The Soul of the Commuter

Back in April of this year, Nick Paumgarten wrote a very sobering essay about commuting for the New Yorker: "There and Back Again". It just won a Sidney Award.

But this essay is a walk in the woods compared to Jane Jacobs' 2004 "Dark Age Ahead" or James Howard Kunstler's 1993, "The Geography of Nowhere". Talking about America, he writes:

"The suburban streets of almost all postwar housing developments were designed so that a car can comfortably maneuver at fifty miles per hour -- no matter what the legal speed limit is. The width and curb ratios are set in stone by traffic engineers who wanted to create streets so ultrasafe (for motorists) that any moron could drive them without wrecking his car. This is a good example of the folly of professional overspecialization. The traffic engineer is not concerned about the pedestrians. His mission is to make sure that wheeled vehicles are happy. What he deems to be ultrasafe for motorists can be dangerous for pedestrians who share the street with cars. Anybody knows a child of eight walking home from school at three o'clock in the afternoon uses a street differently than a forty-six-year-old carpet cleaner in a panel truck."

[Thank you to Leon and Barry]

Commie Roads II

In the vein of Commie Roads...

The Next Road Pricing Hero

The Dutch Parliament, as of 4 December 2007, has approved the policy needed to move the entire country to by-the-kilometer road pricing.

All You Can Drive Roads

The “all-you-can-eat” restaurant is popular in the US and Canada. Pay $14.95 and fill your plate over and over. Surely someone has studied the correlation between girth and frequency of patronizing such establishments, but who needs a science degree to describe the effect?


Free road access has a parallel. Fill your tank – i.e., pay fuel tax, the “all-you-can-drive” $14.95 – then drive what, where, and when you want. Congestion is the analogy to girth. When unlimited desserts are included some people eat six. When road access is free, too many drive in rush hour, on crowded roads, day-after-day. When road use is charged relative to value (higher demand, higher price) people shift their time or mode of travel. They will telework more often, commute at a different time, be more likely to carpool. They may even use transit, bike, or move closer to work.

And if you don’t shift your travel habits, you will enjoy less congested roads. Everyone wins.

No one is happy about congestion, and most of us realize it will be getting a lot worse. We generally admit automotive emissions are harming our cities, our health, and our planet. Less appreciated but easy to understand is that established cities have a hard time to add new travel lanes, that road building costs per lane-mile climb far faster than other costs, that each new lane mile finds as many or more citizens resisting it as clamoring for it.

The compendium of things wrong with adding cars and roads is long, but we still need to move people and goods as much or more than ever. We have a scarce resource: road-surface where and when we want it. The where and when are key.

In the world of how much to drive, fuel tax is a perfect mechanism: correlated, easily collected, hard to evade, somewhat hidden. But in the world of where and when to drive, fuel tax becomes the problem – silent about the difference between high demand and low-demand roads and silent about when fuel is used. But the value of access of many roadways during peak hours is far greater than those same roadways off-peak.

Paying a charge for road use rather than a tax on fuel consumption is the far smarter approach.

We now mostly operate “all-you-can-drive” roads. In fact, once you pay the London or Stockholm daily congestion charge, “all you can drive” still holds for the remainder of the day.

Therein lies the problem with flat fees. They reduce the number of vehicles that enter a cordon, but they do nothing to reduce miles traveled once inside.

The triple problem of road funding, congestion and emissions demands a variable, distance-based scheme for every mile traveled in lieu of the fuel tax. The most suitable technology for that is global navigation satellite systems such as GPS, and that is in development by several companies. There are ways to deploy without capital cost to government and unsightly infrastructure, unlike the current ‘tag-and-beacon’ systems. There are also ways to use this technology with absolute privacy protection.

The technology solution is understood, the economic reasoning is solid, governments are slowly gathering courage, only the switch-over still has a few kinks.

Something to ponder while you’re sitting in traffic.

A Canary in Dubai

Each new congestion charging system gets less attention than its predecessor. London’s was all the rage for a year before and 2 years after February 2003. Stockholm’s generated a blip by comparison even though it serves three times the cars and is a much slicker implementation. But hands up if you were even aware that Dubai just put one in?

I recently gave a talk to 45 engineers (only one of whom was in traffic). All had heard of London’s system, all but three of Singapore’s system, only two were aware of the Stockholm system and none was aware of Dubai’s. Sure, Dubai is further from Canadian consciousness than the others and sure Dubai’s was just installed, but there may be other factors at play.

Consider that congestion pricing is a tool whose time has come, that only journalists in affected cities will note new systems going in, that the international press has wearied of what is clearly a trend, and that your 3 year old will never drive on an unpriced road.

Consider that Dubai is also providing a more critical message. Dubai’s system is based on shortrange radio beacons and in-vehicle RFID tags. This gold-standard for electronic toll collection (ETC), works perfectly well for limited access highways in half the countries on the globe. In fact, it works for congestion pricing on limited access island cities like Stockholm pretty well, too. It works less well in Singapore because the central, congested areas are somewhat more diffuse and peter out onto untolled roads that motorists use instead. That flattens out peak traffic, but does not move people out of cars. It simply delays the confirmed solution.

Dubai’s system has experienced a stronger-than-usual backlash – much of it the usual suspects: distrust of government motives, an assumption of (and knee-jerk rejection of) taxes, entitlement to free access to roads, and misunderstanding of market pricing (but at a dollar each way, that is likely no where near market pricing). But there is another important element here: bad tools + bad design = poor results.

Only a small but critical fraction of the network was tolled which largely reroutes traffic rather than encouraging alternatives. This relocates the pain rather than relieving it. Like easing your headache by stubbing your toe. If you want to force consideration of alternate modalities, you have create a cordon. It also appears that a single price is in effect. This provides no signal about when not to drive – only where not to drive.

For once, I empathize with the local whiners – this does look more like tax collection than congestion abatement. Dubai’s system harms the fledgling reputation of congestion charging.

Could Sustainability Become Unsustainable?

The New York City Economic Development Corporation (NYC-EDC) is soliciting expressions of interest from vendors and consultants regarding provision of services for NYC’s intended Congestion Pricing Electronic Toll Collection (ETC) system.

