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Federal Highway Administration > Publications > Public Roads > Vol. 71 · No. 1 > Partners In Time

Jul/Aug 2007
Vol. 71 · No. 1

Publication Number: FHWA-HRT-07-005

Partners In Time

by Patrick DeCorla-Souza

USDOT is joining with Urban Partners in up to five metropolitan areas to alleviate congestion.

Congestion like that shown in this photo continues to increase in many areas of the United States, but USDOT and the Urban Partners will apply proven remedies to get fast results in select cities. Photo: Texas Transportation Institute.
(Above) Congestion like that shown in this photo continues to increase in many areas of the United States, but USDOT and the Urban Partners will apply proven remedies to get fast results in select cities. Photo: Texas Transportation Institute.

Highway congestion in metropolitan areas has increased dramatically over the past two decades. Congestion pricing, sometimes called value pricing, can offer substantial relief in the short term and reduce the waste associated with traffic congestion — loss of time and productivity, fuel burned, and tailpipe emissions.

Under the U.S. Department of Transportation's (USDOT) National Strategy to Reduce Congestion on America's Transportation Network, also known as the Congestion Initiative, the Department will facilitate broader application of variable tolling, as one congestion pricing strategy, in combination with improvements to transit service, telecommuting, and technological innovations.

"Our quality of life and continued economic prosperity demand that we find creative solutions to the growing burden of congestion," says USDOT Secretary Mary E. Peters. "We want to work with forward-thinking State and local leaders to find new ways to get people and goods moving again."

What Are Urban Partnerships?

One major component of USDOT's Congestion Initiative is Urban Partnership Agreements. The Department plans to join with up to five metropolitan areas, or Urban Partners, to demonstrate proven strategies for reducing traffic congestion. Urban Partners may be one or more State or local transportation agencies, transit agencies, major employers, or private sector transportation providers or operators. USDOT and the Urban Partners will agree to pursue four strategies with strong track records of effectiveness.

The first strategy involves broad applications of congestion pricing that can be implemented soon. To reduce the time needed for implementation, these strategies could include networks of priced lanes that use existing highway lanes; variable tolls on entire roadways, including toll roads, bridges, and existing toll-free facilities; cordon charges to enter a congested area; and areawide pricing involving charges on all roads within a congested area. Unlike the single- facility implementation projects and regional studies previously funded by USDOT's Value Pricing Pilot (VPP) program, the Congestion Initiative is seeking significant reductions in congestion from near-term implementation on a broad scale.

The second strategy includes more efficient and responsive public transit systems that tailor services specifically for rush-hour commuters. For example, free-flowing priced highway lanes can provide opportunities for speedy Bus Rapid Transit (BRT) and express bus services. Such services are flexible, cost-effective modes of public transportation. They also have short timeframes for implementation, meaning they can play a large role in reducing congestion in the near term.

A third strategy will involve commitments from major employers in relevant regions to allow more of their employees to telecommute and work flexible schedules. Flextime policies can help stagger work schedules and reduce the number of drivers during peak travel times.

Finally, urban partnerships will use cutting-edge technological and operational approaches to improve system performance, supporting regional efforts to expand provision of real-time traveler information, improve traffic incident response, improve arterial signal timing, and reduce the obtrusiveness of highway construction work zones.

In return for a commitment by the Urban Partners to adopt innovative, systemwide solutions to traffic congestion, USDOT will support them to the maximum extent possible with financial resources (including a combination of grants, loans, and borrowing authority), regulatory flexibility, and dedicated expertise and personnel.

"Secretary Peters has challenged everyone in the Department [of Transportation] to think creatively about the problem of growing congestion and declining system performance," says Assistant Secretary for Transportation Policy Tyler Duvall. "She explicitly rejects the status quo view that these are unsolvable problems and instead believes that solutions are well within our reach. Once achieved, the economic and societal benefits of those solutions will be substantial. I can think of no better time in history to be working at USDOT."

