Perfectly Shapeable Charge

Chris Davis, over at blogs.discovery.com recently wrote one of the more intelligent pieces on the contentious subject of road pricing. As evidenced by the comments made to his post, one of the problems with this discussion is the number of variables that need to be considered.

1. The move to improved or alternate power plants makes the gas-tax less useful every day. Mary Peters put it best: “Relying on the gas tax is like relying on cardboard to keep the rain out – the longer you use it the less it works.”
2. Taxing the resource (oil) we want people to use less of in order to fund our roads is plainly shooting ourselves in the foot as is funding hospitals solely on cigarette taxes.
3. Are we trying to fund roads? Then we can tax anything you’d like such as property tax or sales tax as is now done in some jurisdictions (a great congestion-builder, by the way).
4. Are we trying to manage congestion? Then tax by time of use, distance driven and place of use (TDP).
5. Are we trying to reduce emissions? Then tax road use by vehicle type/size.
6. Are we trying to move people to electric cars? Then tax gas AND roads.
7. Are we trying to balance the damage from trucks? Then charge trucks more (to be reflected at retail anyway; sorry, Virginia, no free lunch).
8. Are we trying to open highways for more effective commerce? Then charge cars more.
9. Are we trying to get people to use transit or walk or bike or telework or move closer to work? Then charge by time of use, place of use, and distance driven.

If you want to do all of these things in some reasonable measure, then Time, Distance and Place (TDP) charging is your ticket – your only one. The technology now available to do this can be made private (even anonymous), and can handle parking, insurance, driver rewards and credits and a dozen other user-attractive features, so that the cost of metering for road-use charging can be reduced to the current cost of collecting gas tax.

The fact that the gas tax is unsustainable is incontrovertible. We can patch it with an increase. We can even index it to the cost of road build and maintenance (that would be an astonishing achievement wouldn’t it?). But as soon as we reach 10% fleet electrification (which is coming in the decade after next – if not sooner), then what?

The gas tax simply will not work much longer. Far-sighted organizations like James Whitty’s ODOT are asking “How can we prepare for that?” ODOT’s and Jim Whitty’s work has been pioneering as has Puget Sound’s and Matthew Kitchen’s. Is this work perfect? No. Does anyone have the perfect answer? No. Can we diddle the gas-tax to get there? Not for long. Can the current administration side-step this? Maybe.

Can the next one?

Recombinant Market DNA

Energy and its generation, conservation, consumption, and taxation it so fundamental to human commerce that the changes we will see over the next two decades will be multifaceted, complex and profound. We consumers often think in terms of a series of singular changes. If gas costs rise, we’ll consider a more efficient car. As our commute takes longer, perhaps we’ll consider a nicer in-car audio system. As housing costs rise, we consider moving further from the center of the city.

Seldom do we take several things into account at once, because these changes are not all apparent to us at the same time. And the changes are not unidirectional. This fools us over and over. Last year, gas prices scared the hell out of us, then they came all the way back down. Housing prices have hovered steady in the past couple of years in Canada and even dipped wildly in the US.

Just as Detroit did not read the deeper signals from the 1973 oil-embargo (and continued not to read them for 35 years, so as to completely humble an American icon), we too can easily not read the signals that matter to our own personal eco-system. How many owners of 3-year old oversized vehicles do you know that were pleased with their purchase last year? How many people do you know who are getting really tired of their 40 minute commute that now averages 70 minutes each way?

And hey, it is not just you as a consumer who is not always reading the future clearly.

Let's look at four new mobility-related eco-systems.


Automotive energy eco-system

Modest-scale, vertical wind turbine technology works in a broad range of wind speeds. Ontario has new legislation permitting developers to incorporate wind and solar generators whose production can feed into the power grid with feed-in tariffs higher than residential consumption tariffs. As that technology gets more efficient and when I can put in on my roof, I will be able to power my own electric car, another technology that is rapidly developing. What will happen when the next generation of personal-scaled power generation meets yet more progressive legislation regarding feed-in tariffs and in turn meets the reliable electric car? What changes when 3% or 7% of our personal automotive fleet is electrified? God help the gas tax when fleet electrification reaches 30%.

