Dutch Rewarding Drivers to Drive Off-peak

Is it possible that we don't need so many new roads as we think? Likely. Is it possible to manage congestion without tolling every road? Possibly not, but there is a way to put it off until “the next administration”, while still addressing congestion. So think the Dutch—those masters of nationwide road tolling ideas.

This article from a Dutch Newspaper was translated by Google, then edited for readability. The original is here.

Could even be our city, eh?

With rewards, 3,000 fewer cars during Utrecht rush-hour

2012 04 12 

Since the start of the project Spits Free in the triangle Utrecht - Amersfoort - Hilversum driving during peak hours about 3,000 cars fewer are using the road in that area. Participants will receive a reward if they avoid morning or evening peak.

The deputy with responsibility for this is Remco van Lunteren from Utrecht. The project is now six months in the Utrecht region and according to van Lunteren, it is a success. In four weeks, participants drive 1.5 million fewer miles during rush hour, says the province.
In the region, 60,000 people drive daily during peak hours. The project involves about 5,400 motorists. There is a waiting list to participate.

The county calculates that spitsmijders ‘earn’ an average of about 30 euros per month to drive at other times. Participants especially avoid the rush hours on Tuesday and Wednesday. 

The province of Utrecht recently calculated the socio-economic impact of the project. It is noted that a few less cars on busy roads during rush hour already provide for the resolution of a file (the congestion file? ed.). In some places, the road is never silent, says the province. Spits runs freely until the end of this year.

While most governments may not be willing to hand out cash for drivers to use roads at different times (and I don’t think they should), there are many other direct, economic ways to reward such behavior, outlined in numerous other blogs, here. The point is that drivers respond to economic incentives, by shifting travel time (or mode). And there are many cash-equivalent economic incentives that are cost neutral to the taxpayer.

We should start looking at them.

Edward Glaeser’s Triumph of the City

Edward Glaeser’s 2011 book, Triumph of the City: How our Greatest Invention Make Is Richer, Smarter, Greener, Healthier, and Happier, is a worthy read. In the middle of a chapter called, “How Were the Tenements Tamed” is a gem about congestion.  I copy it here without permission and in the spirit of sharing a beautiful piece of writing that is among the clearest I have read in a decade of dedicated reading about traffic and congestion. Tim Harford, another economist I admire wrote a brilliant passage that I cribbed as well (that time with permission!).

As you will see, Glaeser’s urban view is about much more than congestion, so I left his context intact.

More Roads, Less Traffic?
Contagious diseases turn the great urban advantage—connecting people—into a cause of death. Traffic congestion eliminates that advantage altogether by making it too hard to get around in a city. Too much trash turns city streets into a health hazard; too many drivers turn city streets into a parking lot. Providing clean water requires an engineering solution, but providing uncongested streets requires more than just technical know-how. Our streets only become usable when people don’t overuse them, and that calls for the tools of the economist. Driving creates a negative externality, because each driver typically considers only his own private costs and benefits. Drivers don’t usually take into account the fact that their driving slows everyone else down. The best way to fix that externality is to charge people for using roads.

Moving water into cities and sewage out was a vast undertaking, which tested the very limits of engineering know-how. Traffic congestion is also an engineering challenge but a psychological one as well, mainly because each improvement changes drivers’ behaviors in a way that actually offsets the improvement. For decades, we’ve tried to solve the problem of too many cars on too few lanes by building more roads, but each new highway or bridge then attracts more traffic. Economists Gilles Duranton and Matthew Turner have found that vehicle miles traveled increases essentially one-to-one with the number of miles of new highway, and have called this phenomenon the fundamental law of road congestion. 

The traffic problem essentially reflects the impossibility of sating the demand for anything that’s free. Roads are expensive to build and valuable to use, yet American motorists seem to think that a right to drive for free was promised them by the Bill of Rights. Soviet Russia used to charge artificially low prices for consumer goods, and the result was empty shelves and long lines. That is basically what happens when people are allowed to drive on city streets for free.

The best way to reduce traffic congestion was dreamed up by a Nobel Prize-winning Canadian-born economist, William Vickrey. Vickrey first pondered the puzzles of public transportation when, in 1951, he joined a mayor’s committee to improve New York’s finances. He was assigned the problem of pricing subways, and he noted that “users of private cars and taxis, and perhaps also of buses, do not, by and large, bear costs commensurate with the increment of costs that their use imposes.” When we drive, we consider the private costs to ourselves of the time, gas, and automobile depreciation, but we don’t usually consider the costs—the lost time—we impose on every other driver. We don’t consider the congestion we create, and as a result, we overuse the highways. 

The natural economists’ solution to this problem is to charge drivers for the full cost of their commute—which means adding a fee that charges drivers for the impact that their car imposes on the rest of the road. Vickrey followed up his core insight in the late 1950s in a report on the Washington, D.C., bus system, in which he first advocated charging driven for the congestion they create. Vickrey’s insight, inspired by the city around him, is another example of self-protecting urban innovation. Decades before E-ZPass Vickrey recommended an electronic system for imposing these congestion charges, and he suggested that charges rise during rush hours, when congestion is worse. 

Decades of experience have proven Vickrey right. Building more roads almost never eliminates traffic delays, but congestion pricing does. In 1975, Singapore adopted a simple form of congestion pricing charging motorists more for driving in the central city. Now the system is electronic and sophisticated and keeps that city traffic-jam free. In 2003, London adopted its own congestion charge and also saw traffic drop significantly. 

So why is congestion pricing so rare in the United States? Because politics trumps economics. Imposing a new fee on thousands of motorists is unpopular, and as a result, millions of hours of valuable time are needlessly lost by drivers stalled in traffic. Vickrey himself died of a heart attack, slumped over the wheel of his car, traveling late at night. I’ve always imagined that he was driving at that hour to avoid congestion. 

In America, congestion wastes billions of dollars’ worth of lost time, but its consequences can seem even more severe in the cities of the developing world, where crowding is more extreme and where alternative traffic options, like subways, are typically underdeveloped. Buildings are shorter and consequently more spread out, and that, along with terrible sidewalks, makes to pedestrian option less practical. In cities like Mumbai, congestion can bring the business of urban life to a standstill, which is why fighting congestion is not about convenience; it is a fight to ensure that the city can fulfill its most basic function of bringing people together. 

[Emphasis mine.]