Congestion Pricing news just got better

The US Congressional Budget Office is looking favorably at Congestion Pricing.

The Washington Post just followed up the recent NTSIFC report with a favorable editorial

Even Peter Gorrie of the Toronto Star, had some intelligent thoughts.

Perhaps the sun will set on the gas tax sooner than you thought, eh?


A hole new approach to road pricing

I figure I knew the reason for all the potholes in Toronto about four years ago. Now others are starting to cotton on. According to John Barber, the Toronto Pothole Proliferation Program is no accident:
"In Toronto today, their proliferation is the visible legacy of an intentional policy…" *
For those with a long enough memory, you will recall that running up to the 2003 mayoral election, David Miller said “We need to consider every possible avenue to address congestion in our city.” When asked if that included road tolls, Miller replied: “We have to look at everything” – clear evidence of an open mind. His 2003 opponent John Tory, now Ontario’s newest ex-Conservative leader was photographed the following day wearing a sandwich board that read: “Say No to Road Tolls.” In 24 hours the entire debate went silent.

Miller remains stuck to today with crowed, underfunded roads that now require an SUV to navigate (thank god for the low gas prices, eh?)

According to Barber the road-maintenance backlog continues to grow. (That’s some news, eh?)

I live on Kingston Road in South Scarborough and I have watched the backlog for the past several years, now. On one bone-jarring ride in my Honda Civic (the only non-SUV still on Kingston, it seems), I finally understood the Mayor’s plan.
Let the motorists beg for road tolls so they can still drive.
By letting the roads go all to rat@#$%, journalists on slow newsdays will point out the potholes to drivers dodging the same. One day, one of the journalists will ask, why not get the money to fix these things from the users?

On that day someone will see the brilliant method in Miller’s Madness. Or perhaps his successor will…
* ya gotta love the art of taking quotes out of context, eh?


Road Use Meters: Built In or Aftermarket

Last week saw a huge number of news articles and online comments re the report just released by the US Congressional National Surface Transportation Infrastructure Financing Commission. One by the Reason Foundation's Bob Poole (thought leader behind the shift from HOV to HOT) asks a critical question:
The report talks a lot about implementation of a national (or federal-government) VMT charge by 2020, but does not make clear how implementation is defined. When I served on the TRB committee on the long-term viability of fuel taxes for highway funding, experts on VMT charging such as David Forkenbrock told us that it takes about 20 years for the passenger vehicle fleet to turn over, as new cars replace old cars that are subsequently scrapped. Unless a hacker-proof retrofit device comes along, it sounds to me like we are stuck with a 20-year transition period. Since the Finance Commission did not endorse a retrofit approach, is your 2020 deadline intended as the beginning year of this 20-year transition?
Mr. Poole is right that hacker-proof after-market devices are critical. Prototype devices are already available and standards are being written in the EU (ISO 17575 touches on this, but there is another standard internally called "Trusted Element" that was established nearly a year ago, that might take another year or two to finalize). This may be non-trivial, but as Commissioner Geoff Yarema pointed out in an IPR piece a few days ago: "It is not as hard as getting to the moon." Fleet turnover is a critical metric for factory installs, but not for the Commission's vision. This should not, cannot and will not be done without [hacker-proof] after-market devices. If we started factory installs in 2015 (say) then by 2035 (Professor Forkenbrock’s 20 years) the cars that were factory installed in 2015 will be a technical laughing stock. Would anyone today want to use a 1989 cell phone? I can't even bench-press mine any more. Besides, the range of innovation for, and value of, multi-application after-market telematics is astonishing. The “dashtop” will be the new laptop. And who wants a laptop built into their desk?

One of the most lucid comments to the commission on this matter is by Robin Chase. The response to Robin by the Commission Chair, whom I greatly admire, is very disappointing.