The assumed, but apparently not absolutely fixed, technological approach for the system is the E-ZPass tag and beacon system that has operated for some years regionally in the New York area and other U.S. regions. This would be complemented with license plate recognition (LPR) cameras to enforce payment from motorists that elect not to use E-ZPass.

At first, this approach this makes some sense:

• E-ZPass is already installed in more than 70% of vehicles that enter Manhattan; hence motorists are familiar with it.
• LPR cameras work with relative accuracy in London, Stockholm, Toronto and other pricing applications.

On the other hand, the E-ZPass approach has drawbacks:

• It is infrastructure heavy. This means high capital expense, intrusion on NYC’s urbanscape, and exposure to vandalism – all of which are acknowledged in the RFEI.
• It is expensive. The costs of such infrastructure will leave less money to fund much-needed transit additions. In London, it cost £2.40 to collect £5; this led to an increase in the congestion charge to £8. (The two congestion zones in London use a similar number of camera gantries as is suggested in the NYC RFEI; we cannot point to a comparison to Stockholm, since this peninsular island required only 18 gantries, less than 10% of what the NYC RFEI suggests.)
• It is complex. The complexity of performing partial tolling in an area that is already partially tolled will require a system of physical, social and monetary exceptions (plus a rebate scheme), whose complexity far exceeds anything in either London or Stockholm.
• It is unambitious. The RFEI traffic reduction goal of 6.3% within the charging zone will do little to ease congestion in NYC. The goal needs to be at least twice that in order to meaningfully impact bus congestion, bike safety and air quality. Without a significant drop in bus congestion and bus delays, congestion charging would not have worked in London and may not work in New York.
• It is inflexible. Once the system is in place, changing the zone boundaries – i.e., adding or removing a street or new area – will be prohibitively expensive. While no system can be perfect, designing-in inflexibility at the start diminishes the value of the investment.
• It is not extensible. When the time comes to congestion-price part of the boroughs, new gantries would have to be installed at a similar, new expense. This is in clear evidence in London where the first zone cost a little under $300M and the second zone cost the same.
• It is not scalable. The NYC system, slated to serve 1.4M vehicles, will serve 9 times more customers then the original London system on an equivalent number of gantries. Hence a gantry failure (say, due to vandalism) will generate 9 times the loss-volume as would a similar failure in London.
• It risks evidentiary gaps. If an enterprising citizen set up a website to report failed gates, motorists without tags may be able to evade charges more readily.

We need to find a better solution.

Mary Peters says it best

When I wrote my infamous Pearl Harbor blog a few days after the I-35 West bridge disaster, a debate about the gas-tax and its inability to solve the problem is exactly what I predicted. This, from Mary Peters, U.S. Secretary of Transportation, is perfectly argued (italics mine).

...in the aftermath of this tragedy, a necessary national conversation has begun concerning the state of the nation's bridges and highways and the financial model used to build, maintain and operate them.

Her opinion regarding higher gas taxes as a solution is clear:

...the gas tax does virtually nothing to reduce the explosion in highway congestion occurring in the past 25 years. Gas taxes are levied regardless of when and where someone drives, creating a misperception that highways are "free." In turn, this encourages overuse and gridlock, often at precisely the times we need highways the most. The Government Accountability Office last month released a report arguing that gas taxes are fundamentally incapable of balancing supply and demand for roads during periods of congestion. We agree.

The GAO, along with almost every expert who has studied the issue, says that direct pricing of road use, similar to how people pay for other utilities, holds far more promise in addressing congestion than do traditional gas taxes.

Secretary Peters has not come recently to this understanding. Indeed it was held by her predecessor Norman Mineta and many in the Department of Transportation long before that. Economist have know this since at least the 1960s. What has stopped this understanding from surfacing is a total lack of political courage, generally at State level. And it is fear of voter backlash that requires a disaster such as the I-35 bridge to permit an informed debate.

President Bush’s famous “we are addicted to oil” speech caused quite a (temporary) stir, back when. I wish he would also say: “…and raising gas-taxes will not solve the problem. Paying for roads as you use them will.” Only then will journalists write less about the necessity to raise the gas-tax and more about the real problem.

What will Congestion Charging do to the GDP?

Tim Harford might be the most accessible economist alive today. Fun even. His book, The Undercover Economist (2006) has a brilliant and readable chapter dealing with how to think about the externalities of congestion. I may have to put the whole chapter up here and risk suit. But for today, here are the last three paragraphs of this delightful chapter:

Yet you will often hear so-called experts complaining that taxes on driving or on pollution would be bad for the economy. That sounds worrying. But what is “the economy”? If you spend enough time watching Bloomberg television or reading the Wall Street Journal you may come to the mistaken impression that “the economy” is a bunch of rather dull statistics with names like GDP (gross domestic product). GDP measures the total cost of producing everything in the economy in one year-for instance, one extra cappuccino would add $2.55 to GDP – or a little less if some of the ingredients were imported.

And if you think this is “the economy,” then the experts may be right. A pollution tax might well make a number like GDP smaller. But who cares? Certainly not economists. We know that GDP measures lots of things that are harmful (sales of weapons, shoddy building work with subsequent expensive repairs, expenditures on commuting) and misses lots of things that are important, such as looking after your children or going for a walk in the mountains.

Most economics has very little to do with GDP. Economics is about who gets what and why. Clean air and smooth-flowing traffic are part of the “economy” in this sense. It's possible that congestion charging would increase GDP because people would get to work more quickly and produce more, and prices in stores would be lower because of more efficient distribution. But it's perfectly possible that congestion charging would reduce GDP. This does not, in fact, matter in the slightest. We know for certain that it would make us better off in a much more meaningful sense: that we would have many new choices open to us about where we go and what we do. There is much more to life than what gets measured in accounts. Even economists know that.

Thanks for this, Tim.

Choose Your Weapon

In my world, Shoupistas are favorite people. These are followers of Professor Donald Shoup, who argues that free parking harms our cities by encouraging driving thereby contributing to congestion and pollution. Shoup is right, of course, and there is ample proof. Get his book, The High Price of Free Parking, and you may even come away thinking that Shoup could solve Global Warming if he had his way.

Shoup’s prescription for street parking (among a catalogue of solutions) has become known as the “15% solution” – price on-street spaces so that a 15% vacancy rate assures that a visitor can find a spot without circling round and round the block (there’s your congestion and the pollution all in one…)

At a guess there are a thousand, maybe two, Shoupistas in the world. Parking does not excite many beyond people in the industry or urban planners.

