Grush Hour

Maybe it is good that neither the US nor Canada can fix the fuel tax

2011-12-26T00:18:00.000-05:00

Iwrite here a lot about the need to shift from fuel-tax to a pay-as-you goroad-use fees. A lot of people write about this. Recently Jack Opiola wrote some more in ITSI (“Evidence buildingfor distance-based charging”).

Opiola’s point is that wecould increase acceptability by giving drivers 2 or 3 choices of methods to payfor road use rather than encourage hostility by mandating a single technology,namely GPS. He goes one further by saying: “themarket place would supply the necessary technology and data collectionservices, certified to ensure the system works consistently. …the Governmentcould contract the tax collection function to private companies, withcompetition driving down administrative costs. Government would provideoversight and certification of private sector providers to ensure fairness.”

I agree completely.

On the way to theexplanation, he points out a few things worth thinking through. I cherry-pick afew:

“Lastmonth the (US) federal government announced a sizeable increase in thecorporate average fuel economy (CAFE) standards for new vehicles, bumping therequired average of 35.5 miles per gallon in 2016 to 54.5 miles per gallon by2025. …this policy will have a devastating impact on highway funding if USCongress does not take corresponding action to identify revenue not based onfuel consumption.”

“…somecars on our streets already contain much of the technology to meet the new CAFEstandards. Fuel efficiencies of many hybrid electric vehicles are approaching50 miles per gallon and steadily raising the fleet averages. Now entering themarketplace are fully electric and plug-in style hybrids - Nissan's LEAF andChevrolet's Volt, among others. Every major automobile manufacturer ispreparing at least one electric, plug-in hybrid, or advanced hybrid model formarket entry in the next two to three years.”

“Thesevehicles, capable of nearing or exceeding the calculated equivalent of 100miles per gallon, will generate little fuel tax. It is estimated the entirefleet will need about 40% of the fuel it currently consumes, reducing taxrevenue by about two-thirds.”

Increasingthe fuel tax “would create an ever-widening inequity between owners of highlyfuel efficient vehicles and those [that] pay a far heavier burden by continuingto operate conventional cars.”

“Alternativefunding sources must be found to maintain the health of highway systems…Policymakers have considered replacements for the fuel tax, such as salestaxes, registration fee increases, personal or real property taxes, income tax,value-added tax, tolling high capacity highways, taxes on oil company profitsand others.”

“Buteach shifts the burden of paying for the roads from one type of user to anotheror to non-users. In almost all of these cases, the proposed alternatives areless equitable than the current system.”

“Thefuel tax is based on use, but its consumption linked formula is woefully out ofdate and not correctable.”

“Sincetwo congressional commissions on transportation funding endorsed VMT as themost viable alternative to the fuel tax in 2008 and 2009, the US has donelittle to advance the discussions.”

The net of this is that inthe next few years the structure of road-use funding via fuel taxation will remain unchanged and this will boost salesof alternative (non-fossil) vehicles, whereas shifting from fuel-tax to road-use fees nowwould dampen those sales. This is one case where government inability to actmay have a partially-positive outcome. Although, Oregon might prove an exception.

Perhaps we should shelve thediscussions about VMT tax and Mileage-based User Fees for a few more years.Technology will soon drain so much revenue from our highways and roads that afuture government will have little choice, anyway.

Spying on your life or saving your life?

2011-12-17T01:33:00.000-05:00

Over in AutoSavant you can enjoy a dose of scare mongering about a device to meter driver behavior for PAYD insurance. Any device that monitors, views, films,captures, measures, listens, collects, or sniffs data about anything humans doseems to be fodder for phobic journalism and paranoid commenters. PAYDinsurance indeed has privacy issues. But they are addressable.

The real reason for PAYD insurance is to distribute riskmore fairly for drivers and more manageably for insurance companies (right nowyour zip code is used (among other things) to help assess your risk profile).In addition to tentatively threatening privacy and increasing affordability formore than 50% of drivers, PAYD insurance also enhances safety, and reducesvehicle miles traveled (VMT).

Unfortunately, instead of discussing privacy, cost, safetyand VMT in a balanced fashion (which I would say should be about 5%, 25%, 50%and 20% respectively, this journalist weighed these four matters at 90%, 10%,0% and 0%. This is to do a huge disservice to his readers.

