On-Street Convenience Pricing

The University of Minnesota hosts a listserv dedicated to congestion pricing. I recommend it for browsing on occasion.

Roger Herz of NYC and a long-time advocate of market pricing recently included a comment, there: "on-street parking should be priced at least equal to and perhaps more than off-street."

I couldn’t agree more.

On-street parking should be by-the-minute with no ceiling and at rates comparable with or somewhat higher than off-street parking (which could retain ceilings to be more competitive with on-street). This can be done with in-car meters that are commercially available.

This encourages turnover and a greater preference for off street-parking. The price difference between on-street and off-street should generally reflect the relative convenience of the on-street offering against the inconvenience of off-street. Call this "Value pricing" for parking. Or use USDoT Secretary Mary Peters' newer and more direct term "convenience pricing".

To bring shop keepers and the disadvantaged on side, offer 10-20 minutes free, but make that up in the remainder of the first 60 to 90 minutes. Don't lower it after the make up period, rather make that the premium for convenience.

With such a system, a municipality could save enforcement dollars while maintaining enforcement revenues by using a simple price escalator after the usual two- or three-hour parking allowance is used up. For example double or triple the minute-rate after the allowance period is up.

As well, it is possible – when the system is GPS based and fully automated – to provide parking credits to motorists who do not move their vehicles during peak hours. Such a pricing-and-reward parking system, priced appropriately, would have a dramatic effect on CBD congestion, without the introduction of cordon tolling as London and Singapore have done. Here is an amusing scenario about this new type of meter: http://grushhour.blogspot.com/2007/08/how-to-get-free-parking.html

The meter is available from Skymeter and is available in an anonymous version (wink-wink, nudge-nudge), and, one assumes, in any color, as long as it is black.


A related idea to offer a reward to delay your entry into traffic comes from the Netherlands.

“Rijkswaterstaat (Dutch road administration) [are] providing real-time traffic and public transport information to visitors of amusement parks and catering establishments [to achieve] a better dispersal of traffic. … displays with traffic information are placed at the exit of a large number of amusement parks, zoos, road restaurants and conference centers [to show] real-time traffic jams and or train delays. When there are traffic jams in the surroundings of the participating locations an interesting alternative can be offered to prolong the visitors stay. For example a ‘rush hour menu' for a special price. The ‘rush hour menu' has to stimulate visitors to stay longer at the location when there are traffic jams or train delays. This will create a better dispersal of traffic.”


Mary Peters - on the mark again

Mary Peters, the US Secretary of Transportation, authored an op-ed piece this weekend. I took the liberty of copying the whole thing below, because few say it better than she and if her article ever becomes unavailable, it would be a loss.

Unfortunately, she missed three critical words. In her bold and correct assertion that “… a larger scale regional approach throughout Northern Virginia and the Hampton Roads regions could be put in place in a relatively short period of time”, she did not mention that the only realistic way to do this is with anonymous satellite technology.

Bravo for getting the economics right (and she is no longer a loner on that score), but we cannot straddle large regions like Northern Virginia with current RFID technology because of its expense, its intrusiveness, and its uneven (read unfair) distribution. The proper way to directly charge for road use in lieu of increased fuel taxes (or any fuel taxes if I had my druthers) is to charge everywhere – variably of course, as Secretary Peters prescribes – but everywhere.



Try Real Reform – Not Additional Taxes

WASHINGTON With the special transportation legislative session complete, Virginia's leaders and legislators now have a clean slate to consider real reforms to the commonwealth's transportation challenges.

The answer to these challenges, for both the nation and Virginia, lies in a fundamentally different approach to financing and managing our highways and transit systems. For example, at the heart of Virginia's transportation's debate was a proposed $6.4 billion tax increase to pay for transportation improvements. Yet Virginia has more than $4 billion worth of projects underway utilizing private funds for new construction. And recent studies show that direct pricing of roads would generate at least as much in revenue while delivering far better economic results.

Clearly, we need to change how we fund transportation projects. It makes little sense -- and it's certainly not sustainable -- to increase our reliance on gasoline taxes at a time when we all recognize the need to decrease fuel consumption and increase the use of alternative fuel sources. And, as virtually every study has concluded, gasoline, car, property, and sales taxes have little or nothing to do with the use of highways and are ineffective at reducing highway congestion, increasing business productivity or improving quality of life. Not to mention that they are rightfully unpopular with the public.

The commonwealth should make history by widely embracing the use of new open road tolling technologies where prices vary throughout the day. As traffic levels change, so too would the nominal amount drivers are charged. These varying tolls would ensure that car and bus traffic keeps flowing, even during the busiest times of the day.

Variable pricing, or congestion pricing as it is more commonly called, is a proven approach to managing and financing transportation systems that price road use based on supply and demand, just like long distance phone service, hotels and electricity. Imagine a rush hour where cars move and commuters get home in time for dinner with their families.

This concept is not a new solution for Virginia, where some of the most significant projects -- such as widening the Capital Beltway -- are moving forward as tolled facilities funded with significant amounts of private sector funds. As a result, while many other local transportation projects are likely to be stalled until Virginia settles on a new funding solution, some of the most significant projects in the state will continue unaffected.

Pursuing this approach on a project-by-project basis, as Virginia is doing with the Beltway project, is certainly preferable to doing nothing. But a larger scale regional approach throughout Northern Virginia and the Hampton Roads regions could be put in place in a relatively short period of time. Virginia's leaders could easily and rapidly oversee the first ever statewide reduction in traffic congestion.

Virginia's leaders have a clear choice. They can ask drivers to pay more at the pump, more at the store, and more at the DMV -- regardless of where they live or when they drive. Or, they can put in place direct user fees that will be targeted to areas where congestion is at its worst, and will actually cut traffic, speed commutes and improve the timeliness and quality of transit bus service.

As important, direct road pricing would provide the commonwealth with a significantly more robust and sustainable revenue stream. Congestion pricing would provide needed revenue for road construction projects. It also would help fund transit agencies struggling to cope with the recent surge in ridership. And, it would help finance some of the ambitious transit expansion plans being contemplated.

Embracing direct pricing for road use would also have the added benefit of encouraging better decisions about land use, stimulate reductions in carbon-dioxide emissions and encourage more of the commonwealth's commuters to try transit. In short, embracing tolling as a solution to Virginia's transportation funding challenges would cut traffic, generate needed revenue, improve transit, and significantly benefit the environment.

Clearly, there is good policy available for Virginia's leaders to take up -- policy that promotes accountability and delivers the results that Virginians, and Americans, want and deserve.

Mary E. Peters is the U.S. Secretary of Transportation. To contact her please visit the Web site www.dot.gov.