One of my favorite Shoupistas, beyond the professor himself, is John Van Horn, editor and publisher of “Parking Today” a long-standing US parking industry monthly magazine, and a proselytizer for Shoup’s thinking.

In his print editorial for August 2007, John asked some questions about Mayor Bloomberg’s plan for congestion pricing in Manhattan, that come from such a unique perspective that I am compelled to reply to them. Regarding the Bloomberg plan to charge motorists at an EZPass beacon to enter Manhattan:

But what is really going to be accomplished? It seems to me that this is a plan to collect another tax. Look at it this way. The city can't raise its income and property taxes any higher (they would be pilloried), so they are looking for a tax that doesn't seem like a tax. In this case, it's a tax on drivers. The charge would be $8 a car.

Many cities are indeed desperate to find new tax revenue (my beloved Toronto is a dramatic case in point). While I cannot say how desperate NYC is for new funding, Bloomberg’s intention is clearly to address congestion. When the cost of the collection system and the required additions to transit are taken into account, he will have to raise the $8 just to break even – as happened in London. This is not a tax grab.

People living on the edge of the congestion zone fear that folks will drive into the city, park in their neighborhoods, and then take public transportation to work. Well, of course they will. So [Bloomberg] is proposing a permit program for the area just outside the congestion zone to handle this unintended consequence. The money from the permits will go into the general fund (another tax?), and the amount of the permit costs is going to be discussed later.

I do not know the amount Bloomberg intends to charge for these permits, but most such permit systems are fairly minor revenue generators. The money is made in enforcement of the expected spillover. If a huge amount were to be charged for the permits themselves, then John has a case – that would be a tax-grab.

It seems the city is simply creating a large bureaucracy to collect money to pay for that large bureaucracy. Why not charge market rates for on-street parking in New York? Wouldn't that have the same effect? Wouldn't people think twice about driving into the city if they knew they were going to have to pay $30 or $40 to park on-street? Off-street rates would go up in kind. Legitimate residents could pay a lower fee or whatever. Set the rates so there is a 15% vacancy factor. This could be done with the infrastructure that is in place. A new taxing plan would not have to be implemented. No one would have to pass laws. There would be no need for "congestion police" to go after those who haven't a clue, and we wouldn't be creating a whole new class of lawbreaker.

Seems a perfectly sensible Shoupista viewpoint. But it has a problem. Not everyone is driving in only to park 8 hours. Some are shopping, selling, or servicing. Some have parking paid by their employer (there is a separate solution to that problem). So this form of “proxy taxation” is pretty uneven and while maybe collecting greater revenues with existing infrastructure, it would have less effect on congestion coming into the city. Charging a lot for parking may discourage some from driving in, but has no influence on the amount of driving one is willing to do once in.

But this also carries a bias. We in the parking business would naturally prefer any scheme that raises parking revenue in particular.

This isn't a problem unique to the uninformed who actually want to drive in Manhattan. Gov. Schwarzenegger wants to do something like congestion pricing in California, and other cities are eying the prospect.

Correct, about 30 of them in the US alone, if you count the number of original applicants to the USDoT’s recent Urban Partnership Agreement awards. Worldwide this number is quadrupled. The distant buzzing sound of London and Stockholm congestion charging is about to become a worldwide juggernaut.

To be most fair and effective in a market economy, one would pay for what they use. They would pay fairly for the use of a parking spot – i.e., depending on demand and length of stay. And they would pay fairly for the use of a road – i.e. depending on when, where and how long they use it. That is how market economics work. Otherwise you have the tragedy of the commons, or as some congestion-pricing advocates view it – communism (more).

By these criteria, then, charging a hefty fee for parking is only a proxy to a congestion charge and that proxy will be unfair to some and completely miss others. As well, Bloomberg’s proposed $8 flat fee is also unfair, and indeed it can be argued, that once paid it actually encourages driving.

There is only one effective and fair way to manage traffic congestion in Manhattan or in California (finally something in common between East and West) and that is to charge by the mile and to vary that charge by the degree of congestion. Mayor Bloomberg’s approach although better than continued inaction is nearly as crude an approach as was Mayor Livingstone’s in London. It is for this reason that London continues to seek technology to replace the current system.

John van Horn and my readers should also know that the end-goal of pervasive congestion pricing is to replace the fuel tax. Naturally, one might ask how we navigate from “mostly fuel tax and a few tolls” to “all tolls and no fuel tax”. Schemes to do this involve tax rebates and pay-distance-charges-at-the-pump in the interim, to a full change-over some years from now. The GPS-based German truck-tolling system provides fuel-tax rebates to German truckers (but not foreign truckers).

All of this has mostly been worked out, and will simply take a couple more years and a ton of political will. Bloomberg’s work will seem both pioneering and primitive 15 years from now.

There is no other acceptable solution to congestion and road finance.

Even Britain thinks Miller blew it

I am steamed that the Toronto I love and still live in has been so badly managed financially. Over the past decade, I bought the “feds did it” logic, then the “province did it” excuse. Still do, historically speaking. But now Mr Miller would have me blame Councillor Ashton.

No thanks, Mr Miller, Brian Ashton was right – its your regressive flat tax proposals that are little related to the harmful human behaviours that are choking our city that are at fault.

Even folks on the other side of the Atlantic can see us better than we can ourselves. The Economist (2007.07.26), in a section called “The Americas” (like we’re still a colony, eh?) ran an article about Toronto: “Nice but broke: Canada’s aspiring city state”, echoing this blog:

The city's case for even more autonomy would, however, be boosted if Mr Miller made more effective use of the powers he already has. Road tolls or a congestion charge stand a better chance of winning approval than his current tax proposals, reckons Tom Courchene, an economist at Queen's University. They would reduce pollution and congestion, and scoop up money from out-of-city commuters.

An acquaintance, Justin, ex of Toronto City Hall, commented to me: “905ers [folks living in the Toronto surrounds] and the Greater Toronto Transit Authority will never take the lead on tolling their own citizens to drive in the region. The political make-up and power-base of the GTTA is too suburban to take the lead as Miller suggests they should.”

So Mr Miller, Professor Courchene thinks you should toll roads, The Economist thinks you should toll roads, Justin thinks you should toll roads, and I think you should toll roads. So when will you figure this out?

