Saturday, 20 November 2010

What are the different types of road pricing?

The range of terms used to describe road pricing are vast and overlapping.   The main reason for such inconsistency is because road pricing terminology usually combines purpose (e.g. congestion charging), geography (e.g. urban, cordon, area), technology (e.g. electronic free flow, open) and vehicles charged (e.g. HGV only).  The separation I have made on the right hand column is based on geography, mainly because this tends to lend itself to the answers to the other issues as to purpose, likely technology and range of vehicles charged.  So my classification is as follows:

- Toll roads and toll lanes: Toll roads are the most common, familiar and oldest form of road pricing.   They are characterised as being single facilities with one or more tolling points.  Most often bridges or tunnels, but also motorways/grade separated highways.   In all cases the choice to users is to choose that road or crossing, or take an alternative route.   The tolls on these facilities are almost always about recovering the capital costs of the particular road.  Although in a few places such tolls are now being varied between peak and off peak times, to manage demand and reduce congestion, but also offering discounts at times of lower use.  This can be described as a form of congestion charging for that specific route only.  The Sydney Harbour Bridge and San Francisco-Oakland Bay Bridge both have higher peak charges to manage congestion.

Within this category I have included toll lanes, because they are about charging one facility.   This also includes High Occupancy Toll (HOT) lanes.  Toll lanes may be extra lanes added onto a highway, with the toll applied to help fund the new lanes, but also manage demand at peak times.  The Orange County 91 Express Lanes are in this category.

As such it is a form of congestion charging, but with the parallel uncharged lanes as a free alternative.   Toll lanes may also simply be tolls applied to existing lanes.  To date the only example of this are HOT lanes, with the existing lanes already set aside for buses and cars carrying usually 2 (or 3) or more people.  HOT lanes allow single occupancy vehicles to use such lanes at a charge, with the toll essentially managing demand so the lanes remain relatively uncongested.   The I-394 HOT lane in Minnesota is an example of this.

The common characteristic of toll roads, toll lanes and HOT lanes is that, generally speaking, motorists can choose other routes to make the trip (or other lanes).   The tolls are focused on the single facility, and are usually set to recover capital costs.  The alternatives may be slower or far more circuitous, but the road pricing component is the single trip on that road.   Some countries have extensive networks of toll roads that make up some of the best highways.  France, Italy, Spain, Japan and increasingly China have well developed national toll road networks.  Yet in all cases it still remains possible to drive long distances using other routes.   Some cities have extensive toll road networks, such as Sydney and Santiago, but still have alternative routes.   The chargeable event for such roads is passing a particular point on the road.

- Urban road pricing: Urban road pricing is distinguished from toll roads in that the tolls are not simply applied to individual routes or crossings.  In that sense, cities like New York (where crossings from Manhattan to New Jersey are tolled) or Sydney (where many main highways are tolled) do not have urban road pricing.   Urban road pricing is when there are no alternatives in driving to a certain part of a city at certain times without paying.   The best known examples of this are congestion charging in London, Stockholm and Singapore (although there are key differences between all three), but also the Oslo toll ring.  In most cases the road pricing is introduced to reduce congestion by managing demand.   In the Oslo case the road pricing was introduced to raise revenue to fund the road improvements and other transport infrastructure.   Cities typically consider forms of road pricing for these two objectives, reducing demand (and congestion) and generating revenue.  The chargeable event being crossing a certain point or movement within a zone.

- Network road pricing:  Network pricing is the unified charging of vehicles across a wide network that goes beyond a city.   Such pricing may only be heavy vehicles (e.g. Switzerland LSVA, German LKW-Maut), or all vehicles (e.g. electronic vignettes in Hungary).  It may be only on motorways (e.g. Austrian ASFINAG tolls), or on all roads (e.g. New Zealand Road User Charges).   Generally speaking, such pricing is about recovering infrastructure costs, but may also be about managing externalities such as congestion and pollution.   It does not include countries where large numbers of highways are tolled when such toll systems are discreet, run independently and unrelated to each other.  Chargeable events may be crossing multiple points, distance travelled or purchase of time to access a network.

The confusion can come from different terminology.  Road pricing can apply to all of these situations.  Tolls can be used to describe them all as well.  Road user charging would tend not to apply to individual toll roads or toll lanes.   Congestion pricing/charging is more about charging specifically to manage demand at peak times. 

So my point is this.  The key to understanding road pricing schemes is:
- Geography (what part of a network is being charged);
- Vehicles (what part of the vehicle fleet is being charged);
- Purpose (why does the charge exist); and
- Chargeable event (what triggers liability for a charge).

Look at that rather than the terminology used.

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