So who’s not reading the future, here? Any government who is not staring down the gas-tax real hard – a tax, by the way that is levied on just the thing we’d like everyone to stop using. I hope we don’t really need that tax, because it has already started to sunset.

Here at home, Ontario’s Energy Ministry is very progressively driving us to more and greener energy – heck, Ontario Power Generation even advertises this on billboards for everyone who drives by: "Relax about oil, already! With our shining solution around the corner you can keep driving. You will just drive home, plug it in."

Perhaps even using your own generator.

Click here to see this as a fairy-land animation...

And it is not going to cost $40 or $50 to fill up – especially if you can put a balancing amount back into the grid. We may be approaching near-free energy for private motor vehicles, once the power infrastructure is in place. In any case, even if reliably taxed, it is not going to replace $300 or $600 per year in road taxes.

But next door, over in the Ministry of Transportation, for the self-same Province, discussion of Road Pricing is verboten.

Cheap clean power, electric cars and road-user charging forms a new eco system. Energy, conveyance, and funding for the roads to get conveyed on. And you can be sure this new eco-system to be realized in the next 10 years will have impacts on jobs, power distribution, fueling stations, and many other secondary fallouts. Changing the automotive power plant changes a lot of things.


In-vehicle telematics eco-system

Dr. David Marples, a telematics expert from the Dutch company, Technolution, points to a fundamental error of thinking that many in the still-incubating GPS “road-use charging” industry make: they assume (actually “design as though”) road-use charging telematics systems will address only one function – time, distance and place (TDP) user fees. He is right for the private automotive market – there is no way we can spend a couple hundred dollars to collect a couple hundred dollars.

Marples makes the point that we will have more success if an in-car platform makes possible many dozens of applications for entertainment, traveler information and payment services. Just like the PC hosts thousands of compute applications your car will have a mobile compute platform likely forming a network node that Robin Chase often talks about and to which vendors can add standardized applications.

Road use payment services will be a key driver for this market. As the first few jurisdictions adopt mandatory GPS-based, TDP road-pricing, who cannot see the opportunity that Marples and Chase point to? Road pricing will drive this eco-system into cars, and the eco system will make the fact of TDP pricing far more palatable than would be a dedicated-use road-pricing device.

While this new eco-system is smaller than the automotive energy eco-system in disruptive scale, it will ripple past your dashboard creating or expanding related services markets. The total cost per automotive mile will creep up, as will your enjoyment, one may imagine. We’ve always preferred enjoying our cars, so this may allow you to tolerate congestion just a bit more, as Anthony Downs recommended to Congress in 2001:

… everyone should get used to being stuck in traffic some of the time. You should get a climate-controlled car with a stereo radio and tape deck and CD player, a hands-free telephone, a fax machine and even a microwave oven, and commute each day with someone you really like. Make it a part of your leisure life!

Mobile payment eco-system

The use of the cell phone for micro payments and mobile payments, already an old idea, is just now arriving in Canada. One of the likely ways road-use charging will be introduced will be to provide a body of related services and rewards to provide more carrot and less stick to help motorists over dramatic change of this tax-shift.

Two types of financial exchange include a road-use credit exchange system and shopping incentives related to parking.

A credit exchange assumes that everyone is entitled to a certain number of mobility credits which equates to a modest amount of free road access. Those people who use less than that amount can sell them in analogy to a cap and trade system.

Shopping incentives related to parking are analogous to the store or restaurant that says it will pay an amount of parking for you if you shop or eat at their location. Both of these incentive systems would be able to tap into the mobile payment eco-system, especially since the road-use payment systems are best serviced by telcos anyway.

Since the mobile payment eco-system pre-dates road use charging systems, I cannot argue that they will be “driven” by road pricing programs. However, the synergy will be good for both.