When I read the article there were 39 comments. 54% wereagainst the PAYD device (stoked by the writers privacy fears), 28% were for thedevice for reasons of fairness, safety or cost savings and 18% were neutral orincoherent. Statistically speaking, these 39 commenters are somewhat smarterthan the journalist (usually only extreme opinions show up in these openforums).

~~~

Technology has been extending average life spans for manyhundreds of years. Medical advances (e.g., near-mandatory vaccination programs)come to mind. Not long ago, seat belts were considered an invasion of privacy,now a majority of us put them on without thinking about it. Tonight I wasstopped in a mandatory alcohol check-point. I was asked if had anything todrink this night. Was that an unfair imposition on me? (I drink a glass of wineonce a month and had none this night.) I have been twice sniffed by narcotics detection dogs while inairports. Another privacy invasion?

Driving safer saves lives. About half of the victims of roadaccidents were driving comparatively safely. Progressive's program may saveopt-ins a couple hundred dollars, and it also saves lives. Anyone with a familymember killed by another driver would applaud this form of insurance; many witha family member who has killed someone in an accident might also consider thisa good idea. 15 years ago I had a brother-in-law who took his own life a fewweeks after killing someone in an auto accident.

Compare how many Americans have been entrapped in a legal matterunrelated to road use with evidence provided by tolling data or automotiveinsurance data vs how many innocent Americans are disabled or dead because ofautomobile accidents.

A similar product to Progressive’s, available in Australia,(betterdriver dot com dot au) promises to save teen lives. Here the partywatching is the teen’s parents. Big Daddy if not Big Brother. Fewer complaints, it seems, because they areour kids.

The key issue is NOT the metering of driving behaviour, itis the USE of that data. There must be strong, and strongly upheld, legislationthat this data only be used for the purpose of fair insurance pricing andsafety. The readers who comment: “you are being monitored” may be right, but itis not the monitoring that is harmful, it is the potential for abuse. We needto address the potential for abuse, rather than reject a powerful tool forautomotive safely.

Fuel Tax vs Property Tax

2011-10-24T00:37:00.003-04:00

Why do we to pay two taxesfor roads?

One of the most commonobjections to VMT charging or mileage-based user fees is “I already pay (forroads) with fuel taxes”. While I have heard or read this many hundreds oftimes, I have never heard anyone complain, “I already pay (for roads) withproperty taxes.”

It is interesting that we areso very sensitive to (or aware of?) of fuel tax, but not so much to propertytax. And why do we pay two taxes for our roads, anyway?

A 2009 article from Access Magazine explains this neatly.

Early in the 20th century mostUS “…cities had the technical and financial means to widen their streets,install traffic signals, and carry out other operational fixes. But they lackedthe means to shoehorn extensive freeway systems into dense urban areas. Oneproblem was that the tax instruments available to local governments were notappropriate for the task. Local governments had the authority to levy taxes andspecial assessments on property and businesses, but not, for example, on fuel.The property tax is a sensible mechanism for financing local streets and roads,because these streets link individual land parcels to the world and help givethem value. It is thus logical for property owners to help pay for local streetconstruction. Freeways, however, affect the value of property across the entiremetropolitan area, not just of nearby parcels. This makes it hard to justifyspecial assessments on freeway-adjacent properties, since the majority of afreeway’s benefits accrue to travelers and landowners over much larger areas.(Indeed, being too close to a freeway can lower land values,particularly for residential property.) … A potential solution to these problems emerged in the 1920swith the development of the gas tax. As a way to finance freeways, gas taxeshad much to recommend them: they placed the tax burden on users of the system,they were relatively easy to administer and collect, and they were robust.Property tax revenues nationwide plummeted 72 percent during the Depressionyears of 1930 to 1939, but fuel consumption and its associated tax revenuesproved surprisingly resilient. Except for a small dip at the beginning of theDepression, fuel consumption rose everyyear until World War II (emphasis mine).

So a fuel taxwas indeed a valuable innovation 100 years ago. It would remain a valuableinnovation if the purchasing power of fuel tax were consistent with the needsof building and maintaining roads. But it is not. As fuel economy improves, asthe purchasing power of the road building and maintenance dollar shrinks, andas we refuse to increase the fuel tax, its efficacy continues to wane. And thatis only half the problem with the fuel tax. It also does not respond tocongestion.

And while theproperty tax is also insensitive to congestion as a pricing signal, its correlation with road use is even more tenuous than is the fuel tax. This makes it less fair than fuel tax—since a young renter who contributes to her landlord's property tax payment and who does not use a car overpays for road use.

So we have twotaxes that are ineffective in managing demand, one of which we cannot adjustand the other of which we seem to have minimal awareness of. Whilemileage-based user fees could solve both problems given the right policydesign, we seem particularly attached to a status quo that is unable to give usthe roads we need, and that increases congestion.

Our attachmentto a tax structure that is keeping in place a very serious problem for bothinter-urban and intra-urban mobility is critically bankrupt and a huge barrierto solving congestion and its attendant ills.

Collaborative Telemetrics

2011-08-26T01:10:00.001-04:00

IfRachel Botsman and Roo Rogers are right in their recent book “What’s Mine is Yours: The Rise of Collaborative Consumption”, we can expect a rise inpeer-to-peer car sharing. P2P carsharing turns any owner of an automobile into a single-car car-rental company,with reservation services provided online. Right now one of the US operators,RelayRides out of Cambridge Mass, installs technology to lock and unlock thevehicle using a near field communication card that the renter-member keeps inher purse meaning that key-exchange does not require owner attention. That’s astart.

Traditionalcar-share operations such as ZipCar, lower automobile ownership, reduce demandfor parking space, reduce automotive miles traveled, and likely reduce trafficcongestion in peak times. P2P car sharing offers all these things—and more. VMTsupply can be increased dramatically without investing in more vehicles, carowners can have their neighbors make their car payments for them, it can make agreater variety of vehicle sizes and types available to a car share renter, andthe vehicle storage depot problem mostly goes away.

Whiletraditional car sharing has economic incentives for people who only needoccasional access to a vehicle, P2P carsharing has economic incentives for carowners. This is disruptive, making it something to watch.

Wikipedia lists 13 P2P car share operators world-wide—with the 1^stlaunch in Germany in 2001. Half of these launched or are launching in 2011.Tellingly, one of the founders of ZipCar, Robin Chase, is also the founder ofBuzzcar a P2P service in France. I predict 100s of these will be set up in asmany cities and only after we figure out how to do it will the market pick ahandful of winners.

Thekey to P2P carsharing work is trust. You need to trust that my car will beclean, safe and operational and I need to trust that you will respect myproperty. Trusting strangers from whom you might buy something is well-managedwith online purchasing from auction sites like eBay or the used book jobbersthat trade on Amazon. If you rent your car online—as you would if you were acar owner in a P2P car-share transaction—your reputation (well, your car'sreputation) will be gleaned from your users by the site that manages thetransaction. But what about the renter's reputation? After all, you will notwant your car to be subject to automatic speeding or red-light tickets andparking fines. How will you know if a renter abuses your accelerator or clutch?

There'sother things such as insurance and perhaps wanting a different rate fromsomeone who uses your car for two hours to drive a hundred highway miles vssomeone using the same two hours to drive just couple of miles to visit his auntie.

Telemetricssystems can address all of this. An in-car meter that measures speed, braking,steering could automatically establish a driver’s reputation for the car owner.While there is no need to track the driver, “driver-style can be calculated as areputation factor and the car owner can decline or accept further rentalrequests based on that reputation. While we are at it, the same meter canmanage distance traveled, usage-based insurance, even parking payment, bridgeor tunnel tolls, and so on.

Whatis now possible is for P2P car share operators to equip a member’s vehicle witha meter sufficient to calculate the entire trip cost on an equitable usagebasis for automatic billing and permit the car owner to select driver style thresholds,so that she need not be concerned with any of these matters.

Collaborative Telemetrics could make P2Pcarsharing the “Killer App” of 21^st century automobility.

Fair to the poor

2011-07-15T11:30:00.003-04:00

The Greater Toronto Area has experienced a noticeableincrease in all-day conferences and hefty consulting reports about road pricingand infrastructure funding. A decade ago it was once every few years. Now it’smonthly. Each of these conferences and reports carry the same message–ourtransportation infrastructure is inadequate, crowded and crumbling. And ourpurse is empty. While this is true of large cities more often than not, Torontohas it worse than many—Toronto’s population is growing especially rapidly andwe have not invested at the rate we should have over the past quarter century.

Reaching Top Speed, a June 2011 report from the Toronto Board of Trade pointsout that the full bill to refurbish and operate transportation infrastructurein the GTA over the next 25 years—$100 billion, before overruns—is a figure 22%greater than the combined cost of theBig Dig, the Chunnel and the Three Gorges Dam.

This same report identified several “funding tools” the topfive of which were road pricing, congestion pricing, fuel tax, regional salestax, and parking surcharges. These lean heavily toward fees on automotive use,although the rebuild is heavily transit oriented. The report suggests thatthese could raise $1 billion per year–or about half of the capital expenserequired for the 25-year plan.

There are important differences among the five tools listed.The most effective for managing gridlock is congestion pricing; the leasteffective is the sales tax. Congestion pricing is politically the mostincendiary; the least is likely sales taxes or parking surcharges. But thetouchiest subject is fairness. Among these, congestion or road pricing is oftensaid to be unfair to lower income families. But is road pricing worse than a sales tax for poorerfamilies?

This problem was looked at recently by Lisa Schweitzer fromUSC and Brian Taylor from UCLA (Access, Spring 2011), albeit in the context ofpure road funding. As we choose amongst funding tools, we should weigh theirobservations.

As a funding mechanism, sales taxes are collected pennies at a time and hidden in many transactionsmaking it virtually impossible to see what one is paying for roads. Salestaxes make the poorest households worse off since the people in thesehouseholds are paying something while driving little—certainly much less thanpeople from richer households. This makes increasing regional sales taxes tofund roads doubly regressive.

Road use fees, which can be made fully transparent, takemoney from only those that use the roads, i.e., mostly middle- andhigher-income families. Schweitzer and Taylor find that switching from tolls tosales taxes shifts the burden from users to non-users and away frommiddle-income people onto both the rich and the poor–i.e., road tolls are betterthan sales taxes for the lowest-income families (although they increasepre-existing access barriers).

How any of us pay for good urban transportation is a verycomplex social issue—hence the burgeoning industry in conferences andconsultant reports, and the dearth of workable solutions.

Toronto’s same old road-pricing script

2011-06-04T23:50:00.010-04:00

(updated 2011.06.08)
The past 12 days have produced a noisy buzz of articles in the Toronto Star regarding the need to use road-pricing of one sort or another to raise capital for GTHA transportation needs and to quell congestion. The basic script for the discourse this past week is identical to the script playing in every city and every country for the past 15 years (this week's example from Oz!):

Experts: “We need road-pricing!”

Drivers: “ We don’t want it!”

Politicians: “And we won’t do it!”

Journalists: “There is no solution, the sky is falling!”

Repeat…

One exception to the above script is a Star editorial, presumably written by a journalist, that says: “We have no choice but to use road pricing, so get over it.” The Star is half right—the no choice part is correct. But we are not simply going to “just get over it”.

It turns out the Experts are correct—we must deploy tolling. The Drivers are right—they really don’t want tolling. And the Politicians are telling the truth (this time)—they won’t do it. The only ones who are wrong are the journalists—because there is a solution.

That solution involves the voluntary selection of services, privileges, rewards and discounts in exchange for behavioral changes. Think of an analogy to the Airmiles™ system, but far, far richer. This approach, already tried and proven viable in France, Holland and the United States (among others), can be accomplished using automated, self-enforcing, privacy-assured, in-car road-use meters. It is possible, given current telemetric technologies to measure where and when a vehicle is driven or parked and to calculate, using a secure on-board database, rewards and discounts based on behaviors such as eco-driving, reduction in car-use, avoidance of peak hours, use of smaller vehicles, avoidance of congested routes, etc. Rewards can include parking cash-outs, or transit passes. Parking discounts or transit passes can be provided for not moving a vehicle during peak times or in congested areas or for using an alternative vehicle. Services include traveler services and pay-as-you-drive insurance that can save drivers money while reducing congestion. Privileges can include a guarantee of no parking tickets, graduated parking access to HOT lanes, fuel-tax rebates in exchange for road-pricing and parking spot reservation via a related parking finder.

It is possible to reward drivers based on comparative behavior. If the monthly aggregate driving behavior of several thousand drivers were established, drivers in the upper deciles could be rewarded (automatically, without disclosure of location) via discounts to their service accounts. There are literally hundreds of easy ideas such as this that a road-use metering system can automate. If a couple dozen were made available, there would be “something for everyone”. Some drivers would in fact save money, rather than pay more, as most journalists assume.

Such a system would be operated by private industry, bolstered by distributing consumer rewards from urban retailers seeking business, regulated by government to ensure equitableness, privacy and access, and (eventually) would permit switching from fuel tax to road-use fees.

A study by RAND (October 2010) described this (section 6.2.3), and NYCDOT currently has a RFEI asking private industry how they might set this up.

So it is possible. And it will be done. And it can start soon—this year, if someone wanted to. It just won’t be done by government mandate...

Hepburn: Ford is right, toll roads are nuts

Bob Hepburn June 08, 2011. Tolls and congestion fees mere cash grabs on motorists with no realistic option except to drive to work.

Pros and cons of road tolls

June 08, 2011. Denial on tolls needs to end, Editorial, June 4

Cohn: Legislature united against road tolls and carbon taxes

Martin Regg Cohn June 08, 2011. Remember the environment? In Ontario, pollution has slipped from mainstream to slipstream.

Editorial: Denial on road tolls needs to end
June 04, 2011. Two authorities — one provincial and the other working for Toronto — agree road tolls are needed to pay for key public transit projects.

GTA needs gas hikes, road tolls, congestion charges to fund transit: Experts
Brett Popplewell June 04, 2011. Add all these charges and this city might solve the gridlock that has Toronto moving more slowly than almost any other city in the Western world.

Oslo does it, Stockholm does it, London does it
Brett Popplewell June 04, 2011. Congestion charging and tolled highways are inevitable for Toronto, according to Harry Kitchen, a professor of economics at Trent University. It’s just a matter of the public and the politicians accepting the reality that this city, in its current state, is grinding to a halt. Why? Because roadways are jammed...

65% of Torontonians say no to road tolls; 72% want bike lanes
David Rider June 03, 2011. Torontonians strongly oppose the idea of road tolls to pay for Mayor Rob Ford’s promised Sheppard subway line, says a new opinion poll.

Road tolls worth considering
May 31, 2011. Road toll ‘reality check’ stirs up Toronto council, May 28

Watchdog recommends road tolls to reduce traffic, pollution
May 31, 2011. Ontario’s environmental watchdog is recommending a “serious discussion” be held on road tolls to lessen traffic and reduce greenhouse gases.

Go with road tolls, Environment Commissioner tells GTA
Richard J. Brennan May 31, 2011. Ontario Environment Commissioner Gord Miller is pushing for more toll roads in the Greater Toronto and Hamilton area to reduce single-passenger traffic.

Mayor Ford won’t support tolls to fund Sheppard extension
Daniel Dale and Paul Moloney May 30, 2011. Doug Ford, the mayor’s brother and trusted adviser, said emphatically that “road tolls are not going to happen.”

James: Sheppard subway? Not now, maybe not ever
Royson James May 30, 2011. The Sheppard subway extension is a lost cause as NIMBY residents, council opposition and high cost conspire to kill the plan.

Road toll ‘reality check’ stirs up Toronto council
Madhavi Acharya-Tom Yew May 28, 2011

James: Ford’s subways will require tolls and grants
Royson James May 28, 2011. It will likely take new road tolls and congestion charges and other revenue tools to help deliver “the biggest transit deal in North America, or perhaps the world,” says the man hired to pave the path toward the $4 billion Sheppard Subway. An exclusive report by the Star finds that new road tolls and congestion charges will be needed to deliver the $4B Sheppard subway.

Fork in the Road

2011-05-15T23:00:00.000-04:00

By now you know that prices for carbon-based fuels will continue to go up more frequently and more aggressively than they will be coming down. You already appreciate that this makes the extraction of costlier and dirtier carbon fuels more likely—fuels like oil from tar sands, coal, and natural gas from fracking. Likely you also appreciate that since these fuels can only increase in costs, this is what has been making innovations in alternative vehicles and fuels more attractive for innovators and investors.

This means there are two competing ways out of the corner into which we are painted. One will impose changes in modal choices and on how and where we build and live. The other, on the kinds of cars we drive and energy we use. Hence we will soon arrive at a societal decision point that I am arbitrarily targeting for 2020, alluding to useful puns on “good vision” and “hindsight”. This is also far enough away that my predictions will be forgotten giving me some freedom from fear of retribution for my heresy.

I propose that we think about this 2020 decision point as a fork in the road called “Cars-as-we-now-know-them”. I propose that at this fork, we have two fundamental choices. Toward the Right, we have the “New Automobility”—alternate forms of energy for mobility. Regardless of whether this is biofuels, electricity, compressed air or fuel cells, motive force will increasingly originate from renewables such as solar, wind and a dozen other ways to trap the sun. This route will make cars, energy, and mobility greener, cheaper and more plentiful. We will have more cars and generate more VMT. Congestion will threaten every last spare minute, and we will have a devil of a problem to fund infrastructure. The more of us that take the Right branch, the greater our societal evolution—and the more we will need road pricing.

Toward the Left, we have the “New Modalities”—we will change our modal mix to tons more of carpooling, vanpooling, transit, biking, walking, telework and moving toward the center of dense cities. This route means changes in transit and urban livability and in health, settlement density and planning. The more of us that take the Left branch, the greater our societal revolution—and the more we will need road pricing.

I have traveled both branches of this fork in my thinking over the past nine years, first the Left branch, then the Right. That is in the permanent record. Good people line both branches. We will not make uniform choices, but perhaps we can make informed ones. The question now is: “which approach will dominate the final numbers?”

Will we turn 50% toward New Modalities and 50% toward New Automobility? Or will it be 10:1 in favor of one or the other? The evidence, I argue is in favor of the New Automobility—simply because it is the path of least resistance. Rather than moralize, just look at the mathematical imperatives of entitlement, habit, culture, innovation, investment, desire, fear and inertia. To set these things aside in favor of pure and correct systems thinking makes us worse than blinkered.

We need to explore both branches, dark or light, of the fork we are arriving at. At least as we start making these choices in the coming years, someone will have thought about their consequences. In the end, thoughtful solutions are all that can win the future back for us (or not).

Millions of Dollars in Free Parking

2011-04-16T10:32:00.001-04:00

I live on the east side of Toronto, a dozen blocks from the Greenwood subway entrance. Last Friday, I wanted to lunch with a friend at Islington and Bloor. To take my car would cost me about $8.00 in gas, lease, and wear. Rather than drive, it made sense to park my car a block or two away from the Greenwood station and use the subway. It would be at least as fast (it was midday), it would be cheaper given Gaddafi gas prices, I would get a couple of blocks of exercise, and I could read a book about traffic congestion (a personal obsession) on the train.

Four superb and completely selfish reasons.

Pleased with my plan, I drove off. When I got near the Greenwood station, the nearest street was marked one-hour parking. Made sense — can’t have tons of folks like me crowding out these local residents. I went North to the next street. One-hour parking. And the next one, too. So I went up one more and finally ended up parking four blocks north of the Coxwell station in the wrong direction. I had in essence “cruised” an extra 1.5 km looking for free parking while passing well over 100 empty one-hour spaces — I figured I needed three hours in total and did not wish to risk a $30 ticket.

These one-hour spaces, on all the residential streets three or four blocks on either side of our subway lines—and around other major facilities that are either poorly or expensively served by parking lots (the East Toronto hospital is one example)—form radii of parking spaces constrained to one-hour parking to prevent abuse. Makes sense. Or does it?

The great majority of these one-hour spaces remain empty after the residents leave for work and until they return home. If left unmanaged, they would be filled by freeloaders— such as me—who would leave their car in front of a stranger’s house and take public transportation to save $10 or $20 in downtown parking fees. One can argue that having people who live a couple of kilometers from a subway station use one of these residential areas and take subway rather than drive downtown (I know many who do this) would do three things: (1) reduce vehicle kilometers traveled for all such commute trips; (2) put more riders on the subway; and (3) raise revenue to help maintain the streets and sidewalks of those residential areas—thereby reducing the property-tax demand for those residents.

I would have been happy to pay $.50 or $.75 an hour for a spot a block away from Greenwood—more if the weather was crappy. The city has an opportunity here, to manage those spaces for the benefit of the residents living there, and for the benefit of Torontonians who live less close to the subway. Benefits include: increased transit use, lower emissions, less congestion, saving money for drivers, reducing property tax demands for the residents affected. The only losers in this are the downtown parking garages. But if the scheme I am about to describe were operated by Toronto Parking Authority’s GreenP, then the TPA would not need to lose a nickel.

How to do it

In order to execute such a scheme, participating vehicles must be self-metered and self-enforced. The reason is the city can ill afford to add new curbside parking meters or new signage , or a new army of parking enforcement officers. As it is now, these one-hour parking areas must be visited twice to apply tire-marking enforcement methods—a very expensive matter—which leads to a strategy of occasional spot-enforcement anyway (I get ticketed maybe once in ten for violating these restrictions).

Such self-managed meters already exist. Using a new technology called financial-grade GPS, they use a completely private method of determining the correct parking fee based on an internal parking “price-map”. Each meter is unique to a participating vehicle, pays parking monthly either on a debit or credit bases and never reveals the location of the vehicle to any party other than the driver. (There is a 100% driver-private way for the parking operator to audit the system—no person can get to know where a spouse is parked since location data does not leave the vehicle).

So a commuter who wished to park in one of these areas would affix a meter, which is the size of smartphone, on her windshield behind the rearview mirror. A small indicator lamp shows that the meter is working so that a parking enforcement officer can safely ignore any legally parked vehicle (blocking driveways and fire-hydrants are citable matters, of course). The absence of a lit indicator lamp that shows a device that is tampered or nonoperational, and such vehicles would receive citations exactly as though they had no meter—no need to get Draconian over tampering a device you volunteered to put in your own vehicle!

Parking officers who enforce these one-hour free parking areas would do exactly what they always do, while simply ignoring any correctly parked vehicle with a correctly flashing indicator lamp.

Participating commuters may prepay or post pay as the city may prefer. In fact both could be offered.

Lest this appear somewhat complicated for a few million dollars and a few hundred thousand parking spots that may be 20% or 30% utilized, consider that this same technology can manage residential parking reducing the fees for residents who may park less on their streets when they travel or when they put their car in their driveway or who may agree pay to park on another residential street to visit late or overnight. Consider that the same technology can manage any street parking—later on. Consider that any participating commuter who drives a hybrid for all electric vehicle could be given a 20% discount when using Toronto Parking Authorities facilities (the technology works for garages as well).

But the most powerful single value for self-enforced time and place-based parking meters is the management innovation of Dave Hill (until recently Chief Operating Officer, Winnipeg Parking Authority). Calling it “Graduated Parking”, he set up a pilot that permitted the use of on-street parking to extend beyond the initial two-hour limit of participating parkers who were willing to pay an increasing fee for each 15-minute parking time slice. This method even permits the first hour to be free, if the City wishes to grandfather this privilege.

With prices appropriately designed, parkers who stay beyond a normal one, two or three hour limit will pay a slightly heftier fee for the extra time, but being self enforced will require no citation. This permits the city’s parking enforcement staff to manage more square miles of onstreet parking with the same staff contingent while reducing city court costs and increasing revenues—revenues that are needed for our streets and sidewalks...

...revenues that can help keep a lid on Toronto residential property taxes—which is in line with Mayor Ford’s promise to hold the line on property taxes.

Using a parking lottery to manage congestion

2011-03-16T01:12:00.007-04:00

Here is a way to use pricing and rewards to manage peak-hour congestion: Institute a parking lottery that is fully funded by the drivers.

First, a city passes a by-law (equivalent) mandating the raising of parking rates by, say, 50 cents or a dollar. The extra money (net of lottery admin) funds prize money. Each time a vehicle enters a parking garage or lot 30+ minutes before and leaves 30+ minutes after a designated peak hour, its license plate number is scanned by computer and is entered into a computerized lottery. The vehicle must remain in the garage for the whole time.

The parking fee premium is pooled and bundled into $5000 prize lots to be awarded by weekly by computerized draws against the plate numbers that qualify. (Plate numbers and locations are personal information that would not be disclosed.)

Thus, drivers who drive in peak hours are paying the prize money for the drivers that drive off-peak. The parking premium can be raised (hence affording more prizes) to manage congestion. This is simply load balancing by lottery. In other words, it enables the municipality to titrate or influence road congestion, not necessarily control it completely. Best of all for city managers, it promotes green innovation, which is never a bad thing.

Government keeps none of the parking fee premium intended for the lottery to guarantee that this is a pure congestion management scheme and not a tax-scheme. An independent auditor can ensure fairness and no skimming and many garage operators use software that can manage this anyway (part of the lottery expense, of course). In order to be most effective, employer lots and garages over a certain size must participate in a way that ensures the cessation of “free-parking” for employees. The minimum operation size would be set by the cost of license plate camera setup, since every participating lot or garage must contribute zero or more dollars to the prize pool (any garage too small by virtue of equipment expense would draw down the prize pool unfairly and no garage operator should be permitted to lose income due to participation).

European vs American Road Pricing view

2011-02-11T22:29:00.009-05:00

The idea of metering road use using GPS-based telematics to determine time-place-distance-based use fees – ostensibly to replace the failing fuel tax – has received a lot of government attention over the past two decades. Because governments predominantly think about funding and sustaining the transportation system, they generally view such a collection system as a critical and dedicated system. Too bad.

As recently as three years ago – two years before the ignominious collapse of its nation-wide, all-eyes-watching, road-pricing plan – the Dutch started to play with the idea of adding a few extra features. These Value-Added Services (VAS) were seen mostly as sugar-coating to make the medicine a bit easier to swallow.

Here is the image-metaphor used in a presentation overviewing the German Toll Collect system at a Spring, 2010 conference in Oslo (less than a year ago!). The slide title was: Value-Added Services: only the cherry on the cake.

Figure 1. European View/Government View

Nothing I have written in the past 8 years approaches the instant clarity of this accidental condemnation of the government view. Only a political cartoonist could match this. This view, necessitated by the need to replace or augment fuel duties and manage demand, leaves nothing for the motorist to desire. Who wants the maraschino cherry, if someone else gets the cake? It is this perception of the governments’ intentions that makes road-use charging so unappealing – so unacceptable – to motorists.

I predicted recently that US thinking in the matter of RUC would soon overtake EU thinking. That time is arriving sooner than I thought. In the Fall of 2010, a report was prepared for AASHTO by Paul Sorensen and some colleagues from The RAND Corporation. I am guessing that upwards of 100 people had some input into this study.

A key stated purpose of the study on which the report was based was to determine who should bake the American version of the cake in Figure 1, The Federal Government or the State Governments. To Sorensen’s credit, he included a third option, in section 6.2.3, reviewed here, a new approach, in which the paradigm of tax-centricity is replaced by one of service centricity. The artist who created the Olso conference slide might draw it as in Figure 2.

Figure 2: American View/Industry View

Big difference. If we bake the services cake right, we could gain acceptance, build a massive telematics industry, make cars safer, make trips more efficient, and much more. Maybe the Americans will get this right where the Europeans have led, but (so far) failed.

Congestion Pricing movies

2011-02-03T03:02:00.005-05:00

Is congestion pricing fair?

How do you price a road?

There are only only extremes

2011-01-27T00:38:00.002-05:00

Here is a remarkable set of talks. From Jan 20 2010. (see the video that pops up).

This covers three extremes (there seem only to be extremes):

anti-rail solves congestion - Randall O'Toole
pro-transit solves congestion - Michael Replogle
nothing solves congestion - Anthony Downs

I will not correct them. They are each partly right and partly wrong. Rather I note that none is fully acceptable to all commuters and that pricing is critical no matter which flavor you prefer. In fact, the only thing that ALL three DO agree on is that market pricing - or pay relative to use - is critical.

Road Pricing - Fairness for the Disabled

2011-01-17T22:47:00.002-05:00

Dear Mr Grush,

How do you and your concept/company propose to deal fairly with those whom public transit does not serve effectively?

The disabled are still not and may well never be adequately, never mind equally, served by any public transit system. There are and probably always be far too many compromises imposed on the disabled who always have fewer options available to them in virtually all areas and especially in terms of mobility. Are you aware how your systems would further disadvantage the families and friends of the disabled? How would you suggest the family of a child with Osteogenesis Imperfecta cope? Have you considered how would a family with one or more disabled child (cerebral palsy, spina bifida, muscular dystrophy autism spectrum disorder, hearing impairment, blindness or any of hundreds, even thousands of syndromes or conditions) be affected by the additional costs of negotiating life?

Have you considered how the elderly, especially the frail elderly, would be negatively affected by your systems? How would their care and ability to maintain their own homes and any independence or any social life be accomplished without entailing enormous additional costs and logistical difficulties?

As well, as long as many medical services are made available mainly in a few major urban centres there will be many patients residing in other regions who will continue to be forced to travel by private vehicle to these designated facilities in order to receive essential treatment. Besides spending time, money and energy simply to have access to medical care your system would impose additional burdens, adding to costs and logistical barriers. How would propose minimizing or, preferably avoiding completely, these further undeserved difficulties for an already disadvantaged population?

I look forward to receiving your well-reasoned reply to my questions.

Sincerely,
Margaret Trethewey

Dear Margaret,

Thank you for your questions. I think your concerns are very important. However, these are matters of policy. While such policies are easy to describe, I am not a legislator so I cannot set them, rather I am cybernetics engineer that likes to address complex social problems (congestion is a social problem, but is not often recognized as such, which is why it remains unsolved)). More importantly, with reasonably simple policies not only can those people who must use private motorized transportation (and there are many - indeed I doubt that there are very few who never need it), have that access at a free or reduced cost (similar to not having to pay a fuel tax), they would also have that transportation at a reduced level of congestion. Consider all the people that use the TTC's WheelTrans service [a door-to-door service for disabled passengers in Toronto], but get stuck in heavy traffic. These people will also see a benefit.

As a matter of considerable bearing on the answer to your questions, one of my patent applications provide for a way for government to grant travel credits to individuals (for whatever reason deemed necessary – and you provide the start of such a list). Such credits can be provided in a number of ways. My personal preference is to provide travel credits as a form of fungible units that can be sold (for example if a person does not need all the credit available, she may be able to give or sell them to another. This allows people more choices.

An alternative, mentioned by Andrew Coyne in this week’s Macleans is to collect all the money from all the road fees and return it to all citizens in equal measure. That would mean than some physically disadvantaged people would receive a surplus.

There is no reason that anyone with a disability need experience any additional hardships as you fear may befall them, but I would never suggest you should not remain vigilant.

I would like to examine further re a criticism buried in your question about the elderly. You describe a road-pricing system as “entailing enormous additional costs and logistical difficulties”. Although it is possible to do it this way (London did!), there is no reason for either outcome. A properly designed system (EVEN WITHOUT TRAVEL CREDITS) would be cost neutral – even cost saving (!) – for people who travel off-peak. So any ‘elderly’ drivers (I assume you to mean people who are retired or whose caregivers may be driving them) can avoid high costs by traveling off-peak. There is also no need for “logistical difficulties”, as a properly designed system is as easy to use as a cell phone that an elderly person carries, but never uses – it is mounted on the windshield of their car and a bill (amounting to $10 or $20 a month in today’s dollars, depending on whether they still pay fuel tax) arrives in the mail – or in their children’s email, which is how I would handle it. I wrote more about low per-driver charges in North America, here.

Bern Grush

Resources

2011-01-17T00:51:00.004-05:00

Here is a resource list. I will add to it from time to time.

Telecommuting – Cole's Version

2010-12-30T20:58:00.002-05:00

The Information Technology and Innovation Foundation (ITIF), a small but highly respected think tank in D.C., released a report by Wendell Cox two years ago called: “Improving Quality of Life Through Telecommuting”.

The report deserves your time. There is much I am leaving out. In fact, after reading it, why not promote telework at your company?

Summary points about the current state of Telecommuting:

It is growing rapidly
Demographic trends favor its growth
It appears likely to emerge as second only to SOV
It emerged as a mainstream organization strategy
It improves economic productivity
It assists in achieving public policy goals
It could reduce inner-city unemployment
It needs to become a key transportation strategy
There are barriers.

Summary of where Telecommuting could go:

It is growing rapidly in U.S. and … is poised to become more popular than transit and non-household carpools as a means of accessing work.
If encouraged by public policies, it could deliver enormous economic and environmental benefits and could even play an important role in creating new opportunities for employment for lower-income Americans. [I would add that since oil prices will rise before the eCar becomes affordable by lower-income carbon commuters, this is more than a little prescient. -bg]
We can get a fourfold increase of telecommuters, to 19M by 2020, and there are two steps the U.S. Government could take this for telecommuting:

Congress should reform the current pre-tax commuter expense plan (Internal Revenue Code Section 132). This allows employees to exclude from gross income up to $220 per month for “qualified parking” (defined as parking provided to an employee on or near the business premises of the employer) or up to up to $115 per month for qualified mass transit expense to and from work. This system biases employee decisions toward driving and transit and away from telecommuting and other modes (e.g. walking and bicycling). From an economic perspective, the ideal policy would be to simply eliminate this provision completely.
The Obama Administration should initiate an interagency examination of the potential benefits as well as strategies for accelerating telecommuting. This should be a part of a national effort to reduce greenhouse gas emissions and create economic opportunities for lower-income Americans (especially in inner cities, where auto availability is limited) and rural communities.

CONSIDER THAT TDP charging would likely drive far more telecommuting than would any other program. -bg

How IBM describes road pricing

2010-12-30T01:41:00.000-05:00

Look how cleverly IBM packages the less-than-perfectly-acceptable concept of road pricing. Are they smart or devious?

To make transport management more effective, several cities across the world are trying to build intelligence into existing systems. Transport management systems and software tools have been effective to curtail traffic woes around some mega cities of the world. A smart traffic system helped Stockholm cut gridlock by 20 per cent, reduce emissions by 12 per cent and increase public transportation use dramatically. In London, a congestion management system lowered traffic volume to the mid-1980s levels. The system in Singapore can predict traffic speeds with nearly 90 per cent accuracy. With future enhancements, the system will help predict—rather than merely monitor—other traffic conditions as well.

Creating a Market for Road User Charging

2010-12-28T12:59:00.002-05:00

The US Government and other governments in the developed and developing world have a problem: autonomous, motorized surface transportation (e.g., car, truck, bus and motorcycle) as it is currently powered and as its requisite infrastructure is currently funded, is unsustainable. Whether this is viewed from the perspective of demand management, environment, highway funding, or peak-oil the simple fact is that the fuel tax as a funding mechanism is grows more economically inefficient each day. As we look forward to increasingly efficient engines and alternative fuels, two of the problems (demand management and funding) will get rapidly worse.

Some form of road-use charging, whether instead of or in addition to fuel taxes and other administration fees, is the solution most often proposed and defended. There are numerous proposals for collecting such charges using dedicated collection mechanisms. None of these are cheap to provide or trivial to enforce. In many countries, the total cost of collecting such fees using dedicated methods range from 20 to 50% of the fees that are or could be levied.

It can be argued that for commercial vehicles (buses, trucks) who directly use roads for profit that payment for use is not only justified, but that their operators likely have recourse to mitigating any incremental costs. It is harder to make this argument for private commuter vehicles. For this reason, acceptability of this impending tax shift requires that collection costs be arranged to be as close to zero as possible, so that such a shift can be expense neutral to the private commuter prepared to make slight adjustments in route, travel time or modality.

We have a precedent for this in the cost of fuel tax collection – usually around 1% of revenue. The requirement to bring extreme cost control to the collection of road use charges is foreshadowed in the recent demand of the Dutch government that its now-delayed road use charging program cost no more than 5% of revenue – a demand that would have been challenging to meet.

In the United States, where the level of fuel taxation is much lower than that in the Netherlands, the challenge will be far greater. A recent NCHRP study was designed to explore the type, scope, size and structure of system trials that policymakers might pursue. [1] One of the key questions examined was who should lead the deployment design of such a system.[2] Should the federal government plan a national system of VMT fees (federal framework)? Should the federal government help states help themselves (state framework)? Or should government foster a market for in-vehicle travel services (market framework)?

The basis of the third idea has two components. First, it assumes that road use charging technology could be “just one application on” a telematics platform of the sophistication of a smart phone. Second, it assumes that such a telematics platform can support numerous useful and desirable applications, some of which would be payment services that support a profit, such as parking or pay as you drive insurance (PAYDI). Given these two factors, such payment services combined with the kinds of safety and traveler services proposed by other telematics programs such as Intellidrive in the US or CVIS as in the EU would comprise an attractive package that some drivers would voluntarily adopt and pay for.

The attached ANNEX includes the full text of the description of the “market framework” as described in the NCHRP study by Sorensen (RAND). That description includes the proposal: “the federal government would let contracts with several firms (the initial “competitors” in the market) to provide metering devices and collection services and help enroll trial participants”. On reflection, it may make more sense to sell three or four automotive payment services licenses to significant telco providers. Such licenses would carry certification-level responsibility for protecting privacy, managing a high degree of charging performance, offering to state and federal government road-use metering and billing services at a pre-determined cost far below what would be expected from a dedicated road-use charging system.

