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

Evidence on performance
Singapore area licence
Singapore electronic area
Toll rings in Bergen, Oslo and Trondheim
Value Pricing in San Diego
London
Demonstration projects

Empirical evidence of the impact of early urban charging schemes comes from Singapore (Holland and Watson, 1982) and Norway (Larsen, 1988). Furthermore, a good deal of our understanding of the impacts of road pricing come from modelling studies, such as Richards et al (1996).

A Singapore Area Licence Scheme

Context
Singapore introduced an Area Licensing Scheme in 1975 to reduce congestion in the city centre. Drivers had to purchase licences for a day or a month to allow them to enter the defined area between 0730 and 1015. The initial charge was S$3; this was raised to S$4 in 1976. Vehicles with four or more occupants were exempt. Police at the 22 entry points observed vehicles and recorded those without licences; they were then fined. Subsequent modifications involved extensions to the evening peak, the working day and Saturdays, to a set of charging points on expressways, and to all cars however many occupants they had. Different charges were levied for different types of vehicle. A major study was conducted in 1975 (Holland and Watson, 1978); the evidence below comes from this.

Impacts on demand

Pattern Most affected drivers continued to travel to the city centre; there were no recorded reductions in numbers or length of journey or destination.
Mode 19% of drivers travelling to the city centre switched to bus; 17% switched to car sharing to take advantage of the exemption for cars with four or more people.
Timing 22% of drivers travelling to the city centre switched to travelling before or after the charged period, resulting in some increases in congestion then.
Route Many drivers travelling through the city centre diverted to the ring road, resulting in some increases in congestion on that route; a few changed mode or time of travel.

Surprisingly there were very few changes in evening peak travel; it appeared that people continued to use their cars to leave the city centre in the evening peak, even though they had made changes in the morning.

Impacts on supply

Only minor adjustments were made to the road network, and no delays were caused at the entry points. However, drivers did need to spend time purchasing licences.

Contribution to objectives

Objective Scale of contribution Comment
Efficiency 4 The reduction of 44% of traffic entering the centre resulted in an increase in speeds of 22% in the centre and 10% on the approaches. Speeds fell by up to 20% on the inner ring road. No comprehensive cost-benefit analysis was conducted, but it is clear that there were substantial reductions in congestion costs and increases in benefits. It is possible that charges were, in practice, too high and that greater benefits could have been obtained by a smaller reduction in car-use and a
Liveable streets 2 The schemeís impact was primarily on the commercial and business centre of the city. Residential streets were therefore little affected, but there was an improvement in conditions in shopping streets.
Protection of the environment 0 This was not a key objective and no attempt was made to assess impacts. However, it can be expected that it was improved in the city centre in the morning peak, with some minor deterioration outside the controlled periods and on the inner ring road.
Equity and social inclusion -1 The study attempted to identify gainers and losers, but found little evidence of differential impacts, and suggested that the range of alternatives offered reduced the scale of any inequities. A subsequent study, however, suggested that poorer car-drivers had been adversely affected (Wilson, 1988).

Safety
0 This was not a key objective and no attempt was made to assess impacts. However, it can be expected that it was improved in the city centre in the morning peak, with some minor deterioration outside the controlled periods and on the inner ring road.
Economic growth 0 An attempt was made ten years later to identify impacts on the urban economy and business relocation. None were found; they had been dwarfed by the expansion of Singaporeís economic base. Businesses were very supportive of the scheme.
Finance 3 In 1975 prices costs were approximately S£60M, the operating costs S£1m PA, and revenues approximately S£7M PA. Although revenue-raising was never an objective, the scheme raised substantial net revenues; operating costs being only 12% of revenues.
1= Weakest possible positive contribution,5= strongest possible positive contribution
-1= Weakest possible negative contribution-5= strongest possible negative contribution
0= No contribution

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Singapore Electronic Road Pricing

Context
In 1998 the Area Licensing Scheme was replaced by an Electronic Road Pricing Scheme. 97% of the 700,000 vehicles in Singapore were fitted with on board units, in which smart cards were inserted. Gantries at the Area Licensing Scheme entry points and expressway charging points were equipped to identify, interrogate, charge and, if necessary for enforcement, photograph, all vehicles passing. Charges are now levied per crossing rather than per day, and vary by time of day and vehicle type. Charges are revised quarterly to maintain speeds at between 20 km/h and 30 km/h in the city centre, and 45 km/h and 60 km/h on expressways. As a result charges are lower than with the Area Licensing Scheme for much of the day and have been waived on Saturdays. Early results are now available (Menon, 2000).