Congestion Pricing

Congestion pricing works by shifting discretionary, rush-hour highway travel to other transportation modes or to offpeak periods, taking advantage of the fact that as many as half of rush-hour drivers on an urban highway on a typical weekday are not commuting to or from work and may have some flexibility in their time of travel. By removing a fraction (even as little as 5 percent) of the vehicles from a congested roadway at critical times, pricing enables traffic to flow much more efficiently, allowing many more cars to move through the same physical space than would be possible under congested flow.

Similar variable charges are used successfully in other industries. For example, airline tickets, cell phone rates, and electricity rates often vary to manage demand. There is consensus among economists that congestion pricing represents the single most viable and sustainable approach to reducing traffic congestion.

The Minnesota Department of Transportation (Mn/DOT) uses signs such as this one to mark authorized bus shoulders along stretches of freeway and arterial highways between Minneapolis and St. Paul. Mn/
The Minnesota Department of Transportation (Mn/DOT) uses signs such as this one to mark authorized bus shoulders along stretches of freeway and arterial highways between Minneapolis and St. Paul. Mn.

"In no other major area are pricing practices so irrational, so out of date, and so conducive to waste as in urban transportation," says Nobel Prize-winning economist William S. Vickrey in his May 1963 article in the American Economic Review, "Pricing and Resource Allocation in Transportation and Public Utilities: Pricing in urban and suburban transport." Congestion pricing involves open road tolling with no tollbooths and all tolls collected electronically at highway speeds. It includes four main pricing strategies:

Managed Lanes. On high- occupancy toll (HOT) lanes, low- occupancy vehicles are charged a variable toll to manage demand, while high-occupancy vehicles (HOVs) are allowed to use the lanes for free. Examples are the HOT lanes on I-15 in San Diego, on I-394 in Minneapolis, and on I-25 in Denver. Express toll lanes are similar to HOT lanes except that HOVs are not provided free service, although a discounted toll rate may be offered. The only operating example is the S.R. 91 Express Lanes in the Los Angeles metropolitan area.

Variable Tolls on Existing Roadway Facilities. This strategy has been implemented on existing toll facilities by raising existing flat tolls in peak periods or reducing them at offpeak times. Examples are toll facilities operated across the water crossings between New York and New Jersey in the New York City metropolitan area, and two bridges between Fort Myers and Cape Coral in Florida. New variable tolls to manage traffic were introduced on previously free expressways in Singapore in 1998.

Cordon or Area Charges. These are either variable or fixed charges to drive within or into congested areas. These charges have been implemented in London and Stockholm.

Regionwide or Areawide Pricing. This strategy involves per-mile charges that vary by level of congestion. Global positioning system technologies are being used to pilot test this strategy in the metropolitan areas of Seattle, WA, and Portland, OR.

Congestion pricing will be implemented using open road tolling, which involves traffic being tolled as it moves at highway speeds, such as on the express E-ZPass lanes shown in this photo.
Congestion pricing will be implemented using open road tolling, which involves traffic being tolled as it moves at highway speeds, such as on the express E-ZPass lanes shown in this photo.

Successful congestion-pricing projects in the United States and abroad show that congestion pricing can work. The projects implemented to date have provided three key lessons learned:

Pricing maximizes freeway efficiency. Not only does pricing have the potential to guarantee a reliable, congestion-free trip for the motorist paying the charge, but it also increases the number of vehicles served during rush hours. On highways where vehicles are densely packed together, a driver trying to change lanes when there is only a small gap between vehicles can cause motorists behind him or her to brake. Traffic flow collapses, and speeds and vehicle throughput drop precipitously. On the S.R. 91 Express Lanes, vehicle throughput during the most congested hours exceeds 1,600 vehicles per lane per hour on the priced lanes, while the adjacent free lanes carry only about 800 vehicles per lane per hour.

