Tag Archives: road congestion

City-wide trial shows how road use charges can reduce traffic jams

The Conversation

File 20171119 11450 mgpqvz.jpg?ixlib=rb 1.1
A trial of 1,400 drivers across Melbourne suggests time-of-use charges can be effective in easing traffic congestion. AMPG/Shutterstock

Leslie A. Martin, University of Melbourne and Sam Thornton, University of Melbourne

Road congestion in large Australian cities is estimated to cost more than A$16 billion a year. Economists have long argued the best way to improve traffic flow is to charge drivers for their contribution to road congestion. We have now analysed data collected from 1,400 drivers across Melbourne to see whether road user charging can change their behaviour in ways that ease congestion. And the answer is yes.

Because the obstacle to adopting this approach has been concern about its fairness, we also looked at driver incomes. Would congestion-based charges price the poor off the road for the benefit of those who can pay? We calculated how different systems of road use charges affected households on different incomes, and how driving patterns changed under different prices.

The evidence does not support other common policy responses to traffic congestion. Building new roads does little to relieve congestion. Placing tolls on roads can push traffic onto others.


Further reading: Do more roads really mean less congestion for commuters?


However, even small reductions in congestion can produce large benefits. On congested roads, reducing traffic by 5% can increase traffic speeds by up to 50%.

The question is: what would the optimal charges be? Drivers often plan their travel ahead of time, so Uber-like surge pricing is not necessarily the best way to go. Could simpler fixed charges, based perhaps on time of day or location, be effective?

In 2015-2016, Transurban Group implemented the Melbourne Road Usage Study (MRUS) to answer these questions. More than 1,400 drivers across greater Melbourne installed GPS devices in their vehicles for eight to ten months. After a period to establish baseline use, a randomly selected subset faced a series of road use charges via a system of virtual accounts. Every month participants accumulated real money from reduced charges as a result of their decisions about driving.

A congestion-charging zone in central London. Bikeworldtravel/Shutterstock

Well-targeted charges ease congestion

The Melbourne Road Usage Study tested three simple charges:

  • a flat distance-based charge of 10 cents per kilometre
  • a time-of-day charge of 15 cents per kilometre at peak times and 8 cents at other times
  • a distance-plus-cordon charge where drivers were charged 8 cents per kilometre at all times plus A$8 if they entered the inner city.

Our working paper, Can Road Charges Alleviate Congestion?, evaluates the raw data.

Charges that vary by time of day were most effective at reducing driving at congested times. Drivers subjected to a higher cost of driving in the weekday peak hours of 7am to 9am and 3pm to 6pm reduced travel by 10% during these periods.

While a simple 10 cent charge on distance travelled did reduce driving, this was mainly outside the congested inner city and at off-peak times – mostly in the middle of the day and on weekday evenings. Most freeway congestion occurs around morning and late afternoon commutes.

London and Singapore have charges to enter the congested city centre. Further research is needed to assess the effects on inner-city traffic in Australian cities.

The evidence points towards most drivers who enter the CBD being willing to pay higher weekday charges. But few drivers entered the cordon zone during the study. Less than 5% of the drivers made over half of the trips into the area.

Access to reliable public transport matters

Public transit has a key role in getting cars off the road. Our data showed households located far from the CBD and from public transport drive more. Living 500 metres closer to a tram or train station has the same effect on kilometres driven each day as living 5km closer to the CBD.

Households within a 10-minute walk from public transport drive least. The largest reductions in driving from time-of-day and cordon charges come from households living 10 to 20 minutes’ walk away.

Road use charges could be fairer

Congestion-based charges can be a more progressive way to fund roads than the existing system of registration fees and fuel taxes.

The fuel excise makes up almost half of the average annual road bill in Australia. It’s essentially a distance-based fee, but more fuel-efficient vehicles pay less per kilometre travelled. Hybrid vehicle drivers, for example, contribute much less to fuel tax revenue.

Yet, although hybrids contribute less to air pollution, they increase congestion just as much as their petrol-guzzling counterparts. And congestion is a much greater shared economic cost than vehicle air pollution.