Impacts on demand

Pattern There is no evidence as yet of any impact on these.
Mode It may be that there have been some changes in mode, given the further reduction in traffic levels, which are 15% below those under the Area Licensing Scheme.
Timing Drivers appear to be very sensitive to differences in change by time of day. In addition the number of
multiple entries was substantially reduced
Route There is no evidence that further changes in route have occurred, although there are still some congestion problems on the boundary route.

Impacts on supply

Capacity has been maintained, and the delays involved in purchasing licences removed.

Contribution to objectives

Objective Scale of contribution Comment
Efficiency 0 No detailed analysis has been conducted but it seems probable that, by targeting charge levels to achieve optimal speeds, efficiency has increased.
Liveable streets 1 As with area licensing, there was little impact on residential streets
Protection of the environment 1 This was not a key objective. There will have been some limited further reduction in environmental impact through the further reduction in traffic
Equity and social inclusion 0 No assessment of equity impacts has been made, but those making occasional journeys off-peak and on Saturdays will have benefited, while costs will have increased for those making multiple journeys.

Safety
1 This was not a key objective. There will have been a limited further reduction in accidents through the further reduction in traffic.
Economic growth 0 It seems very unlikely that there will have been significant impacts on the urban economy.
Finance 2 The cost of introducing electronic road pricing was substantial, at S£200M. Revenues are, in practice, lower than with area licensing, at S£8M PA, but revenue generation is not an objective.
1= Weakest possible positive contribution,5= strongest possible positive contribution
-1= Weakest possible negative contribution-5= strongest possible negative contribution
0= No contribution

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Toll rings in Bergen, Oslo and Trondheim

Context
In 1986 Bergen, Norway's second largest city, was the first city in Europe to introduce a toll ring (or cordon) charging system. It was introduced with the objective of raising the finances required to accelerate the implementation of a wide-ranging programme of transport investment. The system charges all vehicles (other than buses in regular service) a flat fee for entering the city's central business district and operates between 6AM and 10PM Monday-Friday. Toll rings were subsequently also introduced in Oslo and Trondheim. As in Bergen, the main objective is to raise revenue so charges are set according to revenue goals, though both Oslo and Trondheim use electronic toll collection and in Trondheim tolls are differenciated by time of day.

Impact on demand

Pattern In Bergen, whilst it was expected that the ring would decrease traffic volumes by around 3%, other than a slight decrease in the beginning there has been an average annual traffic growth of 2-3%. In Trondheim there have been significant impacts on peak hour traffic levels, with reductions of 10% immediately following the introduction of the differenciated charges, increasing over time to 17%.
Mode It is likely that there has been some change in modal share over the period, though this will have been in part due to the investment in public transport, using the revenues from the toll rings, which has taken place over the period.
Timing Reductions in peak traffic in Trondheim resulting from the differenciated charge were outweighed by increases in traffic in off peak periods.
Route In Bergen, there are no natural detours so there has been little impact on route choice.

Impact on supply
The toll rings themselves have not affected supply, though the finance they have generated has enabled a series of major transport projects to be implemented.

