Road pricing: finally inside the box

The famous riddle where nine dots have to be connected by straight lines without lifting your pen taught the world to “think outside the box”. Over the last five years, urban road charging has moved from the zoo of exotic transport management measures, to the heart of the public debate on the future of urban transport.

Urban charging is a key topic in the EU’s Green Paper on urban transport and is likely to be mentioned in the derived action plan. The number of cities and regions investigating road pricing is growing. Urban pricing is moving inside the box. This is good news – if some very fundamental issues are taken into account.

Why urban road user charge is good for you

Urban road user charge is a transport demand measure that is aimed at reducing the number of vehicles entering defined city sectors by putting a monetary cost to the access of a zone or the crossing of a cordon. This cost is claimed in the form of a toll, charge or tax. When properly implemented, the charge can decrease congestion and serve environmental objectives such as energy use, air quality improvement and noise. Successful charging schemes should be part of a policy package of measures to facilitate a modal shift from private car use to public transport, walking or cycling. Revenue is in most cases used to invest in transport infrastructure or operations.

Urban road user charge is the object of much lively debate. These discussions are ranging from very philosophical (“why pay for something that is currently for free?”) to very practical (“if I pre-pay the charge, and I do not make the trip, how do I get reimbursed?”)

One thing is certain: in a very short time span, road pricing has set a strong benchmark for what urban transport policies can achieve in congestion abatement and modal shift.

Future deployment of urban road user charging schemes will be dependent on a coherent policy framework, its integration in the local transport policy and the solution of remaining practical challenges.

Issue 1:

Local pixel, bigger picture: cooperation between governance levels is crucial

Urban road user charging should be related to the fair principle of internalisation of external costs. A correct price for mobility will discourage improper use of roads, like traveling in peak hour, low load factors of trucks, single car occupancy or use of vehicles that are not suited for urban areas. This principle is several decades old. It has been confirmed at EU level on several occasions by practically all EU institutions. However, there has been a lot of conversation but not so much action. Until now.

It is good news for urban road pricing that the Urban Transport Green Paper debate (including the urban charging issue) is running in parallel with the revision of the Eurovignette directive and especially the publication of an EU model for internalisation of external costs in transport. This model is expected to provide EU member states a framework for costing infrastructure use. The adapted Eurovignette directive would legally bind the member states to organise fair pricing of road infrastructure use for heavy vehicles. For local champions of road pricing, it is crucial that they are backed by a strong European policy: “It is more comfortable to be a local pixel if you can show people a bigger picture.”

There are several cases around Europe where the national level is a barrier to local action. These barriers are manifold. The correct legislation is not in place. Differences in coalitions on the national and local level can make cooperation difficult. Sometimes, a minor issue can block the implementation of road user charging projects: in some EU member states, it is still the driver of the vehicle and not the owner that has to receive the fine or penalty when breaching traffic law. Not hard to imagine the difficulties to manage automated enforcement under these legal conditions. Last but not least, a new issue appears on the agenda: how would local action relate to nationwide pricing schemes?

It is likely that only a few local politicians volunteer to risk their necks in urban road pricing schemes, as long as it is perceived that they, the local political leaders solve local transport problems that are created at the regional level. In many cases, especially for capital cities, the catchment area is remarkably large. Regional partnerships could lead the way for urban congestion charging. Cities around Europe are looking at the UK TIF process to learn: road pricing as part of an integrated transport management plan set in its (sub)-regional context is definitely an exemplary model. The Transport Innovation Fund is a UK Department for Transport financing structure that provides incentives to develop and deploy smarter, innovative, local and regional transport strategies. The fund supports the costs of smarter, innovative local transport packages that combine demand management measures, such as road pricing, with modal shift, and better bus services.

Finally, it is up to local politicians to come up with a coherent plan. Urban pricing is now in the picture as a “passe partout” solution. The scheme is expected to solve all transport related problems and can bring in extra capital to pay for all accompanying measures. This is of course not true. Success stories show that these successes relate to specific objectives, such as revenue collection or congestion abatement. Once one objective is reached, the scheme can be adapted to maximise the result on other objectives. A coherent plan could also consist of mid to long term conditions to which road pricing would be linked. For example, when problem ‘A’ will not be solved by package of measures ‘B’ by 2013, we will resolve to road pricing combined with package of measures ‘C’ …).

Issue 2:

Is pricing a transport planner’s question?

Let’s put a provocative question on the table. Is pricing actually a transport planner’s question? Especially in the preparation of nationwide pricing schemes, transport planners disappear from view. Consultancy tasks are taken up by financial or management consultants. In principle, one could imagine a future for charging in which the technical systems are sold off the shelf, and no involvement of transport professionals would be necessary.

Is pricing actually a transport planner’s question? Definitely yes! Luckily, in currently running or conceived urban charging schemes, transport planners are at the core of the project. There are sufficient research issues on the table for which the input of transport planners is crucial. Experience shows that the proper tools for forecasting the impact of pricing schemes exist, although cyclists and pedestrians often disappear in the computing. One of the big challenges is to make the accompanying package multimodal (so including cycling and walking) and not target this at an expected modal shift to public transport. Further experience in combining “hard” measures (pricing and PT provision) with elements from the “soft” Mobility Management toolbox has to be built up. Another target for future applied research could be the link of a road user charge with availability and price of parking.

For long term effects, we have to turn towards land use planners for prognoses, monitoring and action. A proactive land use policy at the local level, fighting urban sprawl and a creeping evacuation of the cordon from all its social and economic activity should accompany urban road charging schemes.

Issue 3:

A long list of unresolved practicalities

As in every emerging market, end costumers (in this case local road operators and cities) are confused by service providers and the different technological systems they offer. With the delay in the deployment of Galileo, it is very unclear when GNSS supported urban charging would be possible. Cities are interested in receiving guidance in this regard, and are aware of the necessity of interoperable systems.

Next to technology, another major concern is the actual operational cost of the system. The back office costs have to be kept to a minimum, and still enable a trustworthy and robust system. For both London and Stockholm, one could say that they have left an initial stage where the first objective was to have a fully operational system in a limited timespace. Now that the system is in place and the congestion abatement objective is covered, profitability is rising in interest. Cost cutting in the operation is essential for sustained public acceptance and for coherence of service provision. For the Stockholm scheme, outsourced services like billing and mailings return home to the national civil services.

Last but not least, the authority in charge of the pricing scheme must be able to implement transparent enforcement procedures. From the start, systems need to be designed in such a way that an absolute minimum of appeals are filed. With evermore cross border vehicle movements in Europe, a European solution for cross-border enforcement is needed.

And still: a bright future for road pricing in European cities

Imagine that the legal principles for internalisation of external costs in transport are confirmed at the EU level. Imagine that member states create momentum for local action (for instance because national internalisation frameworks will not solve all local congestion or air quality issues).

Imagine that the benefit to cost ratio for urban charging schemes rises because of a lower system cost thanks to initiatives such as TIF in the UK where more cities examine pricing. Imagine an economy of scale where several cities share back office functions to minimise costs. Imagine better integration of existing ITS systems (e.g. traffic monitoring equipment) to reduce costs.

Knowing all the critical issues surrounding road pricing should not lead to the proverbial “paralysis of analysis”. Step by step, a roadmap for urban charging schemes is established. There is a rather big chance that urban road pricing will exponentially grow in Europe.