Such operating licenses, to be purchased by the telcos, would provide these firms with the market protection needed to invest significantly in telematics-based payment, safety, and other traveler apps in a market structured to deliver smart-metering apps in the same way smart phone apps are delivered today. The federal government should in turn use the revenues from these licenses to incent insurance companies to reform their insurance premium determination programs and municipalities to reform parking management.

It is through fostering and initially protecting a market for telematics payment services that the United States can start building an attractive, for-profit, in-car payment service platform for a volunteer population. The telco providers of such a platform would be regulated for privacy protection and the protection of other consumer interests (fairness, equity, correct charge assessment, etc).

The goals of reducing congestion and beginning the gradual shift from the way we now pay for roads, parking and insurance can begin immediately at far lower cost to the US taxpayer and with the promise of attractive services to volunteer motorists and a profit opportunity to telcos and their providers.

_____________

ANNEX

(NCHRP study “System Trials to Demonstrate Mileage-Based Road Use Charges”. P.78-80)
http://onlinepubs.trb.org/onlinepubs/nchrp/nchrp_w161.pdf

“6.2.3. Foster a Market for In-Vehicle Travel Services (Market Framework)

This last framework, which represents the greatest departure from conventional thinking about how to accomplish a transition to VMT fees, is intended to address several goals in parallel: overcoming public acceptance challenges through voluntary adoption, implementing a fully operational (if initially voluntary) national system of VMT fees as quickly as possible, and reducing the cost to the government of collecting VMT fees.

In essence, this framework envisions, and seeks to foster, the emergence of a market for in-vehicle metering devices and billing services that are capable of levying VMT fees and simultaneously supporting numerous value-added services, such as automated payment of parking fees, PAYD insurance, real-time traffic alerts, and routing suggestions based on current traffic conditions. Firms (e.g., device manufacturers, software developers, system integrators, telecommunications providers, toll road operators, and the like) would compete to provide these services, thereby driving down the cost of the required technology. Additionally, because firms would be able to collect payment for some of the additional services (e.g., a small percentage of parking fees or PAYD insurance premiums), the amount that they would need to charge the government for collecting VMT fees would be reduced. The main goal of the trials in this framework, then, would be to support and accelerate the development of this market. To do so, the federal government would let contracts with several firms (the initial “competitors” in the market) to provide metering devices and collection services and help enroll trial participants. In parallel, the federal government would fund or subsidize states that wished to examine VMT fees, cities or counties that wished to explore automated parking payment or local VMT fees, and insurance firms that wished to offer PAYD policies. These parties would then link up with one or more of the technology vendors to conduct the trials. After several years, the trials would evolve to full-scale implementation of an initially voluntary system. Trial participants that valued the additional services would become the initial adopters, and additional drivers would be able to adopt the in-vehicle equipment on a voluntary basis as well. After several more years, once it had been demonstrated that the system was operating successfully (i.e., that it was collecting fees, preventing evasion, and protecting privacy as planned), the government might then mandate the adoption of VMT fees for all vehicles. This approach to trials and implementation is described in greater detail by Grush (2010a)[3].

Note that the role of private firms in providing metering devices, billing services, and other value-added offering would be possible in the other frameworks as well, but would not be the only approach that might be contemplated (e.g., a particular state might choose to examine the collection of VMT fees with registration in a publicly-administered system). In this framework, in contrast, the involvement of multiple competing firms in the provision of metering and billing services would be viewed as a critical component in achieving the goals of driving down costs and stimulating the development of value added services to promote voluntary adoption.

Advantages. This framework offers several conceptually compelling advantages:

The opt-in period would allow time to demonstrate the effectiveness of privacy protection, fee collection, and enforcement strategies through the participation of voluntary adopters. This should reduce the current degree of public and political skepticism surrounding VMT fees, making it less difficult to mandate the adoption of VMT fees at a later date.
To gain market share, competing firms would be motivated to provide as many valuable add-on services as possible. This would help to maximize the benefits of the considerable social investment in in-vehicle metering technology.
Because the service and technology providers could collect revenue from a broader range of sources, the cost to the government for installing equipment and collecting VMT fees should be reduced.
On a related note, the cost to conduct the trials, on a per-participant basis, might be reduced in this framework. Provided that the government clearly signaled its intention to transition to a national system of VMT fees, firms might choose to cover some of the trial-related costs with their own resources in order to prepare a successful bid to participate in the trials, which would in turn position them as an early market leader. On the other hand, as expressed by one of the workshop participants, many firms have been “burned” by investing their own resources in European trials that did not lead to implementation and might therefore be less willing to do so again. This potential benefit is therefore far from certain.
The cost of installing equipment in vehicles would not be lost; rather, the same equipment would continue to be used when the trials phased directly into implementation and trial participants became early system adopters.

Potential Drawbacks. This framework also faces several risks and obstacles:

In a voluntary opt-in framework involving privately provided equipment and services, it is conceivable that drivers would choose to adopt the equipment for PAYD insurance, for the chance to automate the payment of parking fees, and to enjoy other services but then choose not to pay mileage-based fees. Assuming a relatively flat per-mile rate structure, drivers of highly fuel-efficient vehicles, in particular, would be better off paying current fuel taxes than mileage fees. In order to increase voluntary payment of federal road use fees, the government would likely need to create some form of incentives. For example, it might set federal fuel taxes somewhat higher than mileage fees and then rebate fuel taxes to adopters, or it might institute some form of federal registration fee (collected by states and remitted to the federal government) that would be rebated for VMT-fee system adopters.
Under this framework, since it is envisioned that the trials would evolve directly to full-scale implementation, it would be appropriate to develop an initial set of interoperability standards and corresponding certification process in advance of the trials. Though possible, this would be challenging to achieve within just a year or two.
As a corollary to the preceding point, it would be necessary to make certain system design decisions—for example, the decision that fee collection would be handled by multiple private firms operating in parallel, rather than by a single firm or by the public sector—in advance of the trials. There would not, therefore, be the opportunity to inform such decisions based on lessons learned during the trials themselves.
With independently funded technology and service providers, states, cities, MPOs, insurance providers, research institutions, and the like, it could prove more difficult to manage and coordinate the trials under this framework.
The success of an industry-led model would depend largely on voluntary consumer adoption. The assumption is that consumers would be willing to purchase devices to have access to the add-on services. However, it is not certain that a mass market will emerge for these devices. For example, while some drivers would undoubtedly find the prospect of paying for parking via an in-vehicle device appealing, a large share of drivers have free parking for most trips and would not be interested in this application. Moreover, many of the envisioned services, such as routing assistance or stranded driver assistance, are already available on other platforms. If relatively few consumers voluntarily chose to adopt the equipment in order to gain access to the value-added features, greater government subsidies or mandates could be required. Related to this point is the observation, offered by a private sector representative, that from the service provider perspective, the “base” business case has to make sense (i.e., the ability to earn some return on investment by charging for the collection of VMT fees); it cannot be assumed that firms would recoup all of their investment from value-added services.
An industry-led model would create not one but two enforcement challenges: the potential for tax evasion by drivers, as well as the possibility that the firms or consortia collecting the fees would not remit them in an accurate or timely fashion. Firms might be responsible for collecting billions of dollars annually, necessitating sufficient staff on the government side to carefully monitor contracts and audit accounts as well as a plan for penalizing firms found to be in breach of contract. The federal government would also need to either augment its own enforcement resources or rely on state support to help prevent driver attempts to evade fees.[4]

[1] Sorensen, P. (The RAND Corporation), “System Trials to Demonstrate Mileage-Based Road Use Charges”, National Cooperative Highway Research Program (TRB), October 2010, p.xv.

[2] ibid, page 73-80

[3] Grush, B. 2010a. http://grushhour.blogspot.com/2010/04/no-more-ruc-trials-please.html

[4] As the author of this blog, I respectfully disagree. There are low-cost ways to set up metering and billing services to counteract both consumer and service-operator fraud. To the degree that payment via telematics can be maintained on a voluntary basis versus s fixed administrative fee that must be pre-paid to retain an vehicle license, fraud can be minimized at a cost lower than that of current enforcement systems.

Gas tax, road pricing and the CAA

2010-12-07T22:01:00.003-05:00

Driving home from the Smart Transportation Summit (Toronto, 2010.12.07), I had a conversation with a colleague who had attended the Road Pricing & Smart Growth Conference in Toronto (2010.12.02). While there, he was at a discussion table with "a young woman from the CAA" who said the CAA wants to see the Provincial (Ontario) and Federal fuel tax revenues shared in a way that might benefit the Greater Toronto and Hamilton Area (GTHA).

My colleague asked:

"What is the CAA's position as the gas tax dries up?"

"What do you mean?"

"Well, people are buying more and more Priuses and Volts."

"So?"

"As cars become more and more electric, we won't have much fuel tax to share."

"Oh, I never thought of that!"

"Seriously? There are 100s of papers and government-funded studies concerned about what to do as the fuel tax dries up."

"Huh! I didn't think the government thought that far ahead!"

I know several automobile associations, and I have worked with a few of them. The Australian AA asked the government for road pricing schemes to relieve congestion. The ANWB (Dutch) helped the Dutch government to design their (now iced) system. The Royal Automobile Club Foundation (UK) has written extensively in favor of road pricing (its head, Professor Stephen Glaister, even starred in a documentary called Gridlock a few years ago to defend the now-hideous-in-hindsight London Congestion Charge.)

The CAA is the only automobile club I know in the developed world that does not constructively engage with the road pricing conversation. They are knee-jerk against it, and that is irresponsible to its constituents – Canada’s drivers – bordering on the criminal.

The Canadian Automobile Association has a critical role to defend its constituency. Our roads are inadequate, we cannot build to keep pace with congestion, and road pricing – the keystone of TDM – is critical to the solution needed to maximize performance of what we do have.

The CAA should consider that they marginalize their voice and the interests of Canadian drivers by not coming to the table. If you will accept that road pricing cannot be avoided forever:

Who, if not the CAA, is best suited to ensure that road pricing programs is deployed to keep the road under our cars, rather than to force cars off the road.
Who, if not the CAA, is best suited to ensure that road pricing not fund a “war on cars”.
Who, if not the CAA, is best suited to ensure all revenues are spent on roads, relieving congestion and making driving safer and more productive.
Who, if not the CAA, is best suited to insist that lower income drivers be protected with some form of progressive charging structure or rebate.
Who, if not the CAA, is best suited to ensure that if road-pricing revenue is spent on transit, then such transit needs to benefit the driver by significantly relieving congestion.
Who, if not the CAA, is best suited to ensure that road pricing is performance oriented and that only charges sufficient to manage congestion and fund roads be charged.
Who, if not the CAA, would have the strongest voice in the matter of privacy, i.e., that any road pricing technology must be absolutely private – preferably even more private than the devices and cameras used on the 407.
Who, if not the CAA, would have the strongest voice to demand that if GPS is to be used as part of the tolling system, then the guidelines regarding trip data that have been drawn up by the International Working Group on Data Protection in Telecommunications (IWGDPT), with input from the Ontario Privacy Commission must be followed.
Who, if not the CAA, is best suited to ensure that any payment service that a driver would use would conform to operating standards and would charge correctly.
Who, if not the CAA, is best suited to ensure that Canada not blindly follow the dominant America direction toward a simple mile-driven charge, which is a very expensive replacement for the fuel tax that would have no congestion abatement effect, as would a properly constituted system that considered time, place and vehicle-type, as well as distance traveled.

Considering the earlier comment made by the CAA staffer regarding her surprise that the fuel tax is failing and her surprise that governments "thought that far ahead” perhaps we need an alternate automobile club prepared to understand the economic synergies between congestion and road-funding method, and prepared to understand that government, like a deer in the headlight, is unable to act to solve this problem because it is terrified of the massive number of uninformed and frustrated motorists so that we drivers who cannot or will not be accommodated by transit can drive at more that 9kph in the future.

Otherwise the automobile will only continue to suffer from its own marketing success.

San Francisco, Enlightened Population, Thoughtful Leadership

2010-12-05T00:41:00.007-05:00

Part 1

As of December 4, the San Francisco County Transportation Authority has released the Draft Final Report of its Mobility, Access and Pricing Study (MAPS). I will critique this report over my next few blogs.

There is also a overview video here, whose cover frame is overlaid with the news-byte: “Private automobiles contribute over 45% of greenhouse gas emissions.” The number generally quoted for this is closer to 33% – i.e., transportation, of which the private automobile is only a fraction, contributes about a third of GHG emissions, so that I had always understood the private automobile to be responsible for between a sixth and a quarter (depending on several other factors). In any case, in the interest of determining how this number became inflated, I note that on page 1-8 (figure 1-4) the combined contribution of the Intraregional Road Vehicles plus the San Francisco Road Vehicles is 47%.

So the cover statement on the video should probably read: “Cars and trucks in the San Francisco area contribute over 45% of greenhouse gas emissions.” The misquote unnecessarily demonizes the automobile.

Still… how did the more typical number quoted as 1/3 become nearly 1/2? The reason is at least four-fold. First, the 47% number is from 20 years ago and engine efficiency has helped to slightly lower the relative contribution of the internal combustion engine of the private automobile since then. Second, the principle forms of commence in the Bay Area would tend to make the internal combustion engine a larger relative contributor than say would be the case with refinery-heavy New Jersey (which of course leaves some of San Francisco’s road-filth on the east cost and uncounted in the 47% figure, which means 47% might even be conservative!). Third, San Francisco has greater than average congestion (for the US), which would also raise the local relative contribution of vehicular GHGs. Fourth, San Francisco, due to its latitude, needn’t heat its homes as much as more northern mega-regions, hence lowering the relative contribution of buildings re GHG emissions in the case of San Francisco.

So, the ‘over 45%’ number is indeed believable – and alarming – and says that the solutions proposed (including congestion-pricing) may be as important for San Francisco as for any US city. It may be that the case for congestion pricing in San Francisco is stronger than it was for Manhattan.

Next: Plan Details.

Rethink or Obit?

2010-12-01T17:18:00.006-05:00

Here is a draft preface to Overcoming Global Gridlock, my 2011 book on why it is necessary to replace fuel taxes with universal road tolls and how to make them acceptable.

We have reached a crisis point with cars and trucks. We face mounting congestion. We need to reduce both emissions and oil consumption pretty much everywhere. In many countries funding for road building and maintenance is becoming ever harder to sustain. All the while, demand for personal mobility and goods movement continues to expand. And there is little to indicate many people are willing to give up the private vehicle.

If the autonomous vehicle has so many problems stacked against it, but demand for it is increasing, you can see that something has to give. This is predicted for the coming decade or two.

Cars are important to us. Judging by their use and abuse, the mile-for-mile preference we have for them over other forms of mobility, the growth in their numbers[i], the increasing number of vehicle miles traveled each year[ii] and a hundred other indicators, it is the car we are addicted to rather than oil[iii]. Oil is just one symptom. Most of the sustainability problem as it is now will survive the end of oil.

We can list a lot of bad things about our cars, but there are also a lot of good things. Perhaps the good outweighs the bad – I, for one, think that it does. There are a lot of reasons we have so many cars and there are many solutions offered to deal with their overwhelming ubiquity. We needn’t review those things here. You already have an opinion. You already like or dislike cars. I am probably unable to change your mind. You already have a car (or two) or wish you had one. Or perhaps you have even managed to get rid of yours. Or not yet.

Here is what you cannot argue with – the relationship between our species and the car is in some trouble. Our roadways scar our planet and drain our treasuries. Our cars clog these roadways; they are ravenous for fuel and clean air, and for space to park. They directly kill more people every year than all the wars on the planet; they indirectly shorten the lives of many more. And sooner or later we will have to wean the entire fleet off of oil – likely 2 billion of them by the time that happens. If you have a car and you don’t think you are addicted to it, lend it to me for a month.

How did it get to this? Where is it going? And how much longer can we let it play out before we engage in a concerted effort to rescue the beloved private vehicle?

When my grandfathers were youths there were no cars. The streets of large cities like Paris, Moscow and Chicago teamed with horses. Manhattan had 5mph speed limits that were routinely ignored and 200 pedestrians were trampled to death each year.[iv] The London Strand was described with streets flooded “with churnings of ‘pea soup’ (a euphemism for a slurry of horseshit and urine) that at times collected in pools over-brimming the kerbs, and others covered the road surface as with axel grease or bran-laden dust to the distraction of the wayfarer.”[v] Horse-drawn vehicle congestion was a normal condition.

Chicago, 19th Century

By the time my mother’s father, a blacksmith who shoed horses, entered the Great Depression he had 13 children but no work thanks to the automobile. The decades leading up to the second war saw the end of the horse and the entrenchment of the autonomous vehicle. When my father’s father reached his middle years in the ‘20s, he owned a Model-T and maintained it himself. The congestion in our great cities switched from horse to car. We could fit more vehicles on the same streets and we breathed the pollution instead of walking in it.

New York 1929

After the Second War, the car entered our sex-lives and our song lexicon – spilling out of our radios.

I'll buy you a Ford Mustang, I'll buy you a Ford Mustang,

I'll buy you a Ford Mustang if you'll just give me some of your love now

Yeah, give me some of your love girl, yeah, you know what I want.[vi]

When I was 13 I knew I’d drive when I was 16. Neither of my parents nor any of theirs thought that as a teenager. A new entitlement had locked in.

The automobile has had a good ride since the 1950’s. Road building, urban form, transport policy and automotive innovation have deepened the entitlement to the point that we have now collectively forgotten what non-automotive transport and sex-before-cars was like. For many of us, not owning a car is little like being caught naked in public.

This entitlement, if not the car itself, is endangered. The reputation of the private vehicle is tarnished and declining. In some circles drivers are looked on as if they still smoked cigarettes. The utility of the private vehicle is diminished by congestion. Parking has turned from minor nuisance to dreaded chore. The gap between the promise of car ads and the experience of owning one widens more each year. My fourteen-year old daughter guffaws at car ads. She looks at me funny, when I say she will be driving soon.

In the 2010s era of peak-oil, a century after peak-horse, most big cities have speed limits of 25-35 mph, and average speeds that are far lower. Pedestrians may be a little safer in these cities than they were under horses hoofs, but now we waste time and fuel. We pollute, text co-workers that we will be late, and use GPS to find alternative routes. In my city, Toronto, resigned complaints about congestion dominate morning greetings in place of innocuous comments about the weather. Our morning and afternoon rush-hours now bleed into a single 12-hour peak.

This trend will not self-reverse. Left as it is tending, the utility of the autonomous vehicle is threatened. And with it we will lose what remains of the convenience, effectiveness, autonomy, pleasure and sexiness of private commuting and travel.

This book is not anti-car. In fact it is pro-car – but in a balanced way. It is true that many drivers continue to be rude to transit, aggressive toward bikes, and threatening toward pedestrians – and like blowing smoke in the face non-smokers, drivers do that to the detriment of the way of travel they prefer. Unless we consider new ways of thinking about the use of fuel-powered, multi-thousand-pound, autonomous, private vehicles, we risk writing the obituary of freedom that the automobile came to symbolize in the last half of the twentieth century.

This book describes the way out.

[i] Sperling, Two Billion Cars

[ii] FHWA, Our Nation’s Highways 2008.

[iii] Quote from Bush.

[iv] Vanderbilt, Traffic

[v] Jacobs, Death and Life page 444

[vi] The Animals

When will GNSS be chosen over RFID to Toll Roads?

2010-11-19T01:14:00.004-05:00

In a recent email exchange over the various San Francisco proposals to deploy congestion pricing, a long-time road-tolling pundit remarked: "I'm not sold on GPS. It is expensive and unreliable as the Germans have found with their GPS-based Toll Collect for trucks on the autobahn system."

GPS (properly "GNSS") metering has come a long way since the 1990’s technology used in the 2003 Swiss and 2005 German systems. Companies from Germany, Austria, Italy, Canada and New Zealand all have reliable GPS metering in operation in the field and collecting revenue. Even the Toll Collect system resolved all their original reliability problems. In fact, Financial-grade GPS (FGPS) has been tested by Caltrans in San Francisco and has been reported here; and this page also provides a URL to the original draft report from Caltrans.

Compared to RFID, GPS technology is more flexible, more extensible, and cheaper for large systems. If the only thing San Francisco will do in the next 20 years is one cordon, then it should use RFID by all means. But if this is the camel's nose in the tent (and you and I know it is), then GPS should be used. Had FGPS been used in London instead of cameras, the initial system would have cost 200M instead of 500M and the western extension 20M instead of 500M. RFID is perfect for one-time, non-extensible use. It is no longer appropriate for systems that will be extended or need to be flexible.

A recent paper given at the 2010 Slovenian Traffic Congress talks about 10 reasons GNSS is better than microwave. Actually there are 11, but the author left out interoperability (since the GPS signals are non-proprietary), and it was too late to change the paper before delivery.

E-ZPass has 22M transponders and 3700 toll lanes equipped with readers. I would suggest that the 5-year replacement cost for this system at $1,000,000 per lane and $2 per vehicle (exclusive of operating costs) is $3.75B. Alternatively the 5-year replacement cost using GNSS road-use metering at $150 per vehicle is 3.3B. We would have to study the operational costs, as well, of course, but let’s assume they are a wash (they are not, because E-ZPass is more costly.)

So already, for large systems, the cost of GNSS rivals that of RFID. The bill of materials for a FGPS-based device in volume is already approaching $100, and will go lower. RFID prices no longer decline: materials will go up, labor will go up, power will go up, construction costs will go up, maintenance costs will go up, right-of-way costs will go up. But, GNSS prices will decline. As the pressure for tolling more and more of our network increases, the case for RFID which is already founded more on habit than understanding, continues to erode. Only its installed base and fear of change preserves its legacy. Its economics is failing.

We will certainly make the switch from RFID to GNSS. The question, now is only: "When?"

I think there is further evidence in the fact that Kapsch paid a measly $3.18 (about 1 drive’s-worth!) for each E-ZPass user or a paltry $2.9M for each of the 24 Toll Operators that are part of the E-ZPass group. They bought the (captive!) customer base for a song. As richer telematics platforms for the connected vehicle provide more and more features, and as FGPS-based parking, insurance and road tolling become simple apps on these platforms, dedicated transponders and the hideous clutter of gantries will no longer be the gold standard for tolling.

But congratulations to Kapsch for picking the pocket of America as she sleeps.

There are ways out of this

2010-11-18T20:45:00.000-05:00

A while back, I talked about an ecosystem of eCars, smartgrids and Pay-as-you-drive roads.

Shai Agassi has a way to get clean electricity into your car without multi-hour charge-times.

And Scott Brusaw has a new way of generating solar power that is very close to the car. And here is an article related to this idea that even talks about charging the car as it drives.

There are new power storage innovations, as well. Paper batteries news item, and the original paper.

I see a lot of optimism in this. Sure it will take awhile, but which future do you prefer? That or this...

From the Behance Network (?)

The Decade of the Dashtop

2010-11-12T05:37:00.008-05:00

I had the privilege of giving a 3-minute TEDx talk at a Toronto event called TEDx IB York, yesterday 2010.11.11. I used the word Dashtop in the title to play on high-tech history of desktop-laptop-palmtop that I allude to in the talk.

Here is the text (co-written with Lukas van der Kroft and with a nod to Tom Vanderbilt for the Manhattan horses). I will add the Youtube link when it becomes available in a few days.

It’s 1870. I’m a driver in Manhattan. The speed limit is 5mph. But I ignore that. I seldom yield to anyone. My horses stink. And the kind I drive trample 200 pedestrians to death every year.

It’s 2010. I’m a driver trapped in congestion. I’m wasting time and fuel. I’m polluting. I’m texting people that I will be late. I am poking at my GPS to find another route. And, I am beginning to hate cars.

The number of vehicles on the planet will double in 25 years, but roads will expand by less than 10%. Since is impossible to build our way out of congestion cars and roads need to be much smarter to process more travelers and more trips. Twentieth century driving will go away just like Manhattan’s 19th-century horses did.

Partial solutions won’t work. We expect electric vehicles and smart grids to improve the environment, but they will also add to congestion and wipe out the fuel tax. And that threatens the sustainability of our roads. So we also need to re-think fueling infrastructures and the way we pay for road use.

Extraordinary innovation at the dashboard will address congestion and make transportation safer and sustainable in the new century. Historically, high-tech innovation has moved through cycles of feature-glut-followed by-consolidation-then by-availability. In the 90s it was laptops. Last decade it was smart phones.

What’s up next is the decade of the connected vehicle. We’ll see a wave of breakthroughs on our dashboards. Cars and infrastructure will begin to collaborate over 4G networks.

Real-time speed, location, heading and other measurements about cars around you will become critical to a revolution in safety and mobility. We will rely less on driver attention and field of vision. Our dashboard will know what’s around the corner as well as miles away. It will handle so many tasks we will be supervising our car rather than driving it.

Your new dashboard will enable a massive leap in roadway utilization. It will balance congestion, desired arrival time, emissions, right of way, and signal timing. It will have advanced systems for speed control, collision avoidance, convoys, lane departure, and parking assistance. These are just a taste of the feature glut intended to keep your trip safer and easier and to consume less road space.

Your dashboard will manage road use payments to replace the fuel tax. These will be based on usage patterns: where, when, what, and the distance you drive. And this will force gas taxes, tollbooths, parking meters, and even your car insurance to follow Manhattan’s horses into history.

You may even fall in love with your car all over again.

Thank you.

A reader asks

2010-11-04T05:32:00.003-04:00

Bern,
I have been following this Skymeter thing for some time now, and I have few questions:

1: Could your in-car meter cost be 100% offset or set to a nominal amount such as $10 if tied to location based services or couponing?

 ABSOLUTELY! That is the whole reason for adding multiple, desirable user services such as automatic, ticket-free parking payments and pay-as-you-drive insurance.  

2: Is there a model whereby a smartphone could replace the need for your telematics unit? 

Not exactly, although the smartphone will be integrated for auditing, couponing and several other elements and services. Why can such a replacement not be 100%? There are two critical difference between the telematics needed in the connected vehicle and smart phones.

First, payment telematics for road, parking and PAYD insurance must be attached securely to ensure correct metering for payment. You can leave your phone at home or off. This class of technology acts like an electronic license plate or a taxi meter. It is not transferable or moveable, as is the in-car unit for the Toronto’s 407 or the E-ZPass in the US, which charges at a point and is replaceable by a license plate reader. So doing it your way, but with these constraints would make it like the attached, in-car-phones of 15-20 years ago -- a step backwards.

Secondly, the driver is in a bit of an adversarial relationship with a road-use | parking | insurance meter, unlike your collaborative relationship with your navigation device or smartphone. Hence the road use meter must operate without user intervention and must always be correct to within a tiny error tolerance (e.g., 0.1%). The GPS sensors on your smart phone cannot do that. Skymeter can because it has several other sensors and processors that would make your smart phone about 50% bigger (for now – and to anticipate your next question – sure that will come, someday, as well).

The location-precise telematics we have developed we call Financial-grade GPS (FGPS). What is in your smart phone and your Garmin is Navigation-grade GPS. FGPS means: always accurate, non-reputable, low transaction cost, and private. Just like your Visa card but not like your smart phone (which missing both “always accurate” [with respect to location] and “non-reputable”). The part we developed will disappear behind your rear-view mirror and your smart phone (or a dashboard display) will be your interface. AND your telco provider will be handling your payment. So a Skymeter = the meter, your smartphone = the app interface, and a telco = the service provider. But inside the Skymeter-smartphone combination are several other apps such as safety, in-car signage, other traveler apps, couponing, rewards, parking loyalty programs, and many others -- the smartphone app-model, but for automobility-related apps.

3: Could your parking fees be paid for by businesses that want to encourage you to park near them?

ABSOLUTELY. That is an included capability. This is where the smart phone can play a role, although there are several ways to affect this. Remember your great uncle who does not like cell phones? BUT you need the accuracy and non-refutability of FGPS to avoid cheating.

  4: I think [Google | Facebook | Apple] is going to pay for your parking. Do you agree?

 Well, I think your local retailer might want to pay for your parking (as an earned reward) and folks like Google | Facebook | Apple will fight over ways to help them.

Dutch transportation bombed back to the Middle Ages?

2010-11-01T08:16:00.000-04:00

The history of road tolling can be seen to parallel the history of civilization. A couple thousand years ago, in the Stone Age of tolling, the emperor would set some trusted tax collectors at the side of the road to block passage and collect a toll. Much later in the Bronze Age of tolling, local lords erected small huts that evolved into the toll booth and coin counters of the Iron Age of tolling. Then passing through the Dark Ages of fuel taxes and the Renaissance of microwave and video cameras, we arrive, finally, at the Modern Era infrastructure-free satellite tolling.

Throughout this history, as in many facets of human development, we cling to the past, afraid to abandon old habits. In fact, like adherents of ancient religions suitable for darker times of plague and crusades, far more vehicles today slow or stop to pay tolls at booths or coin counters or have their plates read by cameras, than enjoy free flow satellite tolling. 
Less than 0.1% of all the vehicles on the planet have thus far made the leap from the Renaissance to the Modern Age and these are the million trucks so equipped in Germany, Switzerland and Slovakia. Until a few months ago, the Dutch were poised to push this figure to almost 1% – an enormous leap, if you think about it.

But all that changed presumably because of America’s war in Afghanistan. Early in 2010, the Dutch government collapsed over an Obama-requested reversal regarding Dutch troop withdrawal. That halted the “Kilometerheffing” system, which was to be based on Modern Era satellite technology.

The proposal of the new, minority government is to increase fuel taxes, which is known to have no lasting effect on congestion. Even newer proposals call for privacy-invasive video cameras instead of privacy-protecting GNSS OBUs which were designed to keep personal location data personal.

Does this mean America has bombed the Dutch transportation reform jaggernaut back to the Middle Ages?

I originally thought that, but now I don’t. The real reason is in the way humans prefer risk. We are more willing to gamble when it comes to losses, but we are risk adverse when it comes to gains. And in this politicians are no special case. Drivers prefer to risk continuing to lose more time to congestion than to risk the promised gains of congestion pricing. Politicians prefer to risk the failing efficacy of fuel taxes to risking the potentially greater gains of road-use charging.

Professor Jens Schade (Dresden University) specializes in acceptability of transport pricing strategies. He shows that losses are psychologically at least two times more powerful than equivalent gains. This means that for the new Dutch politicians to continue their predecessors’ programming, they need to percieve that the potential gains of GNSS-based road-user tolling (both in terms of transport efficiency and job-retention) are more than twice as great as the potential losses of raising fuel taxes and putting in a few video cameras. Clearly they don’t.

Green, small, smart, congested

2010-10-11T01:47:00.002-04:00

We hear touted as a solution to our car-woes that cars will get cleaner – all the way to electric and fully sourced from solar and wind.

We note that there is some trend, however minuscule, toward smaller cars. Ones that fit two to a parking spot. Some places have more of them than others.

There are even ideas to put two to a lane.

Now, even the god Google is in the fray with cars that look to be able to drive themselves. In this way cars can bunch closer together.

Each of these improvements will make the private automobile more useful, less polluting, more desirable, more ubiquitous and our roads more congested.

Pollution-free, convoys, two to a lane. More. But roads cannot be supplied effectively as fast as we can populate our fleets. This is so because of space, politics, money, and environment.

Space, not automotive innovation is the limitation; there is no lack of automotive innovation. But we do lack the courage to manage demand.

The market makes cars better by satisfying demand. The market could make mobility better by managing demand with time-distance-place pricing.

Duped by the Hollywood Tracking Myth

2010-10-09T01:46:00.001-04:00

In response to the Lost: Dutch Courage blog that has upset many people, comes the most unfortunate (and commonly believed!) of all responses…

Bertram said...

One thing you failed to mention: the road pricing scheme would [have been] enforced with GPS-powered black boxes in each vehicle. No matter what you think of mobility management, you should be very worried when the government starts collecting detailed whereabouts data on the majority of its citizens.

As a non-driving Dutch citizen I'm glad the scheme is gone... had it been implemented with cameras to charge motorists when they accessed certain zones I would have been emphatically in favour of the scheme, but the way it was proposed was just too Orwellian to trust the government with.

The fact that Bertram is a non-driver, means that he likely carries an unfair portion of the burden of unfettered congestion. If he is mobile, even under the care of others, he would tend to shoulder a share of the financial (hidden tax) and health cost. He would tend to be stuck in traffic when he uses bus, bike, carpool, ambulance, etc.

Bertram has been misled by conspiracy theorists, as have many others, including some planners describing these systems. GPS by itself cannot track you. Only additional capabilities to return your whereabouts to a service outside your vehicle can track you. Bertram is assuming, as do many that road-pricing system look like tracking systems for trucking-logistics – an especially foolish way for a government to deploy a GPS-based road-use charging system. The International Working Group on Data Protection in Telecommunications has been vey clear about this: [1] preservation of driver anonymity using either “smart clients” or “anonymous proxy”, [2] that personal data including location data always remain under the control of the driver, [3] that off-board location record keeping is not required, [4] that detailed trip data be fully and permanently deleted from the on-board system as soon as charges have been settled, [5] that the system is prevented from creating movement profiles and function-creep, [6] that processing of personal data for additional purposes only be possible with clear and unambiguous consent from the individual, [7] and that system enforcement not require or capture any personal data unless there is evidence that the driver has committed a violation of the road pricing system.

Remarkably, what is little considered is that GPS IS THE ONLY TOLLING TECHNOLOGY THAT CAN BE FULLY ANONYMOUS. Cameras capture the whereabouts of your vehicle whenever they see your vehicle; DSRC and RFID do the same. Even the fuel tax tracks you if you pay for your gas with a credit card, since your gas transaction has a time and location stamp. GPS can do its job entirely inside your vehicle never sending ANY location information outside of your vehicle. Ironically, the technology Bertram is mortally afraid of is the only one that can guarantee him the anonymity he desires (and has a right to).

Now Bertram and many others will continue to believe what the press and his friends tell him. Conspiracy is far too fascinating and Government trust is on the wane. Nonetheless, I would entreat Bertram to find out more for himself. What Bertram COULD do is [1] assume road-pricing will one day happen (it will); and [2] set up a citizens' watch-dog to ensure his government conforms to the IWGDPT guideline. It is always better to arm yourself than sit quaking in your armchair.

Freedom of movement is a basic human right.

This will get you started.

Notes from a reader

2010-10-06T00:19:00.002-04:00

Not long after I posted yesterday's eulogy to the Dutch road-pricing system, the following arrived. It was too good to leave buried in the comments...

I normally have a poke at the mindless UK media – which one week will report how dreadful it is that cars are killing people by crashing into each other, emitting noxious fumes and warming the planet – and the next will celebrate the latest setback for common sense (repealing the London congestion charge, canceling the LRUC project, discontinuing the TIF initiatives).  

Last week the Labour party elected its new leader. His speech was mainly themed on how Labour will win the next election, rather than how any policies will benefit the citizens, who will not get to vote again for about five years. Meanwhile the ruling party declares that it will “end the war on the motorist”, the first manifestation of which is to cause cancellation nationwide of speed camera partnerships at local levels. We have some real wars going on, for example in Afghanistan, which have killed about 300 Brits. In the same time, road deaths have killed about fifty times as many people. Politicians don’t know which war to fight, and content themselves with populist pronouncements to feed media expectations.  

London has a Mayor who thinks that putting a few thousand bikes out for hire will really make a dent in the massively larger vehicle population. In the same week that he confirmed the abolition of the Western Extension Congestion Charge, thereby freeing the inhabitants of Kensington & Chelsea from the tyranny of road charging, I noticed an interesting feature on that borough’s website. This site offers suggestions for walking and cycling routes which are planned to avoid the areas of heavy pollution and careless London drivers. Health advice is that, in a growing vehicle population, attempting to walk or cycle by a convenient route is quite likely to lead to a premature death by one means or another.

Lost: Dutch Courage

2010-10-04T14:09:00.018-04:00

On 12 November 2009, Ferry Smith, a senior representative of the Royal Dutch Touring Club, ANWB (similar to the CAA or AAA) spoke at a Toronto conference called Transport Futures, in support of the Dutch road user charging (RUC) program, called "Kilometerheffing" (kilometer-pricing) or as his talk and the Dutch program was titled in English: “Paying Differently for Mobility”.

Just hours before a decisive vote was to be cast by the Dutch Parliament, Mr. Smith talked about how much effort and collaboration had gone into this programme, especially related to the supportive efforts of the ANWB.

Although confident the vote would pass, he admitted it was not guaranteed. Someone asked what he thought would happen next if the vote failed. His answer: “We’d be set back 10 years”, meaning the effort would start all over and they would take until 2020 to regain the place they were now.

Later that day, the vote passed making the Dutch road pricing system a virtual certainty.

On 20 February 2010, the Dutch government collapsed ostensibly over a military issue (troop withdrawal from Afghanistan). With it came a complete freeze of the “Kilometerheffing” system. Transport staff reassigned, consultants laid off. All thrust instantly into suspended animation.

Remembering what Ferry Smith had said, and noting that the number of delayed, withdrawn or canceled RUC programs in the EU had outnumbered the deployed ones, I wrote a rhetorical piece about Governments not being able to toll roads on 24 June 2010.

At the end of September 2010, the new Dutch coalition government released its plan. The big picture is reduced administration, reduced social programming, reduced arts and culture, new restrictions on immigration, burqas and forced marriages, reduced defence, development and payments to the EU, increased law-and-order by way of increased penalties and more officers, some adjustments in education and a break in business taxes.

The road-pricing matter was delegated to the fine print and finally buried:

“There will be no road pricing. Instead, the variable cost of driving is increased through fuel tax. The fixed costs are reduced proportionately. The government is investing 500 million euros in infrastructure, both roads and rail”.

Talk of a new superhighway is included, all while neighbouring Belgium was talking of a copy-cat kilometerheffing system. Quelle honte!

So begins the Ferry Smith Decade in the Nederlands.

