Congestion, unpredictable travel times, supply chain bottlenecks and harmful emissions are just some of the implications of a growing region like Greater Vancouver. As our population continues to increase and applies greater pressures on our transportation network, the region is beginning to look for solutions to address these issues. Evolving technologies and changing trends are prompting the development and success of new solutions to congestion – mobility pricing is one of those solutions.
As the Asia Pacific Gateway, it is of regional and national economic importance that Greater Vancouver has a safe, reliable and efficient mobility network. It is estimated that congestion in our region costs our economy upwards of $1.4 billion every year. By managing congestion, we will improve the movement of people and goods both within and through our region, growing our economy and improving our competitiveness.
The Mobility Pricing Independent Commission was established to initiate and guide the conversation around how to price transportation in Greater Vancouver. The Commission is analyzing the role of mobility pricing – specifically decongestion charging – and is preparing recommendations for the TransLink Board of Directors and Mayors' Council on Transportation.
To further the conversation around congestion and mobility pricing in our region, the Greater Vancouver Board of Trade (GVBOT) has prepared this report on mobility pricing. The report maps out what mobility pricing is, explains its benefits and consequences and presents eight principles applicable to the Greater Vancouver region. We look forward to analyzing the Independent Commission's forthcoming final report in light of these proposed general principles.
Mobility Pricing: Overview
Charging for Movement
- Mobility pricing is a user-pay based initiative that charges for movement. It is implemented to generate revenue via taxes and fees levied on the use of transportation infrastructure and/or stimulate behavioural change for reasons such as congestion control and environmental protection.
- Most commonly, mobility pricing schemes are used as demand management systems to control congestion in urban areas during predefined times. In such systems, motorists are incentivized away from charge roads, bridges and/or specific zones to reduce demand on inundated transportation infrastructure, thereby reducing congestion in traffic-dense areas during peak times.
- Mobility pricing is a form of road pricing, an overarching concept in which transportation infrastructure is considered a commodity that users must pay to use. Road pricing encompasses physical infrastructure such as roads and bridges as well as non-tangible elements like road-side parking space.
- Ensuring equality is a key component policy makers often struggle with when developing a mobility pricing scheme. While behaviour change and decongestion are often the objectives, the decongestion charge should not come at the expense of vulnerable groups, such as low income individuals and families, persons with disabilities and seniors. Other important considerations around fairness must also be addressed, such as whether to provide charge-free access options or routes to ensure accessibility and inclusivity, whether to charge individuals a congestion fee for driving where alternative modes of transportation are not available (e.g. the lack of public transit in rural areas), whether the charge for commercial and private vehicles differs or not, and whether individuals living further away from urban areas and thus travelling further distances should face a higher charge than individuals living in urban areas.
Types of Mobility Pricing Schemes
There are several different methods of mobility pricing, and the most appropriate scheme for a region depends on several factors including objectives, financial considerations, and geography.
Corridor Charge: Tolls for using a specific road or link in a road network. Examples of a corridor scheme include Highway 407 in Toronto.
- Point Charges: Type of corridor charge that charges a set fee for passing through a defined location of a road, bridge, or tunnel. Examples included the former tolls on the Port Mann and Golden Ears Bridges in Metro Vancouver.
Area Licensing Scheme: Vehicles are charged for driving within a specified area either upon entry, distance travelled or time spent within the zone.
- Cordon Pricing (Toll rings): A cordon scheme is a type of area scheme in which vehicles are charged for driving within a given area, such as a downtown core. Vehicles are charged at charging points (cordons) that are located at all entries and exists of the determined area. Charges may vary according to vehicle size, pollution or GHG emissions and at peak hours. Some systems provide exemptions or discounts for certain types of vehicles such as motorcycles or electric vehicles, or certain types of users, like local residents. Examples of successful area schemes include Singapore and London. This is also referred to as a cordon scheme or, in London’s case, a congestion charge.
Full Network Charging System (Full Network Pricing): Vehicles are charged for using roads over the entire transportation network or in a defined area, such as an urban centre. The charge is based on distance travelled, duration of trip or time of day. The State of Oregon is currently running a pilot program based on a full network charging system, in which motorists are charged based on distance driven, regardless of where they drive.
Parking Pricing: In this road pricing scheme, vehicles are charged for parking on road sides and parking lots. Parking pricing is prevalent in most major cities in developed countries and price paid is either a flat fee or proportional to the duration that a car is parked in a zone (parking spot).
