January 23, 2018

Mobility Pricing: What U.S. states are doing

The Sun editorial board continues its thoughtless, lazy attack on mobility pricing in one of those fatuous editorials that has no other purpose than riling up public opinion (tax grab!) – including a gratuitous reference to bike lanes causing congestion.  Its suggestion: have another referendum – and good luck with that.
The American states, meanwhile, pursue research and demonstration projects, knowing that with the accelerating decline of the gas tax, alternatives are imperative and inevitable..
Here’s a summary of recent progress.
From Governing.

Congress included $95 million in grants in its last five-year highway funding law for states to study mileage-based fees and other alternatives to the gas tax. States must match the federal grants 50-50. In the first two years of the program, the Federal Highway Administration has doled out money to eight states …

The states’ work varies greatly. Minnesota is exploring the idea of imposing taxes on transportation companies like Uber and Lyft, rather than individual drivers, with the idea that individuals may be less likely to own their own vehicles as ride-hailing, car-sharing and autonomous vehicles become more common. Colorado, where gas tax rates have remained the same for 22 years, recently wrapped up a four-month test with 150 drivers that explored different ways of tracking mileage for motorists. Missouri explored adjusting its vehicle registration fees to reflect their fuel efficiency, and it is now getting public feedback on equity and data security issues.
Some of the most intriguing work comes from California. The state conducted its own test-run of 5,000 vehicles a year ago, the largest experiment of its kind in the country. Its test run lasted for nine months through March 2017, and it included trucking companies along with motorists from every county in the state.
California gave participants seven ways to track their mileage, including odometer checks, permits for a set number of days, permits for a certain allotment of miles, plug-in devices, smartphones and in-vehicle telematics like OnStar or Acura Link. The various methods were meant to give users options that protected their privacy – one of the biggest stumbling blocks in selling the mileage-charge systems to the public. But 62 percent of the participants in California’s study chose options that tracked their location anyway.
The state’s report on the pilot found that the options with the best privacy protections – like odometer checks – would also be the hardest to enforce. The most reliable methods for tracking mileage were plug-in devices (that fit into a ports in vehicles that are often used by mechanics to diagnose mechanical problems). But those devices are also likely to be obsolete by the time any widespread mileage fee could be imposed. …
One idea is to have connected vehicles pay the fees through a “wireless handshake,” when the vehicle pulls up to get gas, an idea that Honda and Visa have explored for traditional gas purchases. But the agency wants to do it without having to retrofit every vehicle or every fuel station in the state. …



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  1. If provincial gas tax and TransLink tax were replaced with distance based mobility pricing, then my guess is that a majority of drivers would pay less tax. Add distance based insurance and a majority would pay less insurance. It would be interesting to see research on how much the average driver could save under a good mobility pricing scenario. Carbon “tax” is similar. This could be a financial win for a majority of drivers. Bonus is reduced congestion.

  2. Automobile dependence is assessed in terms of its direct and indirect costs for 37 global cities. The data show that cities with the most car use, road provision, and urban sprawl have the highest road expenditure, the least transit cost recovery, the most spent on commuting, the highest external costs from road deaths and emissions, and the largest proportion of city wealth going into transportation. As well, the newly developing Asian cities are showing that their automobile-oriented planning is proving to be costly in economic and environmental terms. The costs of automobile dependence in a globally competitive urban environment cannot be simply rationalized away due to apparent or perceived benefits of automobile-based lifestyles.
    From ‘The Cost of Automobile Dependency: Global Survey of Cities’
    Jeff Kenworthy, 1999
    Automobile dependency is defined as high levels of per capita automobile travel, automobile oriented land use patterns, and reduced transport alternatives. Automobile dependency increases many costs: higher vehicle expenses, reduced travel choices, increased road and parking facility costs, congestion, accident damages, and a variety of environmental impacts. Beyond an optimal level, excessive automobile dependency may reduce economic productivity and development. A more balanced transportation system can provide many benefits to consumers and society.</p
    Todd Litman, 'The Costs of Automobile Dependency and the Benefits of Balanced Transportation', Victoria Transport Policy Institute, 2002
    Obviously, road pricing is not new since folks like Kenworthy and Litman did the math and found that private transport costs society dearly through its huge drain on public resources, and encapsulates a powerful net impact on the environment where remediation invariably involves a high degree of socialized costs.
    It is no surprise that the Sun editorial board assumes a pro-car stance while grudgingly acknowledging the importance of transit from the other side of their collective mouths. Not only do they publish entire sections dedicated exclusively to advertising for cars and trucks, but at one point or other members of the board were Fraser Institute alumni who regularly publish "analysis" of egregious expenditures of tax dollars that incoherently stops short of one of the worst culprits of all: the road system.

