social impacts, nor have such concerns arisen since implementation.

Minneapolis, MN

On I-394 in Minneapolis, MN, the first attempt at 

implementing HOT lanes in1997 met resistance in 

large part because of public belief that only highincome users would benefit. A second attempt approximately 9 years later succeeded in part because 

advocates made the case that all income groups 

value time savings and reliability for certain trips. 

Worsening congestion and a shortage of transportation funds were also important to the success of the 

second attempt, according to evaluators. Surveys of 

corridor users found a relatively small difference in 

income between those who do and those who do 

not own transponders: 25 percent of owners had 

annual incomes of $50,000 or less compared with 

32 percent of non-owners. However, concerns about 

equity have not been significant since start up.

Patterson and Levinson (2008) stated that “the 

[HOT] lanes are Lexus Lanes in the sense that increased income predicts increases in three of the 

four metrics used to measure direct benefit.... 

Individuals with higher incomes receive more direct benefits from the lane than those with lower 

incomes.” However, according to the University of 

Minnesota and NuStats (2005), HOT-lane usage 

with MnPass was reported across all income levels, 

including by 79 percent of high-income respondents, 70 percent of middle-income respondents, 

and 55 percent of low-income respondents. 

Patterson and Levinson (2008) sought to determine whether the higher levels of MnPass use found 

among wealthier drivers was attributable to their 

residential location (specifically along the managedlanes corridor) or to their income. Both factors were 

found to be significant. The highest income motorists paid the most (in average and total tolls) and 

received the most benefit. 

Patterson and Levinson (2008) cited specific equity benefits of managed lanes:

•	 Vehicle shifts away from general-purpose lanes

lead to improved travel conditions on such 

lanes, 

•	 A high-quality transit alternative is generally part

of a managed-lanes project, 

•	 Unused transponders may be considered to provide high-value travel-time insurance to their 

owners, and 

•	 When social benefits are paid for by those who

choose to drive, situational equity is generally 

improved.

Users of I-394 MnPass high-occupancy toll lanes as a 

percentage of Minneapolis, MN, population.
12 | C o n g e s t i o n P r i c i n g

Approximately 65 percent of respondents to a 

survey conducted in spring 2006, a year after initial 

implementation, thought that HOT lanes were a 

good idea. Support for the lanes was also found to 

be high across income levels, including by 71 percent of high-income respondents, 61 percent of 

middle-income respondents, and 64 percent of lowincome respondents.

Houston, TX

For the I-10 and US-290 HOT lanes in Houston, 

TX, focus groups held during project planning did 

not find concerns about social equity among either 

corridor users or the public at large. The general reaction was that all would benefit if congestion were 

reduced. There also have been no equity concerns 

raised during operations. It should be noted, however, that these HOT lanes are somewhat different 

from other examples, that is, single-occupant vehicles are not permitted in the HOT lanes—tolls are 

used to manage two-person carpool demand. Burris 

et al. (2007) found that even in the lowest income 

group, over two-thirds of respondents were interested in paying to use the HOT lanes.

Seattle, WA

For SR-167 HOT lanes in Seattle, WA, evaluators 

found through outreach efforts that low-income 

drivers are as supportive of the HOT lanes as are 

drivers from other income groups.

Orange County, CA

SR-91 in Orange County, CA, was the first project 

to implement congestion pricing on new lanes and 

until 2008 was the only operating example of congestion pricing on new lanes. FHWA’s A Guide for 

HOT Lane Development report (FHWA, 2005) provides data from studies of SR-91 express toll lanes 

in California. At any given time, about one-quarter 

of the vehicles in toll lanes are driven by high-income individuals, whereas the remaining cars are 

driven by low- and middle-income individuals. It is 

estimated that 19 percent of the peak-period users 

of the SR-91 express lanes make less than $40,000 

a year, and 42 percent make less than $60,000 a 

year. Low-income drivers do use the express lanes 

and are as likely to approve of the lanes as drivers 

with higher incomes. In fact, over half of commuters with household incomes less than $25,000 a 

year approved of providing toll lanes. 

An evaluation of the SR-91 express lanes (Sullivan, 2000) found a “moderate” income effect, with 

the percentage of trips on the express lanes for the 

lowest and highest income groups (20 percent and 

50 percent) staying the same over the 3-year evaluation period. Evaluators also found that the use of 

express lanes increased over time for both those 

who carpooled and solo drivers across all incomes. 

