Mission and Scope

The mission of the proposed Congestion Pricing Committee would be to foster research aimed to gain a better understanding of the technological, operational, business, administrative, political and institutional aspects of pricing transportation systems and services. The scope would include a wide array of strategies designed to cover both conventional and non-conventional approaches employed across the modes, to include integrated transit, variable pricing coordinated across surface transportation modes, aviation pricing, parking pricing, parking “cash-out”, and road pricing mechanisms that seek to affect transportation demand and use. The Committee will seek to advance a deeper understanding of the effects of pricing on the transportation system, by addressing passenger and freight mobility, transit and highway interdependence, airport pricing models, and interoperability of systems.

The primary objective of the committee will be to engage in research, planning, evaluation, education and outreach associated with innovative pricing projects and national pricing policy development. The Committee will contribute to the transportation pricing knowledge base, enabling Congress to evaluate pricing options for future transportation legislation and enabling state, local and regional authorities to propose, develop and implement effective pricing projects and strategies.

Whereas issues relating to economic theory of pricing, revenue generation from pricing and economic development impacts of pricing are the primary focus of existing TRB Committees: the Transportation Economics Committee, the Taxation and Finance Committee and the Economic Development Committee, respectively, the Pricing Committee will apply these concepts in the pursuit of its mission to focus on the technological, operational, business, administrative, marketing, political and institutional aspects of pricing.

Justification for Committee

Pricing has the potential for creating the most fundamental change in our methods for planning and funding our transportation system since the 1950s. Pricing generates revenue, affects congestion, travel demand, and emissions. It also alters the management and efficiency of the transportation system, redistributes the cost burden, and incurs administrative and compliance costs. While many current TRB committees have related interests, these changes could be so broad in their impacts and implications, that no existing TRB committee has the appropriate scope. As such, the Joint Subcommittee on Pricing was formed by several standing committees to create a crosscutting body that could address these issues.

In particular, road pricing offers the potential to generate much needed transportation revenue, while simultaneously managing demand. As transportation revenue falls short of investment needs, and the purchasing power of the motor fuels tax continues to be diminished at the federal and state levels, transportation pricing and user charges are likely to play a larger role in the transportation financing solutions of the future. Recent advances in technology such as electronic toll collection (ETC) and global positioning systems (GPS), continue to reduce the cost of pricing systems while also making them more transparent to users. These factors are increasing the potential for acceptance and implementation of pricing systems over time. On the other hand, there continue to be environmental and community issues that limit the ability of metropolitan areas to expand their roadway systems, increasing the need for effective methods to manage ever-increasing travel demand on more constrained transportation capacity. All of these factors make it imperative for TRB to provide greater visibility for pricing within its committee structure so that emerging pricing research issues can be addressed more effectively.

Background

As America strives to maintain its mobility, pricing is an important tool in an overall process of operating and managing the transportation system. It has been in existence for centuries, and was critical in the late 1700s and 1800s, as well as the period between 1940 and 1956, in financing new infrastructure in the United States. Road pricing typically involves the use of fees or tolls for road use. Modern implementations of road pricing include congestion pricing or value priced tolls collected electronically that vary with the level of congestion. However, it can encompass a variety of market-based approaches to respond to congestion problems.

Value pricing in particular encourages some drivers to eliminate lower-valued trips or take them at different times, or to choose alternative routes or modes of transportation such as transit or carpooling. The promise of value pricing is that improvements in the pricing of transportation facilities will lead to improved service for transportation users, more productive use of existing transportation capacity, and reduced need for future capacity expansion. In addition, a project using road pricing can generate revenues that can be used to further enhance urban mobility.

Direct impacts on highway system operations experienced as a result of operational road pricing projects include:

• Improved use of available HOV lane capacity, thus allowing more people to be moved through the travel corridor;
• Generation of revenues to support express bus and transit services;
• Shifting of trips out of the peak-congestion period into the shoulders of the peak, leading to more efficient use of available capacity; and
• Improved service for users by maintaining free-flow traffic conditions through the use of value priced express lanes.

Three types of creative uses of vehicle usage-based road pricing are being explored in the U.S.: Pay-As-You-Drive Automotive Insurance; Mileage-Based Automotive Leasing and Vehicle Taxation; and Car Sharing. A related strategy is Parking Cash Out. With parking cash out, employers offer their employees the option of receiving taxable cash in lieu of free or subsidized parking provided by the employer.

Although road pricing projects are operating in a number of locations and being studied in many more, it is still an innovative concept. Much has been learned about the promise and the potential of value pricing over the last several years, and much more remains to be learned. Many aspects and types of pricing remain untested in the U.S.:

• New tolls on one or two lanes while providing toll credits to motorists using the remaining “regular” lanes, a concept known as “Fast and Intertwined Regular” or FAIR lanes;
• New peak-period tolls on all lanes of existing toll-free facilities, implemented in conjunction with new transportation alternatives, facility expansion or toll rebates for local residents;
• Truck-only tollways to promote efficiency and safety for goods movement;
• Mileage based insurance;
• Priced Q-Jumps at congested locations on the highway network;
• HOT lanes with multiple ingress/egress points;
• Pricing of an entire corridor;
• Toll rings or toll zones (e.g., projects implemented in Norway, and more recently in London, U.K.).

While the concept of marginal cost pricing has manifested itself most prominently in road pricing models (i.e., value pricing) in recent years, the principles are promising throughout the transportation system in ensuring efficient use of limited scarce capacity and infrastructure in all modes. There remains a considerable agenda of applications and research in managing transit, freight and airport capacity, as well as access to aviation and maritime gateway facilities. These untested areas of pricing hold the opportunity to promote greater synergies among modes and operations.