One of the Commissioners, Kathy Ruffalo, also responded to Bob:
It would be my hope that the industry would be the ones to begin the work to develop standards for any VMT technology. I believe that industry should be the driver for any standards. Having said that, DOT would eventually need to mandate the use of these standards to require original equipment manufacturers (OEM) to install the technology by a date certain that would allow for a 2020 implementation process. After market installation of the technology on a large-scale basis would probably be quite costly. So – the goal would be for the OEMs to do the install in new vehicles with factory-installed equipment. I agree that fleet turnover will take time. During the transition – when some vehicles would have the VMT technology and others would not – we would have to have dual systems. Some drivers would pay a mileage based fee and others would pay the fuel tax. Eventually, we would reach a level of use where the number of vehicles needing after market installation (retrofits) would be isolated to a manageable number. While we believe we can begin to use a VMT system by 2020, it will require the willingness of all participants – especially the public – to be a partner to the transition.
Ms Ruffalo is right that industry will make these standards. That has been underway in the EU for well over five years (e.g. ISO/CEN 17575 and others). Unfortunately, only one American participates on that committee of 30-some experts. Aftermarket installation does not have to be as costly as imagined. Hacker-proof devices can be self-installed (this requires the right enforcement infrastructure, but enforcement is needed anyway so no incremental expense is needed in this regard). The manufacturing cost of hacker-proof devices is currently about $125 (in high volume, of course) and Moore's law will make it $50 in 5 years.

But how can we switch 250M vehicles and 200,000 fueling stations in the United States for Jan 1, 2020? We can do that by building an installed base of VMT aftermarket meters over a period of 10 years so we can cut over on Jan 1, 2020. How would we do that? Well, these same devices can be used for parking (huge convenience) and for insurance (save money for some) and driver rewards programs such as credits for not moving your vehicle during peak hours, hypermiling, parking loyalty and so on. Sell metering services that provide a range of desired services (including overlaying the current ETC systems). Who would do that? The cellcos. The business model is exactly the same as the cellular telephony. The handset becomes affixed to the windshield. The email service is switched for a metering and payment service. Everything else is identical: free meter for 3 years contract, monthly service, monthly bill, roaming, service package. AND there is no need for the Oregon-style data exchange with fueling stations, which should be avoided to ensure that people can fuel at home from their solar or wind generators. The prototypes for everything I describe can toll 240M vehicles by 2015, or more realistically 5 years after someone says: "Go".

Commissioner Yarema was so right. America does have the engineering skills.


Six Key issues the US must address in moving from gas tax to VMT charging

This blog also appears in National Journal Online

The events of February 20 to 26, 2009, in the US have launched a significant debate for Americans regarding its critical surface transportation system. This debate will have a lot of low points such as the Lahood-Gibbs-Oberstar shouting match that helped sell newsprint for a couple of days and fewer high points such as the release of the final report of Congress’ National Surface Transportation Infrastructure Finance Commission.

The debate will cover a surprising number of issues. While the debate regarding what the Fed should do and what the States should do is critical, I side-step that because I’d be out of my depth and because I believe we can achieve a full switchover to VMT without rewriting the Fed-State relationship in any fundamental way. So conveniently blinkered, I think these are the six issues that matter, in order:

Privacy. Some Americans are frankly afraid of GPS and any other mysterious technology. We will not be able to explain it away for everyone. Some Americans who are not afraid of GPS are anxious not to risk its misuse. Who would fault them? Some Americans understand it is possible to have a system that does NOT track motorists but so hate taxes (or new charges) on principle that they will latch onto the privacy argument as a red-herring. Attacking privacy fears with “Don’t worry” or “ ‘They’ already know your credit card and cell phone” will serve to make these Americans, who in aggregate are possibly in the majority, only more resistant. We need to acknowledge that, correct or not, the big brother perception is powerful. We need to legislate that no VMT meter can permit location (tracking) data out of the vehicle, without specific (signed?) permission of the registered vehicle owner and its operator(s). This is already in progress in the EU. To get this underway, now, keeps the debate about VMT charging on the table and says: “first thing is to kill the big-brother possibility”.