Contribution to objectives

Objective Scale of contribution Comment
Efficiency 2 No detailed analysis has been conducted but it seems probable that, in Trondheim at least, efficiency will have been increased via the targeting of the charge on peak period traffic.
Liveable streets 1 The schemes are focused on the central business districts. Residential streets are therefore likely to have been little affected, though there may have been an improvement in conditions in the central shopping streets.
Protection of the environment 1 This was not a key objective. There is likely to have been some reduction in environmental impact through the reduction of traffic.
Equity and social inclusion 1 No assessment of equity impacts has been made, but those making occasional journeys outside the charging periods, eg on Saturdays, will have benefited while costs will have been imposed on those travelling during the charging periods, eg during the peak periods in Trondheim. Opinion polls originally indicated that approximately two thirds of Bergenís population were against the toll ring, though it has now been widely accepted by the majority. The change in opinion is thought to be connected with the visible improvements in the local transport network benefiting everyone and is despite relatively high levels of tax on motoring.
Safety 0 This was not a key objective. There may have been a limited reduction in accidents through the deterance of car travel, though this is likely to have been offset by increase in road capacity.
Economic growth 0 In Bergen, Saturday was deliberately kept free from tolls in order to support the cityís shops. However, the effect on city centre shopping is not known.
Finance 4 In Bergen the initial investment to establish the ring was approximately NOK 15M. Annual income has been higher than expected and is approximately NOK 70M. Of this, NOK 50M is spent on roads, NOK 14M is taken up in operating costs and NOK 7M is stored in a fund (the use of which attracts great political debate).
1= Weakest possible positive contribution,5= strongest possible positive contribution
-1= Weakest possible negative contribution-5= strongest possible negative contribution
0= No contribution

For more information see www.brotunnel.no

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Value Pricing in San Diego

Financial and technical support from the US Federal Highways Administration (FHWA) has been used to facilitate the implementation of three pricing projects which have come to be known as 'value pricing' schemes. In addition, the FHWA has supported a comprehensive study of an additional, privately operated pricing project.

The first of the three value pricing projects was implemented in 1996 along the 13km high-occupancy vehicle (HOV) section of Interstate 15 (I15) in San Diego. Access to the HOV lane was extended to include a limited number of solo drivers who were able to pay for a monthly pass for use of the HOV lane during peak periods. The number of available passes rose gradually from 500 to 900 over the first year and the cost of the pass rose from $50 to $70. Then, in March 1998, the pricing scheme was upgraded to become an automated, dynamic system. Congestion in the HOV lane is monitered and forms the basis of the toll levels. Tolls are set with the aim of maintaining 'free-flow' conditions in the HOV lane and range between $0.50 and $4. They vary as often as every 6 minutes and the current toll level is displayed on a real-time sign post in advance of the entry to the lane. Tolls are deducted using transponders and over-head readers A similar scheme has since been introduced in Houston, Texas. In addition, higher peak fees on existing toll roads and bridges have been introduced in Lee County.

Impacts on demand

Pattern Traffic volumes along the section of I15 increased 'moderately (by approximately 6%)', comprising a significant (48%) increase in volumes in the HOV lane (as paying users took up the spare capacity which existed in the HOV lane prior to the introduction of value pricing) and a slight decrease in volumes in the other I15 lanes. The overall increase was smaller than was observed in the 'control' corridor.
Mode The main impact would appear to have been an increase in car-pooling (ride-sharing), particularly under the monthly pass system. Some diversion to express bus services is indicated, though this would appear to have been a relatively minor impact.
Timing The main impact has been to divert trips from the peak; both from the middle of the peak to the 'shoulder' of the peak and from peak to off-peak.
Route No evidence reported

Impacts on supply:

By freeing up the spare capacity in the HOV lane for use by non-HOV users, the I15 value pricing scheme has, in effect, increased the overall capacity of the road. In addition, the revenues it has generated have provided funding for a new express bus service along the corridor.