Low-income and moderate-income travelers appeared to be more selective and used the tolled 

route for less than half of their trips.

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

Lower Income Middle Income Higher Income

62% 62% 61% 64% 63%

71% 71%

63% 60%

Fall 2004

Fall 2005

Spring 2006

$60–$100K

 37%

$40–$60K

 23%

<$40K

 19%

>$100K

 21%

Percentage of Minneapolis consumers surveyed who 

approve of allowing single-occupant drivers to use 

the carpool lane for a fee.

Annual household income of SR-91 peak-period 

travelers in 1999.
IN C O me-Based E quity I m pa c ts of Congestion Pri c ing | 13

When prices rose, people in the lowest income 

group did not reduce their travel, but people of 

moderate income did. This suggests that people 

with lower incomes have less flexibility in the time 

they travel (Kuehn, 2008), or that low-income individuals have very high values for reliable travel 

when they need it.

Experience From “Full facility” 

Pricing Projects

Lee County, FL

In Florida, proposals to raise peak-period tolls on 

Lee County’s bridges were rejected as inequitable 

to those with inflexible schedules and led to a program of reduced off-peak tolls instead. Income equity was not raised as an issue in planning or in 

evaluation focus groups and surveys.

New York, NY

The Port Authority of New York and New Jersey 

did not uncover major equity issues in planning for 

variable tolls, nor did they evaluate equity effects 

after program implementation.

Planning Studies Conducted

Under the VPP Program

Studies funded under the VPP program have included innovative approaches designed specifically 

to address equity issues. The authors of one study 

evaluated the equity impacts of a regional value 

pricing program, which are discussed below.

Fast and Intertwined Regular (FAIR) 

Lanes 

This approach was studied in Alameda County, CA, 

and involved providing toll credits to qualified lowincome users on the basis of their monitored usage 

of free regular lanes located adjacent to HOT lanes. 

Accumulated credits allowed for periodic free use 

of the HOT lanes by these motorists.

“FAST Miles” 

The FAST Miles approach being studied in Minneapolis would allocate a fixed amount of toll credits to all area motorists, similar to the limited number of free peak-period minutes allocated by cell 

phone companies to their customers. Total credits 

allocated to all motorists would be limited by the 

peak-period capacity available on the roadway system. This would ensure that demand would not 

exceed supply of road space (i.e., roadway capacity) 

and guarantee congestion-free travel for all motorists in exchange for use of their free credits to “pay” 

for roadway use.

Network of Variably Priced Lanes in the 

Washington, DC, Metropolitan Area

An analysis was performed for three scenarios involving a network of priced lanes (National Capital 

Region Transportation Planning Board, 2008). With 

respect to transit, because transit service was added 

between the base case and the scenarios, only gains 

in accessibility were noted. With regard to highways, one scenario had no losses in accessibility; 

thus, no population group experienced losses. The 

pattern of losses and gains for the other two scenarios were very similar, with no one population 

group receiving a large share of the benefit and no 

one population group shouldering a disproportionate share of the losses. Gains and losses in accessibility to jobs by highways across population groups for 

one scenario is presented in the figure “Demographic assessment of the change in accessibility to jobs 

by highways,” and the distribution of gains in accessibility to jobs by transit for the same scenario is 

presented in the figure “Demographic assessment of 

the change in accessibility to jobs by transit.”
14 | C o n g e s t i o n P r i c i n g

General Population

African American

Asian

Hispanic/Latino

Low-Income

Disabled

23.0%

80.8% 19.2%

74.5%

77.0%

82.4%

77.0%

79.5%

25.5%

23.0%

17.6%

20.5%

0% 20% 40% 60% 80% 100%

Minimal Impact Moderate Gain

General Population

African American

Asian

Hispanic/Latino

Low-Income

Disabled

7.6%

8.9%

7.5%

6.9%

13.0%

11.6% 11.6%

80.3% 12.1%

83.6%

77.9%

70.8%

76.8%

80.0%

8.9%

15.2%

16.2%

11.2%

0% 20% 40% 60% 80% 100%

Moderate Loss Minimal Impact Moderate Gain

General Population

African American

Asian

Hispanic/Latino

Low-Income

Disabled

23.0%

80.8% 19.2%

74.5%

77.0%

82.4%

77.0%

79.5%

25.5%

23.0%

17.6%

20.5%

0% 20% 40% 60% 80% 100%

Minimal Impact Moderate Gain

Disabled

8.9%

80.0%

11.2%

0% 20% 40% 60% 80% 100%

Moderate Loss Minimal Impact Moderate Gain

Demographic assessment of the change in 

accessibility to jobs by highways.

