Guest Post: If Auckland is going to price congestion, make it work
A guest post by David Lupton:
Three years ago I argued in favour of pricing congested roads. At the time it was largely a debate about whether Auckland should introduce congestion charging at all. That debate has moved on. The Government has now provided the legislative framework and Auckland is actively developing a scheme.
So the important question is becoming not simply whether we should have congestion pricing, but what sort of congestion pricing we should have. If we are going to do it, we should make sure it actually fixes congestion, replaces rather than adds to existing taxes and rates, protects privacy, and does not lock us into an unnecessarily expensive or inflexible system.
Judging by the comments last time, I persuaded some people and confirmed the worst suspicions of quite a few others.
The objection I have the most sympathy with is this: Why should motorists trust central or local government with yet another charging mechanism?
That is a perfectly reasonable question.
If congestion charging means putting cameras around Auckland, charging us another $5 or $10 for travelling to work, adding the money to the Government or Council’s revenue, and leaving us sitting in much the same traffic afterwards, I am against it too.
But that is not what congestion pricing has to mean.
There is a much better way to do it, and modern technology makes it remarkably simple.
First decide what we are trying to achieve
The objective should not be to raise money. Nor should it be to punish motorists or force them out of their cars.
It should be to make the road network work properly.
There is a fairly simple piece of traffic engineering behind this. As traffic increases, the number of vehicles a road carries increases up to a critical point. Beyond that point the traffic becomes unstable, speeds collapse and, perversely, the road starts carrying fewer vehicles.
Anyone who has watched an Auckland motorway change from busy but flowing traffic to stop-start crawling has seen this happen.
So the sensible target is not an empty motorway. It is a busy motorway operating at or close to its maximum sustainable flow.
That is also important when people say congestion pricing “prices people off the road”. A successful scheme does not necessarily mean fewer people getting through. By preventing traffic breakdown, the road can actually carry morevehicles through the peak, and they get there faster.
The question then becomes: how do we set the right price?
Let the road tell us the price
There is no reason for a committee to sit around a table deciding that the Northern Motorway should cost $4.50 between 7.00 and 9.00 and $2.00 between 9.00 and 10.00.
We can measure congestion directly.
Every significant road has a normal uncongested travel time. We can also observe its actual travel time. The difference tells us how congested it is.
The charge should simply rise as that excess travel time increases and fall as it disappears. Then the more congested a road is, the higher the charge.
If the charge on a particular road is high, some motorists will use another route, travel at another time, take public transport, share a car or decide the trip is not worth making. Traffic falls, travel time improves and the charge automatically falls with it.
If the charge is too low, congestion increases and so does the charge.
The really interesting part is what happens across the network.
Suppose charging the motorway diverts traffic onto Great South Road. If Great South Road has spare capacity, excellent. We have made better use of the network. But if the diversion starts congesting Great South Road, its charge rises too. Some traffic then moves again.
The same applies to rat-running through residential streets. We do not have to predict every diversion and install another toll gantry. If diverted traffic congests that road, the price responds.
The whole network progressively balances itself.
That is much closer to the way we allocate almost every other scarce resource in a market economy. We don’t allocate supermarket food by making people queue until some of them give up. We allow prices to tell consumers that something is scarce and allow them to make their own choices.
For some reason, with roads we have decided that queueing is fairer.
We already own most of the technology
Here is where things have changed dramatically.
Traditional congestion charging requires gantries, cameras, account systems and sometimes special equipment installed in vehicles.
But almost every driver now carries a GPS receiver, computer, communications device and payment system in his or her pocket.
We call it a phone.
An app could identify the roads being used and calculate the appropriate charge. It could also tell you before you leave what your likely charge will be and show you what happens if you leave half an hour later or take another route.
No special box needs to be installed in the car.
And participation need not be compulsory.
Auckland is already considering a more conventional system based initially on automatic number-plate recognition. Keep it.
If the normal cordon or corridor charge is, say, $5, that remains the standard charge. Someone who doesn’t want the app pays the $5 in the ordinary way.
Someone who chooses to use the app gets a discount based on the actual congestion charge calculated for the roads they used.
That has two advantages.
It gives motorists a reason to use the app because they can pay less, rather than forcing them to use it.
And it means none of the initial investment in cameras and back-office systems is wasted. As app use increases, the cameras increasingly become the fallback and enforcement system rather than the primary means of calculating everybody’s charge.
There should be conditions
I would support an Auckland congestion-pricing scheme only if some fairly hard safeguards accompanied it.
- It must replace existing taxation, not be added to it. Congestion pricing is a way of pricing road use more intelligently. It must not become another layer of taxation on top of fuel excise, road-user charges and rates. Revenue raised from motorists should be matched by reductions in other transport taxes or rates. If politicians want more revenue, they should argue openly for higher taxes rather than disguising one as congestion management.
- Success must be measured by traffic performance, not revenue. Set and publish the target speed or traffic-flow condition. If the scheme does not reduce congestion, it has failed. If maintaining good traffic flow requires very little revenue, that is a success, not a funding problem.
- Privacy must be designed in from the beginning. The Government does not need a database recording everywhere I drove last Tuesday. The detailed GPS processing can take place on the phone. The system needs enough information to calculate and verify the charge, not a permanent record of everybody’s movements. Camera records for compliant vehicles should likewise be deleted quickly. And anyone who does not want GPS charging should be able to use the ordinary number-plate system instead.
- The pricing rule should be transparent. Motorists should know what the system is trying to achieve and why the price changes. The authority should not be able to quietly increase charges because it needs another $100 million for its transport budget.
Those safeguards turn congestion charging from a rather frightening new taxing power into something quite different: a mechanism for allocating scarce road capacity.
What about people who cannot change when they travel?
There will always be some. A nurse starting a shift cannot necessarily decide to turn up at 10.30. Nor can every tradesman carry his tools on a bus.
But that is true of every market. The fact that some people’s demand is inflexible does not mean prices cease to work.
The important point is that not everybody has to change.
If only a relatively small proportion of motorists decide that Tuesday is the day they will work from home, leave at 7.00 instead of 7.30, share a ride, take the train, or make that optional trip later, it can be enough to stop the network crossing the point at which traffic collapses.
Those who really need to travel at the busiest time then get something valuable in return for the charge: a road that actually works.
And if the system is revenue-neutral, motorists as a group are not being asked to pay more. We are changing how we charge for road use so that the price gives people useful information about when and where capacity is scarce.
Auckland is going to consider congestion charging anyway
The Government has now legislated for time-of-use charging and Auckland Transport and Auckland Council are developing options.
My concern is therefore no longer principally whether Auckland should investigate congestion pricing. That argument is largely behind us.
The important question is what sort of congestion pricing we get.
The first scheme will almost certainly be relatively conventional. That is understandable. Years of work have gone into it and nobody is going to throw that work away because someone turns up with a cleverer idea at the last moment.
They shouldn’t.
Introduce the first-stage scheme if it passes the tests above. But make sure its technology and back-office systems can subsequently accept GPS-based charging as an alternative.
Then we can move progressively from a few rather blunt cordon or motorway charges to something much better: a network in which the price responds automatically to actual congestion.
No new tax.
No compulsory tracking.
No expensive gadget in every car.
No bureaucrat trying to guess the perfect toll for thousands of roads.
And, most importantly, a very clear test of whether the policy is working:
Is Auckland traffic flowing better?
If the answer is no, don’t tell motorists how much revenue the scheme raised: Fix the scheme.