Pricing incentives can shift demand to times when spare capacity is available. On the two Florida bridges, a 50 percent toll discount is offered during a 0.5-hour period before the 7 a.m. to 9 a.m. peak period, and for 2 hours after it. A similar pricing strategy is applied in the afternoon. The discount, which amounts to just 25 cents, has induced 20 percent of travelers who are eligible for the discount (since they have transponders and are electronically tolled) to alter their time of travel at least once per week out of the peak hours and into the discount periods. This reaction suggests that some drivers can be flexible about when they have to be on the road, and monetary incentives can encourage them to travel when there is less demand.

Public acceptance increases dramatically after actual experience with pricing. After pricing was introduced on the I-15 HOT lanes in California, public acceptance held steady at close to 80 percent approval among all income groups. "What's even more interesting," says Derek Toups, associate regional planner for the San Diego Association of Governments, "is that, when the public was asked whether an extension of the priced lanes or adding the same number of free lanes would be a more effective way to reduce congestion, three out of five respondents preferred the priced-lanes option."

He adds, "In San Diego, the public now understands the value of pricing. Pricing keeps a reliable, congestion-free option available to them for occasions when they absolutely must get somewhere on time."

Stockholm's congestion-pricing experiment also demonstrates that seeing is believing. Detailed monitoring of public opinion before and during the experiment revealed a gradual and continuous transformation of opinion. People were initially hostile to the cordon charge by almost a 2-to-1 margin. Opinion switched as familiarity with the system and its impacts on congestion and quality of life grew. In 2006, voters approved a referendum on the trial's continuation, and the trial was reinstated on August 1, 2007. A similar shift in public opinion occurred in London on introduction of congestion charges for using central streets.

The day-to-day variation in travel times is now understood as a separate component of the public's and business sector's frustration with congestion. An important benefit of pricing is that it guarantees toll-paying vehicles a reliable trip speed and travel time. Congestion pricing also benefits drivers and businesses by reducing delays and stress, increasing the predictability of trip times, and allowing for more deliveries per hour.

This table shows an example of a variable toll schedule, this one fo the maximum tolls that are charged on the I-15 Express Lanes in San Diego, CA. Source: San Diego Association of Governments. Variable Toll Schedule for Evening Rush Hour - 3:00-3:30 maximum toll $0.75, 3:30-4:00 maximum toll $2.00, 4:00-4:30 maximum toll $2.00, 4:30-5:00 maximum toll $4.00, 5:00-5:30 maximum toll $4.00, 5:30-6:00 maximum toll $2.00, 6:00-6:30 maximum toll $1.00, 6:30-7:00 $0.75.

Gaining Support for Congestion Pricing

If pricing were used to restore free-flowing traffic conditions on metropolitan freeways during rush hours, a commuter who drives at a "crawl" speed of 24.1 kilometers (15 miles) per hour on a severely congested 8.0-kilometer (5-mile) freeway segment twice each day (that is, once in each direction) would save about 0.5 hour each day, or 120 hours annually — equal to 3 weeks of work or leisure time. Even so, public concerns will arise about the imposition of new charges on facilities that were previously toll free. These concerns can be addressed in several ways.

Gaining Public Acceptance Of a Broad Pricing Approach

  • Propose it as a trial program, subject to referendum
  • Provide a money-back guarantee for premium service
  • Return surplus revenue to motorists, or use revenues to provide direct benefits to motorists paying the tolls
  • Provide travel alternatives
  • Provide toll discounts for low-income motorists
  • Improve arterials with signal optimization

For example, a money-back guarantee could be offered if promised levels of service (such as travel speeds) are not provided to the toll-paying motorist. To alleviate doubts about its impacts, the pricing scheme could be proposed as a trial, with permanent implementation subject to approval by citizens in a referendum. Net toll revenues (after paying for system maintenance and operation) could be returned to motorists on a monthly basis in the form of credits to their transportation accounts. At the motorist's option, unused credits could be redeemed at the end of the year toward payments for annual registration fees and taxes.