Contribution to objectives

Objective Scale of contribution Comment
Efficiency 2 No detailed analysis has been conducted but it seems probable that, in Trondheim at least, efficiency will have been increased via the targeting of the charge on peak period traffic.
Liveable streets 0 The schemes are focused on the central business districts. Residential streets are therefore likely to have been little affected, though there may have been an improvement in conditions in the central shopping streets.
Protection of the environment 1 This was not a key objective. There is likely to have been some reduction in environmental impact through the reduction of traffic.
Equity and social inclusion 1 No assessment of equity impacts has been made, but those making occasional journeys outside the charging periods, eg on Saturdays, will have benefited while costs will have been imposed on those travelling during the charging periods, eg during the peak periods in Trondheim. Opinion polls originally indicated that approximately two thirds of Bergenís population were against the toll ring, though it has now been widely accepted by the majority. The change in opinion is thought to be connected with the visible improvements in the local transport network benefiting everyone and is despite relatively high levels of tax on motoring.
Safety 0 This was not a key objective. There may have been a limited reduction in accidents through the deterance of car travel, though this is likely to have been offset by increase in road capacity.
Economic growth 0 In Bergen, Saturday was deliberately kept free from tolls in order to support the cityís shops. However, the effect on city centre shopping is not known.
Finance 4 In Bergen the initial investment to establish the ring was approximately NOK 15M. Annual income has been higher than expected and is approximately NOK 70M. Of this, NOK 50M is spent on roads, NOK 14M is taken up in operating costs and NOK 7M is stored in a fund (the use of which attracts great political debate).
1= Weakest possible positive contribution,5= strongest possible positive contribution
-1= Weakest possible negative contribution-5= strongest possible negative contribution
0= No contribution

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London congestion charging study

Context

A major desk study in London in 1992-5 provided one of the most comprehensive studies of cordon charging options and technologies. The simplest was a single cordon around Central London; the most complex a system of three concentric cordons and four radial screenlines, with the outer cordon surrounding Inner London. Most aspects were studied in detail (Richards, et al, 1996); the transport impacts are described below (May, et al, 1996).

 

Impacts on demand



Pattern Destination -a small proportion of the reduction in traffic in Central and Inner London was explained by changes to destinations in Inner and Outer London.
Mode The majority of journeys no longer made by car to Central London were predicted to switch to bus (which benefits from reduced congestion) with a further substantial switch to rail.
Timing Where changes differed by time of day, significant numbers were predicted to switch away from peak period travel.
Route Where possible, changes in route are the most common alternative. With the single cordon much through traffic was predicted to divert to the Inner Ring Road, reducing the benefits outside Central London. With the more complex scheme, the screenlines reduced diversions, but traffic levels still increased on the orbital outside the outer cordon.
Freight impacts Surveys suggested that freight vehicles were largely insensitive to charges, except where they could reroute to avoid them.
Overall traffic With the single cordon at the highest charge tested (£10 throughout the working day) car traffic in Central London was predicted to fall by 40% and all traffic by almost 25%. Two thirds of these reductions were achieved with a £4 charge.

Impacts on supply

No effects on capacity were predicted.

Contribution to objectives

Objective Scale of contribution Comment
Efficiency 4 For the Central London cordon, economic benefits were at their highest at a charge of £6 per day. They fell slightly at higher charges as charging began to discourage drivers whose benefits exceeded their marginal costs. At a charge of £8 per day, speeds were predicted to be 32% higher in Central London, but only 4% higher in Inner London. The same charge with £2 charges on each of the other cordons in the 3 cordon system, increased speeds by 26% in Central London and 10% in Inner London.
Liveable streets 2 Traffic levels were predicted to fall in residential streets within the charged area, but to increase in those just outside the boundary. The overall reduction in traffic would enable some re-routing of traffic away fropm residential streets, at the cost of a small reduction in efficiency benefits.
Protection of the environment 3 The Central London cordon with an £8 charge reduced carbon monoxide in Central and Inner London by 12%, and carbon dioxide by 6%. A £4 charge achieved reductions of approximately two thirds of these levels. The 3 cordon scheme had around double the impact.
Equity and social inclusion 2 Impacts were assessed for 3 income groups. The highest income group suffered the greatest loss of benefits with both schemes. Conversely, the lowest income group experienced small benefits from both, largely because they are more likely to use buses and benefit from reduced congestion.