  3. Metered travel will choke the economy and hobble the ability of perhaps half of the population to earn a living. Metered travel is an inequitable intervention into the lives of everyone.

    1. For some contractors and others who use their vehicles for work, perhaps.
      But the intent is to use the funds largely to get people off the roads by improving alternates like transit. In that regard, it makes perfect sense to charge the private users in direct proportion to their level of use of the public road system, the full capital or operating cost of which is not covered directly by drivers. In effect, people who drive less are subsidizing the heaviest users through levies and property and income taxes.
      Alternatively, transit recovers about 50% of its operating costs through the toll … er …. farebox, and is orders of magnitude cheaper, more efficient and environmentally friendly on a per capita basis. Moreover, transit and cycling lead to healthier citizens who require hospitalization far less than people who are over-dependent on cars, and transit-oriented neighbourhoods create more humane cities.

    2. We “meter” today indirectly by gasoline taxes, but with ever more fuel efficient and hybrid, and soon, electric cars that is too crude and far too low a road toll. Metering makes sense, as does add’l fees for choke points like bridges/tunnels/busy intersections !
      Metering with modern devices, based on GPS and/or odometer like mechnical systems ought to be implemented.
      I’d go even as far as having a box that shuts the car off if insurance or road tolls are unpaid, or if criminal. Modern systems allow all that. That data could be collected for a month or 2, then deleted as privacy protocols are important. A car is a very dangerous weapon if not used prudently [ which is what we told our kids in their then teens ] and as such certain restrictions on weapons are totally ok with me. One such restriction is a box that allows you to drive, for a fee, in certain places, like MetroVan. No box, no access. Tourists could buy or rent such a box upon entry.
      I can’t wait to get less cars on the road so the traffic actually flows. Many folks would happily pay to get less folks traveling by car and thus, better flow.
      I’d like to see trucks heavily tolled as a lot of US bound or originated traffic pays 0 gasoline taxes here. Loads of wear and tear too.
      We ought to learn from European or US tolling models.
      This MetroVan proposal so far makes a lot of sense to me. Car use is indeed far too cheap in MetroVan. Once you put a hefty price on things, people start to behave differently, i.e. travel less, earlier or later, move or chose a different mode ie bus, train or bike.
      Of course, as always we need to look a efficiency of spending and we have a major disconnect right now between public servants lavish wages & benefits vs private sector employees. These discussions about public sector waste / inefficiencies are conveniently brushed under the carpet in the “increase taxes and fees” debate, but needs to urgently happen in parallel, as does more investment into RAPID (and not just slow and often wobbly) transit options !

      1. Thomas, there might be a solution to your personal dilemma about the negotiated contracts for public servants: Have Tim Hortons take over the public service.
        Just imagine, you could apply for a building permit or passport and order a double double with a gooey glazed maple donut at the same counter. Each Timmys franchise could devote an entire back room to a local branch of the CRA with part-time workers reviewing your tax return amongst the mops and paper towel supplies at minimum wage. You may have to put up with coffee stains and sticky fingerprints, not to mention the odd rounding error and document mix-up, but who cares when you’re saving the cost of a cappuccino a week on your taxes that would otherwise go to public salaries?
        If you have a fire or a medical emergency, just run on over to the nearest Timmys drive-through window and cross your fingers they don’t misplace your address with the previous guy’s coffee order. Maybe the order taker will have a beginner’s first aid course or a 5-pound fire extinguisher he can lend you.
        Seriously, not to knock the honest and good-intentioned workers at Tim Hortons who do not have a lot of choices, but if anyone needs a union, it is them.