Sweden Proves Congestion Pricing Works

Many people think building transit takes cars off the road. It doesn’t. Here is a delicious quote from a government study from Lawrence Solomon’s “Sweden proves congestion tolls work” (Financial Post/National Post Saturday 4 August 2007):

It "is not possible to show that the investments in public transport (park-and-ride facilities, expanded bus and rail services) had any visible effect on the total number of trips taken on public transport during autumn 2005, before the [congestion] charges began to apply," a government study states. "Of the 22% decrease in car travel across the charge zone, only 0.1% at the most could have been caused by the expanded bus services."

US-DOT’s Pearl Harbor

One of the prerequisites for massive political change is a horrific disaster to permit or push our leaders to take action. Roosevelt needed Pearl Harbor to declare war on Imperial Japan, Bush needed 911 to address (however badly) the growing “terrorist” problem.

The US DOT and most state “xDOTs” have been studying ways to resolve their dual transportation crises of congestion and funding shortfalls for several years now. And since Al Gore’s resurrection the US DOT can now add the burden of emissions caused by congestion to that problem list.

And it’s the same in every other country – sometimes worse.

The general formula for the solution is to move away from fuel-tax dependency and toward road tolling. The ideal endgame is to replace the fuel-tax with a time, distance, and place charge (congestion pricing) on every mile driven everywhere.

While we’re some ways from that, it is being worked on, and the collapse of the Minneapolis bridge is the disaster that will focus motorists and politicians on a closer understanding of the problem.

How many people remember what they were doing when the USS Cole was attacked? Probably six. But how many recall what they were doing when the World Trade Centre was attacked?

Telling motorists that an absolute fuel-tax shortfall causes budget problems or that improving engine efficiency and alternate fuels means diminished relative tax efficacy, or that congestion causes productivity losses and economic harm and that congestion pricing would solve that, or that congestion increases the volume of harmful emissions, generally cause motorists to nod off. However, the notion that lack of funding might be the culprit in the Minneapolis bridge collapse, rather than an engineer asleep on her pencil, gets more attention. (Now we need them to get that the funding model is just as important as actually getting the funding.)

Minnesota and Oregon are two states that have already taken a leadership role in advocating ways to move from fuel-taxes to congestion pricing. This addresses funding, congestion and emissions, while fuel taxes essentially address only funding.

Minnesota’s Governor Pawlenty is a strong advocate of congestion pricing and has work in progress to move in that direction. The bridge collapse will get that advocacy the attention it needs.

What will happen in the short term is that many states that have been trying to increase the fuel-tax, will now be able to do so on the basis of safety – always more important than productivity. Pawlenty, who has resisted that to now (it really is the wrong solution), may have to cave in. There are a lot of good reasons that the cost of driving should rise, but doing it though fuel taxes will have only a minor effect on congestion. Rather it will affect discretionary travel more than commuting – i.e., it will cost motorists more to have less fun, rather than have motorists start thinking about alternate methods of commuting.

Watch for many, many references to the Minnesota I-35W bridge as politicians and transport leaders call for transport funding reform.

I just hope we are smart enough not to simply raise fuel taxes and walk away…

How to Get Free Parking

This is about to appear as the future-fantasy context for a parking article running in three publications in the US, UK and Canada.

It’s May already. 2010. My hybrid sits waiting in the lot below my apartment for the drive to my job downtown. I still prefer taking my car some days in spite of the new congestion charges. It's easier when I'm in heels and there is far more parking available now anyway. Ever since the City decided to end the clogged mess of free-parking by charging fair market rates on virtually every street, I have been able to pull up to the curb, pop out, and do my business – all without circling for a spot. And without paying a meter, I might add. You see, back in 2008 I was among the first to install one of those new GPS-type parking meters in my car to save myself the trouble and wasted time of feeding the pay-and-display machine. At the end of each month, I get a bill that is itemized to make expense reporting easier, saving me even more time, not to mention that I always used to lose the receipts! My employer likes it because there is no chance I can pad my parking expenses. My boyfriend got an anonymous meter that he pre-pays, and he can even get a numbered debit account off the web – it doesn’t have his name on it, but his employer believes him, so that’s OK. But for me, I’m just happy to be rid of the whole parking nuisance. Better yet, back in 2009, the city instituted a very cool ‘pay-to-stay’ program: if I do not move my vehicle between 7:30 and 9:30 AM, I get a $3 parking credit which I can use anywhere, anytime in the city. I get another $2 credit if I do not move it between 4:00 and 6:00 PM. So I take transit two or three times per week and try to leave real early on the other days. By the time I add up the credits, I hardly pay any parking at all. And after my employer pays her portion of my expenses, I am sometimes even a little ahead. I wish my boyfriend was that smart … but the really funny thing is, I never thought I could have free-parking by having paid-parking everywhere.

Congestion Video on WSJ

2007 07 20 The Wall Street Journal ran an excellent story: Life in the Faster Lane. The accompanying video is worth disturbing your cubicle mates.

Livingstone's OpEd to NYT

"THE New York State Assembly ended its session on June 22 without reaching a consensus on Manhattan’s congestion pricing proposal — a delay that may cost New York City some $500 million in federal transportation money. Assembly members have voiced concerns about the economic impact of the program, the effect on traffic outside Manhattan and even the effectiveness of the idea itself.

Four years ago, London was engaged in a very similar debate. We now have the luxury of hindsight. While the two cities’ situations are not identical, they certainly have analogies and therefore, perhaps, the success of London’s program can shed light on the current debate in New York." [full article]

Theo Moudakis

Toronto Star Cartoonist Theo Moudakis clearly understands our hypocrisy best. He wins the first annual Grushhour award which is dinner for two at a restaurant of his choice (contact me to get the award).

I reproduce the winning art work (copyright to Toronto Star and/or Theo Moudakis), here, without permission, but in the spirit of spreading his clear message.

Letter to Toronto Mayor David Miller

June 22, 2007

Mayor David Miller
Mayor’s Office
2^nd Floor, Toronto City Hall
100 Queen Street West
Toronto, ON M5H 2N2

RE: New Taxation Measures, City of Toronto Act 2006
Personal Vehicle Ownership Tax

Your Worship Mayor Miller,

We urge Toronto City Council to reconsider automobile tax policy in the City of Toronto, specifically the proposed Personal Vehicle Ownership Tax. Fixed fees on automobiles (unless sufficiently high to deter vehicle purchase by low-income drivers) do nothing to reduce car use or provide incentives to drivers to switch to other modes of transportation.