Demographic assessment of the change in 

accessibility to jobs by transit.
IN C O me-Based E quity I m pa c ts of Congestion Pri c ing | 15

FHWA conducted a survey of the UPA cities (including New York) to gather information about the 

real and perceived equity implications of their projects. In addition to equity by income, regional geographic equity was also considered in some instances, because the costs of congestion pricing and the 

distribution of benefits (typically in the form of 

new transit and ferry services funded from toll revenue) may be distributed unequally, as with any 

transportation policy that does not involve tolls or 

pricing. The comprehensive evaluations that take 

place in the UPA cities will each, to some degree, 

provide further examination of equity issues after 

the projects are in operation. Details about the 

projects are available on FHWA’s Web site at http://

www.upa.dot.gov/index.htm

MIAMI, FL

Focus groups were conducted in 1995 in regard to 

South Florida’s managed lanes on I-95. The focus 

groups discussed potential traffic-improvement 

strategies, including managed lanes. Of the nine focus groups of approximately 10 participants each, 

five were conducted in English, three in Spanish, 

and one in Creole. Although focus groups by their 

nature do not present a statistically valid representation of public opinion, their results may nevertheless be indicative of such opinion. Focus groups also 

have the benefit of ensuring that people fully understand the aspects of an issue before voicing their 

opinions.

A key finding from the focus groups is that the 

perceptions of benefits from managed lanes did not 

divide along any apparent demographic boundary, 

including ethnicity and income. The managed-lanes 

concept was found to be difficult to communicate, 

but after sufficient time was taken to convey the 

concept clearly, participants generally perceived 

that both personal and regional benefits would result from managed-lanes implementation. As could 

be expected, participants said that they would use 

managed lanes less frequently as the price to use 

these lanes rises. It is interesting to note, however, 

that many individuals had been unaware of toll increases that took place in the region shortly before 

the focus groups were conducted, suggesting that 

those who participated in the focus groups might 

be overestimating their price sensitivity.

SAN FRANCISCO, CA

A 2007 survey asked 600 residents of the San Francisco, CA, region (JD Franz Research, Inc., 2007) 

about support for studying congestion pricing. Support was found to be slightly higher among verylow- and low-income residents of the region relative to other residents. San Francisco’s UPA project 

managers offered a theory for this result: Lower income residents are more likely to be transit riders 

who would benefit from both reduced congestion 

and increased transit investments from pricing revenues. For low-income drivers, their increased likelihood of having less scheduling flexibility (e.g., due 

to having to punch a time clock) and concern about 

daycare late fees may cause them to more highly 

value reduced congestion and greater travel time 

reliability.

Equity Implications of 

Urban Partnership Agreements
16 | C o n g e s t i o n P r i c i n g

SEATTLE, WA

King County, WA, conducted a transportation survey in December 2007 (EMC Research Inc., 2007). 

Many questions were asked of the 501 respondents, 

a number of them pertaining to support for tolling. 

Although the survey report did indicate the percentage of respondents in each income group, survey responses were not broken out by income. 

Among the findings was high support for tolling 

when compared with other alternatives when a 

specific infrastructure need was presented. Between 

78 and 84 percent (depending on the order in which 

answers were presented) of respondents preferred 

electronic tolls over a sales tax increase to fund the 

SR 520 bridge replacement.

Support for tolling grew substantially if a portion 

of revenues was dedicated to transit, even if tolls 

had to be significantly higher to allow for such a 

diversion of revenue to occur. A toll of $2.50 to 

fund the replacement of the Lake Washington floating bridge was supported by 64 percent of respondents, whereas 74 percent supported a $4 toll to 

fund the bridge replacement along with increased 

transit and bicycling investments in the corridor. 

Thus, the equity and other benefits of improved 

transportation options were shown to be more important to respondents than was keeping the toll 

rates as low as possible.

With revenues dedicated to replacing the SR 

520 bridge, 69 percent of respondents indicated 

support for variable tolling. In regard to another 

roadway, in which the need for tolling revenues 

was not presented, only 28 percent of survey participants indicated support for variable tolling, 

even after the benefits of such tolling in terms of 

relieving congestion were described to them. The 

bottom line is that the use of revenues is an extremely important determinant of public support 

for congestion pricing and is likely to be a more 

important determinant of support than the level 

of congestion charges and the design of the congestion-pricing scheme.