Safety
2 The Central London cordon, at an £8 charge, reduced London-wide accidents by around 3%; the 3 cordon scheme again had around double the impact.
Economic growth 1 Neither scheme was predicted to have significant impacts on the distribution of land-use. A £4 charge on the Central London cordon would increase employment in Central London by 2% and reduce households there by under 1%, but with increases in the number of high income households. A 3 cordon scheme at double the charge would increase employment in Central London by 2% and reduce it in Inner London by 1%, again with very small changes in residential locations.
Finance 4  At £8 per day, the Central London cordon was estimated to generate gross revenues of £420M PA; the 3 cordon system £740M. Capital costs were estimated as £85M to £140M and £240M to £335M; operating costs £55M PA and £155M PA. Both options thus more than covered their costs within the first year.
1= Weakest possible positive contribution,5= strongest possible positive contribution
-1= Weakest possible negative contribution-5= strongest possible negative contribution
0= No contribution

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Demonstration projects

A number of demonstration projects throughout Europe have been undertaken in recent years, the results of which are summarised below.

The Leicester Environmental Road Tolling Scheme (LERTS) involved monitoring the use of a small scale electronic tolling scheme by 100 volunteers who were given money which they could either use to pay the toll or which they could save by using the alternative services provided (park and ride and bus priority). Interim results indicate:

  • Patronage on the park and ride service grew from 1300 to 3150 passengers per week, illustrating a latent demand for the service even in the absence of the toll scheme;
  • Journey time savings for bus of 25% (24 to 18 minutes);
  • Journey time savings for cars of 3% (14.5 to 14 minutes);
  • Transfer from car to park and ride amongst commuters during the tolling period

ranged between 16% and 32%, with transfer to bus and to ride-sharing each in the range 1-4%;

  • 31.9% of people made no change;
  • 25.2% changed route;
  • 12.8% changed departure time;
  • 14.9% used park and ride;
  • 2.1% used other Bus;

The Stuttgart 'MobilPass' field trial involved 350 users in a test of different pricing strategies using an electronic fee collection system. Simulations using the MobilPass data have shown that, in principle, corridor tolls on peri-urban roads accessing Stuttgart will result in greater transport and emission reductions than a cordon toll does. This is because, in the case of a cordon, the toll paid includes any subsequent trips made within the cordon, where as in a corridor the effect of pricing schemes will be noticed directly.


The Athens cordon pricing experiment, undertaken as part of the TRANSPRICE project, involved two groups of 50 selected users, each made up of current car users who commute to central Athens from northern Athens suburbs. The users were allocated a nominal budget and presented with a choice of either driving to central Athens in their car, as before, but having to use their budget to pay to cross a cordon or switching to a metro-based park and ride service with the opportunity to save their budget. The results indicate:

  • 65% of users made no change;
  • 24.0% of users switched to the park and ride service;
  • 5.5% of users switched to other public transport;
  • 5.5% of users switched to other modes (e.g. ride sharing, taxi).

The Bristol ELGAR demonstration project, undertaken as part of the CONCERT project, involved an electronic road pricing scheme whereby 116 volunteers could be rewarded for switching to modes other than private car for their journey into the city centre, a package of public transport improvements and a series of variable message signs giving information on pollution levels. Findings indicate that

  • The majority of users continued to use their car as before;
  • 15.1% of journeys switched from private cars to other modes (though it was found that most of the reduction resulted from a few of the participants switching nearly all of their trips from private car);
  • over half of the respondents to the follow-up questionnaire thought that the revenue from any future road pricing scheme should be spent on improving public transport; and
  • three-quarters of those switching to public transport expressed a positive opinion about this experience.


Gaps and weaknesses

The limited range of real world evidence on urban road charging represents, in itself, a weakness of the body of knowledge on this policy instrument. However, a number of cities are now quite close to implementing urban road charging, e.g. London and Rome, which should provide further evidence within the next few years.

Furthermore, there are gaps in our knowledge of the full range of impacts which have been experienced in those few situations where urban road charging has been introduced, particularly with regard to the Norwegian examples. We will continue our efforts to gather evidence on these examples and invite users of this knowledge base to send us any evidence that they are aware of.

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