We are encouraged by the City’s Climate Change Action Plan. We are also encouraged by the City’s Green Sector Economic Development and hope to benefit from your support of local business. However, real climate change action requires consistent support in all tax policy – especially in transportation.

Once a motorist pays a fixed tax, she is encouraged to drive as much as possible to recover the full value of her investment. Put another way, if I have already paid money to own and drive a car and if that payment has no relation to the amount I use my car and if any reduction I produce will not result in direct savings to me, then why I would pay another $2.75 to ride a transit system?

Only when motorists pay more per trip for driving will they be incented to pay for transit. The fairest type of per-trip charge is a distance-based charge modulated for congestion management. There is a made-in-Toronto technology to deliver this.

We’d be pleased to meet with you to further discuss Toronto’s automobile tax policy, and how to incent transit use with progressive taxation rather than the reverse. We know you believe that Climate Change is the defining challenge facing your generation. Here is an opportunity to explore an immediate and powerful solution.

Sincerely,

Kamal Hassan
CEO, Skymeter Corporation

CC: Councillor Shelley Carroll, Toronto City Hall
Patsy Morris, Committee Administrator, Toronto City Hall

Giant Sucking Tax Abuse

In Thursday’s (07.06.21) Toronto Star, a paper that claims it knows what’s best for Toronto, a Patrick Corrigan cartoon, Giant Sucking Sound, appeared without context other than the dim memory of the reader for the recent announcement of a miniscule and overdue parking fare increase of 0.50 per hour for the over-demanded street parking in this city. A fare increase that was excused as inflation-adjustment by a Councillor who did not need to defend it. A flaccid fare increase that no one except the fare increasers, journalists, and me got exercised about.

But, on reflection – given the way in which this price increase was designed and announced, by people who surely understand how and why street parking is grossly under-priced, by people who know how to price it properly (this wasn’t it), by people who could have priced it properly, by people who have a mandate to provide fair access to street parking in the City, by people who know that underpriced street parking causes circling hence congestion hence emissions – I can hardly blame a cartoonist for propagating their error.

No wait, maybe Corrigan is right. Perhaps the mindless 50 cent across-the-board increase that did not take demand management, i.e., local demand, into consideration was indeed a simple revenue grab.

Yes, I apologize, Patrick Corrigan, you are correct. It was all about revenue and nothing about demand management. Abuse of taxation power at it best.

Figure 1: Copyright Patrick Corrigan and Toronto Star. Used here without permission, but with complete respect for the working rights of cartoonists who have neither read nor even need be aware of Shoup’s High Cost of Free Parking to pass on the disinformation and tax misapplication perpetrated by The Toronto Parking Authority and Toronto City Councilors.

Be Still My Heart

In what looks the baby brother of the 127-element NYCPlan, Toronto has just tabled a report setting out eight or ten specific approaches to emissions reduction in Toronto. Among these is the recurrent “road tolling” conundrum. Although only one of the measures in the plan, tolling grabbed the headline in the Star’s article, the caption under the photo and of course the majority of the commentary. Few people blink at hybrid taxis, banning 2-stroke engines or completing the city’s Bike Plan (thank god!), but bring up road tolling and teeth gnash.

The headline, City considers road tolls in emission-cutting plan, which had me spewing coffee, was diluted by the usual: “Miller told reporters he's not committed to tolls and that any such fees would have to be GTA-wide.” It went on: “ ‘The recommendation is simply to begin work along with the Greater Toronto Transportation Authority to consider it,’ ” [Miller] told members of the media at city hall yesterday.” This is better news considering that the Chair of the GTTA is known to be more open minded and courageous about this then T.O.’s Mayor has been to now.

Unfortunate timing, however, at the same time of this press conference, a few building over, the Premier of Ontario, promised a large new sum of money for Toronto transit to bolster his election chances. I can already hear the Mayor saying “whew, that gets me off the hook”.

The Star article ended with Pantalone saying "The time for talking needs to be over and some serious doing needs to be done.”

I wonder.

Congestion mythmaker from NYC

Some good news on the US congestion IQ front – a local council member, Jessica Lappin expressed uninformed misgivings about Mayor Bloomberg’s plan for congestion pricing in Manhattan and is rounded criticized in this Streetsblog entry.

The first entry even called Shoup's High Price of Free Parking a "masterwork".

Smart Mayor. Smart Citizens. Smart New York.

Toronto Congestion Soundbites

David-Michael Lamb, CBC RadioOne’s City Reporter, interviewed Bern Grush June 11, 2007.

The communist analogy.

The tragedy-of-the-commons analogy.

In each of these it was reported that Skymeter is being trialed in a number of places. In fact, as of June 11, 2007, Skymeter is only in discussion with several governments for such trials, but no contracts have yet been issued. Skymeter technology will be ready for trial in September 2007.

Kathryn Wylde on Congestion Pricing

TESTIMONY BEFORE THE ASSEMBLY COMMITTEES ON WAYS AND MEANS, TRANSPORTATION, CORPORATIONS, ENVIRONMENTAL CONSERVATION, ENERGY AND CITIES

FRIDAY, JUNE 8, 2007

KATHRYN WYLDE
PRESIDENT & CEO
PARTNERSHIP FOR NEW YORK CITY

[3-page .pdf here]

The Partnership for New York City, representing the city's business leadership and largest private sector employers, has helped with the development of PlaNYC and supports its recommendations. PlaNYC lays out a comprehensive set of actions and investments that we believe are essential to maintaining New York's sustained growth and our competitive position in the world economy. The business community is prepared to join with the City and State as a partner in the implementation of this plan and in helping to develop creative ways to achieve its ambitious goals.

I would like to use the opportunity of this testimony to address concerns that are frequently raised about congestion pricing. The purpose of congestion pricing is to discourage people from driving private vehicles into the city during the busiest times. This creates two legitimate challenges that the Mayor's office and the MTA are working to address:

• Expanded mass transit options must be provided for areas of the city and region that are currently underserved; and
• Communities surrounding the Central Business District must be protected against an invasion of park-and-ride commuters.