Annual vehicle registration fees make up most of the remaining road bill. These provide no incentive to reduce congestion.

Fuel taxes and registration fees put a disproportionate burden on low-income households in the outer suburbs. Our research shows these households would be better off if roads were funded more by congestion charges.

Field experiments help get the settings right

So what is the optimal congestion charge? Economic theory (Pigou 1920) tells us to price at the cost that each extra user imposes on the system.

With road use, though, the calculation is difficult. To fix rates in advance, we would need to know exactly how much longer everyone’s trip is when each extra driver joins each system. And we’d need to cost that slowdown for each individual on the road at that time (i.e. value their time and, potentially, the cost to them of being late). New research has been using clever experimental designs to identify these values.

That said, maybe it is not too important to get the price just right. For electricity, we are starting to see that households respond to there being a price, not its specific level.

Before widespread road use charges are implemented, we would like to see more field experiments like the MRUS to find answers to other questions. Would it be better to combine a time-of-day charge with targeted locations? How effective would it be to charge more for using highly congested arterial roads at peak times? Would this simply push congestion onto nearby local roads? How large a gap between peak and off-peak prices is needed to produce a strong response?

Another interesting option is the i10 model outside Los Angeles. Two lanes are for traffic willing to pay more to get to their destination faster.

Dynamic pricing ensures traffic in these lanes flows freely – if too many use these lanes and traffic slows, the price increases. Drivers can decide every few kilometres if they want to pay more to stay in the express lanes. Those who must get somewhere on time are able to, and the fee revenue can be used to reduce road costs for others.

The Melbourne Road Usage Study (MRUS) shows field experiments can help us design better road use charges. By all appearances, households took it seriously and were positive about their involvement.

The ConversationThe MRUS provides evidence that well-designed road use charges could help reduce congestion by encouraging people to drive at different times, take other routes or use other transport. This could lead to better use of existing infrastructure, thereby reducing costs, while generating revenue for infrastructure investments. Under such a system, drivers who contribute little to congestion could see substantial gains.

Leslie A. Martin, Lecturer (Assistant Professor) in Economics, University of Melbourne and Sam Thornton, Master of Economics candidate, University of Melbourne

This article was originally published on The Conversation. (Reblogged by permission). Read the original article.

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Stuck in traffic: we need a smarter approach to congestion than building more roads

The Conversation

Marion Terrill, Grattan Institute and Hugh Batrouney, Grattan Institute

The equation doesn’t look pretty. Traffic congestion costs us billions of dollars each year – so we are told – and population growth is not letting up. When road rage meets large economic costs, it’s little wonder our politicians are desperate to do something.

The trouble is, too often that “something” is a great big new freeway. Building more roads isn’t the best answer, because the roads we have are mostly up to the job – if only we could make better use of them by spreading traffic out beyond the morning and evening peaks.

Instead of focusing on freeways, governments should change the way we pay for urban roads and public transport. To work out how best to do this, the Grattan Institute has looked at several million Google Maps estimates of travel times in Australia’s largest cities. This analysis reveals both the extent of the problem in Sydney and Melbourne and its city-specific characteristics.

For many, the problem is minor

The truth is, for a lot of people, road congestion doesn’t matter much. This is because most people work in a suburb close to where they live.

Chart 1 shows congestion delays for Sydney’s 146 most-common commuting trips.

Chart 1: For many Sydney commuters, congestion is very modest

Additional minutes compared to free flow

The horizontal black line in the coloured bar is the median of all journey-to-work routes, weighted by the number of people who used a car to travel to work on those routes in the 2011 Census reference week. Trip times were estimated by assuming all travel between suburbs was between representative addresses for each suburb. Routes with fewer than 400 such commuters are not included. Grattan analysis of Google Maps, and ABS (2011)

The average delay is small: an average commute at the busiest time of day takes around three minutes longer than the same trip in the middle of the night.

While some commutes are delayed for much longer, it is unusual for trips to take more than ten minutes extra in peak periods.

