Planning for Pricing

1
Planning for Pricing

• TRB Workshop on Best Practices in Value Pricing
• Sunday, January 11, 2004
• Patrick DeCorla-Souza, FHWA
• Ken Buckeye, Minnesota DOT
• Ed Regan, Wilbur Smith Associates
• Todd Litman, Victoria Transportation Policy
  Institute
• Angela Jacobs, FHWA

2
Overview

• Introduction to Pricing DeCorla-Souza (20 min)
• Theory of Pricing Todd Litman (10 min)
• Planning for Pricing Ken Buckeye (20 min)
• Analytical Concepts with Exercise (30 min.)
• Analysis Tools and Resources Jacobs and
  DeCorla-Souza (10 min.)

3
Introduction to Pricing

• By
• Patrick DeCorla-Souza, AICP
• Federal Highway Administration

4
Introduction to Pricing

• Why consider pricing?
• Types of pricing strategies
• Issues
• Incorporating pricing into an ideal regional
  planning process

5
What is Road Pricing?

• Tolls or other charges
• Vary by level of demand
• Purpose
• To manage demand and reduce congestion
• To generate revenues
• Types
• Facility-based tolls (most of todays workshop)
• Vehicle use based charges (last hour)

6
Why Consider Pricing?

• Metropolitan Transportation Issues
• Travel growth and congestion
• Public resistance to major highway projects
• Funding shortfalls

7
Objectives

• Financing
• Provides new revenue for highways or transit
• Mobility
• Provides congestion insurance
• Uses spare capacity on existing HOV lanes
• Maximizes trip throughput
• Environment
• Reduces induced travel demand and emissions
  relative to free lanes
• Reduces sprawl relative to free lanes

8
Facility-Based Pricing

• Toll roads with variable tolls
• HOT lanes HOV lanes which permit non-HOVs
  paying a toll
• Priced express lanes new lanes on free roads
• FAIR lanes tolls on some existing free lanes
  with credits provided to all motorists on
  remaining lanes or based on income
• Cordon charges
• Area licenses

9
Pricing Manages Traffic Flow

• SR 91
• As congestion on regular lanes increases, vehicle
  throughput decreases
• HOT lanes maintain their throughput

10
Pricing Manages Traffic Flow

• SR 91
• Toll-paying SOVs save 20-30 min. relative to
  congested lanes
• Trip time is reliable

11
Non-Facility Pricing

• Parking pricing and parking cash out
• Mileage-based insurance charges
• Mileage-based lease charges, taxes and fees
• Car sharing

12
Pricing Manages Travel Demand

• Parking Cash Out
• Cars driven to work per 100 employees

13
Facility-Based Pricing Issues

• Political
• geographic and income equity
• induced travel/ sprawl
• concern that federal or state funding share will
  drop
• Technical
• cost, financial feasibility
• traffic operations (access/ egress) and
  enforcement
• Public acceptance
• Double taxation (roads already paid for)

14
Costs vs. Revenues Operational Projects
15
Costs vs. Revenues New Projects
16
Public Support San Diego Survey

• 70 approval for existing HOT Lanes
• 84 favor HOT Lanes extension, which integrates
  bus rapid transit

17
FHWAs Value Pricing Pilot Program

• What have we learned?
• Public support can be achieved
• Increased choice, congestion insurance
• Packaging with transit
• Can successfully keep congestion at bay
• Can prevent loss of vehicle throughput
• Revenue potential depends on HOV policy
• Capital costs in metro areas are high and
  generally cannot be financed fully from toll
  revenue

18
Ideal Regional Planning

• Include in Goals and Objectives
• Economic efficiency
• Use-based financing
• Self-financing of new infrastructure investments
• Efficient operation of the transportation system
• Measures of Effectiveness
• Cost per hour of delay reduced
• Cost per new trip served in peak periods
• Revenues vs. costs

19
Ideal Regional Planning

• Include among system alternatives
• Demand Management Scenario Base Case Do
  Nothing plus pricing packaged with transit and
  carpooling incentives
• Highway and transit investment alternatives plus
  pricing packaged with transit and carpooling
  incentives
• Hurdles
• Political and public acceptance
• Evaluate Scenarios

20
Ideal Regional Planning

• Analysis of Impacts of Alternatives - Travel
  Demand
• Post-processing of traffic assignment from four
  step models
• Modeling within traffic assignment step
• Modeling within mode choice
• Modeling within trip distribution using the
  LOGSUM term of the mode choice model
• Modeling as part of activity-based model

21
Ideal Regional Planning

• Need to address model deficiencies
• Four step models that account for loss of peak
  period throughput due to congested flow
• Speed-flow relationships that account for
  precipitous drop in speeds when demand exceeds
  capacity
• Need to estimate impacts, user benefits, external
  costs, toll revenues, equity of incidence of
  benefits
• STEAM
• Sketch-planning tools SMITE-ML and SPRUCE

22
Regional Planning

• Evaluation of Alternatives
• Benefits vs. costs
• Net Present value, B/C, Rate of Return
• Cost-effectiveness
• Cost per hour of delay reduced
• Financial feasibility
• Share of costs funded from project revenues
• Equity/ environmental justice
• Share of costs vs. benefits by income group
• Share of costs vs. benefits by geographic area

23
Vehicle Use Pricing Reforms For Efficiency

• By Todd Litman
• Victoria Transport Policy Institute

24
Market Principles

• Free markets tend to be the best way to
  allocate scarce resources. But, love of markets
  must not be blind. To be efficient and fair
  markets must reflect certain principles
• Consumer choice
• Cost-based pricing
• Neutral public policies.