We believe that both these challenges can be resolved with good planning and commitment of additional resources. On the other hand, there are a half dozen commonly raised concerns that we believe can be set aside more easily, drawing upon a huge body of research on the subject and the experience of other cities.

The first concern is generated by polls that show public opinion runs against congestion charges, generally in a ratio of 60:40. This ratio has been about the same in every city around the world before congestion pricing is introduced and before the details of the program and its benefits are clear. After a congestion pricing trial is underway, however, the ratio flips almost immediately and public opinion always runs heavily in favor of the charge. The air is cleaner, streets are safer and more pleasant, and riding a bus becomes an efficient and pleasant way to move around the city. Polls of New Yorkers show that opposition to a congestion fee comes from people who use mass transit as much as those who drive, illustrating that this is a reaction to the perceived imposition of a tax (which we all hate), not a concern about a modal shift. Until people see the dramatic results, the decision to charge for driving on roads that have formerly been free will take political courage.

The most common objection to congestion pricing is that it is a regressive tax. In fact, it is a progressive toll. Last December, the Partnership published a major study that quantified a cost of more than $13 billion a year that excess traffic congestion is imposing on businesses and residents of the Metropolitan Region. We are all paying this cost of congestion, whether we drive, use mass transit, or walk, and that is regressive. We also found that congestion throughout the region has passed the "tipping point" - that is, the point at which heavy traffic no longer contributes to a vibrant, healthy economy but is essentially destroying economic activity because it causes delay, inefficiency and increases the costs of living and doing business in New York. Studies by independent experts find that the cost of traffic congestion translates into higher prices for consumer goods and services, higher costs of construction, and higher costs of doing business in New York City and the surrounding suburbs. Congestion relief will reduce these costs and save all of us money.

It is also alleged that Manhattanites are the only beneficiaries of the traffic relief program. In fact, the reason for locating a congestion pricing zone in the Central Business Districts of Manhattan is that vehicles moving to and from this 8.5 square mile area are the primary cause of traffic jams across the entire 28 county region. Traffic congestion on the Long Island, Gowanus, Van Wyck and Staten Island Expressways, 125th Street, Flatbush Avenue and Downtown Brooklyn, the Major Deegan and the Jersey Turnpike is caused by the volume of cars and trucks moving in and out of Manhattan's CBDs. This is where more than half the region's economic activity and two thirds of our office jobs are concentrated and, unless we reduce and more effectively manage vehicle flow into this area, the whole region will continue to suffer the consequences.

Some fear that the pricing plan would put an unfair hardship on people who drive into Manhattan because they do not have another option. As noted earlier, the city and the MTA are identifying gaps in the mass transit system and exemptions for the disabled and other special cases are being built into the program. Mass transit currently carries more than two thirds of the people who commute to work in the central business districts. Only 12% of New York City residents who work in Manhattan's CBDs drive to work. The Partnership commissioned a survey of those who drive in during business hours. More than 80% said they drive purely out of choice, because it is comfortable and private. Only 16% did not have a mass transit alternative that was convenient and, most said, faster than driving. In terms of looking at which professions drive in, the highest number is government workers – more than 35% – most of whom also enjoy free parking.

Another worry about congestion charges is that they would hurt small business. Experience shows, however, that nothing is better for business than streets that are free of gridlock so that customers can get to the stores, deliveries arrive on time, and employees don't face hours of delay in getting their jobs done. The local florist, for example, could make more deliveries in the same amount of time and save money on fuel and labor costs because of less idling in traffic. Experts confirm that the cost of freight delivery in New York City is 25 - 50% greater than in other parts of the country due to excess congestion. Here we can look at the real experience of other cities that have adopted congestion pricing and find that small businesses located within the pricing zone, including those making service calls and deliveries, have benefited from this program.

Introduction of more cameras to enforce congestion charging has also raised some alarm. On this issue, I think we have to say that the horse is long gone from the barn. There is virtually no place in Manhattan where we are not being photographed, as we all know from the fuzzy photos that appear in the media as soon as a crime is committed. Post 9/11, most New Yorkers accept cameras as part of our security network, especially after terrorists who attacked in London were quickly caught because of the cameras installed in the transit system. In Stockholm, where there are strong privacy protections, cameras for the charging district are set up so that they only focus on license plates and there are strict protocols for confidentiality and destruction of photos.

Finally, there is the question of how much it will cost to implement the pricing system and whether it will achieve the desired results. The federal DOT is prepared to provide funding to help pay for set up as well as a variety of transit improvements. In terms of results, we have the benefit of learning from the experience of other cities and also the Mayor has proposed a three-year pilot project. This means we have an opportunity to test how the system works, adjust it to achieve desired results, and correct for any errors.

Critical to the successful implementation of this plan are federal and state support, both in terms of funding, as well as legislative and regulatory assistance. We could probably spend several years debating the specifics of the perfect congestion pricing plan, but there are several reasons to act now. The federal DOT is offering as much as half a billion dollars if we agree to move forward with a program before the end of the federal fiscal year. There are enormous unmet funding needs for our regional transportation system - both capital and operating. It is important to act quickly to secure federal funds and to establish a new revenue stream for mass transit. Finally, our region is losing an estimated 50,000 jobs a year because of the negative impact of traffic congestion. To maintain the pace of economic growth, we need to act now.

A few weeks ago, the Partnership joined the Bloomberg Administration in hosting leaders of government and business from over forty world cities for the Large Cities Climate Summit. This historic event brought together mayors and business leaders from the world's largest cities from six continents to collaborate on efforts to stop climate change. The highlight of this summit was Mayor Bloomberg's presentation of PlaNYC. This document was hailed as the first truly comprehensive approach by a city to address all aspects of sustainable growth and carbon emission reduction. It has propelled New York to the forefront of this important global conversation. The world is watching New York and we hope the legislature will rise to this occasion and allow PlaNYC to move forward.

###

Bud Perrone
Senior Vice President
Rubenstein Communications
1345 Ave. of the Americas, 30th Floor
New York, NY 10105
office: 212-843-8068
cell: 347-512-2383

Miller is not the only tax-abuser

Finn Poschmann, director of research and William Robson, president and chief executive of the C.D.Howe Institute provide some excellent insight into why we Canadians – and likely many other democracies – will continue to flub any chance we have at addressing GHG issues. In Polluters to pay – except if they vote (National Post, Saturday, June 9, 2007), Poschmann and Robson show that Quebec Natural Resources Minister Claude Béchard can mis-wield his tax authority just as well as can Toronto’s Mayor David Miller.

