1. Liberating road users: Options for progress

2. Liberating road users at ADC 2 September 24, 2010 How are road users constrained? Governments determine  Charges for road use  Allocation of revenues  Provision of new capacity

3. Two plausible approaches towards market system  Provide express toll lanes  Introduce per-mile charging

4. Liberating road users at ADC 4 September 24, 2010 Express toll lanes  Introduced in 1995, on 10 miles of California’s State Route 91  Tolls Electronically collected and prices adjusted to reduce congestion to to minimal levels  Travelers have the choice of paying tolls to save time  Used by members of all income classes

5. Liberating road users at ADC 5 September 24, 2010 “HOT” networks in eight US urban areas  Proposed in 2003 by Bob Poole and Ken Orski in “Reason” Policy Study. Updated in 2006 as chapter 19 of “Street Smart”.  Cost of 8 networks could be $50 billion Term “HOT” [“High-Occupancy or Toll”] unfortunate, as exemptions for high-occupancy vehicles are damaging

6. Liberating road users at ADC 6 September 24, 2010 Per-mile charging  Recommended in 2009 by Congressional Commission, because fuel taxes were not producing enough revenues to satisfy politicians  Charges could vary for different roads and on different times of the day  Would be desirable as a stage in commercializing roads — moving them into the market economy

7. For a market in road space to work:  All roads should be tolled  Road users should pay the road providers, segment by segment  Only GPS-based systems can meet these requirements

8. Liberating road users at ADC 8 September 24, 2010 GPS-based charging systems  Vehicles carry meters, which record distances travelled  Distances, but no trip details, transmitted to billers  Billers debit road users  Billers credit road providers  Eliminates need for government road financing

9. Liberating road users at ADC 9 September 24, 2010 Siemens On-Board Unit

10. Liberating road users at ADC 10 September 24, 2010 Problems with GPS-based charging systems  Fears (groundless) that vehicles could be “tracked” to invade privacy  Fears (well-grounded) that, in the USA, cost-based road-use charges would exceed current charges paid via fuel taxes

11. Liberating road users at ADC 11 September 24, 2010 How, then, to introduce GPS-based road pricing? Not all vehicles can be equipped at once, so offer rewards and seek volunteers in test areas  Rewards can include:  Distance-based insurance premiums  Remission of annual license fees  Easier street parking

12. Liberating road users at ADC 12 September 24, 2010 Plausible next steps:  Accelerate the provision of express toll lanes  Introduce trials of voluntary GPS-based road-use fees, as alternative to existing road-use taxes  Oregon already had successful pilot project