NEW YORK, NY

An analysis was conducted for the New York City 

Traffic Congestion Mitigation Commission with regard to the regional equity implications of three 

cordon pricing and tolling scenarios and supporting 

transit services (New York City Traffic Congestion 

Mitigation Commission, 2008). Results from the 

analysis are discussed below.

Geographic Equity

The analysis of the regional equity implications of 

the scenarios under consideration started by emphasizing the regional inequities from existing toll 

policies, in which 45 percent of toll revenues collected from drivers bound for Manhattan’s central 

business district (CBD) are paid by New Jersey 

residents, even though New Jersey vehicles constitute only 24 percent of the total drivers heading 

into the CBD. This 45 percent figure can be compared with Manhattan drivers, who currently pay 

only 7 percent of collected toll revenues, and residents of the other four boroughs of New York City, 

who pay a total of 29 percent. 

Three scenarios were considered: (1) the mayor’s 

cordon pricing plan, (2) an alternative modified 

cordon pricing plan, and (3) tolling of existing free 

bridges into Manhattan. For new tolls under the 

various scenarios, Manhattan residents would pay 

between 28 and 31 percent, residents of the other 

four boroughs would pay between 38 and 49 percent, and New Jersey residents would pay only an 

additional 7 to 17 percent. The new toll revenues 

would be dedicated to subsidizing transit, and the 

new transit would primarily serve New York City 

residents. The new bus routes would be along the 

corridors where there is substantial car commuting, 

further relieving congestion along these routes and 

thus directly benefiting those who continue to commute by car.

The analysis concluded that between 22 and 24 

percent of revenues for the transit subsidies would 

come from Manhattan drivers, and 41 percent 

would come from drivers from other boroughs, 

which would appear to be fair. Both the mayor’s 
IN C O me-Based E quity I m pa c ts of Congestion Pri c ing | 17

congestion-pricing plan and the alternative congestion-pricing plan were found to “allocate transit 

subsidies among drivers largely in proportion to the 

percentage of CBD-bound drivers in each geographic area.” The toll plan, which added tolls to 

bridges that are currently toll-free, “allocates transit 

subsidies less proportionately as compared to the 

two congestion pricing plans.”

Income Equity

Councilwoman Melissa Mark-Viverito’s blog posting 

on January 30, 2008 (Mark-Viverito, 2008), partially 

excerpted on this page, speaks for itself. 

The New York City mayor’s proposed congestion-pricing plan, the alternative congestion-pricing 

plan, and the toll plan all included the imposition of 

new fees and tolls. To better understand the impacts 

of these costs on different socioeconomic groups, 

agency staff examined the income profiles of those 

groups most likely to pay the fee or toll. This analysis raised several issues for further consideration, as 

discussed below.

The fee and toll plans most impact those who 

drive to the CBD on a daily basis; the vast majority 

of trips into the zone are not made by automobile. 

Therefore, individuals who typically walk, bike, or 

take transit to the CBD would not be financially 

affected by the fee or toll options. Of motorists, 

those who drive into the CBD every day for work 

would be most impacted. For example, under the 

mayor’s plan, a daily auto commuter who travels 

from Upper Manhattan to the Financial District 

would pay about $2,000 in congestion fees each 

year (vs. $912 a year for those who use transit). By 

comparison, a motorist who drives into the zone on 

weekdays once or twice a month for shopping or 

entertainment would pay about $100 to $200 a 

year in congestion fees under the mayor’s plan.

Those who commute by car to the CBD earn 

comparatively higher incomes: New York City 

DOT staff analyzed the income levels of city and 

suburban residents who use the automobile as their 

primary mode to reach Manhattan jobs. Staff found 

that of the 2.14 million workers in Manhattan, 

about 292,000, or 14 percent, drive to work each 

day. These workers have a median annual income of 

$60,941, compared with a median annual income 

of $46,416 for all workers in Manhattan, including 

the 1.85 million workers who take transit, walk, or 

bike to work. In aggregate, the fee would most impact commuters who earn 31 percent more than 

the median income of all Manhattan workers. Taking into account other income earners in the household, workers who drive to work in Manhattan have 

a median household income of $103,700. This 

compares with a median household income of 

$89,379 for all Manhattan workers.

