Most urban highways should be variably-priced

Objections to transport infrastructure can take many forms. The far right is wont to view mass transit as a communist plot, a tool to horde all of us into Agenda 21 housing blocks. The far left is inclined to see highways as a sop to the oil industry and automakers, with additional lanes as a cause of traffic congestion. At the root of these objections lies a core difference in failure modes between trains and cars.

At low usage, both cars and trains are fast and comfortable. I’m in my car, seat reclined a bit, radio on, cruising. Or I’m on a mostly empty subway car, sprawled out across the mustard yellow naughahyde, listening to the whine of the tunnel.

As usage increases, cars and highways fail in terms of speed. If I’m driving an Audi and encounter a traffic jam, I’m still in an Audi. I’ve still got leather seats and a good CD. I’m just not going anywhere.

On the other hand, as usage increases trains fail in terms of comfort. A train at crush load will see slightly longer dwell times, but even in Tokyo the train is still going to do 80 or 110 or 130km/h once it departs the station.

So how should we price failure modes? Consider how people react to differentially-priced comfort versus differentially-priced speed. One way to look at comfort is airlines. And if you look at airlines which provide slightly more comfort at a slightly higher price they’re doing horribly.

But if you look at speed, you’ll see that people value it immensely. Punching in a random Amtrak trip, I get this timetable:

Leaving Baltimore at 6:30pm, options include an Acela for $191 and 2:15 of travel time, or a Northeast Regional for $125 and 2:40. Regionals are extremely comfortable – wide, cushy seats, lots of legroom – so that $66 differential is primarily speed. For a travel time difference of 25 minutes, that works out to a time value of $158 an hour. For an arrival time difference of 45 minutes, it’s $88 an hour. Either way, it’s a lot of money.

Moreover, a seat on the 9:28 can be had for a mere $49. Since the 7:54 is the same exact train for $125, the $76 price differential is entirely time-related. Understandable: If you get into New York at 10:30pm, you can make it to most of the clubs before they start hopping. If it’s after midnight, not so much. That $76 to arrive in New York 96 minutes earlier equates to a time value of $47.50 per hour.

Similar evidence comes from highways. TTI did a report fairly recently where they looked at people who pay to use managed lanes even when the adjacent lanes are at free-flow. When they sent drivers a survey asking why, they found that, among other things, managed lane users were hedging against the mere possibility of downstream congestion in the general-purpose lanes.

Anecdotally, you also have the Hardy Airport Connector which charges a full dollar for you to avoid two or three traffic lights. That’s about 40 cents a light. If that average light delays you by one minute, that’s about $24 an hour. Farther north you have the Addison Airport Toll Tunnel which costs 50 cents to avoid a detour of slightly more than one-half mile.

All of this tends to suggest that new urban road projects should be tolled and variably-priced.

When the Katy Freeway expansion was in full swing, a lot of people diverted to the Westpark, and that road saw stop-and-go congestion each way. During that time period HCTRA considered doubling the toll but backed off after there was a large public backlash from people who had bought homes assuming tolls would remain relatively static. Adopting variable pricing from the get-go could remove the expectation that rates will stay relatively constant.

The most obvious place to do this would be whenever the gap is closed on the Fort Bend Parkway between Alt 90 and the Post Oak/Loop “Y.” Other new highways such as the “Lone Star Parkway” (roughly parallel to FM 529 from the Grand Parkway west) would also be good candidates.

9 thoughts on “Most urban highways should be variably-priced”

  1. Taking the train into New York to go clubbing is a really bad example. People readily accept time premium pricing in that case because (1) most of the customers can afford it, and (2) the trip is an optional leisure activity, so people who can’t afford it aren’t going to generate much sympathy. The opposite is true with daily commuters on highways. Driving to work is not optional, the timing is usually not flexible, and higher tolls are a disproportionate burden on lower income people.

  2. True, getting to work is mandatory. But where you’re commuting from is entirely a personal choice. This is why everything should be variably-priced from the get-go. If you start off with flat tolls and then wait for congestion to occur before introducing variable pricing, there will necessarily be a steep onetime increase in peak tolls as you switch from LOS F to LOS C (or whatever your metric is).

    But if you start out with variable tolls – on, say, the Prairie Parkway – then you’re not “burdening” anyone because as of right now there is no Prairie Parkway and there are almost no houses along what will be the Prairie Parkway – it’s all just lines on maps. And the tolls will increase gradually, commensurate with traffic.

  3. “where you’re commuting from is entirely a personal choice”

    Some choices are more voluntary than others. 🙂

    I certainly agree that congestion pricing is more palatable on new roads than on existing highways. I’m just not convinced that variable tolls don’t inevitably lead to a fairness problem with people at the lower end of the economic spectrum being “priced out” of the “highway market”.

  4. One thing you have to remember. The Regional only has Coach and Business class seats. The Acela only has Business and First. The price differenctial between the first two trains above with the same level of service is only $29

  5. John,

    What fairness problem. Whether you are poor or rich you are using the same infrastructure and harming the same others through your creation of congestion. A BMW and a Ford put the same wear and tear on the freeway, and take up the same amount of space.

    If you want redistribution, allowing the poor to harm others at a lower price is not the way to go about it.

  6. John – If there were a fairness issue, we could just have variable pricing and give poor people a tax prebate.

  7. Politically acceptable conversion to variable rate tolling?

    Do you think it would be politically palatable if the off peak times were lowered enough that on balance (with the raised peak charges) the daily (unweighted) average toll was unchanged? The toll roads should be much cheaper between 11pm and 4am.

  8. I don’t see why it wouldn’t work that way anyway. For instance if you look at the Westpark (flat rate) it’s $3.20 from 610 to Highway 6. But if you look at the Katy Managed Lanes it’s $1.00 for the same trip anytime other than rush hour (6-10a EB, 3-7p WB), at which point it goes up as high as $5.00.

  9. I do value comfort over speed, but the rates are not equal.

    Let’s say I’m at Texas A&M, and I need to get to a far-flung part of campus. I could get on the bus, and have standing room only until I get there (probably too hot) or take my bike. Assuming the weather is pleasant, but it still takes five minutes longer to get there, I’m taking the bike.

    Now assume that trains ran from College Station to Houston. The train costs a bit more, but both are equal in times of speed. I would probably take the train: even if it’s fairly full, I can sit on a seat and read a magazine instead of gripping the wheel on 290 and praying that no one does anything stupid.

    As for the airport example, the comfort thing doesn’t matter, because once you go on an airplane, the “comfort” quickly disappears and you’re going for speed entirely. It’s just the nature of it: you won’t reclaim the “comfort”. You’re already being fingered by a TSA agent, you already ran around the airport, you’re already being forced into a tiny little seat with no leg room. There’s nothing you can do at that point.

    Similarly, would you rather wait 20 minutes in a traffic jam, letting the air conditioning run, your stereo blasting classic rock, and playing Angry Birds, versus shaving off those 20 minutes being stuck on a train between a guy who hasn’t showered in two months and a woman who, for some reason, feels that she has the need to talk about her yeast infection she has?

    I’m sticking with the traffic jam.

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