road pricing reformroad pricing reform - home - the university of...

ROAD PRICING REFORMROAD PRICING REFORMConsidering the benefits of more efficient road user charges

THE UNIVERSITY OF SYDNEY

BUSINESS SCHOOL

P f Mi hi l BliInstitute of Transport and Logistics Studies

Prof. Michiel Bliemer

ITLS Leadership and Policy Seminar Series June 2013ITLS Leadership and Policy Seminar Series, June 2013

OVERVIEWOVERVIEW

› Pricing strategies

› Objectives

› Travel behaviour

› Technology

› Acceptability

› The challenge

› The idea

› Yes, but…?

› Some conclusions

2

PRICING STRATEGIES 1

PRICINGPRICING

Annual registration fee

› Most countries

› Main objective: financing road infrastructure

4

PRICINGPRICING

Fuel excise tax

› Many countries

› Main objective: general revenues, reduce emissions

5

PRICINGPRICING

Toll roads

› Norway, Sweden, France, The Netherlands, Belgium, Australia, etc.

› Main objective: raise revenues for road construction and maintenance

6

PRICINGPRICING

Cordon charging

› Singapore, London, Stockholm

› Main objective: alleviate congestion in the city

7

PRICINGPRICING

Accessibility pricing

› San Diego, Orange County, USA

› Main objective: improve accessibility between cities

8

PRICINGPRICING

Workplace parking levy

› Nottingham, UK

› Main objective: reduce congestion, encourage sustainable travel

9

PRICINGPRICING

Kilometre charging

› Germany (trucks only), (proposed in the Netherlands)

› Main objective: finance road infrastructure, reduce externalities

10

PRICINGPRICING

Peak avoidance

› The Netherlands

› Main objective: reduce congestion

11

PRICINGPRICING

Pay-as-you-drive (PAYD)

› UK, The Netherlands, Australia, etc.

› Main objective: stimulate safe driving

12

OBJECTIVES 2

OBJECTIVESOBJECTIVES

Possible objectives of road pricing reforms

1. Finance maintenance of current infrastructure

2. Increase revenues for new infrastructure

3. Increase efficiency of current infrastructure

4. Decrease externalities (e.g., emissions)

14


Just investing in more roads is not the answer

› Car costs have to perhaps double or triple in order to be able to build sufficient roads

› More roads may (temporarily) alleviate congestion, not air pollution, climate change, and unsafety (they all get worse)

› How liveable is a city with all 4 lane roads?› How liveable is a city with all 4-lane roads?

15

OBJECTIVES

Road pricing reforms in Europe

OBJECTIVES

› Why road pricing reforms?- Congestion is becoming unacceptable in and around major cities

› Objectives- Increasing efficiency of current infrastructure

- Decrease externalities (e.g, emissions of CO2, NOx, PM10, PM2.5)

› AcceptabilityF i f h t- Fairness: pay for what you use

- Travel time benefits for road users

› How› How- Distance based charging with GPS technology

- Cordon charging with camerasg g

- Peak avoidance rewarding with smartphones

16

OBJECTIVES

Road pricing reforms in the USA (Jack Opiola, TRN Breakfast masterclass, 29/5/13)

OBJECTIVES

› Why road pricing reforms?- Fuel tax generates decreasing revenues due to increasingly efficient engines

› Objective- Increase revenues for new infrastructure

› Acceptability- Revenues should be hypothecated for investment in road infrastructure

› How- Distance based charging should replace fuel tax

Should not rely on GPS technology but on odometers- Should not rely on GPS technology but on odometers

- Car drivers pay for first 12,000 miles; pay extra or get refund later

17


Road pricing reforms in Australia?

› Why road pricing reforms?- Congestion is becoming unacceptable in major cities

› Objective- Increasing efficiency of current infrastructure

› Acceptability?

› How?

18

CAN WE?CAN WE?

Central question of this presentation

› How can we design road access pricing reform that- improves the efficiency of the current road infrastructure?

- reduces travel times?

- is fair?

- is revenue-neutral for Treasury?

- does not increase the average costs for car drivers?

- does not rely on complex technology?

- is acceptable by the community?

d t i h f d ti ?- does not require much fraud prevention measures?