In both cases, the creative development of the pricing signals we need consumers to receive are missing. In Béchard’s case the signals are intended to be silenced to avoid loss of votes. In Miller’s case the signals are visible but diluted and mis-aimed. Poschmann and Robson’s, write:

“The political lesson here is that hasty reaction to public pressure is hurting our chances of making wise choices. That preventing consumers from experiencing” pricing signals emanating from careless consumption, “would prevent them from reducing their emissions is something any first-year economics student could have pointed out. Yet the rush to announce has now diverted the debate.”

“Without the impact on consumers that would change their behaviour, Minister Bechard's tax” [and Miller’s] “is just another tax. The rush to judgment on man-made global warming risks exposing Canadians to lots of pain, for no gain at all.”

More politicians could take a lesson from New York Mayor Michael Bloomberg.

Bloomberg has bigger balls than Miller

A lot of people are congratulating Michael Bloomberg for his plan to use congestion pricing in Manhattan.

Here the Real Estate Board of New York claims that the New York Times, the Daily News and the New York Post, News Day, the Staten Island Advance as well as Gore and Clinton love the idea (as does the REBNY, of course).

Swartznegger says he likes it.

Tony Blair says he likes it.

But Bob Friedrich doesn’t like it.

Here Bloomberg explains the full mind-numbing complexity of the problem, very neatly: “The incredible number of cars and trucks that flood our streets each day is the primary reason for congestion...”

Here is the Quinnipiac University result of polling people on the street in New York. The overall result is 37% “for” and 56% “against”. This is the usual pre-pricing result – the same numbers appeared in London and Stockholm prior to the charges being put in place. What is unusual is the 62% “for” in Manhattan. It is not surprising that there is less hostility, but this strong “for” is a first.

Where Bloomberg really gets my vote however is when he said at the end of this clip: “City Government is supposed to lead, State Government is supposed to lead, Federal Government is supposed to lead, not do polls and do just the popular thing.”

Why can’t our Mayor Miller find his way?

~~~

New York is not the only place with the problem. Here is the Leeds conversation. The nice thing about this video clip is that many of the people on the street in Leeds seem to understand how and why congestion pricing works.

Post Journalist Foments Urban War

If you have read here before, you know that many journalists who write about road user charging (or congestion pricing) are easy targets. In Canada’s National Post, journalist Kelly Patrick recently weighed in with the GrushHour-bating title Toronto’s war on the car, Saturday June 2, 2007.

Ms Patrick’s errors are especially egregious. First, let’s look at language. Two weeks ago Jim Byers described “slapping a fee … on drivers”, clearly analogizing congestion pricing to traffic fines. Now Patrick describes transit advocates as “looking to essentially punish motorists out of their vehicles”. If you’re going to use that kind of language, then consider for a moment that the steady decline of relative transit investment in Toronto over the past 35 years has “punished” transit riders into private vehicles, that these additional automobile trips have “punished” bicycles off the road, and that all of this taken together is “punishing” our children with asthma.

But our journalists are also victims. Writers such as Patrick have been “punished” by lousy transit for so long that unless they are over 50 could hardly recall a time when Toronto transit served commuters particularly well. Her mindset might run something like this: “I hate transit, I live too far to bike (biking is too dangerous in Toronto, anyway) and frankly I like my car, so build more roads with my fuel taxes and get those slow-moving buses out of my way”.

While I have no way to know what is really in Patrick’s mind (words like “war” sell more papers, and anyway she has a right to earn a living, even if research and constructive analysis are not involved), I have described how a large, but thankfully shrinking, portion of Toronto motorist-think.

What is completely missing when a journalist looks only at the surface of a problem, thereby losing any opportunity to inform a reader as opposed to just reinforcing their frustration, is an understanding of how things are interconnected. Seeing congestion pricing as only a tax grab ignores dozens of current automotive-related inequities, and ignores the fact that reducing driving while improving transit is in fact better for those motorists who decide to continue driving.

Patrick goes on to compare driving with smoking: “…driving has now joined smoking and drinking as vices…”. While there are similarities (pollution, entitlement, health, etc.) there are many differences. To compare smoking in a restaurant with driving to work is of course, absurd and, I sense, designed to raise the righteous indignation of the long-entitled motorist.

I recently discussed the problem of mixing congestion pricing with sin-taxes – not as a language issue, as it is here for Patrick, but rather as criticism of Mayor Miller’s enormous waste of his new powers of taxation. He is squandering an opportunity for critically needed social change while he drives his popularity into the ground and while singing green songs in other cities. He was handed the tools to leave a substantial transportation legacy, now he will leave only a bigger mess than he inherited. It is all talk.

Patrick goes on, writing “taking road space away from vehicles” means the author sees roads as “for cars”. Not buses, not pedestrians, not street cars, not bicycles, not goods delivery. Just cars. The entitlement of the motorist runs genetically deep.

Further on Patrick describes “raising revenue for the cash-strapped city -- all have the side effect of dinging drivers.” Miller named a number of other tax changes. Garbage, smoking, theatres, etc. It is not all about drivers.

But gentle reader, this is nothing. Patrick’s most hilarious error is in her opening paragraph. Evidence that she has never seen the inside of a subway station.

Arif Vellani's morning drive from St. Clair Avenue East and Warden Avenue has all the hallmarks of the hellish Toronto commute. First, [Arif] crawls westward along busy St. Clair in his Honda Accord. Then he usually gets stuck on the parking lot that is the southbound Don Valley Parkway on a weekday morning. At the end of his journey, he pays $11 to park at a lot at Church and King streets, four blocks from his office. "My drive still takes less time, even with all that, than it does to take the TTC," he says.

If our poor victim, Mr Vellani, lives near St. Clair East and Warden then he is also near the Warden subway station. Most likely walkable. I use that station and I get to King and Yonge in about 25 minutes. If Vellani “crawls along St. Clair” and “gets stuck on the Don Valley Parkway”, we’re talking more like 40-45 minutes.

Either somebody has fabricated this story of misery or the truth is that Vellani simply likes the autonomy of his Honda Accord more than the subway. In fact, he is willing so spend an extra 20 or so minutes and $11 in parking to listen to the music he likes and smoke if he pleases. One hopes that Mr Vellani has no real problems to confront.

And, I prefer my Honda, too. I am just willing to tell the truth about it.

So let’s say Patrick was duped by Vellani and cannot read subway maps. This is still no excuse for misunderstanding congestion pricing. The principle of market pricing to manage over-consumption of a scarce resource (road space in this case) is well understood. There is no need to teach this to Patrick or any other person who has completed a secondary education. So why the lapse in thinking?

Entitlement. Self-entitlement often causes lapses in social intelligence. I’ve experienced it myself.

Everyone, everywhere feels they are owed the kind of automobile trip promised in the advertisements. I do too. I don’t wish to be “punished” out of my car. But I also don’t want modal choices constrained to car, car or car, as they often are. I simply want to see a balance in choice. More transit, more bike trails, less traffic congestion.

In 1963, William Vickrey, Nobel-Prize Economist from Columbia University, published in the American Economic Review: “In no other major area are pricing practices so irrational, so out of date, and so conductive to waste as in urban transportation.”

And nothing has changed in North America in these 44 years.

So why should Patrick know any better?