~~~~~

Analysis
To be fair, while the Dutch fuel-tax-fixed-tax swap is revenue neutral (that hopeful prayer and false-hope offering to the voter) it does have the driver notice the new road-use charge for the first three or four weeks, at least. Vehicle kilometres traveled will recover almost immediately – and I do mean this in terms of mere weeks. While drivers sigh with relief, they will have no relief. Nothing will change. Both their pocketbooks and their congested roads will remain unchanged.

There is an odd added perk: increased speed limits. Like offering free candy to a diabetic. One disappointed, anonymous, online pundit adds: “I will only be able to speed late at night when the roads are not congested.” Darwin award, for sure, since I suspect he may drink first in celebration.

Another comic side effect is that the expression “kilometerheffing” originally imbued with some affection by the road-use charge promoters has been cheaply appropriated to describe the new fuel tax increase and fixed tax decrease.

All government doublespeak. Orwell by not being Orwell.

I have no bone to pick with the new coalition government agenda. The conservative-liberal agenda ebbs and flows will always continue. Rather I point out that this is just more evidence that Departments of Transport cannot directly approach an all-at-once tax shift from the congestion-blind fuel tax to the congestion-sensitive road-use-charge. There is never sufficient time in a single administration of a democratic nation, and there is almost never sufficient continuity of courage or vision. Ex-Transport Minister, Eurlings (Nederlands), may have had this courage-vision combination and even the benign support of his then-government, but to design a solution that could not proceed – in-progress and automatically – into a subsequent administration is the kiss of death. Look at the Brits. They swap out Secretary of Transport (a posting that is evidentially a way-station to a better portfolio) almost annually. No one holding such a temporary position and who needs some degree of acceptability lest they remain stuck in the post, would dare stick out his neck (Alistair Darling excepted, but that was before Britain’s most effective road-pricing voice, Peter Roberts, soured the whole thing – now the DfT works under more secrecy than does the CIA – so goes Roberts’ brand of uninformed democracy). I am not faulting the DfT. I am commending them for finding a way to proceed. AND I mourn the loss of intelligent debate.

