Transport strategy
Policy Instruments

Urban road pricing
SummaryTaxonomy and descriptionFirst principles assesmentEvidence on performancePolicy contributionComplementary instrumentsReferences

Taxonomy and description
Types of charging method
Variations in charge

Urban road charging involves charging road-users for their use of road space over a certain area and/or during a particular time period. It may, actually, take a number of different forms, as described below. It has two main objectives: to reduce traffic congestion/control traffic levels; and (related to that) to improve environmental quality, via the reduction of noise and pollution and enhanced streetscape and urban design. It achieves these objectives by seeking to influence the demand for road-use by increasing the cost of travelling by road at certain times, in certain areas and/or along certain routes. A third objective is to raise revenue which, it is often argued, may be used to finance other transport measures.

Congestion, Revenue and Quality


The term urban road charging is used, largely inter-changeably, with a number of other terms including Congestion Charging, Road Pricing, Road User Charging. The US has adopted the term Value Pricing.

Types of charging method

Most studies and applications are based on point charging in which a charge is levied to pass a point on a road. In this form it is similar to conventional toll systems. Several US Value Pricing applications adopt this approach, with charges to use dedicated lanes, and with exemptions for High Occupancy Vehicles. These have been referred to as HOT lanes.

Point charging
Point Charging
Cordon Charging
Cordon Charging
Area Charging
Area Charging


A charge on a single road is likely to encourage traffic to divert to avoid it. Most point pricing systems therefore involve cordon charging (or toll rings) in which a series of charging points are established at all entries to a given area (often a city centre). It is possible to extend this concept to a series of concentric cordons, or cells, or a cordon combined with radial screenlines.

A variant of cordon charging is area charging (or area licensing) in which the charge is levied to use a vehicle within a defined area, rather than just to enter it. This will also control vehicle journeys wholly within the cordon, which are unaffected by cordon charging (and might as a result increase).

Both cordon charging and area charging introduce boundary problems. Through traffic will re-route around the cordon, and may increase congestion; drivers may park outside and walk, adding to environmental problems. Those just outside the cordon will pay to travel to the centre; those just inside will not. Drivers making long journeys across the cordon pay the same as those making short journeys. These discontinuities can be overcome by continuous charging systems, which charge for all travel within a defined area (such as a city). These can be based on

distance travelled (distance charging)
time spent travelling (time charging)
time spent in delay (delay charging).

The last of these requires further definition. One example tested in Cambridge, UK involved charging for any 500m length which took longer than three minutes (Oldridge, 1990).

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Variations in charge

Charging has the advantage of being very flexible. The following variations have been considered:

Changes in overall charge level
changes in overall charge level
Charging in one direction or two
charging in one direction or two (for cordon charging)
Different charge levels on different cordons
different charge levels on different cordons (for cordon charging)
Varying charges by time of day
varying charges by time of day


Varying charges by type of vehicle
varying charges by type of vehicle
Exemptions, or reduced rates, for specified types of user
exemptions, or reduced rates, for specified types of user (e.g. residents, disabled drivers)
Credits which provide a limited number of free journeys
credits which provide a limited number of free journeys
Caps which limit the amount which can be charged in a defined period
caps which limit the amount which can be charged in a defined period (e.g. a day, a month)


Displayed permit It is possible to operate cordon charging or area charging using simple pre-purchased paper licences. This system operated in Singapore for several years. However, enforcement has to be manual, and can be expensive, and drivers must spend time purchasing licences. Also the ability to vary charges is more limited.


A relatively low technology alternative is to use automatic number plate recognition. Drivers purchase a permit, and their vehicle is then added to an electronic list; automatic cameras record vehicles crossing cordons (or within areas) and check number plates against the list. This is still only feasible for cordon charging and area charging and variations in charging are still limited.

Cordon charging systems in Singapore and Norway now use fully electronic systems (ERP) in which the vehicle has an on board unit, in which a smart card is inserted. When the vehicle passes a charging point, it is detected, interrogated to identify the on board unit, and a charge deducted from the smart card. Vehicles detected without an on board unit or smart card are photographed for enforcement purposes.

Time charging could operate in a similar fashion with the on board unit switched on to charge the smart card (at a specified rate per minute) when the vehicle enters the area and switched off when it leaves it, or when the engine is stopped.



Distance charging and delay charging would either need a link to the odometer in addition, or to use GPS to identify vehicles' locations. It is likely that GPS systems will become the accepted way to impose all forms of urban road charging in due course, particularly since they can also provide other services such as driver information systems.

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Text edited at the Institute for Transport Studies, University of Leeds, Leeds LS2 9JT