~~~~~

Actually, something has changed – the technology to repair pricing practices, called Time, Distance and Place (TDP) pricing is finally ready. It will likely appear first in the Netherlands, or perhaps in Singapore. A small number of cities in the US are starting to look at it. A gradual shift from a fuel-tax based to a pay-as-you-use-it based transportation economy has already begun. I predict that we will see trials in Toronto circa 2009, followed by congestion pricing in conjunction with a large infusion in transit by 2011 or 2012.

Welcome to the beginning of the end of congestion.

Kudos to Sean Gordon

It is not often we get a straight piece of reporting on the issue of congestion pricing. Sean Gordon, Quebec Bureau Chief for the Toronto Star wrote just such a piece: Montreal eyes downtown tolls on 18 May, 2007.

It is refreshing to know that a journalist can still report on something and leave his opinion out of it, to let the reader decide for themselves. Nowhere in this article can I tell if Gordon is for or against tolling. I can’t tell if he drives an SUV or uses a bike. That is as it should be.

The only bone I could pick, since that is my job (and I am 100% biased toward proper congestion pricing) is the characterization of Mayor Tremblay’s plan as “presumably patterned on London, England's successful anti-congestion strategy”. If Mr. Gordon means: toll the busy inner commercial core to encourage alternate modalities, then I would concede accuracy. But if he means: set up cameras at ~300 intersections at a cost of $600M (the cost of the first two stages of the London Congestion Charge (LCC) system) and charge a fixed entrance fee, I hope very much he is wrong.

Why? Because a simple one-size-fits-all cordon-fee distinguishes only among drivers who will take their car into the CBD and those who will not. (Yes, I get that is important.) But such a charge is a blunt, regressive instrument. And this is well known criticism of the LCC – indeed our own Toronto Councillor Brian Ashton has traveled to London to review the LCC, and he has rejected this system, presumably for this reason as well as the mistaken notion that we must have a subway system the relative size of London’s, first.

Since the endgame for congestion pricing is to replace the fuel-tax-based economy with a pay-as-you-use-it economy, we need to mete out road access by distance. And location. And degree of congestion. In other words, pay for your externalities, not your gas.

As we start the engines of the road-pricing debate, we will too often refer to the LCC as the model. It is the model for bold action, and Mayor Livingstone deserves all of the praise he garners. But it is not the model for economic efficiency, system efficiency, urban aesthetics, or fairness.

While Mayor Livingstone has been a guiding light for other more timid mayors, his specific system architecture should never be copied.

Are We Slapping or Servicing Motorists?

In Wednesday’s Star, 16 May 2007, Jim Byers wrote a piece called N.Y. mayor wants tax on drivers. While this purports to be a simple piece of reporting, his language colors his work with his personal grudge against congestion pricing and biases the reader.

When you report on congestion pricing by calling it a “tax”, you automatically have the reader hear “punitive” rather than “pay-for-use”. In Toronto, this is especially a problem because the new taxing powers that Mayor Miller has are just that – taxing powers. Conversations about sin taxes and road-user-fees are lumped together in past reporting to make it all look like a huge fiscal correction to our City’s financial woes. The value of congestion pricing to us motorists and to the environment is lost in the fiscal emergency and in the biased reporting language.

Here is At Mayors’ Summit, Bloomberg Campaigns for Clean Air published on the same day by the NYT. This reporter used “fee” and not “tax” – and its her city!

Here is a piece from the New Yorker that also discusses the matter with less bias. The words “fees”, “tolls”, and “pricing” figure prominently (which is what they are). “Tax” only shows up in the sentence “taxis would be exempt”.

But Mr Byers can be forgiven his use of the word “tax” – he’s hardly the first. In fact, Byers is in good semantic company. The economist Greg Mankiw discusses this…

“there is some debate about whether road pricing is really a Pigovian tax or just a user fee for consuming a scarce resource. …. When people are not charged (or are undercharged) for using a common resource such as a congested road, then incremental use of the resource entails a negative externality on other users. Imposing a user fee for the scarce resource can be described as a Pigovian tax to deal with this externality. Similarly, a conventional Pigovian tax such as a tax on pollution emissions can be described as a user fee for consuming clean air. The distinction between user fee and Pigovian tax in these cases is purely semantic.”

But Byer’s one-word version of Professor Mankiw’s long-winded but carefully drawn distinction abuses his readers.

Unfortunately, he compounds his error, when he writes: “[Bloomberg] has proposed slapping an $8 (U.S.) fee on drivers who come into Manhattan…”.

“Slapping” carries clearly punitive connotations, bringing to mind more of a traffic fine than a per-use fee. If Bloomberg uses those fees to fund transit and to open roads or to do something green, he's providing more service to motorists than he is slapping them for driving. Why else did Stockholmers vote their road-use charge back in? Not because they felt slapped.

The truth of the matter is that journalists and reporters often use language in ways that harm the environment by negating the value that bold politicians such as Bloomberg or Livingstone bring to the table.

Journalists’ greatest value to society is to uncover the truth. Defending one’s god-given entitlement to free access to roads brings no value.