Mobility Housing-Location eco-system

While first response to a road pricing program may be complaint, immediate remedies include paying, using transit, or carpooling. In the medium term people who do not prefer to pay this way will telework, bike, get a smaller car, or even change jobs. But in the long term, people will begin to choose housing that minimizes automobile travel. In this eco-system, strongly precipitated by road pricing, real-estate values will shift. The cheap(er) home an hour from work will see a relative price fall and the smaller home or condo in the city will see a rise. This shift will be permanent and may predict a large number of related changes – far more than can be listed here. On the other hand this growing price differential can tend to counteract the congestion-effect of pricing programs, simply putting money saved by not commuting into a home or providing a cheaper home to a person who values his time less. Regardless, this will be a powerful new influencer on life style decisions.

While I outlined four different eco-systems, each sufficiently complex to make predictions a bit iffy, they actually combine to form a large new eco system that incorporates all of this and more. What is central to all of this recombinant market DNA is that changing the power plant for the private automobile changes taxation and together they will change everything else.

2020 will differ far more from 2000 than 2000 did from 1980.

How much will Pay As You Go driving cost you?

There is an oft-stated fear that time, distance, place (TDP) road use charging will “price cars off the road”. (The US calls this VMT charging.) Let’s play with some numbers.

Revenue Neutral (see comment #2): The average American motorist pays less than $20 (about $C25 in Canada) per month in fuel taxes. That is $240 per annum or 66 cents per day. 1000 miles per month means about 2 cents per mile as a rough figure. In this scenario you would pay the same amount in a mileage charge instead of a fuel tax.

System costs: This is unrealistic because TDP charging costs a couple percent to operate – assume a 4% credit card level – so expect to pay an extra $0.0008 per mile to stay revenue neutral or $9.60 per year to have the charge collected. We are now at $250 per annum, up from $240. Or up 2.75 cents per day.

But this is also too simplistic, because you are not paying enough to keep the roads up anyway, so…

More Funding needed: To make up the projected $15B annual shortfall in the Highway Trust Fund (shared by 253M vehicles), your share would be an extra $5 per month or ½ cent per mile. So a flat mileage fee that tops up the Highway Trust Fund would mean an average of $.0258 per mile or $310 per year up from $240. An average of $70 difference annually means an extra 20 cents per day per vehicle compared to now – what’s that – the price of a cigarette, right? Do we really want to keep our crowded, crumbling roads, and polluted cities to save 20 cents a day?

And who would not be able to drive their car to work because of 20 cents? So what’s the fuss?

Well, TDP charging means variable rates. Time, distance and place means that more or less will be charged for traveling at more or less congested times or in more or less congested places. So, as an example only, expect that driving in congested times or places would cost you 3 or 4 times more per mile (say 8 to 10 cents* at the top of the scale, up from 2.5 cents) AND driving in less congested places and times would cost less (say, 1.5 cents at the bottom of the scale). So immediately, if you are a rural dweller you would be better off while an urban dweller who takes a car into the city at rushhour could be worse off.

* Yes, Manhattan might go higher. But why are you driving in Manhattan?

But who among us ONLY drives in congested places and at congested times? If you are a suburban driver who drives the same 12,000 miles after charging begins, at the projected average 0.258 cents per mile for 2/3rds of your trips and 10 cents per mile for the other third, your annual road use fees would be $606 instead of $310 or an additional 81 cents per day more than the simple, non-green, miles-traveled, non-variable rate.

The assumption is that a majority of urban drivers will have some choice regarding traveling earlier or later or by different means. More efficient car types will also carry lower TDP per-mile rates. Perhaps the suburban driver will pay more for a long daily commute. Or perhaps that driver will start using light rail where it is available. The key is: the amount of road use charge to be paid for the same miles traveled can be altered by the choices the driver makes rather than how many gallons of gas are used. You will have some choice of cheap miles and expensive miles. That is not possible when paying gas-taxes fixed by volume.

To be realistic, only the drivers who still prefer to drive during rushhour would pay more. For those that wish to do so or the few that literally have no choice, at least their trip will be less congested.

TDP road use charging carries advantages for all of us.

