Dynamic tolling benefits highway users in congested areas

By Michael Brenneis

Congestion pricing is gaining a foothold in the management of highway vehicular travel, and with good reason. Congestion pricing, sometimes called demand-based pricing or dynamic tolling, is in the early stages of adoption by state DOTs as a congestion-management practice. Highways with underutilized high occupancy vehicle (HOV) lanes, and general lanes above capacity, tend to be good candidates for dynamic tolling. And as Daniel C. Vock details in a recent article on Governing.com, highway congestion pricing can benefit users and non-users alike.

The Virginia DOT instituted dynamic tolling on I-66 in 2017, opening HOV lanes to drivers of single-occupancy vehicles (SOV) willing to pay the toll. Previously these lanes had only been available to HOVs, emergency vehicles, motorcycles, and those licensed as clean-special-fuel vehicles. These users, with the exception of clean-special-fuel vehicles, are still allowed free access. For others, tolls are dynamically priced. As more people enter the road, the toll rises.
Typically, roads have been tolled in order to pay for the construction or maintenance of the infrastructure itself. The purpose of dynamic tolling in Virginia is to maintain a consistent speed in the tolled lanes, shift users to carpooling, transit, and bicycling, and develop revenue to support transit and bicycling modes. In theory, the act of opening formerly restricted lanes to willing SOV drivers balances the system, and reduces congestion for the drivers who remain in the free lanes by sending some SOV drivers to the toll lanes and others to seek alternatives.

Prior to the introduction of dynamically-priced lanes in Virginia, SOV drivers had few alternatives to spending time on congested roads. The conversion of HOV lanes to high occupancy toll (HOT) lanes can increase the efficiency with which the entire highway is used. Some drivers may experience diminished levels of service due to the need to carpool, use transit, or spend more time travelling on slower roads. But these potential disadvantages can be offset by the investment of toll revenue in alternative modes, or by discounting tolls for lower-income individuals. Arguably, there are also health and quality-of-life benefits to travelers who shift to active modes or transit. On some roads the use of dynamically-priced lanes offers a needed alternative for emergency vehicles and others making high-value trips, who might otherwise be delayed by congestion.

Virginia’s uncapped dynamic tolls can produce some spectacularly high tolls, leading to public outcry, but the prices largely serve to maintain toll-lane speeds. The success of the Virginia lanes contrasts with lanes in Washington and Utah where low caps on tolls led to oversubscription. Uncapped toll price shock have led some to conclude that dynamic tolls are designed to convenience the wealthy. However, Vock reports that toll operators contend that the purpose of HOT lanes is to “make it easier for ordinary motorists to get where they are going when they cannot be late.”

The popular perception that peak-hour tolls disproportionately affect drivers with lower incomes has also come under scrutiny. In the Portland area, analyses show effects on individuals with higher incomes. The FHWA contends that low-income drivers can be financially harmed when they don’t have access to transportation choice; something dynamic tolling provides. Toll revenue-funded improvements to alternate routes and modes, reduced sales- and fuel-taxes, tax credits, and subsidized transponders are all potential policy solutions to equity issues.

In car- and truck-dependent societies, where people need to interact in order accomplish their objectives, road congestion can be one byproduct. Evidence is mounting that increasing capacity induces demand. Dynamic pricing is one tool by which congestion can be managed, and perhaps ameliorated.

Michael Brenneis is an Associate Researcher at SSTI.