Entitlement and Fairness. The arguments around entitlement to mobility, whether some roads are a free access public good, whether taxes should be paid by people who use roads directly with a private or commercial vehicle vs paid by people who use the road but do not drive a private vehicle, or exceptions for certain vehicles and persons, and so on, are often meritorious. We do not want to make anyone worse off. But we might. So how do we address that? There are credit schemes and tax schemes and assistance schemes to help people move or shift modalities. What are they and how will they work? If they were understood, anticipated, and in place, some people would prepare.

Funding vs Management. If VMT is only for funding transportation, then it would be applied in a particular way – in fact the argument “just increase the gas tax” would not be out of place if we could ignore an impending shift in energy source. But if VMT is also for congestion cessation, then we need to build education programs – for politicians as well as for us plain-folks – because I promise you an amazing number of people really don’t understand demand management. And if VMT charging is to be pitched for green reasons, I am further concerned. There is a lot of green print and intention – stated preferences – but when a majority of people are asked to pay, revealed preferences are otherwise. And if the argument is for National Security – well, I’ll leave that one for the reader. And when you put them all together, as needs doing, you have the debate from hell.

Access vs Environment. “Access”, here, is not just “entitlement” in sheep’s clothing. To be realistic, we need access to other places whether work, worry, wink or worship. Moving people and things from one place to another leaves a footprint. Yes, many of us would like to see that footprint minimized. Do we have a common definition of what footprint we will tolerate? Saying “a 50% reduction” or “an 80% reduction” or “the 1990 level” really makes most of our eyes glaze over. So many of the “agreements” we have made to date are not only toothless, they are also with plans to get there.

Roads vs Transit. Some drivers say “Put my money into roads, please” (makes sense). Urban planners say “We need better transit so put some money there, please” (correct). Then we get hard-to-follow economic arguments that moving a commuter from car to bus makes the road less congested so the motorists left driving should be happy to fund transit (uh, ok…). If balanced transportation options are good for everyone, why are motorists so damned nasty to cyclists and transit vehicles? The math on transport modal balance and management fills trucks. But most people still think their mode is the one-true-mode. Where else have I heard that rhetoric? I don’t think this problem can be worked out in a town-hall or in the newspaper. This will need urban planners with some selling skills and some politicians with testicular courage. And hopefully, what works will be copied by more of the same types. But beware of failure, though.

Cost. Considering how tough those five are, why even mention this one? Well, if we cannot shift the tax base from gas to road consumption at a cost close to that of collecting fuel taxes 1.01% according to the NSTIFC report – as opposed to the 20% it takes to collect the German Truck tolls – then we don’t have a deal. There are ways to get to 1.7% according to the same report. Can you name one? The Europeans can’t.

Instead of trying to read the Lahood-Gibbs-Oberstar crystal ball and divining what Obama’s really thinking, we need to start cracking some harder issues.


How Toronto’s parking pricing contributes to pollution and congestion, wastes time, and robs Toronto of desperately needed revenue

A friend who lives in East Toronto is testing a new pay-as-you-go parking and insurance meter. He came to visit me last week downtown at College and University for a one-hour meeting. I told him he could park on a side street for $2 an hour (GreenP municipal street parking) or in the private parking lot under my building for $8/hr (IMPARK). Guess which parking option he preferred. Figure 1 shows a trace of his trip to visit me.

Figure 2 shows a close of up the final 39% of the distance he drove – all of it in fruitless circles to find a way to put his parking money in a City meter. Surely, 39% can't be typical can it? Can short trips engender this much waste? You bet it can. This trip should have been 5km, but was 8.25km.

Even closer, in Figure 3, you can see he cruised the block of Elizabeth between Gerrard Street and College Street four times! Who’s at fault here? The carbon-burning, single-occupant vehicle driver trying to save $6? Or the City he was so eager to give his $2 to?