Fan Mail

The assumption that George Orwell’s time has arrived with VMT/TDP road pricing is especially visceral in the United States. I am accosted often and bluntly. Yesterday’s exchange with a new fan illustrates two things. Tolerance for tracking is near-zero and willingness to understand is there when explained.

Not one word has been altered in the following email conversation, except that my correspondent's name has been withheld.

Tonight I was in a bar with my best buddy, Malcolm, who, having recently been run over by an elderly lady in an SUV, was having a Guinness when my blackberry buzzed with a email from a satisfied reader of an article I had written for Roads and Bridges Magazine.

Mr. Grush – If you won’t admit that the eventual result of a GPS mileage system will be Orwellian monitoring of movement, you are either a fool or a liar. The U.S. State of Mississippi has recently outlawed ticket-writing red light cameras statewide. This is a very positive development that should be followed by more legislatures to stop the abusive implementation of technologies fostered by the political lobbying of companies that develop them. – K.N.

The perfect way to introduce oneself, I thought. Luckily this Canadian was born in Maryland and bullied in Pennsylvania, so I immediately appreciated the affection: “you are either a fool or a liar”.

Or a genius.

I shot back, certain that this would engender more affection.

The Third Reich and Soviet Union were full of geniuses led by very misguided people whom history has correctly judged very harshly. K. N.

I was right! My turn...

I'll bet you have a deep understanding of how GPS works, too. I suspect you watch a lot of telly. Seriously, Ken the technology is not what you imagine. It is anonymous. Unlike E-ZPass.

Then he started to go a bit soft.

Having graduated on the dean’s list from Georgia Tech and practiced engineering for thirty years, I do in fact have some understanding of technical matters. Running my own company has not left me much time for television. Your description of the anonymity of the system in the article may hold as originally implemented, but you can bet it will be manipulated by officeholders less well intentioned than yourself. My point is that technocrats tend to believe their creations can only be used for good purposes, but history has unfortunately shown otherwise. K.N.

Technocrat?! Now I’m insulted.

Then they will have to use a different device. Mine does not allow position data to exit the device.

Then he really starts losing it. What a spoiler!

Then let us hope if we are to be burdened with this that your device wins the bid and keeps the business in perpetuity. If after a few years one of your competitors underbids you, or sells some politician on their device which may not be so benign, let us hope we can resist them. K.H.

Next thing, he'll want to work at my company. This thing is going too far!

Thank you. I accept that as a blessing. Search "privacy" at www.grushhour.com. You will see I lobby for legislation that forbids location data to exit the vehicle. If you go back to the beginning you will see it was not always so. I have come to this only in the last year. e.g., see skymetercorp.com > Media > Archive and find Data Protection Act. I have since recanted.

The first time data from my system is used for harm, I'd be out of business. Oddly, your privacy is more important to me than it is to you. One mistake and I am exposed to serious and inescapable criticism.

BTW I was asked to build an ankle bracelet for prisoners about 3 years. I refused because I did not want to seen tracking anything. Ever.

I have not seen the article. Is it online?

Finally, he gives up all semblance of healthy disgust.

I am glad to hear you share my concern. The article was referenced in the NSPE email newsletter which aggregates articles from the technical press. Here is the article, and have a good evening:

Squeezing Tolls From Error Bars
Transportation Management & Engineering (04/09) Vol. 14, No. 2, P. 8; Grush, Bern