The only way to avoid this quagmire is to approach the eventual shift by building the charging platform by other means. Note that one of the more repeated online comments on hearing that the Dutch road-pricing system will be replaced by a fuel-tax hike was “good thing, because a fuel-tax hike will save all those billions on a road-pricing system.” Here is a way to proceed.

~~~~~

On 2010.10.07 13:30, Paolo Pezzotta commented:

Bern,
As you know from my posting when you first noted the likelihood of Dutch national VMT [TDP] tolling, I noted that there was a vast difference in truck tolling home-based-vehicle (auto) tolling. These are vastly different markets serving vastly different functions relative to the economy and urban systems and the politics are consequently vastly different. You thought it was a slam dunk. I thought it might provide some surprises. I was right.

We all should catch on this and try to learn something from this fact.

Jerry,
You are confusing two very different things. Cordon pricing schemes do in fact push folks off the road (predominately lower income folks)- that is their function, see London and Stockholm plans. VMT pricing will do the same. Less cars will “go through” as a result. That is the objective. Neither will provide sufficient funding to meet a market’s needs. Both will massively misallocate capital. The public knows what it is doing. It is the technocrats that need to come up to speed.

These notions should be abandoned. Driver based funding strategies have done a great deal of damage, institutionally, physically, competitively.

Paolo -- Jerry is right that CP can provide faster, safer, cleaner trips to more (not fewer) vehicles. BUT that is only when the schema is designed to move the trips to off-peak times. The problem is that we have a Secretary of Transportation who used the phrase "coerce drivers out of their cars". Incidents like this tell me that even people who should understand CP, do not. -- Bern

On 2010.10.07 03:06, Jerry Bridgman commented:

The weary, angry cynicism of the cited blogs may be hiding from you the possibility the CP product you are offering is deficient! Ideally reducing congestion would provide faster, safer, cleaner trips to more (not fewer) vehicles. Engineer that and you might have a salable product.

On 2010.10.06 11:45, Allen Greenberg commented:

I appreciate your highlighting of the near-impossibility of implementing a mileage-based user fee system within the single term of a political champion. I had not thought of it quite that way, but it makes perfect sense, and thus—as you note--alternatives need to be sought.

On 2010.10.06, 09:05 Jack Opiola commented:

I am afraid you give Alastair Darling too much credit. After the debacle of Byers, his predecessor over the Hatfield Train accident and the reneging on the Public Trust set up for the rail network in the UK, PM Darling was posted to Transport to keep it out of the press and put a tight lid on Transport. He was magnificently effective in positively doing absolutely nothing in his tenure as Transport Minister, which is probably why they rewarded him with Treasury where he again efficaciously provided negative value to the post and the UK.

I am afraid you misread his actions. By consolidating the HMCE efforts for truck tolling into a larger UK road pricing agenda, he was killing it, not promoting it. His Deputy Minister was released to promote the technology investigation but the PM with stodgy influences could never see outfitting 33 million vehicles with any technology, let alone a GNSS or DSRC hybrid for road pricing.

The £49 billion in fuel excise tax annually is a treasure chest that Treasury will never surrender. After all, less than half returns to Transport (all transport) and the rest funds Government's other platforms.

I am afraid the poor (literally) British drivers are already overtaxed with a blunt financial instrument that fails to address congestion, limit car usage nor provide sufficient supply-side measures to address the manifest problems. Whilst Mr. Peter Roberts may be misplaced in his expression of love for motoring, his outrage may be better targeted to express exasperations at a government that continues to rip off its drivers and pay them back for their contribution with niggardly transport policies and practices. While a VMT approach - that is an approach that replaces the fuel excise tax with a fair, equitable, reliable and sustainable solution - may be the solution, I cannot envisage the past or current UK Politicians ever giving up the goose that is providing such a wonderful golden eggs as provided by the gas tax.

Toronto Council Candidate hears that parking is like prostitution

2010-09-30T01:15:00.000-04:00

This video is hilarious. A pair of local voters tells Ward 30 candidate Liz West that cars are like hookers.* If you push them off one street they show up on the next. Does that makes GM and Ford pimps? And you and I johns?

Wonder if we will ever figure out that parking is a serious problem?

* surely this was taped a few days before the prostitution laws were struck down. Maybe they'll strike some parking laws down next.

Would Rossi's tunnel become a funnel to hell?

2010-09-14T11:57:00.005-04:00

Yesterday, mayoral candidate Rocco Rossi set out an idea for a tunnel to funnel more cars more quickly into downtown Toronto. The online comments looked to be over 90% negative. Similar to the comments in response to tolling (and this tunnel would be tolled!). Zoooooom. Screeeeeetch. Craaaaaash. Burrrrrrn.

Likely this idea was suicidal out of the gate, but I am glad he brought it up. It highlights once more the corner we have painted ourselves into with transit negligence, free-parking, and unfettered entitlement to tax-payer subsidized roads.

A toll on the Rossi Funnel could help pay for the new roadway – and keep it free flowing. But that would keep free roads 427 and DVP congested. Just as the 407 leaves the 401 congested. This tunnel would be a victim to triple-convergence within 18 months of opening:

spatial convergence: drivers who formerly used alternative routes during peak hours switch to the improved expressway;
time convergence: drivers who formerly traveled just before or after the peak hours start traveling during those hours; and
modal convergence: some commuters who used to take public transportation during peak hours now switch to driving, since it has become faster.

You can’t fix congestion with a new piece of roadway.

Even on opening day, it would do nothing to relieve downtown congestion without attention to parking. In fact it will make it much worse. If we fixed the parking problem by pricing it right, we could get the city out of debt and then build funnels. Actually, if we priced parking right, you wouldn’t need the tunnel. We could bail the city out of debt instead of burying it further. People drive their cars for three reasons: they are cheap, transit is terrible, and the personal vehicle is, well, personal. If we addressed the first two, congestion would evaporate and our municipal debt could be addressed.  

The Wheel: From Mobility to Connectivity

2010-09-11T01:38:00.002-04:00

The automotive experience is undergoing rapid change. Having essentially evolved into a local area network of computers on wheels, the automobile is now poised to become an Internet node. One kind of intelligent transportation system (ITS) – known as the Connected Vehicle – based on 4G networks will provide new levels of traveler services, convenient payment services, real-time safety features, low-cost infotainment, and new types of social computing applications. In aggregate these will serve to optimize mobility, reduce congestion, make driving safer, healthier and more enjoyable, and make payment for road use, parking and insurance fairer and more convenient.

Skymeter's contribution to the Connected Vehicle consists of private and anonymous payment services based on Financial-grade GPS (FGPS) applications. These services will permit drivers to pay only for the insurance they need by paying per mile or kilometer traveled, only for the parking they occupy by paying by the minute, and only for the roads they use by replacing fuel, registration and property taxes with time-distance-and-place fees, allowing lower rates for off-peak driving.

Paying only for what we use is not only fairer to the consumer of roads, parking and insurance, but has the powerful effect of putting more control over the cost of mobility into the hands of the driver. How often have you sat in congestion on a roadway burning more in fuel and fuel tax than you would have if the road were uncongested? How often have you returned to your parked car with money still on the meter – or worse, how often have you returned a few minutes late to be greeted by a $25 or $40 parking fine? How often have you taken transit, a shared ride, a sick day, or a week’s vacation but paid your automotive insurance anyway? Have you ever parked your Smart Car beside a Cadillac Escalade only to pay exactly the same parking fee?

Road authorities say they need more money while motorists say they pay too much in fuel taxes. Insurers want to raise rates but motorists say insurance costs too much. Parking fees continues to climb while drivers cruise to find cheap spots. We say it is expensive to drive, but the problem is we pay the wrong way. We pay for roads by the tank full, insurance by the year, and if you can rationalize all the ways you pay (and don’t pay) for parking you deserve the Nobel in micro-economics.

Connectivity will help alleviate this mobility problem in three ways. Strong connectivity is important for fixing how we pay for mobility, enabling fairer and more transparent ways to pay only for what we use. Connectivity enables the information we need to choose less congested routes and times, to find parking spots and without circling and hunting. Most importantly, connectivity enables the network effect of dozens of other applications related to safety, traveler services, and infotainment that provide motivation for the innovation and markets that will drive the costs of delivering payment services down to 2% or 3% – a rate that closer to the collection of fuel taxes (1%) than to the current collection costs of insurance, tolls and parking fees (10%-70%).

What we are about to see is that the Connected Vehicle will provide a critical platform for correcting the key economic problem of wrong-payment for mobility – a problem that gives rise to increasing funding unsustainability and congestion.

Dialogue Mapping and Congestion

2010-09-10T14:45:00.001-04:00

I have mentioned, earlier, “Wicked Problems” as a thought paradigm useful in thinking about congestion, road-pricing and the use of road-use metering for allocating road use fees, in this blog over the past months. Here, here and here.

We are often called to address these kinds of problems in debates, studies or academic conferences.

This talks about the failure of conferences for advancing solutions for really entrenched problems. This says conferences about congestion and road funding, however necessary, may not produce sustainable results soon enough.

This talks about a powerful way to reach a rational consensus about a problem before attempting to derive solutions. This says that we may not be able to reach a shared understanding of the problem if we continue business as usual.

Here is a short article about the application of Dialogue Mapping to Traffic Congestion.

No New Math from China Traffic Jam

2010-08-29T09:53:00.014-04:00

This week provided another opportunity to review the state of progress of demand management for roadway traffic. A spectacular traffic jam outside of Beijing attracted world attention, likely only because it has lasted several days, instead of the more usual hour or two that we now frequently enjoy as a respite from our families while listening to our favorite music.

A WSJ article by Carl Bialik (2010.08.28), The Inconvenient Truth About Traffic Math: Progress Is Slow, opens with “there is absolutely no way congestion can stop increasing” then hauls out a stack of miserable statistics such as “peak-hour trips now average 25% longer than non-peak hour trips, up from 9% longer 25 years earlier”.

Several solution approaches are mentioned, then criticized as ineffective (“tools [such as ramp metering] shaved an average of about three minutes of travel time for each rush-hour commuter, each week”) or rejected outright (“adding roads … lead[s] to more travel, because of an effect … describe[d] as triple convergence. Many drivers who had shifted their trips to off-peak hours, or to different roads, or to public transit, resume their previous pattern and converge onto the new highway”).

Instead, we are “working to spread traffic out more evenly” (which we were told a paragraph before will save me a whopping 3 minutes per week).

The rest of the article completes a litany of disturbing stats and limp solutions – solutions we already know are growing in cost and diminishing in effectiveness. Ominous in its expense and limited effectiveness will be to “merge data from 60 million devices to detect patterns and build a prediction engine…to predict traffic accurately within 20 minutes, at 80% reliability.”

The Montague Street Flyover

Another will “weave together information about multiple modes of transportation, including road and rail, then attempt to shift traffic accordingly [by using] such information to tell drivers, via electronic roadway signs, how long it will take to get to a popular destination by different routes.” Such approaches are intended to “get a lot more use out of our existing transportation infrastructure.”

Well, very little, actually. We know well that these measures all have minor impacts, like the earlier 3-minute-per-week effect. Similar to attempting to cure Alzheimer’s with Ginkgo Biloba, these impacts are swamped by the growth in vehicle miles traveled as populations grow, accumulate wealth, buy cars, abandon transit, and spread out. Cumulatively, all of our increasingly complex smoothing tools and sanding tricks provide only diminishing returns in congestion abatement.

And we all know this.

There is one tool that has proven the exception: road pricing. Done correctly, as in Stockholm, Singapore or on the SR-91, it produces an initial 15-25% traffic reduction, which can then be sustained with market pricing.

So what’s new? Nothing, really. Every one of the people quoted by Bialik in his Times article knows, studies, writes about or sells road pricing as a solution to the problem. So, why no mention of the only known sustainable solution? WSJ editorial policy? Bialik doesn’t like the idea? The solution just slipped everyone’s mind when interviewed by Bialik?

Why do we persist in hoping and praying like this? “Oh Great Transportation Fairy, we pour out our hearts that you will grant us our birth-right of infinite road space. We know you do not listen, but we beseech you anyway.”

As my mother often told me: “The Transportation Fairy helps those who help themselves.”, but as Bialik documents, rather than help ourselves we seem satisfied praying to some pretty minor saints.

We need a new ready-made collection platform for road fees

2010-08-12T01:14:00.000-04:00

One of the largest differences between collecting fuel taxes and collecting road-use taxes (and this plays very much against the business of collecting road-use taxes) is that a century ago there was a convenient measurement node and collection platform already in place (fuel distributors). Government(s) merely had to tap into an existing infrastructure. Relative to any of the current proposed approaches to collecting for road use from each vehicle (RFID/DSRC, GPS, Cellular, Camera, OBD, Odometer, Vignette), collecting at several hundred fuel distribution nodes is smart, easy and cheap.

Making the critically important shift from fuel-consumption tax to road-consumption tax has almost everything stacked against it except that it would (if priced correctly) solve many of our surface transportation problems (funding, congestion, emissions, oil dependence). The problem with all the proposed replacement collection methods is their business execution model: build an elaborate, dedicated, complex, confusing, and expensive infrastructure that is subject to greater user resistance and mischief, to collect a few dollars a week from each vehicle – a terribly small amount for such a complex operation.

This is why the economically inefficient fuel tax is preferred. This is why even less efficient sales taxes are preferred. This is why property taxation is preferred and heavily used. And this is why, in the United States, we are currently back-filling the fuel tax out of the General Fund. From the simple business of finding an affordable assessment and collection mechanism pretty much anything other than metering each vehicle is a more expedient business to administer.

If there was a device already in each vehicle – a reliable device that had another, highly desired, indispensable purpose, i.e., a purpose comparable in importance as having fuel in your tank – such a device could carry an embedded road-use meter and become the collection platform for the replacement of the fuel tax.

We already know several ways to make such devices. What we are missing is a way to make it have a highly desirable and indispensable purpose. We are missing a free, pre-existing collection platform model to rival the fuel distribution business model that Governments so easily exploited over the past century. This is why building a new, dedicated tax-collection infrastructure that reaches into every vehicle is wrong-headed. And this is why promoting telematics systems for safety, convenience, traveler services, parking payment, PAYD insurance and infotainment – systems that can carry road-use metering functionality for little or no marginal cost – should be the first order.

Such systems can be made desirable, useful, reliable and nearly self-enforceable. They can make our roads safer, our drives more pleasant, our trip more efficient, our roads less congested and save almost all of us money. Much more importantly – for matters of funding, demand management, emissions management and oil dependence – such systems can provide the basis for private enterprise to offer profitable and competitive services, just as fuel distributors already offered profitable and competitive services a century ago.

If markets for telematics-based parking and insurance metering, for safety systems, for traveler services and for infotainment were nurtured, standardized, encouraged and in some cases (insurance, parking) regulated or legislated in newer and smarter ways, private enterprise would build the telematics platform governments need to replace the cheap, convenient collection platform afforded by the fuel distributors over a hundred years ago.

This idea should hardly be surprising. We have been in the Information Age for some decades. Automotive telematics is an information technology. We have ignored the obvious for too long. A private, for-profit telematics platform with numerous desired driver-service applications can be exploited to avoid system operational costs of road tolling, using the same business thinking that governments used to exploit the fuel distribution system a century ago.

Kant, Morality, Traffic and Big Brother

2010-08-03T00:06:00.002-04:00

I have spent seven years (more like 45 man-years if you count the whole team) developing technology for anonymous metering of road use so that governments can rescue our failing surface transport systems by replacing the fuel tax with road-pricing that is a lot more private than the current tolling technologies such as E-ZPass or SunPass.

My started a company to do that because I am a privacy freak and knowing that we need to move to pay-by-road-use instead pay-by-fuel-tax or pay-by-property-tax, I wished to have nothing to do with being ‘tracked’. I also knew that privacy would become one of the barriers to solving the “wicked problem” of congestion. There are several other reasons for our ‘acceptance-by-design work’, but two ideas are enough for one blog.

Now it turns out that my company’s work is not only good for transportation funding, demand management, reducing emissions, and your privacy, but now it seems it is also good for your moral character.

Emrys Westacott, Professor of Philosophy at Alfred University, asks Does Surveillance Make Us Morally Better. Turns out surveillance may be better for society in some cases (such as traffic surveillance for speeding or drunk driving), but it is not necessarily good for your personal moral development, such as a parent strapping a webcam onto the cookie jar.

I’m sure he’d come down on the side of absolutely privacy of road use. Read his article, and see why. Makes those seven long years of hard work worthwhile…

Chipping away at the fuel tax

2010-07-31T22:03:00.012-04:00

In July 2010 UK Transport Secretary, Philip Hammond, confirmed that the ‘Plug-In Car Grant’, designed to stimulate demand for low carbon vehicles, will go ahead from January 2011.

Parsing this sentence, repeated in many news articles, you might suppose this program is about greening the fleet. But if you read the majority of the first 20 Google hits for ‘plug in car grant’ you would see it is more about economic stimulation for the auto-industry. The low-carbon part is the perfect excuse for a subsidy.

An article at puregreencars.com was clear despite its name: “Carmakers had been putting pressure on the new government to announce the electric car subsidy and had warned the UK would not be attractive for new technology auto investment without it.” No handout, no investment.

If you have read here before, you know well that fuel tax, as a mechanism to fund roads, is unsustainable, and that all programming to move us into vehicles that directly use less hydrocarbons further endanger that funding source.

Notice that the UK Government has in the past been unable to execute its oft-touted national road-pricing program, but is now prepared to take tax dollars from somewhere to subsidize the purchase of cars (albeit clean ones) hence reducing the tax base needed to build, repair and operate the roads that these new, greener cars will use. Notice that they are not paying people to take transit, bike, or move closer to work, but they are using tax money to pump up an industry that can only cause congestion levels to increase.

Drivers prefer the autonomy, convenience, privacy, and timesaving of a car. It is very hard to transition people out of cars or to move domiciles for the guilt of a few pounds of carbon that they cannot see except in the abstract. If you can subsidize switching costs, a lot of people will elect to drive a cleaner car. But why not do this with differential road-pricing rather than cash handouts? You could start voluntarily and immediately, as it turns out.

I am all for government programming to nudge us in the right direction, however, the problem is that if the car user is being encouraged with direct subsidies, he is encouraged to drive more. The resting state of a world of heavily subsidized, 100% green, single-occupant vehicles is 24-hour total gridlock.

Green-at-all-costs needs slightly more thought than this.

Tolling Scofflaws - 1859

2010-07-19T23:53:00.012-04:00

Canadians have a venerable history of disdain for road tolls, so that the spoiled and entitled commenters that whine and threaten at the end of every Toronto newspaper article about tolling are hardly equipped with novel thoughts. Here are a couple of Krieghoffs from 150 years ago. According to the Art Gallery of Ontario (AGO), Cornelius Krieghoff apparently came down on the side of the scofflaws and perhaps admired them. In these depictions they seem to be drinking while driving, as well. So not much has changed, although these fellows would likely be driving three separate SUVs if they were alive today.

If you click-in and study these two paintings carefully, you can see that Kreighoff took some trouble to look at the tolling scofflaw problem from two different angles, but unfortunately came to the same conclusion.

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Other Items:

Road pricing 'inevitable', says RAC (UK)

Road pricing Q&A (UK)

Can Government Toll Our Roads (Canada)

Edward Keenan at EYEWEEKLY gets it.

Governments can’t toll roads

2010-06-24T00:35:00.000-04:00

We cannot solve the social and political barriers to nationwide road tolling using the kind of thinking common to Departments of Transportation over the past decade.

The progress of long-sought nation-wide tolling programs is abysmal. Austria, Switzerland, Germany, and Slovakia have achieved this for heavy-goods vehicles only and generally only on highways. This meager outcome – about one every two years – after a decade of planning and development has been made possible for a combination of reasons: commercial operators can arrange a measure of financial recovery, a modicum of trust in the reasonable argument that this must be done to fund roads, technocratic vision, and political will.

Even for these four countries, specific circumstances made it easier than for many others who wished to do this. Size: three of the four countries are relatively small and culturally homogeneous. Foreign hauliers: all four are heavily traversed by foreign vehicles making cost recovery more urgent. Familiarity: some already had numerous tolled road segments. Industry and Trade: Germany saw that the technology selected for the task might revive its moribund high-tech export industry. No single reason would have sufficed in any of these cases, so hard is the political argument for nation-wide tolling.

Success with wide area urban tolling has been limited to a half-dozen instances: Bergen, London, Milan, Singapore, Stockholm, and Valletta. Here, too, a number of factors were at play – different in each case. Some combination of bold leadership, political fortune, geo-morphology, severity of congestion, and trust in persuasive reasoning helped put these programs in place.

The good news is that systems such as these ten have been successful in achieving their goals. It is true that the London system – in hind-sight perhaps the least-well executed – has experienced a slide back to earlier congestion levels. But the reasons are understandable and the argument that London would be still worse off without it is worthy.

The bad news is that the expected domino effect of nationwide and urban tolling everywhere shows every sign of late arrival. The UK’s lorry road user charging system and it nationwide road-tolling system has been withdrawn or hobbled – even the majority of its congestion-related transportation innovation fund has been withdrawn, and the new Coalition government has recently provided only a timid promise to “work toward” tolling heavy goods vehicles. Programs from The Netherlands, Sweden, and several other states have been postponed, slowed down or iced. Maybe the Czechs, French, Poles or Slovenes will pull something off in 2011 or 2012 to keep up our limp, one-every-two-years performance.

A program as difficult and complex as nationwide road user charging requires many circumstances to line up to be put into play. To have sufficient buy-in, you need things such as an affordable and reliable way to measure and collect fees for use, a trusted government, a way to guarantee privacy, a way (and the will) to educate drivers about the problem, politicians that can understand the need (and who are willing to speak out for it), and a set of social policies to address things such as revenue allocation and people made worse off by the change.

Instead of these things, any particular country is more likely to have circumstances such as drivers and journalists being fixated on misinterpreted constructs of entitlement and privacy, a history of government non-transparency re earmarks for fuel-tax revenues that make promises of correct revenue allocation hard to believe, politicians taking a position against to garner votes and a general lack of understanding of road funding and transport economics.

No driver is eager to pay for road-use – including those of us who understand the need for it and the ways to make it respect privacy – and only a minority of people understand that paying by time and place of use rather than with fuel or property taxes sets up pricing signals that can reduce congestion. Fewer still are aware that one dollar of road tolls has the congestion abatement effect of three dollars in fuel taxes – implying that fuel taxes are three times harder on lower income earners than are road tolls, and making transparent road tolls a social improvement over relatively hidden fuel taxes.

In spite of the hurdles, every year hundreds of transport economists study and write about the need for road-pricing and congestion pricing, often without paying tribute to the breadth of these social and political problems much less suggesting how we will overcome barriers to deployment. In the US, since the National Surface Transportation Infrastructure Finance Commission released its report in February 2009, the note of urgency has sharpened, but the discussion in the inner circles has generally been about what kind of trials, or what kind of technology or who among the state DOTs or the Federal government should lead system set up.

Shift in thinking
The cumulative weight of social, political and system complexity is dawning on the community that must solve the combined sustainable mobility problems of road funding, traffic congestion, vehicular emissions and national security (oil independence). An increasing number of us are seeing that we have no choice but to address this from the driver’s perspective: “what’s in it for me?”

In other words, a direct focus on how to technically and programmatically shift from fuel tax to road-use charging is migrating toward a more nuanced focus on (1) how to gain acceptance and increase the desirability of autonomous telemetrics for fee collection, (2) how to compound the price signals possible from pay-by-use, (3) how to increase government confidence in the reliability, security, and privacy of telematics technology, (4) how enforce the use of such systems cost effectively and while respecting privacy, and (5) how to lower the capital and operational costs of such systems.

This new focus, should it take hold, means that we would consider user-focused market approaches rather than government tax-mandate approaches – at least in the near- to mid-term. Specifically, we would be designing programs for parking payments, pay-as-you-drive insurance, parking finders, green discounts, intelligent safety, navigation and other traveler services to which motorists would voluntarily subscribe in significant numbers because of convenience, savings and rewards. Systems on which road-tolling can depend later.

If this sounds more suited to the consumer design sensibilities of commercial telematics innovators than to tax programming schematics of National Governments or their Departments of Transportation, then how can we best tap into these? After all, there are not yet massive ten-million-subscriber markets for financial transactions for automotive use such as telematics-based parking and insurance payments. If this were to change, then cheap, autonomous road-tolling programs could hitch a ride on the same wireless infrastructure.

Governments could encourage parking reform by eradicating underpriced or free parking in urban areas. National governments could incent regional or urban governments to do this. National, State or Provincial governments could encourage insurance companies to switch to PAYD using a combination of incentives and regulatory change. The creation of markets attracts innovation, investment, and new tax-bases. Such innovation can easily be directed toward telematics-based financial systems for anonymous, autonomous metering systems for parking, insurance and road-use payment systems. Furthermore, such platforms also support safety, navigation and traveler services – things that have been shown to have an attraction for 40-60% of drivers in the EU. These same systems can accelerate safety and congestion management in the immediate timeframe, all while paving the way to earlier tolling of congestion in urban areas or of certain classes of vehicles such as all electric cars. The bonus is that this approach minimizes the political fallout compared to massive nationwide tolling programming.

If these new markets were liberated and correctly regulated (privacy, fairness, interoperability, transparency, accessibility, etc), a metering and collection system for road-use charging could be built with private money in exact analogy to the way private money developed the current fuel distribution systems on which governments currently depend to collect fuel taxes.

Such programs as I describe may appear circuitous to advocates of the switch from fuel taxes to road use charging. They are. But all the evidence to date says that governments cannot go about universal road tolling directly. They need industry help. But today industry waits for government tenders for trials or for massive tolling systems like the singularities in Germany or Stockholm. Transport ministers complain that driver populations grant no permission for an economic solution to the road funding and traffic congestion problem, but it is also the case that government behaviour in the form of parking and insurance regulation grants no markets to incent solutions.

How long will our transportation ministers and secretaries continue to beat their heads against the road-tolling wall? How much longer until the lessons of markets and driver services will be used to ease the road to fuel taxation reform?

UK’s New Coalition and Lorry Tolling

2010-06-16T12:57:00.000-04:00

The new UK Government published "The Coalition: our programme for government" containing at section 30 twelve points "to improve the well-being and quality of life" and ' to make the transport sector greener and more sustainable".

A handsome list until you study the language. Eleven of the 12 points use eleven assertive verbs: mandate, grant, reform, make, establish, support, turn, support, commit, stop and tackle. Unfortunately the only point that requires any political courage uses the much safer verb phrase "work towards". Specifically, "we will work towards the introduction of a new system of HGV road user charging to ensure a fairer arrangement for UK hauliers."

What this means is that they will talk about this with their tails well tucked-in.

Any tolling system costs money to set up and to operate. The history to date is that these systems variously absorb from 20-40% of gross revenues. Since foreign hauliers comprise a slim minority of UK HGVs, they can hardly refund patriated vehicles while charging only foreign vehicles, as is often dangled. With political expediency begging for revenue neutrality, a costly system to collect what is effectively seen as a tax will be unacceptable. The argument that government needs money militates against revenue neutrality and an expensive collection system will destroy any residual appeal.

The Department for Transport, as everyone knows, has been running a set of trials for the past two years that have shown a high degree of both technical and commercial promise for autonomous tolling telematics. As is also becoming increasingly apparent there is no reason for a government to mandate and purchase a dedicated tolling system. Proven telematics technology now permits inexpensive (under £100) units to perform dozens of safety, navigation, parking, traveler and insurance services in addition to tolling management. That makes if possible to have private companies operate profitable services while providing tolling services with little or no capital or operational expense to the taxpayer.

In this circumstance, to deploy a paper vignette system would be absurd and installing a large numbers of DSRC gantries, virtually immoral. The way to do this using private risk capital and 2010 engineering innovation is to set up two to four tolling licenses for the UK and let those for ten-year increments to two to four commercial operators. These operators would be offered a small percentage (3-5%) of tolls collected and left to their own devices to determine competitive services, under reasonable regulations, and to earn a profit.

May the smartest companies do well.

Leapfrog, Anyone?

2010-06-01T17:33:00.000-04:00

It is commonly thought by road-pricing pundits of the nation-wide tolling persuasion that the United States is a decade behind the European Union in readiness to execute. That’s certainly what I thought in 2003, when Minister Alastair Darling was pitching a national road-pricing system in Britain and the London Congestion Charge was still flush with early success. I no longer think this is true.

Of all the changes since EU optimism has dampened, two stand out. The EU has canceled, delayed, curtailed or diminished more road-pricing systems and proposals than it has sustained, and the focus has shifted from environmental sustainability (congestion, emissions, livability) to funding.

This sea-change from the benevolent chirps of EU congestion pricing to the grizzly roar of a starving US Highway Trust Fund is decisive. Money speaks louder than livability (even as BP pours oil into the Gulf, anti-tolling newspaper comments from people who can’t make the connection continue apace in Toronto).

This has a couple of implications. The first is that the US is getting serious about national road-pricing and balanced against the EU's halting accomplishments, this has closed the execution gap to 3 or 4 years. I split this shrinkage evenly between the EU's faltering progress and the recent American awakening. While that hardly predicts when a full shift will occur, it says the US may close the gap completely in the next two years.

The second is that a panic-based focus on funding sustainability engenders poor system designs. A "money-now, demand-management-later" criteria leads to solutions that serve to rob us of demand-management tools that transport economists have demanded for 55 years. Every dollar sunk into wrong-focused solutions will cost us ten dollars to undo, later.

As an example, a draft US study in progress currently lists eight charging solutions but only one provides the full tool-set needed to address congestion, funding and emissions, while promoting a shift to EVs. While the well-respected team working on this understands the risks, cash-starved decision-makers acting on the final report may not. We run the risk of politicians selecting an expedient pathway to money, say by reading odometers or tolling only limited access highways that will heavily mortgage our future ability to manage demand. It may even force us into the long-discredited view that we should try to build our way out of congestion.

We should think harder about why and where we are about to leap.

Four trends will advance the road-tolling agenda in 2010-11

2010-05-02T14:03:00.007-04:00

Four trends, in order of importance, will advance the US (and world) road tolling agenda in 2010-11:

ONE:
Funding pressure (e.g., continued Highway Trust Fund bankruptcy) will remain and grow because more and more vehicle miles traveled (VMT) are in higher efficiency vehicles. (This is a US focus due to excessive fuel tax under charging and related political phobia).

TWO:
VMT growth is recovering with the economic recovery, hence the congestion pressure will return: (world focus). Add to this that rising incomes will drive demand for more road capacity (point added by Gabriel Roth).

THREE:
The BP oil-spill disaster will stoke anti-big-car, anti-sprawl, anti-internal-combustion opinion (US and world focus - the disaster will be seen internationally). This will put pressure on electric vehicle delivery and legislators will seek ways to charge user fees to these vehicles as their numbers stop being insignificant. There is already talk of "starting tolling with electric cars", as it is thought that people who purchase electric vehicles would tend to be more likely to understand how tolling would work and why it is important and fair, as well as understand how privacy can be protected.

FOUR:
The rise of an opt-in metering philosophy to market evolution (Skymeter is a player in bringing this approach to popularity) - this will allow US thinking to catch up to EU thinking, albeit on a parallel path. EU will switch to an opt-in path (for cars) in 2011, esp as the 2012 deadline for the European Electronic Toll Service (EETS) will pass unmet. More critically, this will allow the EU to re-focus on cars (they only do trucks so far and the hiccup in the expected Dutch system for all vehicles will permit rethinking toward opt-in (some in Dutch Ministry of Transportation (Rijkswaterstaat) are already saying this, off-record).

I offer a 5th point – more hunch than prediction: Obama will soften toward VMT charging as the oil spill will set back his current off-shore drilling position. His VMT charging position will remain "no", for the next year, running up to the election he will say "we have to look at all options". After the next election (if he wins re-election) VMT charging will become more than just ITS academics or a subject of time-biding AASHTO studies.

Why we need toll roads

2010-04-28T12:08:00.001-04:00

Toronto's transport system is beset by congestion, emissions, and a lack of funding. The fix is to charge drivers for the roads they use. (From The Mark)

Smart meters need smart policy

2010-04-17T13:57:00.006-04:00

Lee Greenberg writes in the 2010.04.17 National Post (a Canadian conservative daily paper):

“A $2-billion program aimed at shifting home-energy use to off-peak hours is about to fail, says the province's chief environmental watchdog. Gord Miller, Environmental Commissioner of Ontario, says millions of so-called smart meters will be useless unless the government changes course and sets a sufficiently low hydro rate to convince people to do their laundry and dishes at night and on weekends.”

Miller’s concern centers on the fact that the difference in on-peak and off-peak is only a factor of 1.9. Coupled with the fact that the weekday off-peak is between 9pm and 7am, there would appear to be too little motivation for a household to hold laundry and vacuuming until late in the day (or early next).

A 2007 study in Ottawa found households saving $1.44 a month through time-of-use pricing that differed by a factor of three! A $1.44 buys a small coffee at Tim Horton’s.

So is Ontario installing $580 million in smart meters so that each household can get save the equivalent of a free small coffee? Once a month? Can't be.

The social and economic performance of smart metering is a critical matter. We are fast approaching a time of smart metering for road use. A smart meter would meter time-distance-and-place of driving (anonymity guaranteed by performing and keeping all calculations inside the car) to calculate a replacement for fuel taxes – hardly a choice, given the move to the all-electric vehicle.

While road-use-metering, when it arrives, will be principally motivated by the loss of the fuel tax, it is also intended to manage demand for road space – exactly as the electric meter is intended to manage demand for power.

Couldn’t be simpler.

Cars increasing, fuel tax decreasing. Now what?

Or could it? If Ontario cannot figure out how to set the clock or price differentials for electricity metering, how can it figure out the time and place differentials for mileage-based road use fees?

If I can only save $1.44 per month by shifting my time of travel, I won’t. If I save $1.44 a day (to say nothing of a month) by taking the bus instead of my car, I will not. I had better be saving $5 per day, if you want my behavior to shift.

The policy that sets the rate differences between peak and off-peak travel, or between a pre-Gore SUV and a post-Gore EV, or between urban streets and highways and rural roads is called a pricemap.

Since the Province of Ontario has not until recently permitted its Ministry of Transportation to even discuss road use charging, it is easy it understand that there has been no discussion of starting the work needed to design this pricemap. Even the more forward-thinking Dutch flopped around this pricemap design business for some time.

Worse, if we cannot set the pricemap correctly for our critical power supply, how will we do that for our even more critical road supply?

------------
In other news: Germany is having the same tolling discussion Toronto is and Ontario should be!

Bibliography for Chicago Parking Privatization

2010-04-13T18:19:00.006-04:00

In 2007, Donald Shoup summarized the problem with underpriced parking in a New York Times opinion piece: http://www.nytimes.com/2007/03/29/opinion/29shoup.html

In 2009, the City of Chicago addressed this problem while attacking a financial crisis. It leased its 36,000 on-street parking meters for a 75-year term. One outcome was that underpriced parking was dramatically reduced. On average, hourly on-street parking fees will be doubled in four stages from 2009-2013. The number of metered spots will increase and the hours of metering are being extended. Altogether, the total revenue from on-street parking will more than triple. This money will go to a private company who paid the City of Chicago $1.15B.

