Profitability and contribution to alternate travel modes in new United States value pricing projects
Creators: name: Dees, Jonathan Mark
Publisher: name: The University of North Carolina at Chapel Hill University Libraries
Year: 2010

description: This paper examines profitability of value pricing schemes in the United States. First it introduces road pricing in general and common as-applied scenarios. Second, it provides background on welfare impacts of road pricing and the economic impacts of profitability in road pricing. Third, it examines facilities in the United States that have been developed recently, examining their operations, revenues, expenses, and profitability. Finally, it summarizes and compares these facilities and their profitability outcomes in light of the need for a socially positive welfare outcome for successful equitable implementation of road pricing schemes. Funding road transportation has begun a transition from large-scale user fees on gasoline to a smaller-scale set of fees related to individual facilities. Charging users of individual facilities has common in major urbanized areas around the world, with prominent schemes in Stockholm, London, Singapore, and other cities. In the United States, a reluctance on the part of government entities to raise taxes on motor fuels has created a need for secondary funding sources. US DOT's Federal Highway Administration has funded studies, demonstration programs, and implementation programs in the past 10 years with the intent of creating viable directly-priced facilities. Road pricing has gained in popularity in recent years with the introduction of automatic toll collection systems that remove the labor costs from direct toll collection. They also allow vehicles to traverse a toll booth much faster than toll collection involving an individual performing the toll collection. Electronic toll collection also allows for much easier modification of toll amounts, allowing dynamic toll pricing in response to stimuli. Congestion pricing arose out of these developments, which allows a facility administrator to vary the price of usage to arrive at a target volume or revenue for the time period under observation. Congestion charging converts users' implicit value of time in their decisions to drive on congested facilities to an explicit one that attempts to allow users to spend less time (but more money) on their trips through congested areas. In the United States, congestion charging has been most commonly implemented as value pricing, a subset of variable tolling that provides parallel facilities with some of the lanes priced and some unpriced. This paradigm arose because of the preexisting high-occupancy vehicle (HOV) lanes on many highways in the United States, lanes with restrictions on usage based on vehicle occupancy, usually either 2+ or 3+ persons have to be in a vehicle to use the lane. After these lanes were built, much of the time they were underused, encouraging researchers to explore new policies that would improve uptake of these lanes (Stockton & Daniels, 2000). Out of this research came the addition of a priced capability to add users to these lanes, creating High- Occupancy Toll (HOT) lanes. Most of the projects studied in this research are HOT conversion projects.