25
Definitions

• Cost refers to resources used to produce a good
  or service, which may include money, time,
  materials, land or even risk and discomfort.
• Price refers to the to the direct, internal,
  variable costs that people must bear in order to
  consume a good.

26
Raise My Prices, Please!

• Of course, motorists do not like to pay more
  for roads and parking, but unpriced facilities
  are not really free, consumers ultimately pay
  through higher taxes and retail prices. The
  choice is actually between paying directly or
  indirectly.

27
Paying Directly Returns Savings To Individual
Motorists

• Paying directly is more equitable and
  efficient, since users pay in proportion to the
  costs they impose. Free facilities force
  everybody to pay, including non-drivers and
  motorists who reduce their vehicle use. Paying
  directly gives individual consumers the savings
  that result when they drive less, providing a new
  opportunity to save money.

• Motorist Reduces Mileage
• ?
• Reduced Congestion, Road Parking Facility
  Costs, Reduced Crashes, etc.
• ?
• Economic Savings

28
Vehicle Expenses
29
The Full Costs of Driving(Including nonmarket
costs such as time, accident damages and
pollution emissions.)
30
Market Distortions - Examples

• Free parking.
• Unpriced road space, lack of congestion pricing.
  No financial penalty for driving during
  peak-periods, or financial reward for reducing
  peak-period traffic.
• Roadway costs not borne by motorists.
• Fixed vehicle insurance and registration fees.
• Tax policies that favor automobile-oriented
  benefits (e.g., company cars, free parking) over
  other employee benefits.
• External environmental and social costs of motor
  vehicle traffic.

31
Economically Excessive Vehicle Travel

• Although individually these distortions may
  seem modest and reasonable, their effects are
  cumulative and synergistic. The result is
  economically excessive motor vehicle use.

32
Optimal Pricing Leads to Optimal Consumption

• Optimal consumption is the amount people would
  willingly purchase in a competitive market (i.e.,
  they have a variety of travel options) with
  prices reflecting full marginal costs.

33
Transportation Pricing Reforms

• Current vehicle pricing violates efficient
  market principles, resulting in inefficient
  transport patterns. Vehicle use pricing reforms
  can help correct these distortions by
• Improving consumer options.
• Making prices better reflect marginal costs.
• Reducing biases that favor one form of travel
  over others.

34
Optimal Pricing
35
Pricing Reform Impacts

• Transportation economists study the impact of
  pricing on travel patterns. This is measured
  using elasticity values, which indicate the
  percentage change in travel activity that results
  from a percentage change in price. For example,
  an elasticity of -0.5 means that each 1.0 price
  increase reduces mileage by 0.5. When properly
  measured, vehicle travel turns out to be
  relatively price sensitive, meaning that price
  reforms can have a significant impact on travel
  patterns.

36
Planning for Pricing

• Kenneth R. Buckeye
• Minnesota Department of Transportation

37
Process

• Pre-plan
• Define problem
• Manage expectations
• Develop goals and objectives
• Involve public

38
Pre-planning

• Survey the landscape
• Connect to regions planning process
• Identify the players
• Balance the planning team
• Disseminate information
• Understand the politics, issues and objections
• Learn from successful projects

39
Is Pricing in the Tool Box?

• Legislative authority
• Set the stage
• Put the pricing tool in the tool box
• Integrate pricing into the planning process

40
Defining the Problem

• Driving forcess
• Whats in it for me?
• Problem must be believable and legitimate
• What are the alternatives?
• Return on investment

41
Manage Expectations

• A new paradigm
• Its a political world
• Equity
• Dont oversell, take baby steps

42
Developing Goals and Objectives

• What problem will be addressed?
• What does the region value?
• Vision
• Corridor management
• Regional context
• Common/unique goals and objectives
• Benefits

43
Goal and Objectives

• Improve overall corridor mobility making the
  corridor more efficient and the HOV lanes more
  effective
• Preserve transit and HOV priority
• Maintain premium speed levels
• Increase user choice
• Reduce fuel consumption and emissions
• Generate revenue for capital investment,
  operations, and transit enhancements

44
Perceived Barriers to Pricing

• Public and political support
• Equity
• Technology constraints
• Enforcement
• Modeling constraints

45
Public Involvement

• Purpose
• Inform public
• Create constructive dialogue
• Listen
• Respond
• Media

46
Effective Strategies for Public Involvement

• Sources
• Advisory groups
• MPO
• Community organizations

47
Outreach and Education

• Leadership
• Champions
• Task forces
• Venues
• Theory
• Experience from other projects