A small proportion of low- and moderate-income commuters who drive would be dispropor-

“In the East Harlem and South Bronx communities that I represent, we

are automatically skeptical when business interests and politicians 

from outside our communities claim to be watching out for us—

because nine times out of 10, they’re doing just the opposite. 

“So it is with congestion pricing. For months, some suburban elected 

officials from wealthy areas, as well as a coalition backed primarily by 

the American Automobile Association and Manhattan garage owners, 

have tried their best to cloak themselves as guardians of New York’s 

poor and middle-class residents. 

“...The truth is that just 5 percent of commuters in Brooklyn, Queens,

Staten Island and the Bronx travel to Manhattan by private car. People

who drive their cars to work also earn 30 percent more a year than those 

of us who use mass transit. It is our poor and middle-class families who 

would benefit from congestion pricing—as the fees charged to drivers

would be used to improve the bus and subway system. 

“Critics have also tried to whitewash congestion pricing’s health benefits to communities such as Harlem and the Bronx, where kids are

hospitalized for asthma attacks far more often than in Westchester, 

Nassau and Suffolk counties... 

“Unlike those who falsely claim to speak for the best interests of my 

constituents, the commission ought to recognize it would be irresponsible not to pursue a policy that could provide immediate and measurable relief of traffic congestion while improving the air that all of my 

constituents breathe and the buses and subways that they ride daily.”

Councilwoman Melissa Mark-Viverito’s blog posting on January 30, 2008. 
18 | C o n g e s t i o n P r i c i n g

tionately impacted by a fee or toll: Most low- and 

moderate-income commuters who travel into the 

CBD take transit or walk and would not be impacted by a fee or toll. Of all New York City residents 

who commute to work, only 5 percent drive to the 

CBD. Of that 5 percent, most (80 percent) have a 

feasible transit alternative to get to work that would 

take no more than 15 minutes longer than their 

auto trip. Therefore, only 1 percent of Manhattan 

workers lack a viable alternative to paying a congestion fee or toll. The low- and moderate-income 

workers disproportionately impacted by a fee or a 

toll represent a further subgroup within this 1 percent. Legislation that was proposed for consideration by the State legislature would have provided 

tax credits to compensate low-income motorists for 

amounts that they would have to pay in excess of 

the round-trip transit fare.

A large number of low- and moderate-income 

residents would benefit from improved transit services under any of the three revenue-generating 

plans: As a group, low- and moderate-income New 

York City residents rely more on transit for their 

travel needs when compared with higher income 

residents. Therefore, these low- and moderate-income residents would benefit more from the shortterm transit enhancements that would precede a 

toll or fee imposition and from the expansion of the 

transit system made possible by increased revenues 

for transit investment.
IN C O me-Based E quity I m pa c ts of Congestion Pri c ing | 19

Any change in the way charges are made for road 

use will benefit some individuals more than others. 

Those who have higher incomes will tend to use 

congestion-priced facilities more often, which leads 

to a perception that wealthy people are favored; 

however, income-related equity concerns may not 

be entirely warranted. Although data from priced 

lanes that are operated in the United States show 

that high-income motorists do use the lanes more 

often, the lanes are used by all income groups, serving drivers’ needs when they absolutely have to get 

to their destinations on time (e.g., getting to a daycare center before late fees kick in). Moreover, approval ratings are equally high for all income groups, 

in the 60–80 percent range, because all income 

groups value the “insurance” of a reliable trip time 

when they absolutely need it.

Low-income travelers who take transit more frequently will benefit from transit-service improvements that generally accompany congestion pricing. 

Toll revenues can be used to compensate those who 

might otherwise consider themselves “losers” as a 

result of congestion pricing. Low-income transit 

riders can benefit significantly from toll-financed 

transit improvements, which are generally included 

in any pricing package. In cases in which effects on 

low-income drivers are perceived to be particularly 

severe, such drivers could be provided with toll exemptions, rebates, or other forms of monetary compensation, such as tax rebates or income supplements. Pricing schemes may include protections for 

low-income individuals, such as toll credits. 

Conclusions
20 | C o n g e s t i o n P r i c i n g

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References
ii | C o n g e s t i o n P r i c i n g

Office of Transportation Management

Federal Highway Administration

U.S. Department of Transportation

1200 New Jersey Avenue, S.E.

Washington, DC 20590

Tel: 202-366-6726

www.ops.fhwa.dot.gov/siteindex.htm

December 2008

FHWA-HOP-08-040