Tolls would need to be set at levels high enough to dissuade a sufficient number of motorists from traveling when demand exceeds capacity, in order that premium service can be maintained at all times. In other words, tolls would be set to meet operational needs, and the exact rates would depend on demand for use of the facility. In cases where toll rates are high enough to produce revenue that exceeds the cost of providing additional transportation capacity, this surplus revenue would signal the need to provide additional capacity. In such cases, the surplus could be used to provide new capacity so that motorists who pay the tolls can see that the extra money taken from their pockets will be used directly for their benefit to address their mobility needs. Travel alternatives could be provided for low-income commuters and for others who may not have flexibility to travel at less congested times or may not want to pay tolls. In addition to improved bus services, vanpools and carpools could be encouraged, for example, through employers' transportation management associations. Also, means-tested, low-income commuters could be provided with toll discounts, transit fare discounts, or discounts on parking charges at park-and-ride lots. Some of the toll revenues may be used to pay for optimizing traffic signal controls on parallel arterials (in cases where they may not currently be optimized) to further improve traffic flow.

Nonwork trips are rising as a percentage of travel during peak periods, mainly because trips for shopping, entertainment, children's activities, and other purposes are growing in absolute numbers and because they are being squeezed in by motorists on their way to and from work. The result: congested streets, as shown in this photo.
Nonwork trips are rising as a percentage of travel during peak periods, mainly because trips for shopping, entertainment, children's activities, and other purposes are growing in absolute numbers and because they are being squeezed in by motorists on their way to and from work. The result: congested streets, as shown in this photo.

Transit

A key component of a comprehensive congestion reduction strategy is increasing the quality and capacity of peak-period transit service. Transit offers a more attractive alternative to automobile travel and accommodates peak-period commuters who switch to transit in response to the imposition of congestion pricing.

Congestion pricing and public transportation convey mutual benefits: Road pricing benefits public transportation by improving transit speeds and the reliability of transit service, increasing transit ridership, lowering costs for transit providers, and expanding the source of revenue that may be used for transit, while public transportation benefits road pricing by absorbing commuters who shift their travel from automobile to bus or rail.

By replacing congested traffic with free-flowing conditions on major routes, congestion pricing will improve the speed and productivity of current express bus services, making them more attractive to commuters while reducing their operating costs.

"The combination of public transit and value pricing provides a synergy that can improve the operating performance of the corridor," says Art Guzzetti, director of policy and advocacy for the American Public Transportation Association. "In addition to providing more travel options, integration of transit will improve corridor performance at the 'peak of the peak,' when transit services are designed to carry their heaviest loads. Improved corridor transit makes a win-win."

Reducing congestion also will facilitate rapid deployment of innovative, high-performance BRT operations in major corridors, requiring only modest investments in new vehicles and passenger facilities. "The high operating speeds maintained on congestion-priced highways provide an ideal setting for deployment of BRT," says Dennis Hinebaugh, director of the National BRT Institute. "Such facilities guarantee the fast, reliable transit service needed to persuade commuters to leave their cars at home, further improving the efficiency of highway use and contributing to USDOT's congestion reduction objectives."

Clearing up congestion will make room for express buses like the one shown here and other innovative transit options, which in turn will reduce congestion even further.
Clearing up congestion will make room for express buses like the one shown here and other innovative transit options, which in turn will reduce congestion even further.

Telecommuting

The third critical congestion-reducing strategy is promoting greater use of telecommuting and flexible work scheduling. Telecommuting can eliminate some peak-period commuting travel by using computer and electronic communications technology to enable certain employees to work from their homes or nearby telecommuting centers on predetermined (often regularly scheduled) workdays, or in some cases on a full-time basis. Flextime enables employees to shift their commute trips from peak periods to less congested hours, when tolls will be lower or not charged at all.

The most promising means to achieve these objectives is for public officials to secure agreements from major employers in their metropolitan areas to establish or expand telecommuting programs, and to offer flextime to as many of their employees as possible.

In fall 2006, Virginia created a new State Office of Telework Promotion and Broadband Assistance, which will promote expansion of broadband services into rural parts of the State. This will give high-speed Internet access to bedroom community residents who currently add to traffic congestion by commuting to northern Virginia's employment centers. "More teleworkers mean fewer cars on the road," Governor Tim Kaine was reported to have said at the time, according to Commuter Connections, published by the Metropolitan Washington Council of Governments.