Selection Process and Timeline

Use of Proceeds

Value - An Introduction by William Blair

Value - Analysis by William Blair

Value - Analysis by William Blair Exhibit 1 and 2

Value - Analysis by William Blair Exhibit 3

Some of the commentators to analyze this transaction have been very critical, and there are lessons we can take from this. At the bottom of this post there are several further analytical links.

Here was Chicago’s response to the IVIIPO law suit.

Here is Chicago’s response to the American Transportation Alliance (ATA) report.Here is the ATA’s retraction.Chicago’s Meter FAQs

Chicago brochure re the shift to privatized parking

Full Chicago resource re privatization of parking meters.

Should Toronto do this?

Toll Roads: The Conservative View

2010-04-12T20:34:00.007-04:00

2010.04.12
In today's National Post, a welcomed explanation for the sanity of tolling roads -- provided other taxes are rolled back...

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Bonus 2010.04.13 Audio from Metro Morning (takes a few seconds to load):

from CBC site: "Matt Galloway spoke with Mississauga Mayor Hazel McCallion, and with Richard Soberman. He is a civil engineer, transportation planner and consultant in Toronto."

Soberman explains well why most comments to toll this road or that is just "shooting from the hip". He talks about uniform tolling region-wide and ensuring where the money goes. This is not what Sarah Thomson wants to hear. Unfortunately, he suggested increasing the gas tax which is NOT a sustainable solution.

Mayor Hazel McCallion has spoken up a lot recently about road tolls.

National Post - http://network.nationalpost.com/NP/blogs/toronto/archive/2010/04/09/get-ready-for-road-tolls-hazel-mccallion-warns-gta.aspx

National Post - http://network.nationalpost.com/NP/blogs/fullcomment/archive/2010/04/12/kelly-mcparland-the-road-tolls-for-thee.aspx

Toronto Star - www.thestar.com/news/gta/article/792847--province-not-considering-road-tolls-yet

Mississauga Blogger - www.mississaugablogger.com/2010/04/toll-roads-hazel-mccallion-weighs-in.html?utm_source=twitterfeed&utm_medium=twitter

No more RUC trials, please

2010-04-08T23:50:00.004-04:00

There is no value in further US VMT charging trials, except to delay the inevitable. These trials should end after completion of the University of Iowa’s National Evaluation of a Mileage based Road User Charge. There is far greater promise in unleashing private operators to commence profitable, non-tolling services, then using these for toll assessment and collection as fuel distributors are currently used to collect fuel-taxes.

The past decade of road use charging (RUC) has delivered a cornucopia of conferences, papers, trials, newsprint, books, and promises. What we have to show for this, besides incremental deforestation, is four national truck tolling systems and three urban congestion-zones that are the basis for a tired success-litany recited by transport economists and congestion-pricing hacks, and we have shuffled several billion dollars at an average cost of 30%. Worldwide we now toll perhaps an additional 1% of vehicle miles traveled (VMT) beyond what we would have tolled without any of this. Sadly, had we invested that money in a couple thousand lane miles and tolled every inch of them we might be farther ahead today.

Now that the Dutch government has collapsed, its admired ABvM program suspended, and the UK’s stillborn Congestion TIF shut down, it is time to rethink our approach. The only person of any stature who has said anything that has come true since the commencement of Stockholm’s permanent congestion program was President Obama’s Press Secretary when he pronounced there would be no VMT charging on Obama’s watch.

Government role

The problem with RUC programs, whether VMT in the US or time-distance-place (TDP) in the EU, is that governments approach them like science projects. Government should stay away from system design and technology deployment and focus on policy matters: sustainable funding, equitable access, privacy protection and standardization. Had the Dutch done this instead of picking technologies, running tests and designing trials, government transition would not have derailed transport policy programming.

Sustainable funding. Cars dominate our travel preference, vehicles are becoming more efficient, and we are beginning to electrify our automobiles. The migration from fuel tax to pay-by-use is fairer and likely inevitable. Whether we use odometer, GPS, cellular triangulation or swearing on a bible is not the core issue. Key is uninterrupted funding to keep our transportation system running, safe and expanding. Only government can restore sustainable funding.

Equitable access. Any pay-by-use scheme carries the potential of variable fees – more for congested times and places and less for smaller, cleaner vehicles. How prices are set, exemptions granted, and collection enforced influences who will use roads and when. This shifts traffic flows, alters settlement patterns, changes transit demand and may change property values. We require an evolutionary transition over an extended period, fair entitlement to mobility, greater choice, an opportunity to arrange graceful changes in family, work and school arrangements, and assurance that benefits exceed costs to drivers. Only government can set and enforce such policies.

Privacy Protection. Privacy and information commissioners in several countries treat very seriously location data used to calculate road use charges. The International Working Group on Data Protection in Telecommunications has published a guideline (The Sofia Memorandum) that includes a provision for all location data to remain under driver control. But there is no certification process, or promise to follow this guideline. The fear-based clamor in the popular press is deafening, as is the silence about privacy from transportation departments and ministries. Government is strongly motivated to protect privacy. This promotes acceptance. We will not have acceptance for RUC programs for commuter vehicles without transparent action on the matter of privacy. Only government can do this.

Standardization. Standards must be established and promoted. The international bodies ISO and CEN have established many standards for road use charging equipment and methods. Without these, travel across jurisdictional boundaries will be problematic. Government needs to enforce the use of standards.

Shifting focus

Since the 60s RUC has evolved from demand management theory for transport economists, to a livability paradigm adopted by urbanologists, and most recently to distance-based charging for sustainable transportation funding. With fuel taxation failing due to engine efficiency, recession-induced VMT reduction, political inability to raise fuel taxes, and the specter of the electric vehicle, some countries, particularly the United States, feel the tourniquet of unsustainable transportation finance.

Until recently, one government pre-occupation has been reliable technology and methods to meter use and collect charges. The majority thinking has been centered on GNSS metering for its flexibility and extensibility, focusing on accuracy, cost and privacy. Cost assumed that in-vehicle equipment would be dedicated to tolling, hence provisioning accurate, tamper-proof GNSS telematics is expensive for passenger vehicles, making it bitter medicine for government to swallow.

The past few years have seen an increasing interest in non-tolling services such as PAYD insurance, navigation, parking or other traveler services. These would take some of the sting out of the cost and use of GNSS telematics units, adding sugar to the meds.

But we are still left with a large and complex deployment problem. Some continue to think more and larger trials can diminish this uncertainty.

There are several reasons to run RUC trials: Does the technology work? Will drivers accept it? Will it work as a demand management tool? Can we roll it out on a massive scale? Can it be made tamper resistant? A hundred questions cloud the horizon.

Numerous trials have been executed. Some deployed a few hundred vehicles. The largest in the US incorporated 2,700; Holland was poised for 60,000. It is a blessing in disguise that the Dutch are forced to rethink their program. Perhaps the US can also abandon its delay-by-trial tactic and move directly to deployment.

Trials are expensive. An online search for the three US trials indicates that each of the 2700 Iowa trial participants cost $6110, the 450 Puget Sound vehicles studied were $5510 each, and each of the 300 Oregon drivers cost $9800. The weighted average tab to the US tax-payer was $6,350 for each of 3450 volunteers. Compare this to the 3-year cost of $955 to equip each of 120,000 trucks in Slovakia for nationwide RUC.

The cost to meter a vehicle for three years is about $1000 with current technology. Add another $500 for billing and collection and $1000 for the study itself. If you pay drivers to participate, it is easy to justify well over $3000 per vehicle over a three-year trial. A one-year trial might cost a few hundred dollars less.

Trials seldom promote innovation. Each of the trials I am familiar with was designed before equipment acquisition and became closed to technological innovation once commenced. Lessons learned were proprietary to trial participants. The recently extended DfT (UK) equipment trials may be an exception: they were intended and apparently managed to explore technology innovation. Unfortunately the DfT maintains an information blackout, likely because of low public acceptance of RUC in the UK, in spite of the fact that this work was at tax-payer expense.

When government dominates trial participation, how fast are innovations turned to exploitable product, exports and jobs? Bonn promoted the German truck tolling system partially to help revive a moribund hi-tech industry, but that was in the context of an operational system. So far the only publicly available lessons regarding the most promising technology have been provided in Germany and Slovakia – both operational systems.

Trials are unnecessary. We already know GNSS technology works (Germany and Slovakia prove that). The solution to the urban canyon problem is less well known, but short technical trials have shown that this is addressable in more than one way. We know road pricing changes behaviour as shown in Puget Sound, Stockholm, Germany, London and Singapore. We know volunteer participants appreciate the need and fairness of RUC. We know almost all drivers prefer privacy protection. We know how to distribute, manage and bill massive numbers of handsets, the mobile equivalent to in-vehicle telematics devices. There is no RUC-via-telematics mystery that a trial can address.

Time for deployment

The remaining problems are cost, trust, and equitable access. Evolutionary deployment is the best way to address these. Here is how to get started.

Save $3000-$6000 per vehicle by creating a permanent, self-sustaining market for non-tolling, pay-by-use programs that require road-use metering telematics. Enable PAYD insurance by changing state legislation. Offer a $100 subsidy to insurers per file switched to per-mile-pay. Enable parking-by-telematics by subsidizing megaregions to reform parking management. Reduce underpriced parking, infrastructure costs and enforcement costs in a single stroke. Subsidize driver rewards for not driving during peak hours. Subsidize parking discounts for smaller vehicles and eCars.

Invite telematics payment-service bids from network managers such as Cisco, Telcordia or Alcatel-Lucent and from Telcos such as Sprint, Orange or Vodaphone, or from large integrators such as IBM or Logica. Offer a multi-year, protected market to the winners for parking, insurance, and behavioral rewards in several megaregions. Design service contracts for three million vehicles in a two-year ramp-up, and do not cap them. Unleash full competition after three years. Regulate privacy and guarantee equitable access by enforcing fair but market-structured spatial and temporal pricing rules (pricemap) for roads and parking.

Let these operators add service bundles for infotainment, safety, “Onstar-lite”, traveler services, mobile high-speed internet, and early aftermarket Intellidrive or connected car features. Let them handle existing tolls on behalf of subscribers, as well. In exchange for temporary market protection for insurance, parking and reward distribution, demand that they meter for road-use using a simple revenue neutral pricemap while rebating fuel-taxes at 125%. Treat owners of eCars to an equivalent rebate. Pay these operators 3% of the road-use charges collected expecting them to generate sustainable profit from the other services. (Fuel-tax rebates can gradually be reduced as fleet electrification targets are met, but throughout the evolutionary shift it should always be a little better to pay-by-use than to pay fuel taxes.)

Arrange for service operators to specialize in commercial vehicles offering logistics services instead of connected car components – or both! Arrange for others to specialize in shared vehicle applications: car-share, rentals, lease management, jitneys, etc. Incent others to specialize in private commuter vehicles. Do not directly subsidize telematics development or purchase telematics units. Incent service operators to collect charges at 3% by fostering taxable market programs that require the same systems as RUC. Do not bribe drivers to participate. Incent market builders who can attract customers to voluntarily swap road-use fees for fuel taxes.

Persuasive systems require privacy protection, convenience, time and money savings. Pervasive systems allow governments to observe their reliability as enforceable collection agents. A decade-long, evolutionary approach can generate revenue (parking and service taxation), spawn new markets (jobs, exports), address congestion (parking and insurance reform) while building trust and an installed base of metering and enforcement system operators to replace fuel distributors as tax collection nodes.

Toronto Takes the Gold for Congestion

2010-03-30T11:28:00.006-04:00

In the ever-exciting congestion Olympics, Toronto takes the gold! Raise a toast! Congestion is a measure of prosperity and success. We win!

According to a Toronto Star article reporting a Board of Trade report, our average commutes are now longer that those in a field of 19 majors (see table). But these are not really the biggest and nastiest. The BOT skipped many tens of worse-off cities in Asia. Heck, Moscow, still worse, is not on the list. And look where Montreal is already. We may not even make the podium at next year’s BOT Congestion Olympics.

The truth is this is caused by a lot of things besides prosperity. Lousy Transit, Sprawl, Cheap Gas, Property Values, Gas Tax Unchanged for 20 years, Ontario’s Protectionism of the Auto Industry. A lot of things. It is broadly systemic. It cannot be fixed by a Mayor, no matter how courageous she may be.

Christopher Hume gets it big time: “It should come as no surprise that a (provincial) government that would spend billions bailing out the auto industry would also cut billions from public transit. If it's true that action speaks louder than words, there can be no doubt about where the province's intentions lie – and it's not on the subways, or LRTs, or buses.”

And Dennis DesRosiers was vilified for making this very clear last November: “…if governments collectively want to protect the 900,000 to one million jobs in the automotive industry, they also have to accept that we need more vehicles, not less ... I'm against road pricing… We need consumers to drive more, not less.”

Hume and DesRosiers get it. 100%.

If you add to Hume’s and DesRosiers’ insights that the Ontario Ministry of Electric Outlets has promoted the FIT program as a way to get near-free energy for your car, what else needs to be said?

Good-bye Transit. Hello Cars. Good-Bye Fuel Tax. Hello lots of cars. Hello congestion. Hello Road Pricing. Ontario will save Toronto’s surface transportation system by forcing it to tax its roads. Ruthlessly cutting meager transportation funding is to be expected as a measure in the progress of this multi-billion dollar automotive-sprawl policy. Money is made in building homes and cars, not in building roads and transit. Consumers will be left to build their own roads. No mayoral campaign can stop this. But I am heartened that it is a subject of debate in the current mayoral election.

What almost no one gets is that road use charging is needed to keep the roads under our cars, NOT to keep cars off our roads. No one. No driver. No politician. No journalist. No cyclist. No pedestrian. No philosopher. Only a handful of transport economists and cyberneticists can see this, and they, too, are for the most part unable to say what I just said for fear of being politically incorrect.

I love the smell of rotting gas tax in the morning

2010-03-26T11:16:00.002-04:00

Here is one of many reasons free-to-use roads can't keep pouring out of the end of a gas hose.

Here is why automotive power will be free, but roads won't.

If you know the name of the film and scene I took the title from, you can see where this is going...

A proud day for Canadian Innovation

2010-03-24T14:56:00.005-04:00

Canada’s Skymeter claims Intertraffic Innovation Trophy

After 8 years of work...

"Canada-based Skymeter Corporation has won the overall 2010 Intertraffic Innovation Award. The company succeeded with its smart road-use device which it has designed to handle a wide range of automotive mobility-related payment needs, including road user charging, parking fees, insurance and carbon metering, as well as reward schemes to encourage differential driving times, carpooling or teleworking.

Foppe Mijnlieff (left) and JD Hassan. Lookit dem smiles, eh?

"Specific innovations include the mitigation of urban canyon-derived errors, privacy-protection ranging from full anonymity for private motorists to full transparency in logistics management, and charging reliability independent of map matching.

"Skymeter was also the individual sector winner in the ITS/Traffic Management category. The Awards Jury saw it as a technology for the future and one which seemingly addresses many apparent concerns over using satellite tracking for traffic management applications."

Readings for Toronto Transportation Leadership

2010-03-23T03:06:00.002-04:00

Selected readings re: transport policy ideas related to tolling, parking, revenues, fairness, costs, objections and monetization from an upcoming book tentatively called: "The Death of the Gas Tax and what to do about it".

Replying to objections to tolling in Toronto:
http://grushhour.blogspot.com/2008/02/objections-to-road-pricing-in-toronto.html

Why under-pricing parking harms Toronto:
http://grushhour.blogspot.com/2009/03/how-torontos-parking-pricing.html

How the cost of tolling can be made (near) zero:
http://grushhour.blogspot.com/2009/12/how-to-toll-country-for-free.html

The danger of monetizing Toronto parking before it is fixed:
http://grushhour.blogspot.com/2010/03/parking-manifesto-as-broke-toronto-goes.html

How to add MORE parking, rather than less -- while addressing bike lanes:
http://grushhour.blogspot.com/2009/10/creating-space-get-serious-about.html

A way to fund cycle lanes AND make then safer:
http://grushhour.blogspot.com/2009/10/funding-get-serious-about-toronto.html

How and why to toll roads in Toronto:
http://grushhour.blogspot.com/2010/03/why-and-how-to-toll-roads-in-toronto.html

How to get Free Parking (comic relief!):
http://grushhour.blogspot.com/2007/08/how-to-get-free-parking.html

Why and how to toll roads in Toronto

2010-03-20T21:11:00.007-04:00

It’s time to make Toronto’s transport systems work for everyone. Funding, congestion, and emissions are issues that are not going away. Urban tolling is a matter of discussion in hundreds of jurisdictions around the world and there are many deployments each with its own reason and design and its own success or failure profile. There are none that Toronto should mimic, but there are many lessons to glean. For the kind of tolling we usually think of – that of a limited access highway like the DVP – the current best practice worldwide is the one we proudly pioneered on the 407. We could use the same transponder-plus-camera combination for the easy opportunity and inherited idea recently resurrected by mayoral candidate Sarah Thomson – tolling the DVP and the QEW.

Unfortunately, tolling only these two highways is a flawed approach, expecting one subset of commuters to subsidize those using other routes into the city. It will divert traffic onto adjacent roadways creating new bottlenecks, new hazards for pedestrians and cyclists, and shuffle emissions into neighborhoods. London and Stockholm saw 20% drops in traffic counts after tolling schemes were set up that permitted no alternate access route for cars or trucks. Given free, nearby alternatives to the DVP or QEW, tolled traffic will drop far more than 20%, distorting traffic flow and producing less revenue than needed. The 20% ‘over-performance’ of the 2003 London scheme caused the initial £5 charge to be raised to £8 by 2005. Interestingly, this increase had only a miniscule effect; traffic counts showed extreme inelasticity since the original £5 fee had already exorcized non-critical demand. A core set of drivers are willing to pay to stay in their cars, but not all and not so many if there is an alternative.

Tolling these two roads would do little for congestion or emissions and would raise far less revenue than expected. As proposed, this program could not fulfill its revenue target in 10 years.

For urban livability, our mobility, and our health and sanity, Ms Thomson does Toronto a service by forcing this conversation to the fore. For this alone she deserves an audience in the current race and will carry a burden of our road rage. For this she should be thanked.

We need to start tolling roads – and not only for the unholy trinity of revenue, gridlock and pollution. As we electrify our personal vehicles, the fuel tax, already funding only 70% of our highways and virtually none of our urban streets, will continue to fail us. If you drive an internal combustion vehicle, how long will you subsidize my e-car?

Satellite-based road-use metering can now operate anywhere without 407-style roadside gantries. It requires only a modest number of mobile enforcement spot-checks. This technology is as private as your personal navigation device permitting payment without location data leaving your control – or your vehicle. It is more private that the 407 transponder and can even be anonymous (pre-paid). The smart road-use meter, a forerunner technology for the next-generation dashboard manages demand-based use-fees that depend on time and place. It provides for our road networks what “time of use” charging does for our electric grid.

To make this new shift from property and fuel taxes to pay-for-use charges even more attractive, it manages parking payment by the minute, removes the need for parking tickets, and can find a spot for you. It handles pay-as-you-drive insurance, providing fairer premiums to those who drive less. It even offers a voluntary switch from fuel taxes to variable pay-as-you-go fees saving money for the motorist who can avoid peak-hour travel in a single-occupant vehicle.

TIME 100’s Robin Chase calls this using Finance 2.0 to build Infrastructure 2.0.

But most importantly it is self-enforcing when it is voluntary since its advantages are designed to outweigh the rewards of cheating. Regional governments need build no tolling infrastructure beyond a geographic database of time-dependent prices for roads and parking. Nothing needs to be mandated. Disinterested drivers can ignore it.

Tolling in the style of the 407 is like elevator music no body likes. Using voluntary smart-meters loaded with incentives is like using an iPod to escape the Muzak.

Rescue Toronto’s surface transportation system with rewarding technology, rather than by shooting fish in a barrel.

Sarah Thomson: Tolling Toronto’s DVP and QEW

2010-03-17T21:55:00.006-04:00

There are a lot of ways to toll roads in Toronto. You could toll the city center, as London and Stockholm do. You could toll the entire GTA as the Dutch intend to do with their entire country. You could toll just the DVP and QEW as Sarah Thomson proposes.

There are a lot of reasons to toll Toronto. You could avoid raising property taxes to pay for the roads. You could fund Metrolinx’s Big Move (last I heard, they were shy $38B over 25 years – now 24 and ticking). You could reduce congestion (but parking reform would be an easier way). Or you could toll for only ten years to build out the subway as Sarah Thomson proposes.

I am pro-tolling. I am pro-subway.

But I am not for tolling this way or for this reason.

I commend Sarah Thomson for having the kahunas to propose this out loud while running for mayor. She has started a critical debate – and she is right in all but the details.

Tolling only the DVP and QEW means that commuters to and from Pickering and Oakville fund the subway, but commuters from Richmond Hill do not. This is unfair. Worse commuters from everywhere in Toronto West of the DVP and North of the QEW will also not contribute. I live in Southwest Scarborough. Perhaps I should help fund the subway, but I won’t be able to in this scheme, since I drive along Kingston and Gerrard. Our tendency to want to toll 905 commuters and not ourselves is obsessive. I want to see renewed transit. I want to see Toronto get great again. But it is our city, after all. We need a way to toll everyone a little bit, not a few people a lot. Besides if we tolled by distance traveled – not just because you used a certain road segment – then 905ers would pay a little more – but not because they are not “one of us” but only because they drove further, they used more road, they caused more congestion, and they polluted a bit more. You should pay for how much you use, not because of where you live.

Tolling exclusively to build the subway taxes Peter expressly to pay Paul. It becomes a tax, not a usage charge. I agree that some road tolls should be directed toward transit on the argument that a good transit system can help decongest the roads, but not the 100% cross subsidization Thomson proposes. We need a way to toll everywhere a little bit and to develop a sharing formula so we can repair our roads (which are in a similar state of decline as is our subway) as well as contribute to new transit.

A toll of $5 per day to someone in Pickering to use the DVP is about 110 per month – equivalent to a metro pass. This will divert traffic and move congestion to parallel roads, congesting neighborhoods and reducing Sarah Thomson's target revenue (traffic drop can be expected to be about 20%, so she needs to take that into her calculations. The 20% will largely come from time-shift and road-shift, not from taking transit).

The issue of taxing road users exclusively to pay for transit, is seldom broadly accepted. This is the case in Europe as well as the US. A report arrived in my email today from a US commentator, Bob Poole of Reason.org, a thought-leader credited with contributing the HOT (high-occupancy/toll) concept. While reading a small outtake, note the parallels for Toronto, and the GTA and the 905ers vs 416ers. Even a strongly pro-tolling leader like past Secretary of transportation in US, Mary Peters, was against extensive cross subsidization from a single facility, while she was very much for tolling everywhere using a time-distance-place approach.

Legislators and transportation officials are on tenterhooks awaiting the U.S. DOT’s decision on Pennsylvania’s proposal to put tolls on I-80. The state got turned down two years ago by the Mary Peters DOT, on grounds that its plan did not meet the requirements Congress laid down in the TEA-21 pilot program that lets up to three states rebuild an Interstate with toll financing. What Pennsylvania (still) proposes doing is to make I-80 tolls a major funding source for transit and highways statewide, not just for rebuilding and modernizing I-80 (which is what the pilot program allows). The trucking industry rightly opposes Pennsylvania’s plan as both contrary to law and as a terrible precedent that would convert a toll into a tax.

… Connecticut legislators have been debating for the past year the idea of putting tolls back on I-95 for “improving traffic flow on I-95, maintaining and reconstructing state bridges, and expanding mass transit,” according to the co-chair of the legislature’s transportation committee. In New Jersey, the transition team for Gov. Chris Christie proposed putting tolls on I-78, I-80, and I-287 so as to bail out the state’s ailing Transportation Trust Fund. Wyoming’s state senate in February approved a study that would lay the basis for applying to the feds for permission to toll I-80 in that state, but the measure failed in the other house after heavy opposition from the trucking industry.

An idea frequently mentioned in most of these proposals is putting the toll collection points at the state borders. The idea is to tax those out-of-staters who don’t vote in the state, while de-facto exempting most state residents who do vote there. That almost certainly would not survive legal challenges under the interstate commerce clause of the Constitution. (Even cutting existing turnpike tolls in half for local residents, as some West Virginia legislators recently proposed, was judged likely to be ruled unconstitutional.) And this kind of thing serves to further stoke trucking industry opposition, reinforcing the view that what those legislators are proposing is a tax rather than a toll levied in order to provide Interstate users with much-improved mobility.

Ontario and US transportation leaders share a common set of problems

2010-03-06T23:39:00.007-05:00

Ontario’s Transportation community is in good company.

A 2010.03.06 newsletter from Ken Orski re Transportation Funding in the US is an excellent crystal ball and near-future predictor for Transportation Funding in Ontario (www.innobriefs.com (Vol.21, No 4) “The Clouded Future of the Surface Transportation Program”). Here are its critical messages for Ontario:

This is the third time in less than three years that Congress used the general fund to bail out the Highway Trust Fund, growing from $8B to $19B over three tranches. This is a measure of the steadily declining efficacy of the fuel tax. We enjoy the same trend.

“House approval of the Jobs Bill … on March 4 … has put an end to the series of temporary month-to-month extensions and placed the federal surface transportation program on a solid financial footing for the rest of the year. The bill, which extends the federal transportation program through December 31, 2010, transfers $19.5 billion from the General Fund into the Highway Trust Fund and restores an earlier $8.7 billion rescission of contract authority. These resources, when added to the expected revenue stream from the gas tax, should allow the Trust Fund to support highway and transit programs at the levels authorized for Fiscal Year 2009 through the end of 2010 and into 2011.”

Using money from the General Fund is a holding pattern, because for various reasons they cannot take the necessary measures re funding reform. Note the taboo against mention of a critical market-rectifying tool – paying by road use rather than by a fuel consumption tax. We enjoy this same taboo. We also need “breathing room”, have “murky prospects” and “fail to shed light”.

“Passage … extend[s] the existing law for 18 months (through March 2011). It also provides Congress and the White House with some welcome breathing room in which to come up with a longer-term solution. However, the prospects for a multi-year bill remain murky. Several meetings in the past two weeks have focused on the outlook for transportation legislation but failed to shed any new light on how to pay for a long-term bill…”

US Congress cannot raise fuel taxes. Neither can we.

“Running through all of the discussions was a common refrain: how to pay for the needed improvements to the nation’s transportation system. To close the funding gap between the projected revenue to the Highway Trust Fund (HTF) ($235 billion from 2010 to 2015) and the program needs … would require an extra $215 billion over the life of the next authorization (or an extra $265 billion if the proposed rail program is included). Where is the money to come from? No one has yet produced an answer. “We cannot afford to continue funding our highways and transit out of the General Fund,” Sen. Conrad said, urging Sec. LaHood to devise other funding alternatives. But the latest round of meetings broke no new ground.

The most obvious option --- an increase in the gas tax--- seems to have been taken off the table. The Administration’s unwillingness to consider this option was forcefully reaffirmed by Secretary LaHood at the AASHTO Briefing. “It’s easy for people who are not elected to talk about raising the gas tax,” the Secretary observed. “They don’t have to face the voters.” He left no doubt that the Administration remains unalterably and unequivocally opposed to this option—at least as long as the country finds itself in an economic recession. Nor is there political will in Congress to enact a tax increase in an election year.”

In the US, as in Ontario, how roads are funded becomes less and less transparent. This prevents taxpayer from having any idea of the true cost of the use of a private vehicle.

“How about supplementing the HTF revenue with General Fund appropriations? This option, it was pointed out on more than one occasion in the recent meetings, is not exactly without precedent. It was pursued de facto to keep the Trust Fund solvent during the past year (with two transfers amounting to $15 billion) and it will be used again in implementing program funding under the latest extension ($19.5 billion). Overall, the federal surface transportation program has benefited from almost $60 billion in General Fund transfers over the past two years.

Objections to using General Funds are based on three grounds: that their use undermines the user-pays principle; that it means a potential loss of contract authority, i.e. the ability to enter into multi-year funding commitments in advance of appropriations; and that it opens the surface transportation program to competition for funds from other government programs.”

Hiding the cost of mobility erodes the user-pays principle. This will serve to make eventual funding reform (e.g., road-pricing) ever harder, until we reach a state of emergency.

“While the user-pays principle is not without merit, it has been already substantially weakened in recent years as the Highway Trust Fund assumed additional funding responsibilities for mass transit and other non-highway modes (walkways, bike paths, scenic trails) and, most recently, promoting the “livability” agenda. Today, as much as 25 percent of the Highway Trust Fund revenue is spent on non-highway programs. One way to partially restore solvency to the Highway Trust Fund, some participants at the recent meetings suggested, would be to limit the use of HTF funds to highway expenditures and transfer all of its non-highway obligations to the General Fund. It is estimated that this would free up approximately $10 billion/year for highway expenditures.

At the state and local level much of the revenue for routine highway operations already comes from sources other than user fees. It includes developer impact fees, tax districts, local government bonding, and state and local sales taxes. Thus, another funding approach would be to follow the local example and reserve HTF tax revenues for the maintenance of the National Highway system in a state of good repair while shifting the expense of funding new capacity to the General Fund. The Administration seems to have embraced this philosophy by proposing to fund the $4 billion National Infrastructure Innovation and Finance Fund (NIIFF)— designed to fund major capital transportation projects— with General Fund contributions.”

The US lacks decisive leadership in Transportation Funding. So does Ontario.

“The need for the Administration to become more engaged in advancing the transportation agenda was mentioned repeatedly at the recent meetings. “We need President Obama’s leadership to move things forward,” urged Sen. Voinovich at the Bipartisan Policy Center meeting. Implied in his statement was a widely shared perception that the White House has been largely absent from the debate about the future of the program.”

The unrelenting (and I say fruitless) struggle between highway vs transit continues (note the car-wars swipe):

“The Administration has yet to articulate a clear vision of where the federal program should be going. Its “livability” agenda – described by some critics as “a rhetorical abstraction” and alleged by the AASHTO community to be a code word for downplaying highway investment in favor of public transit – is no substitute for a coherent long-term strategy that clearly defines the federal role, establishes criteria and performance standards for federal investment and provides a financial plan.”

Leadership remains non-committal for both of us:

“Pressed to provide some indication as to when the Department may be expected to unveil its blueprint for a multi-year transportation bill, Secretary LaHood told reporters at the AASHTO meeting that a set of “principles” will be released within the next 90 days. Will the principles include a funding proposal, the Secretary was asked. He would not say. But the Secretary's earlier testimony before the Senate Budget Committee made it clear that the Administration does not expect to release its full authorization proposal before the end of the fiscal year.”

Our two publics are insufficiently engaged:

“Another recurrent theme at the recent meetings has been the need to seek public support and raise public awareness about the necessity for larger investment in transportation But … warnings about “crumbling infrastructure” do not resonate with the general public. People do not seem to share a sense of an impending infrastructure crisis, nor are they alarmed about the deteriorating state of the transportation system. Collapsing bridges are happily few and far between, and the focused attention that state and local highway agencies devote to system preservation and maintaining their assets in a state of good repair tends to keep signs of aging infrastructure largely hidden from view. The effects of disinvestment are not readily apparent and warnings about an “infrastructure deficit” fall on deaf ears.”

People complain about congestion, but do not see is as solvable. It is seen to be like the weather – either unaddressable, or “the worst happens elsewhere”.

“To be sure, another current deficiency of the transportation system— traffic congestion— is highly visible and public dissatisfaction with it is well documented. But the driving public has grown skeptical that more money or program reform will bring effective congestion relief. Perhaps they have come to accept the truth of the oft-repeated refrain that “you cannot build your way out of traffic congestion.” What is more, traffic congestion leaves vast [rural] stretches … unaffected and unconcerned. Mitigating traffic congestion may be of great importance to many individual urban communities, but it is not perceived as warranting federal intervention.”

Without a major change, we will both continue to drift.

“According to most economists, the projected budget deficit in the out years will not return to what is considered as “sustainable” levels any time in the foreseeable future. This has led one respected political analyst, NY Times' David Sanger, to predict that there will be virtually no room for major new domestic initiatives in the next ten years. Instead, as Emil Frankel [Director of Transportation Policy, Bipartisan Policy Center] speculated, we may continue to drift along, relying on General Fund appropriations to prop up the program until such time as the effects of the accumulated disinvestment become visible enough to create conditions of a genuine emergency. At that point, aroused public opinion will oblige the Congress and the President to act forcefully and decisively, setting the stage for a major multi-year program of infrastructure renewal akin in scope and ambition to the Interstate Highway Program.”

Frankel is right. Things have to become “visible enough to create conditions of a genuine emergency”. And that is a shame. Unfortunately, “infrastructure renewal” in the absence of user-pay reform from fuel-tax to road-use-tax will be a no-show. Every government program demands more funds. Every tax-payer demands to pay fewer taxes. This is not rocket science.

Regarding the Innobriefs newsletter:

“Please feel free to forward or reprint this item with appropriate citation. All correspondence, including requests to subscribe and unsubscribe, should be addressed to: C. Kenneth Orski, Editor/Publisher; email: korski@verizon.net; tel: 301.299.1996; fax: 301.299.4425. Please make sure that your email account is set up to accept incoming mail from korski@verizon.net”

Parking Manifesto as a broke Toronto goes into a civic election

2010-03-02T22:37:00.012-05:00

Street parking in Toronto is underpriced.
Underpriced street parking:
- generates congestion,
- generates pollution,
- wastes citizen's and visitors time,
- harms the lower-income driver disproportionately,
- diminishes safety (of cyclists),
- diminishes livability, and
- shifts the burden of funding the City from motorist to property tax payer.
Toronto’s underpricing of street parking denies the City badly need revenues.
The cost of parking operations has been estimated to me at about 70% of its income. This implies that if Toronto appreciates an annual net revenue of $125M as recently reported in the newspapers, that this could be increased to about 325M (est.) without increasing staff or purchasing additional equipment, but by a average doubling of on-street parking fees (assuming 1/2 of the revenue is of from street parking).
In the event the City were to monetize its parking assets the estimate of 500M (recently made by a journalist based on 4 x net revenue) would undervalue the Toronto parking franchise by some 800M (using the same 4x assumption). This would represent a terrible loss of opportunity to our City, forcing a further, unnecessary increases in property taxes.
Under monetization of Chicago's parking to a private company, that company raised on-street prices, extended its operating hours and extended some parking zones. If that happens here, it means that property tax payers are indirectly paying taxes to a private company.
Toronto’s the use of one-hour free-parking and our police force to mark tires is an egregious waste of City money, when it is now possible to correctly managed priced parking anywhere in the City, including streets where paid (non-resident) parking turnover is too low to return investment in pay-and-display equipment.
In the event Toronto parking assets are monetized, I ask that the City argues for a proper valuation (to reduce property taxes or avoid a further raise) and then permit the private operator to adjust prices appropriately, to recover its investment. In other words, I propose the City trust a private operator rather than Council to set market prices and rescue our city from its sea of circling cars looking for cheap parking.

How Toronto’s parking pricing contributes to pollution and congestion, wastes time, and robs Toronto of desperately needed revenue.

Wicked Problems

2010-02-28T22:28:00.004-05:00

I finally completed the white paper I promised back in October about wicked problems. Here it is.

Electromagnetic road pricing

2010-02-27T16:02:00.013-05:00

Many ideas are bubbling up to address the driving range of electric vehicles (EVs). This one (thanks Leon), albeit with a large infrastructure hurdle, would compound the need for road pricing, because the road itself would be charging the batteries.

There is also a lot of resistance to the electric vehicle. David Booth (aka Motormouth), is adamant that EVs are losers and is one of Canada's leading automotive journalists. We should ask why, shouldn’t we?

Booth is adamant EVs are losers in order to sell print. Few readers of newsprint want to read that EVs are improving, that there is a small and growing market, that current demand outstrips supply, that there are many thousands of engineers working on the problem? Such readers want to know which car to buy now. This year.

And no one wants a lecture about how demand grows markets, that markets push technology, that disruption feeds demand, that unexpected breakthroughs happen, and that tomorrow is generally like today only in structure but never in detail. Not everyone needs to buy an EV to change the equation Booth thinks cannot change.

But what happens after 10% do?

