Road Pricing and Public Acceptability

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Road Pricing and Public Acceptability

• Robin Lindsey
• Transportation Futures Ontario Road Pricing
  Forum, November 13, 2008

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Outline

• Public attitudes to road pricing generally
• Institutional and public attitudes in Canada

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Traditional objections to road pricing 1

• 1. Paying for something that was free
• Canadian roads traditionally provided publicly
  without direct user charges.
• 2. Double taxation
• Most road-pricing schemes not revenue neutral.
• The Netherlands intends to modify its current
  road tax system.
• UK has considered lowering fuel taxes if a
  national scheme is introduced.

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Traditional objections to road pricing 2

• 3. Inequitable
• With respect to income
• Higher-income groups more likely to gain because
  willing to pay more for travel time savings.
• Caveat Lower-income groups could benefit if
  public transit service is improved.
• With respect to location
• Tolling of residential streets
• Tolling of road networks
• Japanese policy is not to differentiate toll
  rates by link

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Traditional objections to road pricing 3

• 4. System complexity
• People dislike complex price structures
  generally (driving, public transport,
  telecommunications )
• This militates against varying tolls frequently
  by time of day, multiple charging points,
  discounts ...
• Complex schemes that failed
• Hong Kong proposals (1985, mid-1990s)
• Edinburgh double cordon (2005)
• New York City area-based scheme (2008)
• Complex schemes that succeeded
• HOT lanes in US with dynamic tolls
• Electronic road-pricing in Singapore

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Traditional objections to road pricing 4

• 5. Invasion of privacy
• Largely addressed by anonymous electronic
  tolling technology
• Concern with satellite-based systems
• 6. Loss of retail business
• Retailers generally oppose road pricing
  initially.
• But
• Studies indicate effects are modest
• Any lost business from drivers could be offset by
  gains from shoppers using other modes.

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Opposition to UK national scheme

• The idea of tracking every vehicle at all times
  is sinister and wrong.
• Road pricing is already here with the high level
  of taxation on fuel. The more you travel - the
  more tax you pay.
• It will be an unfair tax on those who live apart
  from families and poorer people who will not be
  able to afford the high monthly costs.
• Please Mr Blair - forget about road pricing and
  concentrate on improving our roads to reduce
  congestion.
• 1. Invasion of privacy
• 2. Double taxation
• 3. Inequitable
• 4. Views improving roads as an alternative to
  tolls

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Recent US survey evidence 1

• Survey of 110 US public opinion studies of
  pricing
• Source Zmud (2008, NuStats)

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Recent US survey evidence 2

• Source Zmud (2008, NuStats)

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Recent US survey evidence 3

• Public support generally higher for
• Specific projects with tangible benefits
• Revenues earmarked for highways or public transit
• Not to special interest groups such as investors
• Simple projects
• Prefer toll roads to mileage fees
• Tolls preferred to taxes or reduced service
• Source Zmud (2008, NuStats)

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Attitudes before and after

• Support increases after tolling begins
• Norway, London, Stockholm, U.S. HOT lanes

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Outline

• Public attitudes to road pricing generally
• Institutional and public attitudes in Canada

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Federal studies

• Royal Commission on National Passenger
  Transportation (1992)
• National Transportation Act Review Commission
  (1993)
• Canada Transportation Act Review (2001)
• Investigation of the Full Costs of Transportation
  (2003)
• Studies supported marginal social cost pricing
  for transport and the user pays principle

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Historic opposition to tolls 1

• Fredericton-Moncton highway project
• In 1998, New Brunswick government entered a PPP
  (design, finance, build, operate maintain, 25
  years).
• Toll to be imposed on pre-existing toll-free
  section.
• Public resistance to toll contributed to downfall
  of government.
• New government revised contract to compensate
  contractor with shadow tolls.
• Toll collection ended in 2000.

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Historic opposition to tolls 2

• Coquihalla Highway
• Operated as public toll road 1986-2008.
• In 2003, BC government proposed privatization on
  55-year lease.
• Car toll expected to jump from 10 to 13, and
  rise over time.
• Massive opposition.
• Government backed down.
• Car toll remained at 10 until tolling ended.

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Public attitudes in Québec

• Preferred type of user charge

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Institutional attitudes in Vancouver 1

• Governments and agencies

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Institutional attitudes in Vancouver 2

• TransLink Strategy Discussion Guide (Oct. 2007)
• 6 wrote in favour of tolls. Other 2 no mention.

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Public attitudes in Canada generally

• Tolls more acceptable
• On new capacity (especially if not otherwise
  built)
• If a reasonable toll-free alternative exists
• If revenues earmarked to the tolled facility
• If toll increases are moderate
• Overall Attitudes vary across governments, other
  institutions and the public.

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References

• Léger Marketing. 2007. Opinion of Quebeckers on
  road network funding. Montreal Economic
  Institute Research Report September 2007,
  MEI-Journal de Montréal-Léger Marketing Opinion
  Poll, September 2007 (www.iedm.org/uploaded/pdf/so
  ndage0907_en.pdf).
• Lindsey, Robin. 2006. Do Economists Reach a
  Conclusion on Highway Pricing? The Intellectual
  History of an Idea. Econ Journal Watch. 3(2)
  292-379.
• Lindsey, Robin. 2007. Congestion Relief
  Assessing the Case for Road Tolls in Canada.
  C.D. Howe Institute Commentary 248.
• Lindsey, R. 2008. Prospects for Urban Road
  Pricing in Canada. G. Burtless and J. Rothenberg
  Pack (eds.), Brookings Wharton Papers on Urban
  Affairs 2008, 235-293.
• Schade, J. and Schlag, B. eds. 2003.
  Acceptability of Transport Pricing Strategies,
  Elsevier, Amsterdam.
• Zmud, J. 2008. The public supports pricing If
  A synthesis of public opinion studies on tolling
  and road pricing. International Bridge, Tunnel
  and Turnpike Association, Tollways, Winter, 28-39
  (http//www.ibtta.org/files/PDFs/win08_Zmud.pdf).