Telework brings work to employees via technology, as with this woman working from her home, rather than bringing employees to work via travel. According to the Denver Regional Council of Governments (DRCOG), employers find telework programs increase employee productivity and retention, while reducing congestion.
Telework brings work to employees via technology, as with this woman working from her home, rather than bringing employees to work via travel. According to the Denver Regional Council of Governments (DRCOG), employers find telework programs increase employee productivity and retention, while reducing congestion.

Technology and Operations

Several technologies, in addition to electronic toll collection, support pricing strategies. For example, advanced traffic signal control on the arterial system could help accommodate any traffic diversions from priced highways. Expressway entrance ramp control may become a more viable strategy with pricing of expressways because backups of traffic queues onto surface streets are less likely to occur if demand for expressways is reduced.

Technology can help provide speedier and more customer-friendly bus services through precision docking and signal priority systems for buses, electronic fare collection, automatic vehicle locator systems along with real-time information on bus arrival times and schedules, and parking alerts to inform potential bus riders about availability of spaces at park-and-ride lots.

Advanced traveler information systems could be deployed to provide pretrip and ontrip information on travel times and costs of alternative modes so travelers can make decisions that best suit their needs. Travelers would have Web or wireless access to route-specific travel time and toll information, and route-planning assistance based on historical records of congestion by time of day. These systems might use communications technologies that gather traffic- and incident-related data from a few vehicles traveling on a roadway and then publish that information to drivers via mobile phones, in-car units, or dynamic message signs.

Finally, the impacts of nonrecurring congestion will be reduced by pricing but will continue to be a significant problem if premium service is to be maintained. Advanced technologies could assist in incident detection and management, and provide information on the nature of emergencies to first responders so they can quickly determine and provide the most appropriate equipment. Advanced technologies also could be used to collect and provide road condition information to drivers during inclement weather.

"Pricing can be much more effective when it is packaged with advanced technologies," says Regina McElroy, director of FHWA's Office of Transportation Management, "not only for collecting variable tolls at free-flow speeds but also to provide up-to-the-minute transit schedules as well as cost and travel time information by different modes that people need to make intelligent choices about when, where, and how to travel. Advanced technologies also can help ensure that road construction, inclement weather, traffic incidents, or other unexpected events will not keep them from reaching their destinations on time."

Reducing the kind of congestion shown here will increase the speed of travel; reduce fuel consumption, tailpipe emissions, and health hazards; shorten response times for police and emergency personnel; and obviate more road building and capital expense.
Reducing the kind of congestion shown here will increase the speed of travel; reduce fuel consumption, tailpipe emissions, and health hazards; shorten response times for police and emergency personnel; and obviate more road building and capital expense.

More Benefits

The benefits of congestion pricing are extensive. Beyond those already discussed, State and local governments can improve the quality of transportation services without tax increases or large capital expenditures. This helps them provide additional funds for other transportation needs, retain businesses and expand the tax base, and shorten incident response times for emergency personnel, thus saving lives. By preventing the loss of vehicle throughput that results from a breakdown of traffic flow, pricing maximizes return on the public's investment in highway facilities. It also benefits society as a whole by reducing fuel consumption and vehicle emissions, allowing more efficient land use.

In a recent speech, USDOT Secretary Peters said, "Urban Partnerships will give us an opportunity to demonstrate the effect of using these types of creative approaches in combination, as part of a coordinated plan to cut congestion."


Patrick DeCorla-Souza, AICP, is program manager for the Urban Partners program at FHWA in Washington, DC. He has provided direction to FHWA's VPP program since 1999 and works with public and private sector partners nationwide to implement innovative road pricing strategies. He cochairs the Transportation Research Board's Congestion Pricing Committee and has master's degrees in transportation planning and civil engineering.

For more information, contact Patrick DeCorla-Souza at 202-366-4076 or patrick.decorla-souza@dot.gov.

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