      2. “We “meter” today indirectly by gasoline taxes, but with ever more fuel efficient and hybrid, and soon, electric cars that is too crude and far too low a road toll.”
        That statement is total baloney.
        Gasoline is sold and taxed by the litre. When it comes to cars a litre of gas will take you anywhere you want to go at anytime for varying distances depending on the engine efficiency of the vehicle. As an aside you also pay this so called in your words ‘road toll’ to run an all terrain vehicle, a boat motor, a skidoo, a paraplane, various pieces of construction equipment, a generator, a lawn mower, a chain saw, and numerous other gas burning machines which have nothing to do with roads or congestion on roads. So no, a gas tax has nothing in common with metered kilometers.
        The purpose of the gas tax is to generate revenue for transit. It is a blunt but effective instrument which we have come to accept as a method to fund transit.
        Road pricing or what I prefer to call ‘metered kilometers’ only recently became possible through advances in technology. Proponents are of course keen to profit from the deployment of these technologies and so we see the rise of an argument that goes something like this: electric vehicles as they become more popular will reduce the amount of gas tax collected, therefore we need road pricing. But is the argument correct or fallacious? Well, in Canada the market penetration of EV’s as a percentage of all vehicles is so low that it cannot even be calculated, so the argument is a false argument. The growth of non-car uses of gasoline likely far out paces the market penetration of electric vehicles in any case.
        The argument then flips to Plan B: Metered kilometers will reduce congestion. Is the statement true or false? Well we don’t know, but what we do know as implied by the statement is that this is a user pay scheme which will force people off the road i.e. reduce congestion through forced attrition. Who would support such an inequitable proposition?
        It’s time to give the boot to the meter man and add a line in the Provincial Transportation Budget for the expansion of Skytrain infrastructure, a system which benefits all British Columbians in one way or another.

        1. You may choose to purchase fuel with the road tax on it and put it in your non-road vehicle, but that is a choice, not a requirement. Fuel sold without the road tax has a red dye added so its use in a licenced vehicle can be confirmed.
          Fuel taxes, cost per km distance based charges, road tolls, pay zones, etc, are all forms of mobility pricing, which is what the commission is studying. No need to pick one to support your straw man.

        2. Also, there is a provincial motor fuel tax that goes to general revenue, and a dedicated tax that helps to fund transit, in specific areas. Two different taxes. Your claim that fuel taxes just fund transit is incorrect.

        3. Jeff Leigh
          The topic under discussion is “with gas tax in peril more states study alternatives” i.e. metered kilometers.
          Its’ very difficult to find colored gas.
          I did not claim that all gas tax goes to fund transit

        4. Jeff Olson: “I did not claim that all gas tax goes to fund transit”
          Agreed. What you actually said was:
          “The purpose of the gas tax is to generate revenue for transit. It is a blunt but effective instrument which we have come to accept as a method to fund transit.”
          In fact, the purpose of the fuel tax is to fund transit (in specific areas), to fund the Transportation Financing Authority (primarily, but not exclusively, roads), and to fund general revenues. Transit is only 17 cents of the 32 cents per litre in Metro. And outside of Metro, you would pay fuel tax of 21 cents per litre, with no specific transit component applied. How can it be that the purpose of a gas tax is to generate revenue for transit?
          So I will revise my statement. Your claim that the purpose of fuel taxes is to generate revenue for transit is incorrect.

        5. So jolson, are you saying that the current gas tax is sufficient? Or, if we have a congestion problem are you advocating for increased gas taxes?

    3. jolson – So how fair is the current system? How effective? I currently subsidize almost all drivers and transit riders in the region. Congestion and related crashes and ill health are probably the biggest transportation related costs we face. How would you fix our current unfair and dysfunctional transportation system? Fresh ideas are required.