~~~~~

Booth is one of Canada's leading automotive journalists, because newspapers sell cars, and damning EVs is good for the ad-men for the internal combustion engine (ICE). The truth about EVs is that at some point there will be a lot more of them, that they will serve some subset of the market (likely between 20-60% by 2050), that they will demand some thought from engineers that worry about electricity grids (they are already thinking), that they will worsen congestion, that as soon as they hit 5-7%, they will force the institution of road-use charging, that users of ICEs will pay both fuel tax and road use charges, and that that will accelerate EV sales.

Booth is right that only a small group of greenies will today sacrifice long-haul travel for the feel-good of owning an EV. But as soon as that small group is large enough to force government’s hand to deal with mess road funding is currently in, a tipping point will occur. The evolution of battery and charging technology is just that – evolutionary. The revolution will come from a tax shift.

If Booth were to encourage readers to anticipate the EV, a small percentage of people might wait one or two more years before they get their next car – just in case selection improves. This is not a good thing for newspapers who rely on automotive ads.

How electric cars and pay-as-you-go are connected

2010-02-15T13:41:00.011-05:00

Shifting to electric vehicles interests me for two issues: How do we encourage people to switch and how will they pay for road use after they switch?

In the past, I have discussed a new market ecosystem for power, e-cars and road-pricing. As well, I noted the manner in which the Danes elected to encourage the uptake of electric cars (excessive, perhaps, but right-minded).

Recently, Streetsblog, described a new report (Exploring Electric Vehicle Adoption in New York City) from the Mayor’s Office of Long-Term Planning and Sustainability. (more)

To summarize the summary for the twitter attention span:

Electric vehicles could help achieve New York City’s sustainability goals.
The Federal Government is aggressively supporting EV development.
There is a potentially large group of early adopters willing to change behavior to accommodate electric vehicles.
These early adopters will likely outstrip the available supply of EVs to the New York market for at least the next five years.
The study suggests targeting early policy actions to those issues that early adopters find most important. Efforts focused on other consumer segments should wait for several years.
Early adopters do not appear to need a high-density public charging network or local tax incentives.
The projected level of adoption of EVs should not threaten the stability of the electric grid as long as most chargers are “smart”, allowing charging to take place during off-peak hours.
An opportunity exists for industry stakeholders to partner to prepare for, and encourage, EV early adoption.

The study also suggests targeting early policy actions to the issues that early adopters find most important. Efforts focused on other consumer segments should wait for several years. I would suggest, instead, focusing on ways to expand the pool of early adopters. The very early adopters hardly need incentives.

So what about pay-as-you-go?
The Mayor's report (above) lists a number of early incentives on page 19. Some of these can be delivered and the list can be extended with on-board devices that manage parking (for payment automation, parking finders, loyalty programs and green-rewards), and pay-as-you-drive insurance. So on the uptake side, technology can deliver value to encourage EV purchase, but once penetration starts, how are these vehicles to pay for road use? You can forget taxing electricity at the rates required for road user fees. The answer is some form of road-use charging, and TDP is the best. So if NYC said, "here are a handful of financial incentives, and the easy way to get them is with a road-use meter," NYC would have those early adopters establish the installed base of road-use meters for road use charging by 2015-2020, as will be needed anyway.

Win-Win.

Toronto public parking and the upcoming municipal election

2010-02-12T01:04:00.004-05:00

Toronto Councillor Karen Stintz mentions the possibility of monetizing Toronto Parking in a BOT guest blog, today:

While talk about selling any one particular asset is premature and distracting, it is not premature to figure out how we might be able to do it. … For example, consider the Toronto Parking Authority (TPA). Currently, the TPA provides low-cost parking to residents and returns modest revenues to the City. The strategic objective of the TPA is to consolidate land and in some instances, sell it off for development purposes. In its current form, there is no reason that the city needs to manage this asset. However, the TPA has the potential to become a vital component in the green agenda if parking lots can also be used as filling stations for electric cars. Suddenly, the public interest is very different from our original thinking.

The subject of selling, or more likely leasing, City assets is critical and not at all premature. There are many pros and cons. There are many ways to make errors. And we clearly need to manage debt.

There are two key criteria: The first is that the use of proceeds must replace value lost with even greater new value gained. Today at the board of trade, Dana Levenson from the Royal Bank of Scotland described several asset sales made by the City of Chicago as returning great value to the citizens of that city and others that performed less well. Toronto Council members should closely study those lessons.

The second is that the assets under consideration need to be correctly valued. And here I am concerned that Toronto’s public parking garages, lots and street meters are very likely to be critically undervalued.

An article in the National Post on Monday Jan 18th included a very short mention of the possibility of monetizing an operating contract for these Toronto Parking Authority assets. To quote from the article “The city's wholly owned parking operations generate about $55-million in profit every year. …anywhere from $200-million to $500-million could be made if the operating contract was monetized…’. You will recognize the text-book “7-times revenue” equation for valuation.

When Chicago monetized its public parking a short while back, the new operator almost immediately raised prices, extended hours and turned a poorly-managed city asset into a far more efficient money generator for its shareholders. This tells me that in the City’s (Chicago’s) hands that asset was underperforming and by extension was underpriced when monetized.

Toronto’s public parking assets are worth much more than $200-500 million both to Toronto’s bottom line and to our city’s livability, if left in the city’s hands and re-priced to market value – i.e., prices made variable, raised to achieve Shoup’s 15% vacancy, hours extended to 70% vacancy, and priced parking deployed far more broadly (which also reduces congestion).

If our City currently generates $55M net as the Post article claims, then the City’s gross revenue would be on the order of 150-160M given that municipal parking operations (when they are as badly underpriced as they are in Toronto) consume between 60% to 70% of revenue. If pricing were doubled (which is likely a minimum needed for the effects listed), and the operator kept hours and enforcement methods the same, the operating profit would be more like $210M – a far cry from 55M. Suddenly the asset would be worth between 800M and $2B, using the same multipliers as the Post implies, since the new revenue all go to Toronto’s bottom line. If hours and areas were extended, valuation further increases dramatically. Your idea of charging electric vehicles adds yet more to the livability equation.

But without Councillor courage, we are better to monetize the asset for the immediate financial relief and let the new operator raise prices to market value and charge electric vehicles in order to make our city more livable.

But what a shame that we ‘poor voting members of the public’ might not share in that new revenue. Any such ‘poor voter’ who thinks he or she will continue to get “low-cost parking” after monetization, as you correctly describe this gift to our motorists, is fiddling while our City burns.

Fix parking pricing and you fix a lot of other things with it.

Americans Abroad

2010-02-07T23:42:00.008-05:00

Over the past few months a group of 10 US transportation experts from USDOT, six state DOTs and a private-sector consultant, engaged in a fact-finding mission re what the rest of the world is doing re road pricing. They called their project: “International Scan: Reducing Congestion and Funding Transportation Using Variable Road Pricing” and visited or examined the usual suspects: Germany, London, Netherlands, Singapore, Stockholm, as well as the Czech Republic, newly added to the slowly growing list.

Last Wednesday, 2010.02.03, the group presented a 90-minute webinar, which I recommend to road-pricing newbies. The recording of the webinar will be posted here by 2010.02.10. In Europe, where I have focused much of my work in the past seven years re road pricing, I have more than once heard the comment that "Americans do not learn from us". That is clearly not true in this case (as an American, the criticism had rankled me).

Something new that I learned from the Webinar: “Singapore estimates that the gas tax would need to be raised by $3 to achieve the same traffic reduction results as a $1 increase in their electronic road pricing system due to transparency of the charge.” This is not surprising in principle, but it is in scale. I wonder if any economists can comment?

There is a lot to learn from the European experience. We can learn about behavioral effects, expected decrements in bad things and increments in good things, about the quicksand of referenda (although our own Johanna Zmud can teach us as much), we can learn about expense, courage and complexity and perhaps something about attitudes (although that is blunted by our poor comparative record on fuel taxation so Americans' entitled attitudes toward "paying differently" will be harder to crack than the Europeans’ (except for the Brits')).

But there is also a lot not to learn. We should not copy any European system wholesale -- in fact, I hope no EU jurisdiction does (although Gothenburg threatens a carbon copy of Stockholm), as each of the current examples has flaws (the London Congestion Charge), each had specific constraints (the Swedish tax law), specific geographies (the most successful was a peninsular island, the most scared is below sea-level), specific leaders (Livingston), specific types of government (Singapore) and specific and twisted deployment histories (Czech Rep and Germany).

It is also the case that the technology developed by 2009 is far more economically efficient and effective, such that if re-done using what is now available, London would not likely be using fixed-position cameras (not because of privacy, since they already have cameras galore, but because those cameras robbed TfL of system flexibility, extensibility and scalability. It is known that Singapore is looking to upgrade (for the second time!) to a newer technology. One cannot make this claim about Stockholm, because it is their atavistic tax laws that chose cameras (only their 2nd best technical option at the time and now their 3rd best), nor would Germany’s system be very different from what it is, except it would be less expensive -- but that is always to be expected.

As an example of cross-fertilization of ideas I wrote How to toll a country for free for the Czech Republic. It's an extension of the some forward American thinking out of the FHWA in the face of the two most difficult American stumbling blocks to TDP road use charging (variable VMT charging): hyper-dependency on the automobile and a badly-misshapen fuel-tax policy history.

The future of car use payment is here

2010-02-01T00:18:00.002-05:00

Here is a preview of car rentals and car sharing. [thank you Russell] Hop in, record usage by distance and duration, and hop out. Only two things are missing – time of trip and location of travel. Imagine adding, as almost certainly will be added, a variable fee depending on time of day/day of week and place of travel – specifically set up to charge less for uncongested times and places. [Just like the airlines do, now.]

A small on-board computer – a “road-use-meter” – will translate location time, place and distance information into a fee in a way that protects privacy (even providing anonymity) and charges the user appropriately.

Why do all this? Well, it is easy to see that the company that owns the cars will want to be paid according to how long a car is in the possession of a user (duration) and by how much wear-and-tear has occurred (distance driven). As well, distance driven will relate to a road-use fee, since the subject vehicles do not use petrol.

But why time or day of trip? And why location of travel? These latter two measurements relate to congestion. If usage-prices differ in these ways, then traffic managers can reduce congestion by charging less at non-peak times and places.

As well, road-use pricing like this is expected be used before long for privately owned cars, whether they are propelled by an electric motor or not.

Programs like these mean we’ll need to build fewer roads, we’ll generate fewer emissions and we’ll endure less gridlock for the same vehicle miles traveled. In many countries – those with currently high fuel taxes – it will be possible to lower travel costs for those drivers who can avoid peak times and places.

Sell GreenP? NO WAY!

2010-01-18T22:28:00.007-05:00

Toronto Mayoralty Candidates Eye Asset Sales

National Post 2010.01.18. An article in Monday’s Post included a very short mention of the possibility of monetizing an operating contract for Toronto Parking Authority assets to raise money for a broke Toronto:

The city's wholly owned parking operations generate about $55-million in profit every year. The blue-ribbon panel provided estimates, still considered accurate, that say anywhere from $200-million to $500-million could be made if the operating contract was monetized over a period of time. There are also 150 parking lots, such as the City Hall garage or the Dundas Square garage, that could be sold.

Chicago did this a short while ago. Raised an obscene amount of money for that city. What happened? The new operator (no fool, he), raised prices, extended hours and generally found a way to shorten his ROI, all the while shoveling Dave Driver’s doubled dough into his shareholder’s pockets.

The Toronto parking asset is worth much more to us who live in the city if left in the city’s hands and re-priced to market value: prices made variable, raised to hit 15% vacancy, hours extended to 70% vacancy, and spread the good cheer to all the streets that are unpriced, underpriced, abused, tire-marked, and only occasionally enforced.

If the City currently generates $55M net as this article claims, then the City’s gross revenue would be on the order of 150-160M given that municipal parking operations (when they are as badly underpriced as they are in Toronto) consume between 60% and 70% of revenue. If pricing were doubled (Toronto needs this to control congestion), and the operator kept hours and enforcement the same, the operating profit would be more like $210M – a far cry from 55M. Suddenly the asset would be worth between 800M and $2B, using the same multipliers as reported, since the new revenue all go to Toronto’s bottom line.