Fuel Tax: Fuel tax is a road pricing scheme in which motorists pay a tax on the fuel they buy at the pump. The amount paid is meant to be proportional to distance-travelled.
Different Goals Require Different Schemes
Mobility pricing is implemented in regions around the world for varying reasons. Some schemes may be more appropriate than others given a city’s or region’s specific needs or goals. Jurisdictions have turned to mobility pricing to address a specific or combination of objectives, such as managing congestion in rapidly growing urban areas to facilitate the movement of people and goods, generating revenue for transportation infrastructure projects, maintenance and improvements, or environmental reasons.
- Congestion Reduction: As urban areas continue to grow, the demand on existing transportation infrastructure becomes too large for supply, leading to heavy traffic and a lack of predictability and reliability of trips. Mobility pricing can be used to encourage behavioural changes by incentivizing individuals to seek alternate modes of transportation, travel during off-peak hours, change their routes and/or reduce the number of trips they take. These changes reduce the demand on roads and congestion, implying quicker commutes for workers, increased efficiencies for goods deliveries and services, and greater predictability for businesses.
- Source of Revenue: The trend towards hybrid and electric vehicles (EVs) and the development of more fuel-efficient vehicles indicate that governments may anticipate a loss in revenue from the fuel tax, limiting funding for transit expansion, transportation infrastructure projects and maintenance. Additionally, increasing populations and densifying regions increase the demand on transportation infrastructure, requiring larger and more frequent investments in major transportation projects. Mobility pricing provides governments with an additional source of income to compensate for the diminishing income from the fuel tax and the growing demand for transportation infrastructure.
- Environmental: Mobility pricing schemes can incentivize travellers to use less carbon intensive transportation options such as public transit, cycling or hybrid/electrical vehicles, reducing greenhouse gas emissions and air and noise pollution.
- Transportation Infrastructure: Reduce aggregate kilometres of travel and road use, delaying the need to build or improve transportation infrastructure.
- Economy: Reduced congestion increases accessibility, allows for travel time savings and reduces travel time variability. It increases on-road speeds for business travel and freight, thereby increasing economic productivity.
- Public Transportation:
- Less congestion increases the speed of on-road public transport modes like buses;
- Shifts some demand to the shoulder and thereby helps make non-peak public transport more sustainable, comfortable and financially viable.
- Urban Planning: Residents can be incentivized to live at higher densities in more central locations.
- Emergency Response: Less congestion allows faster response times by first responders.
- Safety: Fewer vehicles on the road will result in reduced accidents.
Mobility pricing has often been met with substantial resistance by the public due to privacy, cost, and equity concerns:
- Privacy: Certain mobility pricing methods involve tracking where and when vehicles enter certain zones or track a vehicle via GPS. These systems have been criticized for invading motorists’ privacy as their behaviours and destinations may become exposed.
- Cost: Mobility pricing schemes are often costly to implement and operate. To offset these costs and incent the necessary behaviour, the charges motorists face can be burdensome. The price placed on mobility needs to e significant to influence behaviour.
- Public Support: As is often the case with new fees, mobility charges face resistance from the public. The long-term social and economic benefits of mobility pricing can be overshadowed by the short-term costs faced by motorists.
- Equity: Certain mobility pricing schemes are accused of being unfair as they often target motorists living or working in urban areas. Additionally, mobility pricing can be regressive in nature as lower income individuals will pay a larger portion of their income towards the scheme than higher income individuals. Higher income individuals that can afford the congestion charges will travel faster or further than lower income individuals who move to public transportation to avoid the charge.
- Business: It is criticized that businesses within congestion zones lose some business when motorist change their behaviour to avoid the congestion charges. Studies have, however, shown that this impact is often minimal to non-existent.
- Not Always Successful: Mobility pricing schemes have not always been implemented successfully, as is the case of Copenhagen and New York.
proposed KEY PRINCIPLES ON MOBILITY PRICING
Given lessons learned form around the world, the Greater Vancouver Board of Trade recommends the following principles to ensure a successful mobility pricing scheme for the region:
- Holistic Approach: When developing and implementing a mobility pricing scheme, a whole system approach should be taken to ensure transit, roads, and other transportation infrastructure is sufficient to handle changes to traveller behaviour. Specifically, a robust, reliable, affordable and comprehensive public transportation network, capable of absorbing an increase in ridership must be in place for mobility pricing to significantly alter behaviour and decrease road traffic. Public acceptance of a congestion charging scheme will be more likely if reasonable (i.e. comfortable, affordable, comprehensive and efficient) alternatives to driving are readily available. Public and private investments in wide-ranging alternative, intermodal transportation options can also help transition individuals towards alternate modes of transportation.