        1. “Exactly what is unfair about the transportation system?”
          Ask a fifteen year old girl trying to get home from babysitting after dark.
          The blinders some commenters have regarding those demographics that lack a voice in these conversations only serve to solidify the challenges non-motorists face in getting equitable access to public space.

        2. The question is put to Arno who posted the statement not to Chris.
          To Chris:
          How is the transportation system unfair to the babysitter?
          FYI the transportation system is not public space.
          The public realm is public space in which all kinds of activities occur.

        3. jolson – I am not paricularly rich, but research from UBC
          shows that when people cycle, they provide a net social benefit while transit is neutral to slightly negative and motor vehicles are a large net cost to society. Therefore, much of my tax contribution goes to transportation modes that I rarely use while when I use my mode of choice I make a net contribution to society. Is this not unfair? For a more fair system, more investment should be made in cycling and transit while drivers should be encouraged to pay their fair share. The net result would be a system that is more fair and which provides more modal choice and less cost for everyone.

        4. Arno;
          The more one pays into a transportation system the more one contributes $’s to an economy. Additionally, if I purchase a vehicle for $50,000 a whole lot of people (society) will benefit. This simple fact is missing from your full cost accounting example, which suggests that the analysis is not really full cost accounting at all but skewed to suit a particular narrative. The automotive industry and its’ roads (which you sometimes ride on with your bicycle) form a large sector of the economy. There are numerous examples of bicycle economies in underdeveloped countries.
          As for your tax payments we have all agreed as a democratic society to spend our tax dollars in certain ways and there is nothing unfair about it.

        5. @ jolson
          I doubt your $50,000 vehicle with parts sourced from at least five countries benefits as many people as you like to pretend. Let’s see your sources on that.
          On the other hand, the $1.5B (today’ dollars) spent on the Expo Line has stimulated orders of magnitude more value in development (i.e. local jobs, local tax revenue, local multipliers…) over the last 30+ years with no signs of slowing a generation later, and the cost of providing that service is covered through the farebox.
          Name one road that has done anything close or cost as little per capita.

    4. Jolson == The existing metered travel ( transit fares ) have not choked the economy or hobbled the ability of transit riders to earn a living.

  4. A few contractors? Baloney! Do you have any idea who uses roads?
    Roads and vehicles are the foundation of the Canadian economy. Roads are the network of everywhere to everywhere connecting people with home and economic opportunity in all sectors of the economy which are widely dispersed throughout the lower mainland. Mass transit does not go everywhere and it only serves a select few of the population that are able to take advantage of it due to home location and work location.
    Here is a partial list of sectors by %GDP that generate travel for business owners, employees, customers or clients: 13.04 Real estate, rental and leasing, 10.36 Manufacturing, 07.10 Finance and insurance, 06.69 Health care and social assistance, 06.33 Public administration, 05.66 Wholesale trade, 05.52 Professional scientific and technical services, 05.41 Retail trade, 05.28 Educational services, 04.44 Transportation and warehousing, 03.11 Information and cultural industries, 02.55 Administrative and support, waste management and remediation services, 02.27 Utilities, 02.17 Accommodation and food services, 01.93 Other services (except public administration). To this list I would add tourism and agriculture. These sectors are spread across the lower mainland and up the Fraser Valley.
    The commenters on this blog have a very simplistic view of traffic as if it all consists of a commute into the downtown core and back out again in one huge unacceptable congested daily pulse which can be solved with a cash meter. Not!
    As with most debates it is always the simplistic view that dominates the conversation.
    We all need to try a little harder to grasp reality.