The tolling of wide areas such as regions, states or continents will be facilitated by a new vehicle-miles-traveled technology founded on processing innovations in vehicle positioning using Global Navigation Satellite Systems (GNSS/GPS). Some jurisdictions already have electronic road tolling technologies implemented including various radio-frequency identification (RFID) or dedicated short-range communications (DSRC) radio technologies, but not all of these systems boast interoperability. GPS signals are free, openly available and de facto standardized, which means that the opportunity for interoperability among toll-payment service providers can be concentrated on road-use metering standards, privacy standards and payment data exchange among metering providers, payment service providers and toll operators rather than interoperability among proprietary equipment providers. By focusing on road-use metering standards, costs can be reduced, operations can become more flexible, extensibility can be eased, and service acquisition and motorist-oriented services and transportation policies can be broadened. Transport authorities starting to toll wide areas using GNSS/GPS technology will face the temporary issue of interoperating between existing DSRC/RFID facilities with long-term management contracts and the more flexible GNSS-based time, distance and place systems. A high-resolution, GIS-based pricing grid overlaying an entire region can serve as an interim solution, and every component of this grid would be assigned a fee for passage through it and an owner or government entity that would receive the fee. Establishing this service only requires an accurate digital map of the facility to be tolled, the toll anticipated for each road segment, any time-of-day differences in charges and a collection, payment and audit agreement with each participating toll agency.

[more] http://www.roadsbridges.com/Squeezing-tolls-from-error-bars-article10268

Privacy, Location and Innovation

This entry in a Location-Based technology blog, relates to modifying data in a way that enables its public use while preserving privacy. [scan this entry to follow below]

This led to two comments by Bern Grush and Fosca Giannotti, respectively:

Location privacy re GPS tracking will be the single most critical issue for Time-Distance-Place (TDP) road-pricing (called VMT charging here in US and specifically called for in the new report from the [US] National Commission on Surface Transportation Infrastructure Financing.) The problem for that application and at least some solutions that address it are similar to Wood's view and solution. We patented something similar (NOT the same) in the recent past that allows us to "fuzzy-up" the entire journey to an arbitrary degree. BUT it was not filed under "privacy", rather as a method of non-line-of sight noise mitigation, trip descriptor reliability (for consistent charging) and compression. A year after it was granted we realized we also solved the privacy problem. I find that in addition to privacy (a concern I share with any person or motorist) and a knee-jerk response of "NO GPS" is that it stifles innovation WITHOUT providing real privacy. I wrote about this here. Bern Grush on 2009-01-09 12:18

The issue of Location Privacy is broadly studied within two major communities: Location Based Services and privacy preserving Data Mining. An extensive state of art may be found in the book: "Mobility, Data Mining and Privacy" edited by [Fosca Giannotti] and Dino Pedreschi. Such a book is one of the results of the European project GeoPKDD: other results are algorithms for anonymization of trajectories (trajectories are reconstructed by traces left behind for example by cellular phones). The idea of generalization is extensively used in anonymization. In this case what I see as critical the definition (and consequent labeling) of private and public as absolute concepts. Fosca Giannotti on 2009-01-09 16:53

The GeoPKDD site is a valuable resource for those concerned with Privacy and Innovation.

Hello Hello Anybody Home?

It is really getting hard to believe that with all of of the criticism of the flat-rate London Congestion Charge – by advocates of congestion pricing, no less – and all of the talk of VMT-pricing [1] in the United States (which hopefully is TDP-pricing [2] by the wrong name), that intelligent people keep coming up with cockamamie flat rate schemes.

In San Francisco, 'congestion pricing' is something they're sneezing at.

California Dreaming: Even In San Francisco, People Don’t Want to Pay to Drive Downtown.

It flopped in NYC. I predict (and so do you!) that it will flop in San Francisco.

Charging a fixed fee is always economically inefficient. Whether you pay $6 or $20, once paid you have no incentive to drive less or differently. This is also unfair to those who do drive less. If Mary drives 13 miles in the zone, and Susan drives two, why should they both pay the same? For the same reason that all-you-can-eat diners gets fat, all-you-can-drive-cities get congested, we see that in London already. The London Congestion Charge may be well meaning, but it is wrong headed. Stop admiring it. The point has been made. Move on. Pay for exactly and only for what you use. Demand variable TDP-pricing in place of the gas-tax. Its fairer and more effective. And it can actually cost less and be anonymous (now those are nice surprises).

BUT some good news, here, Oregon seems to get it, and they're not all that far away from California. How come? What makes it worse is that tons of money were spent to discover what the Governor of Oregon now knows. Can somebody call someone in San Francisco please?

