Congestion pricing

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Congestion pricing is a concept applied to roadways experiencing high traffic volumes in order to motivate better economic decision making among drivers and improve traffic flow. When a roadway is carrying more vehicles than it was designed for, traffic becomes congested, decreasing travel times and reliability of travel. Applying a pricing scheme, such as a toll, which increases along with congestion (and likewise decreases), motivates some drivers to adjust their travel behavior. Drivers unwilling to pay the higher price will choose to drive at other times, thus maintaining or improving overall congestion conditions.

Congestion pricing can be used to generate revenue in support of enhanced public transit service. Recently implemented projects demonstrate that congestion pricing is an effective tool both for managing vehicle throughput and motivating solo drivers to choose improved transit options.

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, "high occupancy toll" (HOT) lanes 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 the "general purpose" 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. In some examples, the policy guiding price response is based on maintaining a minimum average speed in the HOT lanes, such as 55mph. 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. 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. Cordon pricing is not currently used anywhere in the United States, although a plan had been developed to enact cordon pricing around Manhattan (CITE).

Variable tolls across an entire roadway is also not a common strategy in the United States. A newer and more innovative strategy was piloted by the state of Oregon, which charges drivers based on vehicle miles traveled (VMT) 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. (CONTINUE and CITE)

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 can 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. However, this is a spurious argument on several counts. 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(CITE). 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[2].

Directing revenue to transit

Examples of Congestion Pricing


Elsewhere "Congestion Pricing: A Primer on Institutional Issues". "Transit and Congestion Pricing: A Primer".


  1. Federal Highway Administration. "Congestion Pricing: A Primer". October 2008.
  2. LACMTA. "Metro ExpressLanes Project: Final Low-Income Assessment". 2010.