    1. Roads and vehicles are the foundation of the Canadian economy.
      Humans and interaction between humans are the foundation of the Canadian economy. The highest performing economic generators consist of dense employment centres (downtown, central Broadway + UBC, the seven town centres …). The six largest Canadian cites generate 50% of the nation’s GDP. If per capita kilometres of asphalt were the only measure of economic performance, then rural Canada would be putting out trillions a year.
      Further, many of your above-referenced economic sectors are located downtown where over 50% of people commute on foot, by transit, by bike and by digital media, and where 40% of the population does not own cars. The situation in the dense town centres is similar.
      Now, let’s go to the actual users of roads. During the initial planning of the Port Mann expansion one transportation planner posted his counts and research on the bridge traffic (the source is lost now, but appeared in the Livable Regions blog). They found that 71% of the traffic consisted of SOVs of which a tiny fraction were commercial vehicles. The bulk of SOVs were two-times-a-day commuters to employment centres where transit options do exist, with the rest dispersed to warehouses and office parks.
      So, with today’s distribution I think it’s fair to say about 1/3rd of the daily traffic on major arterials are justifiably in vehicles used for commercial or business purposes outside of rush hours. The unfortunate reality is that decision makers keep mistakenly thinking that rush hour capacity is supposed to be the standard design capacity. That has been one of the most costly errors society has ever made.
      Roads are the network of everywhere to everywhere….
      Only since 1950. Before that it was Native trading routes like the Grease Trail, sailing ships, rivers and voyageurs, Red River cart trails, national railways then urban streetcars. The build out of the road system represents one of he largest net drains on public and private resources ever invented (Newman & Kenworthy 2015, Saunders 2017). It is not sustainable at current scales and levels of urban and energy dependency and has resulted in external forces beyond the comprehension of early road planners, like debt and environmental repercussions at a planetary scale.
      What’s next? Asphalt will cure cancer?

  5. Well, since (a) senior gov’ts are highly sceptical, (b) rationale seems focussed on “it seems to work somewhere far away in another country … in theory”, (c) TransLink is exerting more analysis on how to spend the revenue, rather than the reason for it, (d) it’s not entirely certain the system would benefit congestion – and may worsen it in places and (e) the only true certainty established is that it funnels huge sums into TransLink accounts ….
    … labelling it a ‘tax grab’ at this point is fair description.

  6. Mileage tracking requires a lot of extra administration for little benefit relative to just raising the gas tax or throwing up some cordons and tolls. Those latter two aren’t as “surgical” as per-kilometre fees but do at least have the benefit of being marginally feasible.
    Voters will only be angered by re-establishing tolls over major crossings, but it can be done over a weekend. Cordons and tolls will take 1-2 years of on-cue caterwauling but can fit within an election cycle. Any government that commits to a mileage tracking scheme will not last. There are too many moving parts. If everything goes absolutely perfect it’s a minimum 10-year commitment to plan and implement. This is not considered crisis enough to sustain that kind of political commitment and capital.

  7. I agree that continuous mileage tracking is a big step, and there are issues around visitors without electronic tags, privacy, and so on. But it doesn’t have to be just continuous mileage tracking vs a cordon of drive by scanners. It is very possible to have more than one cordon. When driving on autostradas in Italy, it is a distance based system that works by figuring out how many cordons you went through. There are variable charges based on the distance.
    If there was a single cordon we would have an easier implementation, but the risk of unfair boundaries (the reason the zone fares are a challenge with transit). But with more granularity it is possible to get closer to distance based pricing without in vehicle tracking devices.

    1. Its easy in Italy or France (and now Germany, but so far only for trucks) as every entry and exit has a ticket booth (or now an electronic system). Not so easy across MetroVan. One needs a GPS based system, or one that reads the odometer within a certain area, based on GPS coordinates. Unclear what the state of the art here is in various jurisdictions.
      Perhaps we should track what Oregon is doing, what works and what didn’t work:

    2. If the scanners one drives under are oriented in a line like a fence, then that is a cordon.
      If the scanners one drives under (same scanners) are oriented in a series of lines, then they have the ability to measure distance. Not precisely, or directly, but it depends on how many you install.
      You don’t need to go to Italy. The toll roads around Chicago work the same way with a transponder. The more of them you drive under, the more you pay.
      Even a GPS is often a series of measurements, not a distance counter like an odometer. A GPS just uses a much more frequent sampling interval.
      So no, you don’t need GPS. If you don’t like transponders without GPS, use an odometer monitor without GPS.

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