- is easy to introduce?

19

TRAVEL BEHAVIOUR 3

TRAVEL BEHAVIOURTRAVEL BEHAVIOUR

Responses to road pricing

short term medium term long term

21


Availability of alternatives

› Pricing measures are most effective if travellers are offered alternatives

› Annual registration fee:- Cannot avoid fee by not travelling

- Cannot avoid fee by taking other route no-choice pricing- Cannot avoid fee by travelling at other time period

- Cannot avoid fee by taking public transport

› Time, distance, and location based pricing measure:- Can avoid fee by not travelling

- Can decrease fee by taking other route

- Can avoid/decrease fee by travelling at other time period

C id f b t ki bli t t

choice pricing

- Can avoid fee by taking public transport

22

(Hensher & Bliemer, 2012)


ZoetermeerThe Hague (3 euro)

ZoetermeerThe Hague (7 euro)

Hollandse Brug (4-6 euro)

Moerdijkbrug(4 euro)The Hague (3 euro) The Hague (7 euro) Brug (4-6 euro) (4 euro)

no change other route stay homeother departure time other mode

100

150

40

50

60

60

80

60

80

0

50

0

10

20

30

0

20

40

0

20

40

23

4:00 6:00 8:00 10:000

without peak price with peak price

1:00 3:00 5:00 7:0006:00 7:00 8:00 9:00 10:000 6:00 7:00 8:00 9:00 10:000

(Bliemer et al., 2009)

TECHNOLOGY 4

TECHNOLOGYTECHNOLOGY

GPS?

› GPS devices (on-board units, smartphones) provide the most flexible way to price all externalities

› However:- Expensive (although many people have in-car navigation devices / smartphones)

- Fraud sensitive (can be unplugged)

- Privacy sensitive (locations can be stored)

› Can we come up with a pricing measure that decreases externalities that does not rely on GPS?does not rely on GPS?

25


Odometer?

› Technology can be very simple when only considering distance based (not location based) pricing measures

› Total distance travelled:

5 2 30 0 9 6 KM

26


‘Day-night electricity tariff’?

› Technology can be relatively simple when only considering distance and time based (not location based) pricing measures

› Total distance travelled per time period:

3 7 70 0 1 5 KM (OFF-PEAK)

1 4 60 0 8 1 KM (PEAK)

27


‘Taxi tariff’?

› Determine price like taxi fare, based on travel time and distance

5 2 30 0 9 6 KM5 2 30 0 9 6 KM

0 1 00 0 4 8 HOURS

› Logic: travelling off-peak would be cheaper because travel time is less

28


Technology against fraud?

› For all charging systems, fraud prevention technology is needed (e.g., cameras)

› These systems are expensive on a network scale

29

ACCEPTABILITY 5

ACCEPTABILITYACCEPTABILITY

What makes a pricing policy acceptable?

› The pricing measure should be acceptable by:- the community

- the politicians

- the Treasury

› A pricing measure is likely acceptable if:- the measure is fair (travellers who drive more should pay more)

- most travellers are better off (both in money and in travel time)

- there are no significant vertical equity issues (impact on individuals in different income groups)

- the revenue for the Treasury remains at least the samethe revenue for the Treasury remains at least the same

31


How can we move that donkey?

› “Introduce a congestion tax”

› Does the stick strategy work?

32



› “Lower annual registration fee, combined with kilometre charges”

› Does the carrot and stick strategy work?

33



› “Provide discounts for travelling less (during peak hours)”

› Does the carrot strategy work?

34

THE CHALLENGE 6

THE CHALLENGETHE CHALLENGE

Can we do it?

› Can we create a new pricing measure that:- improves travel times for everyone?

- makes majority of car drivers pay less than their current annual registration fee?

- generates the same revenue for Treasury?

- is easy to implement without complex (GPS) technology?

- does not require significant fraud prevention measures?

- can be implemented in phases for a smooth transition?