- Simplicity: Schemes that are too complex, such as multi-zone cordon schemes, could be less likely to influence behaviour change. If people do not know how the system works and how charges are incurred, they will not understand how to modify their behaviour accordingly to mitigate costs and reduce congestion. Lack of clarity will lead to confusion, frustrations and dissatisfaction among the public, thereby harming the likelihood of public acceptance and support.
- Adaptability and Flexibility: Mobility pricing schemes must be flexible enough to adapt over time to address changing traffic patterns, incentives (e.g. exemption for elective vehicles), new technologies and new trends. The impact and evolution of current and future technologies and trends (e.g. ridesharing, online shopping and corresponding deliveries) must be considered to ensure a comprehensive and resilient system. Even successful systems such as London’s have struggled to keep pace with technological change, and properly account for induced demand. Additionally, a targeted and dynamic system in which charges adjust with congestion levels (e.g. based on time of day) is more likely to be viewed as equitable and garner public acceptance than charges that are applied to congestion hot spots or crossings during off-peak hours when there is, in fact, no traffic at all. Lastly, having charges adjust with time of day (based on congestion levels) increases predictability and enables individuals to plan trips, encouraging behaviour change and a reduction in congestion.
- Variable: A cordon scheme can be effective (it was effective in London for 12 years), however the scheme is more effective and equitable when coupled with full network charging systems. In other words, a variable charge based on time or traffic levels combined with a charge for distance travelled is becoming a global best practice. Singapore, Portland and London are evolving towards this ‘second-generation’ cordon scheme. Portland and London are considering the adoption of schemes that charge for distance travelled within a cordon. Similarly, Singapore’s cordon scheme will be upgraded to capture distance travelled and base charges on a combination of the time when motorists enter the zone and the distance they travel within the zone. A similar approach would be the combination of a distance-based full network charging scheme across the region, coupled with a time adjusting point charging system in key areas such as at bottlenecks or congestion hot spots. Complementing distance-based charging with point charging safeguards against individuals from becoming immune to the distance-based charge, rendering it ineffective in curbing congestion.
- Equity: Any mobility pricing scheme that is implemented must ensure that vulnerable groups are not unfairly impacted, and that acceptable and affordable alternative modes of transportation are available. The subjective nature of equity makes it a very difficult task to implement a ‘fair’ scheme. There are various definitions of equity and fairness. For example, in the case of Toronto, the government considers it equitable to implement a mobility pricing (corridor charging) if an alternative non-tolled route is available to motorists. This principle ensures motorists can access all areas (e.g. urban centers) whether they can afford the charge of not. However, on the other hand, a different region may consider that tolling only some routes unfairly targets motorists living or working in a certain region and that it would be more equitable if all roads were tolled. In mobility pricing, equity can pertain to the amount and location of charging zones or points relative to where people live and work as well as the impact that mobility pricing has on low-income individuals, seniors, and people with disabilities.
- Public Buy-in and Pilot Programs: Public buy-in is paramount for ensuring the success of mobility pricing schemes. Thorough public consultations, pilot programs and a gradual roll-out are best practices in garnering public support for mobility pricing and for influencing behaviour change. An extension of the London Congestion Charge implemented in 2007 was ultimately cancelled in 2011 largely due to insufficient public consultation and rushed implementation. In contrast, the success of the mobility pricing schemes in Stockholm and Oregon are generally attributable to the thorough public consultations conducted in advance of implementation, coupled with extensive pilot programs. Even despite intense initial public opposition, public support for mobility pricing dramatically increased in Stockholm after benefits of the scheme were demonstrated in a pilot program. Oregon’s pilot program runs on a volunteer basis and this opt-in program has facilitated a gradual introduction of mobility pricing to the public with little resistance relative to other jurisdictions.
- Political Buy-in and Regional Cooperation: Previous attempts to introduce mobility pricing initiatives in Toronto and New York were both determined to have failed because of the lack of regional political buy-in on all levels of government and from across the region. Looming elections often provide political parties with the incentive to abandon – or express opposition to – proposed mobility pricing schemes.
- Clear Policy Goals: Determining a clear objective is necessary to ensure the appropriate mobility pricing scheme is chosen. With Greater Vancouver’s growing population and increasing density placing greater demand on its roads, managing congestion and funding public transit are some key goals that mobility pricing would help achieve.