[1] Vehicle-Miles Traveled; [2] Time-Distance-Place

Telcos, Tollcos

On April 28th, this year, Secretary Mary Peters spoke at The Brookings Institution. There she said that congestion in America is worse than ever; that it will continue to get worse; that the gas tax is unresponsive, unsustainable, and unpopular; and that Americans will not agree to increase that gas tax. She added that the “brass-ring opportunity we have before us is to substantially change that system and move forward to something that is more user responsive and more market-based.”

Later in response to a question, Secretary Peters, said that HOT lanes are an interim measure “…a stepping stone to get people acclimated to paying a fee for use of a section of roadway at a peak period of time.” And that here in America we will eventually go to a “vehicle miles traveled (VMT) form of pricing”, by which she means the same thing as the Europeans mean by Time-Distance-Place (TDP) charging. When I asked later how far away that might be, she said “some states cannot wait more than ten years”. The AASHTO Journal in both April and May of this year puts the date for a switch-over to VMT at 2025.

USDOT and Secretary Peters do NOT see market pricing as a way to maximize revenue, rather as a way to maximize network performance – i.e., if we can price to reduce congestion, sufficient funding and somewhat cleaner air will naturally follow.

Given this rapid awakening of Americans to the need to switch to TDP pricing, the American prediction that this will occur somewhere between 2018 and 2025 coupled with the European prediction that it is between 2011-2020 and predictions by many other countries for times in between, this thing might be well past half-way done by 2020.

But what thing?

The EU has declared GNSS to be the only known technology that can feasibly apply TDP pricing everywhere; if the transportation leadership in America sees HOT as interim and sees GPS as the endgame, then we are talking GNSS-tolling in a big way – perhaps 300M vehicles worldwide by 2020.

How is that going to be done? For the US, "ten years" is awfully close. The experimentation, cross-vendor bake-offs and standards bodies in the EU are in a dead heat to be ready for the 2011 kickoff by the Netherlands which has 9M vehicles against Americas 250M. Right now the EU schemes on the drawing board are still expensive; they demand a massive telecommunication commitment, either sophisticated heuristic map-matching at the dashboard or massive amounts of raw data moving to a central processing area. There is nothing on the drawing board that will network to support 300M vehicles. So far we are at 640,000 trucks in open sky in Germany – 0.21% of what is being predicted for 2020.

What will we do here in America? We could assume the Europeans will solve it, then import their technology? Is that what we want? And what if they don’t solve it?

So far as I am aware, the GPS-tolling experiments executed in America have not sought to solve the problem of tolling using Liability Critical GPS as some of those in the EU have addressed – albeit unsuccessfully so far. Rather these experiments use navigation-quality GPS receivers to test user acceptance, state boundary detection, and user modal adaptability. The Europeans have shown repeatedly in Copenhagen, in London, in Amsterdam and in several other cities that navigation grade GPS will not work in our cities due to signal interference.

Let’s assume the problem of low-cost Liability Critical GPS will be solved and shared around the globe. This is a reasonable gamble, since one company already claims this. Still how would such a system be deployed?

What we want to do is:

• put a small device that includes GPS in a few hundred million vehicles,
• measure road use in small time, distance and place increments,
• log that use privately – maybe even anonymously,
• move that data wirelessly to a billing capability,
• generate bills for many tens of such small transactions, perhaps hundreds per month per user,
• set up credit, debit, and pre-paid accounts for these users,
• handle device fulfillment, customer support, troubleshooting, device repair and replacement
• make sure motorist driving in an area far away from their home RUC provider can “roam” on the roads of another provider and have the transaction handled seamlessly.

This mimics exactly what the Telcos do now. There are two differences; first the device meters road use instead of handling voice and email, and second it is attached to your windshield instead of your ear. Otherwise, the business of being a Road Network Tolling Operator is identical to that of being a wireless network operator.

The only organizations that can toll the entire United States on short notice are the Telcos. And 10 years is short notice. We should get started.