Well, let’s think it through…

First, consider that my friend spent about 10-12 minutes circling for parking which made him late for our meeting (he ended up in the $8/hr IMPARK lot). That means that he valued his time at about $36 per hour since he was only willing to blow off 10 minutes to save $6. Others value their time less and circle more – you can count on it.

Second, my friend clearly would have paid anything between $2.01 and $7.99 for the hour he needed. So Toronto is throwing that revenue away on many thousands of high-demand parking spots every day. I assert that with proper pricing Toronto would dramatically increase its parking revenue. I wish they would – and start repairing some streets with the money. The arterial nearest where I live is a single pothole interrupted by islands of asphalt.

Third, my friend wasted a bit of gas and released a bit of carbon. Even if Global Warming is a crock, this is not something we want to be seen doing.

Fourth, my friend generated some congestion. Circling or parking is the greatest single cause of inner city traffic congestion.

Fifth, the additional congestion made him and the other cars around him (congestion begets congestion), burn even more gas, which has additional Greenhouse Gas and National Security implications (burning gas enriches hostile states).

So my friend wasted 10 minutes and some gas in his losing bid to save $6. He needlessly contributed a little extra to air pollution and will probably feel even worse reading this. Toronto suffered some additional pollution and congestion while losing a revenue opportunity of, say, $4 had correct pricing yielded a spot for my friend. Note that we are not only talking about the increment of pollution and congestion that my friend personally contributed, since his circling activity had secondary spillover effects for other drivers around him.

And this is repeated thousands of times every day. Add to that the “lucky winners” of Toronto’s parking roulette who are paying $2 instead of $4 per hour, the city is likely losing upwards of $250,000 per week-day or somewhere between $60 - $100 million per year. If such pricing encouraged a portion of these bargain-hunter parkers not to bring their vehicle into the city, but to use some other modality, that would only be an additional benefit. How many people would leave their car home to save $4 ($2 incremental fee per hour for 2 hours)? Likely 5-10% of the street parkers. And most of them would find another way to transact their business.

Far from a virtuous circle, under-priced parking in a congested city illustrates how the seemingly innocuous actions of many single individuals can add up to large negative outcomes. The cumulative size of revenue loss to our city, the unnecessary environmental impact to a City that lays claim to green leadership, and the direct contribution to the daily grind of congestion beg to be addressed. I assert that Toronto could dramatically improve inner-city traffic flow and reduce emission volumes by increasing its parking charges to the Shoup-optimum of 15% vacancy. Considering the spread between the cost of off-street parking and underpriced on-street parking, the City could easily double it parking revenues – at least in the downtown core.

One irony in all this is that parking metering was not originally designed to raise revenue for cities, although it is doing that now. It was designed to be sure that retail employees did not take the best spots in front of the store, thereby discouraging shoppers. But that purpose only remains appropriate in some places and at some times, and as soon as low-priced street parking is available near storefronts it fills up thereby defeating its own purpose.

Setting a proper parking price, i.e., more than $2 on a street next to an $8/hr lot would free up spaces for short-term visitors, making those visitors happy, saving time, saving fuel, reducing congestion, reducing pollution and swelling city coffers. Correct pricing of street parking leaves almost everyone a winner especially the City and its property tax-payers.

Wait!, you say, what about those people who circle and get a $2 space and therefore are more likely able to visit a shopping area in Toronto to transact business. Isn’t that good? Not so much. Each such lucky person in the parking lottery pays a price for the uncertainty, the circling, the extra gas, the extra walk, and the lateness and the rush. Each one contributes to congestion and pollution, as the majority of them are “entitled” to park their SOV at the lowest price. Underpriced parking carries a small, transient benefit to individuals who happen to be lucky on a particular day, but it carries a large societal detriment to all of us each day, every day.

Any Mayor in any city in any country on our planet can green his city while contributing to its coffers. No program to raise tens of millions for a city could be saner – and its way, way better that increasing property taxes.