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Tolling and Pricing as a Demand Management Tool

In addition to serving as a revenue source for transportation, road pricing in the form of congestion pricing can act as a tool for demand management. The variability of pricing depending on traffic conditions and policies capitalizes on market forces to manage the utility of finite roadway capacity.

Some facilities may experience sufficient demand to act as a source of revenue generation beyond pricing's ability to manage demand, however many facilities do not generate excess revenue beyond that to cover operations and debt service payments, if applicable. In fact, the funding of these facilities often involves revenue sources or financing beyond that which can be achieved through tolls alone.

There are four congestion pricing approaches that involve the collection of tolls:

  1. Priced Managed Lanes - "Partial facility" pricing involving one or more lanes on a roadway facility

    Rather than pricing the capacity of an entire facility, individual lanes (often one or two in both directions) can may be priced and operate parallel to the free general purpose lanes. Priced managed lanes offer a new and reliable travel alternative in congested roadway corridors for transit riders, HOV motorists and paying non-HOV drivers.

    There are two operating forms of priced managed lanes:
    • High-occupancy toll (HOT) lanes use price, occupancy and access restrictions to manage the number of vehicles traveling on them, thereby maintaining free-flow traffic conditions, even during peak travel periods. Typically, qualifying HOVs may use these limited-access highway lanes for free or at a reduced cost. Motorists in vehicles that do not meet passenger occupancy requirements may choose between the general-purpose lanes or paying for premium conditions in the HOT lanes.

      HOT lanes use electronic toll collection and traffic information systems that make it possible to provide variable, real-time toll pricing for non-HOV vehicles. Motorists receive information on price levels and travel conditions via variable message signs, providing potential users with information they need to decide whether or not to use the HOT lanes or the general-purpose lanes.
    • Express Toll Lanes (ETLs) are dedicated managed lanes within highway rights-of-way that motorists may use by paying a variably priced toll. They are also typically located next to the median to encourage travel for longer distance trips. Unlike HOT lanes, ETLs charge all vehicles - including HOVs - for passage. In some cases they may also offer discounted passage for HOVs, but ETLs do not incentivize ride sharing to the extent that HOT lanes do. Enforcement is much simpler and less costly than HOT lanes because there is no need to enforce vehicle occupancy. ETL concepts are also attractive to transportation agencies that want to use toll revenues to cover the cost of new construction and operation.

      Operating Examples

      As shown below, as of October 2013, there are 20 priced managed lane facilities operating across the country and an additional 22 are under construction. Several others are in different stages of planning, with many nearing construction. These new projects offer great diversity in their design and involve the conversion or extension of existing HOV facilities to priced operation, as well as investments in mega-projects with multiple lanes and points of access and egress. In addition, a number of metropolitan regions are moving forward with plans to develop networks of managed lanes that provide improved access and new travel options.

      See the FHWA Guide for Priced Managed Lane Development for detailed information on these innovative projects.

      Priced Managed Lanes Operating or in Construction

      Priced Managed Lanes Operating or in Construction, June 2019

      Download full sized version of map (pdf)
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