Road Pricing Discounts

RUC discounting schemes have political acceptability as their core motivator, but location-based discounting can be complex, unfair and counterproductive. This article proposes an alternative that is simpler and fairer – one that addresses political acceptability while multiplying the pricing signals that motivate congestion-mitigation programming.

Some RUC (road-use-charging) cordon-based scheme designs provide discounts for those that live within a pricing cordon. This can be done intentionally, as is the case in London, or in the original New York City proposal. It can also happen by default with any scheme that only charges for cordon entry, since residents that travel locally or only re-enter after-hours will avoid the charge by fortune of geography and schedule.

In the face of unsustainable fuel taxes and contemplating more and larger charging schemes, up to and including continent-wide time-distance-and-place (TDP) charges, the question arises: “Can we provide a discount to motorists driving near their homes when we use a satellite-based, RUC system?”

Granting a “discount radius” to each motorist could accomplish this, but that increases the expense of the TDP charging computation. A slightly less expensive way is to assign discounts based on charging districts. However, I am generally against such discounts because I believe everyone should pay for what they consume. In an urban community we generally pay the same for utilities such as electricity or water regardless of our location and I think that should apply to mobility, as well.

Considering that discounts encourage consumption and tend to generate cross-subsidies, a more direct question to ask is: “Should we provide discounts for motoring?” or if we must discount, “Should we provide motoring discounts by geography, since that encourages automotive use in specific geographies, harming other residents sharing those locales?”

Geographic discounts say to motorists: “It is fine to drive as long as you are from here, but we’re going to charge visitors, since they contribute to congestion and to air-quality problems”. Such discounts can be seen as cynical, telling the local motorist: “We value your vote more than accessibility – or more than air quality.” Or “It’s not your car, it’s theirs.” Geographic discounts signal entitlement rather than conservation or increasing choices for mobility.

To the first question: “Should we provide TDP RUC discounts?”, there are at least two critical reasons to say yes:

1. It is politically easier to sell: “we will charge a very modest fee, perhaps only nominal, to those motorists who are rate payers here, who work, go to school and church here, who are part of our local commercial and social community; and we will charge a market rate to visitors, motorists in transit, and commuters who do not live here.”
   
   Since the essential hurdle to universal, fair market pricing for roads is political, this reason alone is sufficient to argue for discounts. But is geographic discounting the only political lever to get RUC programs in place?
   
   
2. Poorer motorists tend to drive fewer miles and closer to home. RUC fees, since they can compound the effect of increasing fuel prices, can serve to further exaggerate the have/have-not forces that constrain the mobility of poorer motorists). Hence a close-to-home RUC discount is biased in favor of poorer drivers and this is fair in that regard.
   
   This social reason is, in my opinion, sufficient on its own to force us to address discounting in some way.
   

Hence, I believe there are political and social reasons that make RUC discounting a critical conversation that we need to engage in now. Unfortunately, assigning discount by geography is expensive, unfair and counterproductive.

1. Expensive. Granting a discount radius from a point (e.g. your home) or assigning discounts by district would be administratively expensive.
   
   
2. Unfair. Person A and B are neighbors and live near the edge of a discounting “district”. Both live 5 miles from their respective jobs. Both drive the same type of car and both work the same shifts but A works inside the assigned district while B works in the adjacent district. This unfairness to B could be solved by the more complex and expensive radius approach.
   
   
3. Counterproductive. Assigning discounts to short journeys has the undesired effect of discouraging cycling, doubling, moving, pooling, transit-use, trip avoidance, waiting and walking. This problem is worse than the issue of high administration expense that could be seen as a job generator (a benefit).

Mobility credits

There is another solution that is very inexpensive to operate, fair to all regardless of geographic happenstance and encourages cycling, doubling, moving, pooling, transit use, trip avoidance, waiting and walking. Furthermore, this alternate solution compounds pricing signals, and diminishes entitlement signals.

We have a hint about this solution from the Puget Sound Regional Council (Washington State, U.S.) trials:

If you give people money that they can spend on
RUC fees or keep, they attempt to keep some.

