Congestion pricing

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High-occupancy toll lanes are one form of congestion pricing seen in the US. Source: Famartin (CC BY-SA 4.0)


Most roads are completely free to use. This leads to high demand and, as a result, traffic congestion. Congestion pricing attempts to reduce congestion, decrease travel times, and increase reliability by forcing driving to pay for using roads. Rather that simply levying flat tolls, congestion pricing works by varying the cost of driving depending on traffic levels. When traffic is high prices rise in an attempt to curb demand. Drivers unwilling to pay the high price will potentially adjust their travel behavior to avoid the congestion, leading to more efficient use of road space.

While congestion pricing is meant to reduce traffic, it also generates revenue. This money can be used put towards improving public transportation so that people have a realistic alternative to driving.

Congestion pricing basics

Congestion pricing encompasses several different strategies for applying a price to heavily traveled road networks. The basic concept is to raise the price of travel as the number of travelers increases, especially when the level of traffic begins to decrease the time and reliability of travel. In the United States, the "high occupancy toll" (HOT) lane has recently become one of the most common forms of congestion pricing[1]. HOT lanes are typically converted from existing high-occupancy vehicle (HOV) lanes, retaining the basic concept of free travel by carpools and buses while adding the option for solo drivers to "buy in" to the lane. This strategy allows motorists who value a faster and more reliable trip on the highway to pay for such an alternative. HOT lanes do not replace general travel lanes, meaning people can continue to drive for free on the same roadway. True congestion pricing on HOT lanes requires that the price paid by solo drivers increase as the volume of cars increases. If so many vehicles are buying into the HOT lanes that traffic begins to back up, the price may climb significantly, or in some cases, the HOT lanes may revert temporarily back to HOV-only. There are several ways this can be accomplished, which are explored in the examples below.

Other congestion pricing tools besides HOT lanes include "cordon pricing", variable tolls across an entire roadway, and certain non-tolling strategies. Cordon pricing has been used in London since 2003, in which most vehicles entering the central city must pay a charge between 7:00am and 6:30pm Monday through Friday[2]. The revenues from the cordon price were directed towards improved public transport, and together have reduced traffic by as much as 15% without significant increases on surrounding local roads.

Using variable tolls across an entire roadway is not a common strategy in the United States. A newer strategy, piloted by the state of Oregon, charges drivers based on vehicle miles traveled as a replacement for the fuel tax. The fuel tax is rapidly becoming an ineffective source of revenue as newer cars become more efficient or entirely electric, meaning less fuel is sold and thus less revenues raised.

Equity questions

An oft-cited argument against congestion pricing, specifically HOT lanes, is that they disproportionately hurt low-income travelers. Many politicians in opposition to HOT programs call them "Lexus lanes", claiming that the toll lanes will only be used by the rich and thus do not provide the equal opportunity for low-income drivers to reap the benefit of the improved travel time. Supporters of HOT lanes defend them in several ways. First, an HOT lane is always an HOV lane, allowing carpoolers to enjoy the reliably fast lanes for free. Carpooling is a proven and effective strategy for all commuters to save money, and the HOT lane should prioritize carpooling before toll-paying motorists. Second, studies of existing variable-priced lanes such as State Route 91 in Orange County, California demonstrate that even low-income drivers take advantage of the HOT lanes when they have a highly time-sensitive trip. For many users, the penalty for being late to work or picking up a child from daycare would be more expensive than the one-way toll. Third, revenues from HOT lanes can be directed to public transit improvements along the same corridor. Increased frequency of service funded by HOT lanes can motivate solo drivers at all income levels to switch to a transit commute. Finally, as the Los Angeles County Metropolitan Transportation Authority (LACMTA) demonstrated, policies and programs can be enacted to support qualifying low-income users with toll credits, account fee waivers, or even direct subsidies[3].

It is important to note that the 91 ExpressLanes were built as a tolled express alternative and not as a HOT facility, meaning that initially even carpoolers did not travel for free (although this has been changed under the ownership of the Orange County Transportation Authority). As discussed, even low-income drivers may take advantage of the tolled facility, and furthermore, anyone who carpools can still more affordably split the cost of the toll than driving alone, thus giving all passengers the advantages the ExpressLanes offer.

Directing revenue to transit

Congestion pricing has been used in several applications to fund enhanced complementary transit service. Examples in California include Los Angeles' Silver Line service and San Diego's Inland Breeze [4].

Examples of Congestion Pricing


  • Los Angeles Metro ExpressLanes (I-10 and I-110)
  • SR-91 ExpressLanes
  • San Diego I-15 HOT lanes
  • Bay Area


Additional Reading

Perez, B.G., Fuhs, C., Gants, C., Giordano, R., & Ungemah, D.H. (2012). "Priced Managed Lane Guide." Federal Highway Administration

This document provides an extensive guide to the details of all the stages of implementing a lane pricing program.