Congestion is a problem in the CBD and inner suburbs

Unsurprisingly, the story is different, and worse, in and around central Sydney and Melbourne. Add in all the trucks and vans, students and tradies, shoppers and people going to appointments, and typical delays for travel on CBD-bound journeys are substantially greater (Chart 2).

Chart 2: On commutes into Sydney’s CBD, the average morning-peak delay is 11 minutes

The horizontal black line in the coloured bar is the median of all journey-to- work routes, weighted by the number of people who used a car to travel to work on those routes in the 2011 Census reference week. Trip times were estimated by assuming all travel between suburbs was between representative addresses for each suburb. Routes with fewer than 400 such commuters are not included. Grattan analysis of Google Maps, and ABS (2011)

The trends are similar in Melbourne. Travel on CBD-bound journeys is much more delayed than to non-CBD locations.

Chart 3 also shows that delays are noticeably larger in the suburbs that immediately surround Melbourne’s CBD.

Chart 3: Travel in suburbs surrounding the Melbourne CBD is highly delayed

Increase in travel time relative to free flow travel time

Average delay is calculated as the ratio of trip duration at each point throughout the day to the minimum trip duration observed for that route over the sample period. Based on travel time of representative route samples collected via Google Maps. Weekends and public holidays excluded. Grattan analysis of Google Maps

Some commutes are frustratingly unpredictable

Most travellers don’t just care about how long a trip usually takes. How long it could take also matters.

Chart 4 shows that Melbourne’s Eastern Freeway/Hoddle Street corridor has not only some of city’s worst delays, but also some of the least-predictable travel times. Motorists from suburbs to the north-east have to juggle these less-reliable travel times more than those travelling similar distances from other directions.

Chart 4: Travel on routes to Melbourne’s CBD that rely on Eastern Freeway and Hoddle Street are noticeably delayed and unreliable

Increase in travel time as a proportion of free-flow travel time, weekday morning peak, commutes into Melbourne CBD

For travel departing between 7am and 9 am. Excludes weekends and public holidays. The boxes cover the 25th to 75th percentiles. The vertical line in each box lies at the median for each city. The ‘whiskers’ on each side of the boxes extend no further than plus or minus 1.5w where ‘w’ is the box width. Observations beyond the lines are plotted as dots. Grattan analysis of Google Maps

New roads are not the whole answer

Congestion tends to be worst in the most built-up parts of Sydney and Melbourne, where it would be most costly to construct new roads. This means that even crippling levels of congestion might not justify the construction of astronomically expensive infrastructure.

In any case, new roads often take years to build and can fill up with new traffic of their own.

New roads are important, however, in new suburbs.

The rule for our policymakers should be: build a road whenever the community will gain more from the new road than it will cost, and whenever the new road is a better option for the community than extracting more from the roads we’ve already got. But do not think of new roads as congestion-busting.

So what should be done?

Changing the way we use our existing infrastructure through pricing needs to be at the top of the agenda. This mean charging motorists for the congestion they cause.

Sydney and Melbourne need to consider introducing a congestion charge. That doesn’t mean more toll roads – it means charging people who drive at peak times on congested roads a small fee.


Further reading: Road user charging belongs on the political agenda as the best answer for congestion management


Because some people wouldn’t think it worth paying the charge at the busiest times of day, those who did pay would get a quicker and more reliable trip. People who can travel outside of the peaks would not have to pay, because there would be no congestion charge when the roads are not congested.

The increased cost to drivers could be offset by cuts to car registration fees. And any extra money raised by the congestion charge could be spent improving train, tram, bus and ferry services.

International examples show that introducing a congestion charge need not amount to political suicide. An initially sceptical public came quickly to accept, value, the reform when it was introduced in London and Stockholm.

The ConversationThe congestion equation for Sydney and Melbourne is only going to get more ugly as both cities continue to grow. We need more sophisticated policymaking to ease drivers’ road rage and frustrations.

Marion Terrill, Transport Program Director, Grattan Institute and Hugh Batrouney, Senior Associate, Grattan Institute

This article was originally published on The Conversation. (Reblogged by permission). Read the original article.

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