36

THE IDEA 7

THE IDEATHE IDEA

General idea

› Preliminary results from Bliemer and Hensher (2013)

› SPARK: Saving Per Automatically Registered Kilometres

› General ideas:- Voluntary participation (opt-in) system

- Car drivers can earn discounts on annual registration fee when providing evidence of kilometres travelled less than population average

C d i di t h idi id f ff k- Car drivers can earn more discounts when providing evidence of off-peak kilometres travelled

- Car drivers who do not participate will see annual increases in the annual registration fee (depending on the number of participants)

- This can guarantee revenue-neutrality for Treasury

f- This does not increase the cost of the average car driver

38

THE IDEATHE IDEA

Some data from NSW

› Total number of cars in NSW in 2010: 4,673,192

› Total number of kilometres travelled in NSW in 2010: 66,581 million

› Average kilometres travelled per car is 14,250/year

› 62% of car drivers drives less than this average

› 62% of car drivers would immediately benefit from participating

percentage of cars

62%

14 250annual kilometres driven

38%

62%

39

14,250(average)

THE IDEATHE IDEA

SPARK

› Car drivers who participate will never pay more than their current annual registration fee

› If they show evidence of kilometres travelled, they get discount if they drive less kilometres than average

0 4 70 0 3 9 KM (OFF-PEAK)

0 2 50 0 2 1 KM (PEAK)

› Revenue neutral for Treasury$$

average costs per car

40

# cars# cars100%

THE IDEATHE IDEA

SPARK

› Slight travel time benefits with distance based charging

› Potentially significant travel time benefits with time and distance based pricing

fi d i t ti ffi d i t ti f di t b d h idi t b d h i ti /di t b d h iti /di t b d h i

travel time travel time travel time

fixed registration feefixed registration fee distance based chargingdistance based charging time/dist. based chargingtime/dist. based charging

time time time

41

time time time

YES, BUT…? 8

YES BUT ?YES, BUT…?

But what about a plumber that needs to drive around to clients?

› A plumber would benefit from the system, as lower travel times will enable more work appointments

› Does it really matter on a call out fee of $80?

43


But what about people who have to drive a long distance to work?

› They will likely not volunteer the first years

› They will get time to adapt to the new situation

› Some Australian statistics from the past 5 years:- 90% of young households (<35) without children have moved at least once

- 45% of couple families with dependent children have moved at least once

- 59% of lone parents with dependent children have moved at least once

17% f th ld h h ld ( 65) h d t l t- 17% of the older households (>65) have moved at least once

› Further, people also change jobs

When choosing their residential or ork location people sho ld at least› When choosing their residential or work location, people should at least consider all mobility costs

› The system therefore should be a pull factor, not a push factor› The system therefore should be a pull factor, not a push factor

44


But is it fair to have to pay more in the peak period?

› It is very common in public transport (also in Sydney), why not on the road?

› When more car drivers avoid the peak period, there will be travel time gains

45


But are car drivers not sponsoring public transport?

› Yes, and that is a good thing- Mainly car drivers benefit!

- More people in public transport means less congestion for car drivers

- The city would be in complete gridlock without public transport

- NRMA supports ‘some’ investments in public transport (public hearing 27/5/13)

46

SOME CONCLUSIONS 9

SOME CONCLUSIONSSOME CONCLUSIONS

Summarising

› A fair, acceptable, road pricing system can be developed based on voluntary participation and discounts

› Easy transition, people get used to paying per kilometre, and the benefits of avoiding the peak period

D t l l t h l› Does not rely on complex technology

› Public transport alternatives and fares should link with road pricing strategies

› Of course, additional regulation may be necessary to overcome any equity issues

› Could Australia/NSW be the first innovative country/state in the world to introduce a distance and time based charging scheme for cars?

› Powerful: NRMA should see the benefits for car drivers and take a leading role in e plaining the s stem to the comm nitrole in explaining the system to the community

48

THANK YOUTHANK YOU

Questions?

MICHIEL BLIEMER | Professor, PhD Chair in Transport and Logistics Network ModellingInstitute of Transport and Logistics StudiesThe University of Sydney Business School

49

The University of Sydney Business School

THE UNIVERSITY OF SYDNEYSt James Campus (C13) | The University of Sydney | NSW | 2006 | AustraliaT +61 2 9114 1840 | F +61 2 9114 1722 | E [email protected] | W http://sydney.edu.au/business/itls

road pricing reformroad pricing reform - home - the university of...

Documents