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Road Pricing and Public Acceptability

Robin Lindsey

Transportation Futures: Ontario Road Pricing Forum, November 13, 2008

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OutlineOutline

1. Public attitudes to road pricing generally

2. Institutional and public attitudes in

Canada

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Traditional objections to road pricing [1]Traditional objections to road pricing [1]

1. Paying for something that was free

Canadian roads traditionally provided publicly without direct user charges.

2. Double taxation

Most road-pricing schemes not revenue neutral.The Netherlands intends to modify its current road tax

system.

UK has considered lowering fuel taxes if a national scheme is introduced.

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Traditional objections to road pricing [2]Traditional objections to road pricing [2]

3. Inequitable

With respect to income

Higher-income groups more likely to gain because willing to pay more for travel time savings.

Caveat: Lower-income groups could benefit if public transit service is improved.

With respect to locationTolling of residential streets

Tolling of road networks

Japanese policy is not to differentiate toll rates by link

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Traditional objections to road pricing [3]Traditional objections to road pricing [3]

4. System complexity People dislike complex price structures generally

(driving, public transport, telecommunications …)

This militates against varying tolls frequently by time of day, multiple charging points, discounts ...

Complex schemes that failed:

• Hong Kong proposals (1985, mid-1990s)• Edinburgh double cordon (2005)• New York City area-based scheme (2008)

Complex schemes that succeeded:• HOT lanes in US with dynamic tolls• Electronic road-pricing in Singapore

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Traditional objections to road pricing [4]Traditional objections to road pricing [4]

5. Invasion of privacy

Largely addressed by anonymous electronic tolling

technology

Concern with satellite-based systems

6. Loss of retail business

Retailers generally oppose road pricing initially.

But:

Studies indicate effects are modest

Any lost business from drivers could be offset by gains

from shoppers using other modes.

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Opposition to UK national schemeOpposition to UK national scheme

1. “The idea of tracking every vehicle at all times is sinister and wrong.”

2. “Road pricing is already here with the high level of taxation on fuel. The more you travel - the more tax you pay.”

3. “It will be an unfair tax on those who live apart from families and poorer people who will not be able to afford the high monthly costs.”

4. “Please Mr Blair - forget about road pricing and concentrate on improving our roads to reduce congestion.”

1. Invasion of privacy 2. Double taxation 3. Inequitable 4. Views improving roads as an alternative to tolls

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Recent US survey evidence [1]Recent US survey evidence [1]

Survey of 110 US public opinion studies of pricing

Source: Zmud (2008, NuStats)

Majority support Majority opposition

Overall 56% 31%

Type of respondent

Potential users 74% 15%

Registered voters 71% 24%

General public 42% 42%

Wording of question

Additional information provided 94%

None 48%

Context

Specific project 62%

General opinion 48%

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Recent US survey evidence [2]Recent US survey evidence [2]

Source: Zmud (2008, NuStats)

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Recent US survey evidence [3]Recent US survey evidence [3]

Public support generally higher for:

Specific projects with tangible benefits

Revenues earmarked for highways or public transitNot to special interest groups such as investors

Simple projectsPrefer toll roads to mileage fees

Tolls preferred to taxes or reduced service

Source: Zmud (2008, NuStats)

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Attitudes before and afterAttitudes before and after

Support increases after tolling begins

Norway, London, Stockholm, U.S. HOT lanes …

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OutlineOutline

1. Public attitudes to road pricing generally

2. Institutional and public attitudes in

Canada

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Federal studies

Royal Commission on National Passenger Transportation (1992)

National Transportation Act Review Commission (1993)

Canada Transportation Act Review (2001)

Investigation of the Full Costs of Transportation (2003)

Studies supported marginal social cost pricing for transport and the user pays principle

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Historic opposition to tolls [1]

Fredericton-Moncton highway project

In 1998, New Brunswick government entered a PPP (design, finance, build, operate & maintain, 25 years).

Toll to be imposed on pre-existing toll-free section.

Public resistance to toll contributed to downfall of government.

New government revised contract to compensate contractor with shadow tolls.

Toll collection ended in 2000.

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Historic opposition to tolls [2]

Coquihalla Highway

Operated as public toll road 1986-2008.

In 2003, BC government proposed privatization on 55-year lease.

Car toll expected to jump from $10 to $13, and rise over time.

Massive opposition.

Government backed down.

Car toll remained at $10 until tolling ended.

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Public attitudes in Québec

Preferred type of user charge

Source: Léger Marketing (2007)

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Institutional attitudes in Vancouver [1]

Governments and agencies

BC Ministry of Transport

British Columbia Guidelines for Tolling Tolls permitted only on major projects with significant increases in capacity and if reasonable untolled alternative available.

Translink Supportive of tolling. Independent tolling power on roads it owns.

Greater Vancouver Regional District

Long proponent of tolling. Opposes Gateway Program without demand management.

Municipalities Mixed attitudes.

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Institutional attitudes in Vancouver [2]

TransLink Strategy Discussion Guide (Oct. 2007)

6 wrote in favour of tolls. Other 2 no mention.Institutions that

submitted perspectives Opinions on road pricing

BC Chamber of Commerce Tolls a key traffic demand management tool. Tolls complementary with investments. Critical of provincial policy

Better Environmentally Sound Transportation

Province should apply User Pay principle. May include Pay-As-You-Drive or other pricing schemes.

Consulting Engineers of BC Supports time-of-day charges. Recommends “strict accountability for the disposition of revenues”.

Fraser Basin Council Planning should include “transportation demand management issues such as road pricing or tolls…”

Greater Vancouver Gateway Council

“Supportive of tolling and other congestion management measures, where the additional costs to commercial carriers are offset by travel time savings.”

Smart Growth BC “All expanded or new highways would be tolled using electronic tolling and billing systems.”

SPARC BC — Vancouver Board of Trade —

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Public attitudes in Canada generally

Tolls more acceptable:

On new capacity (especially if not otherwise built)

If a reasonable toll-free alternative exists

If revenues earmarked to the tolled facility

If toll increases are moderate

Overall: Attitudes vary across governments,

other institutions and the public.

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References

Léger Marketing. 2007. “Opinion of Quebeckers on road network funding.” Montreal Economic Institute Research Report September 2007, MEI-Journal de Montréal-Léger Marketing Opinion Poll, September 2007 (www.iedm.org/uploaded/pdf/sondage0907_en.pdf).

Lindsey, Robin. 2006. “Do Economists Reach a Conclusion on Highway Pricing?: The Intellectual History of an Idea.” Econ Journal Watch. 3(2): 292-379.

Lindsey, Robin. 2007. “Congestion Relief: Assessing the Case for Road Tolls in Canada.” C.D. Howe Institute Commentary 248.

Lindsey, R. 2008. “Prospects for Urban Road Pricing in Canada.” G. Burtless and J. Rothenberg Pack (eds.), Brookings Wharton Papers on Urban Affairs: 2008, 235-293.

Schade, J. and Schlag, B. eds. 2003. Acceptability of Transport Pricing Strategies, Elsevier, Amsterdam.

Zmud, J. 2008. “The public supports pricing If … A synthesis of public opinion studies on tolling and road pricing.” International Bridge, Tunnel and Turnpike Association, Tollways, Winter, 28-39 (http://www.ibtta.org/files/PDFs/win08_Zmud.pdf).