Either way Mary Motorist pays 50% of current garage fees instead of 25% (still a steal), but my way the city (and its citizens) get the benefit. The Chicago method that the Post’s article contemplates means that some company’s shareholders get your dough instead.

And all this because City Council does not understand markets and arrives at work without courage.

Folks, it’s our city. Parking is about to get more expensive. Where should the money go? To our starving, pot-holed, Metropolis or to somebody's rich uncle?

Keep GreenP, and raise prices to market value.

RAC – The Congestion Challenge

2010-01-10T16:07:00.006-05:00

In July 2009, UK’s RAC Foundation*, sponsored a study. It’s foreword, copied here in its entirely, deserves to be widely read. I will comment next week on a way out of the very real challenge it exposes -- and a challenge that may affect a country near you.

FOREWORD

In an age where the political emphasis is on reducing car use, it is perhaps worth reminding those who run the country of a stark reality; over three-quarters of drivers would find it difficult to adjust their lifestyles to being without a car.

That is just one of the findings of this joint RAC Foundation / Ipsos MORI report which provides a barometer of opinion about car use and congestion, at a time when environmental policy is aiming to deliver important climate change objectives during great economic uncertainty. It underlines the importance of taking the needs and views of road users into account when developing a strategy in this area. Policy must not be developed without regard for public opinion, or at least the need for public explanation.

And here are a few more things to bear in mind. Congestion, although still considered a serious problem by two in every five motorists, is not thought to be as big an issue as it was ten years ago. This is a marked shift in opinion, created not by reduced traffic volumes, but because motorists appear to have reluctantly accepted the phenomenon of congestion, and believe it will only get worse in the future, particularly on motorways.

Improvements to the situation are considered unlikely and supposedly radical solutions like road pricing carry decreasing support. Additional charges for travel into town centres and motorways, no matter what the caveat, are unpopular, even more so than at the beginning of the decade – witness the resounding defeat of the Manchester TIF scheme in the referendum of December 2008.

Unsurprisingly support is highest for the options that cost the ‘public purse’ rather than the individual, such as public transport improvements. However previous backing for these initiatives has not translated into a change in people’s travel behaviour. In fact, there was actually a greater willingness to swap from the car to another mode of transport ten years ago.

Managing motorways better, through hard shoulder running and the adjustment of motorway speed limits during periods of high congestion, was generally welcomed, and more than six out of ten people favoured the widening of existing motorways where there were congestion problems, a similar level of support to measures that increase the number and frequency of bus services.

But on the whole, drivers remain unconvinced by alternative modes of travel - so much so that over half would rather take the chance of being stuck in a traffic jam than get on public transport. Only three out of ten people think it is likely they will use public transport to make a journey they currently make by car over the next year. This appears to illustrate both a reluctance to change behaviour and also disappointment with the alternatives that currently exist. Despite Government rhetoric about improving public transport, fewer than three in ten people are optimistic about its future, with the majority believing performance will stay the same or get worse.

The resounding message is that the travelling public are extremely pessimistic, and resigned to a future without performance improvements across the various transport modes. Those who anticipate a worsening in traffic congestion over the coming years are no more inclined to support any form of road pricing, in fact they are more likely to oppose policies, which could improve the situation. A stalemate seems to have arisen.

A radically different – or rather, a radically better – future is hard for individuals to grasp and accept. And while there is apparent widespread support for improving public transport, it is clear that for many it will never be an alternative to the car. The challenge then is to make the vehicles people use smaller and greener.

In the short term more can be done to enhance the ‘performance’ of the road network such as providing motorists with reliable journey times. The Highways Agency’s Managed Motorways scheme has started to do this and politicians must ensure it has the money to see it through.

Longer term, any more radical changes to the way drivers use the road system – possibly through the introduction of national road pricing – have to be implemented with public support. Convincing sceptical motorists of the merit of such fundamental shifts in policy will not be easy. But that is no reason not to do it.

[signed]

Professor Stephen Glaister
Director
Royal Automobile Club Foundation

~~~

The RAC Foundation, a registered UK charity, was originally set up in 1991 fundamentally as a research arm of RAC. Following the de-merger and sale of RAC in 1999, the Foundation took on a new and wider role to include researching and promoting issues of safety, mobility, economics and the environment. The Foundation explores the economic, mobility, safety and environmental issues relating to roads and the use of motor vehicles, and campaigns to secure a fair deal for responsible road users. Independent and authoritative research for the public benefit and informed debate are central to the RAC Foundation’s standing. (from the RAC Foundation site.)

Forget green, your time is more valuable

2010-01-06T22:30:00.005-05:00

A Manhattan congestion pricing activist, Charles Komanoff, has achieved the unthinkable. He wrote a very competent argument 10.01.06 “With Congestion Pricing, Saving Time Trumps Reducing Pollution” and most of the numerous responses both pro and con were reasonably intelligent. That alone is one proud achievement in the CP debate.

Komanoff argues that the current value of time lost to congestion far outweighs the cost of incremental emissions caused. Scandal.

I do not like to surrender any argument for CP: productivity, time, emissions, funding, livability, health, national security (oil wars), etc. Right now a non-trivial portion of the developed world might profess to be more concerned about the environment than personal time budgets – at least many more than are willing to follow the arguments in and after his blog. Even though I largely accept Komanoff’s analysis, I don’t want to abandon those people who are pro CP for green reasons.

However, Komanoff’s argument – even if it were NOT backed up with data – is far-sighted. The reason that I have until about a year ago left emissions OUT of my arguments is that I am an optimist about technology, but not about people. However much of the CP fight trades on emissions will be eroded as green cars arrive. “What, me worry, I have an electric car!” Zoom. Zoom.

Electrification will prove Komanoff prescient.

Future car

2010-01-02T01:01:00.008-05:00

Parallel developments in automotive telematics will lower costs of, and enable the move to, TDP/VMT road-pricing.

In the Financial Post, 09.12.31, Nicolas Van Praet writes about a number of things we can expect to raise the IQ of our wheels in the future.

For these new carbrains he predicts expanded capabilities for entertainment, information, and some very smart navigation and safety features. Some them could integrate navigation and safety very tightly, indeed:

Carmakers … are spending a lot of time and money thinking about how to incorporate next-generation mobile communications technology …. They're also trying to figure out how to respond to a demographic change of immense consequences. Sometime over the next decade, the world's population aged 65 and older will outnumber children under five for the first time... The number of seniors is growing at an average of 870,000 each month. Many of those older people are in better health than ever before. And many will want to continue driving. They will need help to do that, "in a sense, to keep them safe from each other …envision you're driving down a piece of road that you … [are] unfamiliar with. The GPS system knows exactly where you are … and it knows that it's night, that you're heading toward a mountain road hairpin turn, and that you're going too fast. You know none of this. But the car suddenly starts to slow down, literally takes complete control of the vehicle away from you."

Many of these carsmarts are already available as individual components and there are experimental systems that are designed to decide if you are going too fast for a particular context, and there are even prototype attempts to decide if a vehicle approaching an intersection is likely to be hit by another approaching the same intersection. So with all this automotive telematics engineering in progress at the same time that the market is churning out 65-year olds at the rate of 870,000 month, one can safely predict that demand will coalesce a new market for bundled telematics as we can barely imagine. A single sleek device, targeted after market at first and maybe factory installed as it matures, that will offer as many features in 2011 or 2012 as the laptop did in 2002 or the smartphone in 2008.

But consider another change that is approaching in the same timeframe – pay-as-you-go systems for parking, insurance, and road-use payments. These also need to be tightly coupled to positioning technology, although perhaps one that is more reliable than today’s navigation-grade GPS.

Cramming information (internet node), safety, entertainment, navigation, trip optimization, traveler services, and payment systems into a single system (actually, as apps on a single positioning and communication platform) is not only possible, but desirable. Desirable because dashboard or windscreen real estate is hugely valuable. Desirable because bundling will save motorists a ton of dough compared to purchasing six or ten different systems (my dash is already cluttered with my satellite radio, a GPS and a smartphone – the later two having multiple apps already).

So what will come first? (A) a sophisticated, factory installed, positioning-navigation-safety-management system? (B) a sophisticated aftermarket, self-installed, positioning-payment-management system? Or (C) a couple of generations of after-market systems that attempt some of each until we get it right for factory installation?

Considering that this is a complex integration problem, that we are not yet able to clearly understand the entire requirement, that there will be well over a billion cars on the road shortly, and that only market experience can fully anneal a competent set of system designs (the first cell phones were losers, no?), the correct answer is likely (C).

One of the things that (C) does for governments impatient to move away from the unsustainable fuel tax, is to give them a telematics platform that has some desirable – soon indispensable – features to host, sugar-coat and even help pay for road-pricing payment services.

This means that the upcoming demand for automotive-telematics-based information, safety, entertainment, navigation, trip optimization and traveler information is likely to be a critically important factor to fund the platform for the upcoming shift from pay-by-fuel-tax to pay-by-road-use.

Drive Less, Pay Less

2009-12-29T23:31:00.001-05:00

I can be lazy and you can still have a good read.

What’s a government to do?

2009-12-28T00:44:00.008-05:00

I have been describing satellite (GPS)-based multi-function payment telematics that encompass road-tolling, parking metering and pay-as-you-drive insurance since 2003. First in patents filings, then at EU conferences then, starting in 2005 in the EU trade press, and in my blog (grushhour.com) since 2007 (this one is fun) and now in keynote speeches at transportation conferences and workshops in North America.

A reader recently asked: “How best can the government facilitate the development of private sector ‘multi-function payment telematics’?” A critical question, indeed.

The Government has two critical roles to play.

The first is to support standards in order to protect consumers, which in this case of road-use payment telematics encompasses users (drivers) and payment operators (toll operators, parking operators, insurance companies). This will include interoperability, communication interfaces, privacy, charging reliability, security, and evidentiary weight for non-repudiation. The International Standards Organization via its European partner, CEN, is addressing these standards now. Only one American regularly participates. More are needed.

The second is encourage voluntary use of telemetric devices for parking and insurance, ostensibly while waiting for policy and planning to be ready for GNSS-based road-tolling. One way this can be done is to encourage municipalities to permit programs for voluntary parking payment via GNSS meters. More detail on this, below.

Another way voluntary use can be encouraged is by permitting PAYD insurance programs in jurisdictions where legislation still lags, or by mandating that a gradually increasing percentage of insurance files be converted to PAYD. There are also a significant number of ways to meter and charge for PAYD insurance and the ones that use pay-by-use telematics are the most fair. These can be encouraged through subsidies to municipalities that partner with insurance companies to bundle parking and insurance on the same meter. The attraction here is that once a few thousand vehicles in a municipality or megaregion are equipped for parking, then an insurance company can offer PAYD premiums to those motorists without consideration for developing a telematics system, since it would already be in place.

Still another way to encourage use is to permit users of these new devices to pay existing RFID tolls on the same bill, since these systems can be set to identify the identical tolling amounts. Those highways for which the tolling authority is a government could consider a small discount, as further motivation.

Of course, if these municipalities and megaregions were to offer rewards of, say, parking-payment credits, to vehicles that did not move during peak hours, or were small, or were electric, or were driven very efficiently (hypermiling), or were driven less often, and if municipalities permitted local business improvement associations (BIAs) to offer loyalty rewards to frequent shoppers in the form of parking credits, this would further develop this new metering sector as it would reward users who subscribe to metering services.

So the short answer to the question “How best can the government facilitate the development of private sector ‘multi-function payment telematics’?” is simple to permit demand to be created by removing restrictions and encouraging the shift. Soon after would follow numerous competitors. Here is what some of them would look like.

~~~~~

Now to return to parking – by far my favorite congestion-related subject.

The advantages of satellite-based parking for a municipality are:

Infrastructure costs are reduced which enables expansion of managed parking.
Enforcement costs are reduced permitting the same parking officers to manage an expanded area of municipal parking.
Citations for meter violations can be replaced with graduated pricing, reducing enforcement labor per parking spot, court backlogs and court services costs, while raising revenue and net revenue.
The reduction of underpriced or unpriced parking reduces urban street congestion.

The advantages of satellite-based parking for a driver are:

No need to pay each time you park.
Pay only for the minutes used.
Can overstay without ticket-anxiety.
No parking tickets for expired meters.
Expense management for business users (note that parking payments may be a business expense, while a parking citation is generally not).
Able to purchase PAYD insurance (to save money).
Able to pay existing (and new!) road-tolls with the same device.

The steps a municipal government must take to permit satellite-based parking:

Permit one or more satellite-parking operators to meter and collect payment for your municipal parking spaces, lots and garages.
Prepare pricemaps of the parking facilities. These are geographic locations (labeled polygons) with associated times and prices. Give these to the satellite-parking operator(s).
Promote the service to your residents, especially to those receiving parking tickets, since those drivers generally find parking payment systems (which include payment of citations) to be bothersome. (Stick a service offer under the wiper with the ticket!)
Do not ticket satellite-parking users for meter violations. Use graduated pricing instead. This should be set for the municipality to be able to encourage short-term parking to remain short, while appreciating the same net revenue as before.
Offer a startup incentive such a credit on account for the first several hundred users.
Design rewards for drivers to encourage both less driving and the use of satellite-based, in-car meters.

The advantage to Departments of Transportation is that voluntary adoption of road-use/parking-use meters permits governments to watch the technology develop and ascertain its reliability at very little risk, while users become accustomed to its fairness, convenience and privacy protection.

Everyone wins. No political suicide.

~~~~~

Here is an sample roadmap for a megaregion to introduce Pay-As-You-Go (PAYG) metering for a million or more vehicles. Click on image to enlarge.

Breaking the mold

2009-12-26T21:19:00.000-05:00

Thinking about universal road tolling for those who are not planning, designing, or making policy for it, is often very simple. Most opinions are one of: “not-on-my-roads”, “big-brother” or “it’s inevitable”.

For those working or thinking about this all day, issues range from acceptance, cost containment, economic effects, economic efficiency, enforcement, fairness, how to get started, privacy protection, what prices to set, what technology to use, when to start, which roads/areas to price, and many more. The considerations that need to be addressed are even more numerous and far more nuanced than this, and as with any program that meets with social and political resistance, one can imagine how difficult a mandated transition could become.

So far the history of GNSS-tolling has been government driven. A few EU countries have mandated countrywide truck tolling, usually on limited access highways. Germany’s GNSS-based truck-tolling system is the most matured example, although we can expect three more countries to join them during the 2010-12 period.

In the United States, the history of GNSS-tolling systems has been one of pilots and trials, such as in Oregon, Puget Sound and the current Iowa trial set in several US cities. More government initiatives.

To date, a government writes a request for proposals (RFP), companies submit tenders and an operational system (Germany) or a pilot (Oregon, etc) results. This government-led approach has four effects:

Established companies wait in anticipation for large government contracts; but during that wait, the impetus for innovation is non-existent.
Innovation, when it is unleashed, is bounded by the RFPs, which are generally written by consultants or bureaucrats familiar, perhaps, with knowledge of past pilots or something tried by one or more EU countries. Imagination may be bounded by the catalogue of work completed.
Solutions are limited to single-functions because bureaucracies are stove-piped (road and parking people exchange few ideas, for example).
Governments view transportation as a core economic management function upon which rests productivity-related movements of goods and people, and for which taxes must be raised and managed; hence, the requirements of collection and enforcement will trump the opportunities for service and value to the motorist. (This last point is becoming an increasingly sensitive issue as the social view of motorists begins to degrade as did the social perception of the smoker during the past 2 decades.* This effect, generally overlooked, will make migration to per-use payment more difficult as drivers will tend to feel harassed rather than served.)

  * Notice that automotive manufacturers generally address motorists in one way, while toll collection authorities do so in another. It does not have to be this way. Road Authorities provide critical and valuable services – why not sell them as a benefit? At least two European manufacturers of multi-function tolling and payment systems, Kapsch and Q-Free, pitch lifestyle choices of convenience, and non-stop driving.

What would happen if a private company started to offer GNSS-based road-use meters for parking and PAYD-insurance, and what if these same meters could be used to collect existing tolls now handled by RFID or DSRC systems? What if they could also enable rewards, loyalty points and discounts? What if motorists found such a payment and reward platforms to be attractive?

We have started providing road-use meters to drivers in Winnipeg for use as parking meters a couple of weeks ago. This commercial approach is a first in the world. By that I mean, a private company is deploying satellite-based metering and fee collection on a voluntary basis for automobiles without government mandate (as was the case in Germany) or without a disposable and expensive pilot (as in Oregon, PSRC or Iowa). This system is a commercial system that will stay and grow if successful or wither and die if not. The government helps by providing parking pricemaps (locations and payment rules), telling its residents it is available (this marketing expense is perhaps the most substantial expense) and providing a few weeks of free parking and helping early adopters with a device down payment to get the project kicked off. We are able to keep some of the parking revenues which is expected to be more than offset by the City's ability to reduce enforcement costs and expand the range of parking-enforced areas.

The result is happier drivers, lower operating and enforcement cost per metered spot, enablement of expanded parking management at little cost, and most importantly experience with GNSS-based payment telematics that both governments and drivers sorely need to overcome fears and to see benefits. Our users are drivers who seek the convenience of not paying at a parking meter and the guarantee of no "parking tickets" (we simply graduate the fee upward as their stay overruns).

Here is one way to think about this approach to reduce or remove system costs for tolling the United States (this will be published in a month or so).

Here is how I thought Steve Jobs might approach the problem of an in-car meter.

The road to proper pricing is not as bumpy as you think

2009-12-22T11:25:00.005-05:00

On Wednesday, December 16, 2009, Maarten van Biezen and Chris Nobel from The Netherlands Society for Nature and Environment, who would be certain advocates for the Dutch intention to price all road use, reported some concerns in an article called “The road to good charging can often be bumpy”

Their article, reprinted here without permission, is important and needs comment. I usually comment on articles from journalists that do not understand the importance and fairness of this tax-shift, but Messers van Biezen and Nobel do understand, but have provided some undue admonishment to their government.

The idea of basing motoring taxation on the distance a vehicle is driven – generally known these days as a 'kilometre charge' – is in principle a good one which environmental groups have advocated for years. But as recent developments in the Netherlands have shown, the road to good charging can often be a bumpy one.

A number of countries have talked about a kilometre charge, and some – notably Germany and Switzerland – have introduced charging for goods transported by road. But the Netherlands want to become the first European country to implement such a charge for private car drivers following last month's proposals put to the Dutch parliament. This is indeed a historic move that should be welcomed.

But, the devil is in the detail. There are four significant things that should change in the proposed Dutch charge.

Firstly, the kilometre charge will replace the existing road tax and vehicle registration (or purchase) tax, and the amount of money raised by the kilometre charge must not exceed the combined income of the two taxes being replaced. The idea is that motorists will pay for using their vehicles rather than owning them, but registration or purchase taxes encourage the introduction of low-CO2 technology. Therefore the unacceptable effect of abolishing the registration tax will be that cars become less fuel-efficient. If the expected 15% reduction in kilometres driven does not materialise, we end up emitting more CO2.

The statement that “the unacceptable effect of abolishing the registration tax will be that cars become less fuel-efficient” is most likely a typo. The authors likely meant “the unacceptable effect of abolishing the road tax will be that cars become less fuel-efficient”. However, the Dutch government has wisely left the fuel tax in place (I think that is what the authors refer to as “road tax”, with apologies if I am wrong). So this fear of drivers reverting to gas guzzlers because of this tax-shift is completely unfounded. The opposite will occur. To consider further, the registration tax, which is quite high in most EU countries including the Netherlands is paid regardless of distance-traveled. A high fixed tax would require that a person thinking to extract the maximum value from his or her purchase would then drive as much as possible. Hence the economic argument (proven correct many times) is that charging by usage instead of by vehicle purchase price reduces driving. What a high purchase price means is that fewer people can afford a vehicle, but those that can will prefer to drive over almost any other alternative.

Secondly, the prospect of having regionally differentiated congestion fees is still unclear. The proposal makes a congestion charge possible after the full introduction of the kilometre charge (2018-2020), but it does not specify how such a charge should diminish congestion and new road building. If you don't charge people more for where their vehicles do most damage - and congestion is one of the negative impacts of too many vehicles on the road - then the charging system does not achieve its objective of steering mobility in an environmentally, and economically, better direction.

The authors are correct that charging by time and place of use is critical to congestion management. The Dutch government knows this and intends to introduce time-distance-place charging (TDP). “Charge maps” will not have been disclosed, because this takes time and negotiation. Since I have not seen these maps I cannot comment on them, but if the Dutch government charges a single flat rate and does not move to TDP charging shortly into the program, I will eat my hat as well as those of Messers van Biezen and Nobel. What needs to be done now is to guard that the charge maps will be designed in a transparent and easy-to-understand manner. Drivers need to be able to easily see how much a trip will cost in advance (similar to ask a taxi driver before you get in) and to not be surprised at the final calculation. Drivers also need to easily determine the cost difference of taking a trip at various times of the day, so that they may plan to avoid high tolls. Avoiding high tolls is the whole point of the program!

Thirdly, the government proposes to cap the total revenue at €6.6bn (2007 price levels). This has been much less widely reported than the proposed maximum charge of €0.067 per km. If the current proposal becomes law, the charge will begin at €0.03 in 2012 and rise steadily to its maximum by 2018. The capping of total revenue means that if mobility increases, the price per kilometre will fall! This would undermine the core objective of the law – a more conscious use of mobility - and will make environmental objectives harder to achieve. It should change.

Capping total revenue makes sense on a relative basis. These programs are about congestion cessation and collecting more than is needed for that purpose or for fair-funding purposes is inappropriate for nurturing user acceptance and trust. However, because we might guess that the underlying demand for mobility will increase, and because of normal inflation, an absolute fixed ceiling would indeed be an error. The reason that the United States has Highway finding problems now is that fuel-taxes are unindexed so that they are an increasingly smaller pool for funding our highways. I realize that the authors are congestion/emission focused rather than funding focused, but the analogy holds AND the two issues (congestion and funding) are strongly correlated.

Finally, the government proposes lower charges for trucks than for cars. As a result of the pledge not to raise average taxes for each category of vehicles, the proposed maximum charge for trucks will be only 2.4 cents per kilometre. In other countries trucks pay rates of 15 to 80 cents per km. You would pay less for driving a truck to the beach than driving your car.

This is most likely a temporary measure requiring the logistics industry to adjust its prices. Truck tolls should rise, as well, which have a very positive effect on fleet efficiency. The number of trucks that have been replaced or updated in Germany because of lower tolls for cleaner vehicles is astounding (this needs reference!) Remember, the person who is really paying truck tolls is the person eating the food or using the iPod that was transported by the truck. Raising both at the same time would cause additional economic ripples that a private vehicle driver may not want. You don't want to pay more for road use AND more when you eat at the same time! This kind of driver-thinking shows an anti-truck bias, which is not different from drivers who display anti-bicycle bias. We are all in this together.

There are times when we have to accept some Realpolitik, and when a new form of charging is being introduced, perhaps this is one time. But the danger of accepting a compromise to get a new form of taxation through the legislative process is that, when it comes into effect, it does not solve the problems it is supposed to solve, which can give the public a negative view of what should be a positive form of charging. That's why the Dutch government better try to get the scheme right, rather than make political concessions that could ruin it in the long term.

I think that the Dutch Government is VERY sensitive to “getting the scheme right”. I predict they will be very close, and with intelligent program design will be able to adjust in the first couple of years. They cannot be expected to make large changes after the first week any more that they can be expected to optimize perfectly for every driver type and every vehicle type and every trip type. I applaud the Dutch Government for its tenacity, diligence and courage.