I propose providing mobility credits. These could most easily be distributed on a monthly or annual basis to the user of a pay-for-what-you-drive road-use meter and could be managed by a billing services operator. An annual allotment is preferred so that a motorist is not pressured to “use up” credits before month-end. An annual allotment could be used up well in advance or could even be carried over in the event that a motorist managed to avoid driving during chargeable times or on chargeable roads.

A credit distribution associated directly with the meter ensures that the metering device holds attraction for the motorist. For example, if such a meter was charging 5 to 50 cents per mile (depending on time and place) and was the only access to mobility credits, then a $250 annual credit against a $10 per month device usage fee, makes the meter an investment rather than an expense. Note that such credits would be easy for a government-operated tolling scheme to justify since most government schemes already provide free access to most roads.

Assume a vehicle-attached meter (i.e., a telematics sensor) operating as an electronic license plate and producing an anonymous, evidentiary record of road use from which can be generated a billing feed (our firm makes one such system, as an example). Grant each motorist mobility credits (for example, $20 per month – enough to travel 40 to 400 miles depending on time and place charge rates). In this way, a simple per-device accounting credit provides:

1. discounted or free trips for a motorist who drives to shop, to church or to drop kids at school;
   
   
2. an incentive for other motorists, including poorer motorists, who would like to conserve these credits for longer trips or trips that must be made in an automobile and to otherwise avoid, cycle, double, move, pool, take transit, wait or walk.

As we engage in the shift from paying based on fuel consumption to paying based on TDP metering, the question will arise whether meters should be paid for by the motorist, by the government, upfront or over-time. If they are distributed at no charge, mobility credits would make it especially attractive to road users to participate in the system, but the meter itself might not be valued, unless credits continued to be provided. If the meters are to be paid for, mobility credits should cover more than just meter costs to provide a net credit. I believe meters should be paid for over time, as are mobility handhelds, now in order to ease the expense. Such as arrangement would make the system easy for motorists to purchase: they would pay gradually for the meters, while receiving a net credit for their participation. It also makes it easy for a meter operator to finance millions of meters, since there is a guaranteed source of revenue to secure the loan.

Transferable Credits

But why stop at credits just to motorists who use the meter? What granting credits to transit users and cyclists? In the economic-fairness spirit of parking cash-outs that provide an equivalent transportation incentive to employees who do not use free employee parking, mobility credits could be provided to all people of driving age. These could be sold or given to others, creating a market analogous to that for carbon credits. Such an approach provides two valuable signals:

1. the motorist who buys such credits is directly subsidizing some other person to use a non-automotive alternative – or at least to use their automobile on uncongested roads and at uncongested times;
   
   
2. the value of not driving is now rewarded, as opposed to only having the act of driving taxed.

Creating a system on the internet for such an exchange is not terribly difficult. True, not all people have internet access, but most libraries provide access and most people have a friend who could help. What is needed is a unique mobility identifier for each person over driving age. In the extreme, an exchange office could be set up for handling this by mail, but it would be best to avoid such an expense and invest in ensuring that libraries have access and staff who can help new users. This has additional side benefits.

Mobility for all

Is it fair to provide mobility credits only for those over 16? Consider that parents of three- and nine-year-olds likely need to travel additional miles for schools, doctors, sports and the like. Consider also that many families have an older person or a disabled person who does not drive, rather depending on others in that family to drive for them. Mobility credits for every person would send even more cycling/walking/transit signals to a family with a couple of young children, especially if they could sell such credits to other motorists. Similarly, relieving the additional expense burden of transporting an aging family member to medical appointments promotes a greater sense of fairness.

In the balance between road-use charges and credits is the combined opportunity for addressing congestion, emissions and funding issues all while keeping an eye on fairness and political acceptance. Credits say: “we understand you require reasonable access”, while pricing says: “Please take treat that access like the precious resource it is.” Done right, the shift from fuel tax to pay-per-use can provide immediate solutions as well as additional health, lifestyle and urban quality benefits.

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.