48
Communications

• Develop a comprehensive communications strategy
• Grass tops vs grass roots
• Media
• Lessons learned

49
Stages of Public Acceptance

• Confusion
• Adamant opposition
• Relief and rejoicing
• Realization
• Reconsideration
• Skepticism / reluctance
• Love, indifference

50
Analytical Concepts in Pricing
Ed ReganSenior Vice President
51
Behavioral Issues And Potential Responses To
Pricing

• Varies By Type Of Pricing Strategy
• Flat Rate Facility Pricing (Traditional Toll
  Roads)
• Variable Facility Pricing (Time Of Day)
• Managed Lanes (HOT Lanes)
• Area Pricing Schemes

52
Typical Motorist Response Options Area Pricing
Schemes

• Pay Fee / Continue Making Trip
• Shift To Transit
• Change Destination (If In Priced Area)
• Change Routing (Through Trips)
• Carpool (Shared Cost)
• Not Make Trip

53
Congestion Charging Zone In The Context Of London
As A Whole
Source Derek Turner Consulting
54
Inbound Traffic Flows
Flow on 16 High-flow Inbound Gateway Sites
During the Charging Hours (0700 - 1830)
160,000
140,000
120,000
100,000
80,000
Total Flow (vehicles excl 2-wheelers)
60,000
40,000
20,000
0
10/02/03
17/02/03
24/02/03
21/04/03
14/04/03
03/02/03
03/03/03
10/03/03
17/03/03
24/03/03
31/03/03
07/04/03
Date
Source Derek Turner Consulting
55
Typical Motorist Response Options Variable
Facility Pricing

• Pay Higher Toll Continue To Travel In Peak
  Periods
• Shift Time Of Travel
• Shift To ETC
• Variable Tolls Often Used With Electronic Toll
  Mode Only
• Divert To Alternative Route

56
Some Key Issues And Challenges

• Challenge Is To Move Traffic Out Of Peaks While
  Minimizing Diversions To Alternative Routes
• If Too Effective Can Make Shoulder Hours Become
  New Peaks
• Propensity To Shift Travel Time Is Influenced By
• Amount Of The Price Differential
• Amount Of Time Change Needed

57
Pennsylvania Turnpike Market Survey
58
Cumulative Time Shift Potential
59
Traffic Impact of Variable Pricing Pennsylvania
Turnpike
2012 Rate 1
2002 Rate 1
15 Minute Traffic Volumes
15 Minute Traffic Volumes
15 Minute Periods
15 Minute Periods
2012 Rate 2
2002 Rate 2
15 Minute Traffic Volumes
15 Minute Traffic Volumes
15 Minute Periods
15 Minute Periods
Base Volumes
Value Pricing Scenario 1
Value Pricing Scenario 9
Peak Pricing Time Period
60
Port Authority of New York New Jersey

• Variable Pricing Became Effective on All Bridges
  and Tunnels in March 2001
• Weekday (6-9 am and 4-7 pm) and Weekend (Noon-8
  pm) Variable Tolling
• Rate Structure

Source Port Authority of New York New Jersey
61
Value Pricing The Initial Experience
Encourage shifts to less congested periods.
2000 2001 2002 2003
5-10 AM Pctg. Traffic Distribution
Does Not Include Holland Tunnel
62
Traffic Impact of Variable Pricing
Leeway Facilities, Florida Midpoint Bridge
Prepaid Patrons
Percent Change in Traffic During Time Period
Time of Day
63
Typical Motorist Response Options Managed (HOT)
Lanes

• Continue Using G.P. Lanes
• Pay To Use Managed Lanes As SOV
• Shift To Carpools For Free Or Reduced Rate Access
• Shift To Transit (Where New Transit Options Are
  Provided)

64
SR 91 Express Lanes
65
Some Unique Pricing Challenges with Managed Lanes

• People Tend To Use The Lanes Only When They Are
  In A Hurry
• Typical Usage Pattern On SR 91 One In Five
  Transponders Is Used On A Given Day
• Prices Set To Typically Serve Less Than 50 Of
  Total Traffic
• Complex Variable Price Structures
• Time Of Day And Direction
• Sometimes Dynamic
• Differential By Vehicle Occupancy
• All Electronic Tolls Less Than 100 Of All
  Traffic Is Eligible
• Sensitive Demand / Price / Operations Equilibrium
• In A Sense, Success Of The Managed Lanes Depends
  On The Failure Of The General Purpose Lanes

66
Demand / Price / Operations Equilibrium
67
I-15 Dynamic Value Pricing Operations
Note Actual Traffic and Toll Rates From
Wednesday March 27, 2002
68
Toll Rate /OperationsProfileWestboundP.M. Peak
IH-10 Managed Lanes Houston
69
Managed Lane Modeling Challenges

• Typical Regional TDM Models Not Usually
  Sufficient
• Analysis Typically Needs To Be In Small Time
  Slices
• Focused Equilibrium Process Within A Single
  Corridor
• Delay Patterns On Free Lanes May Require
  Simulation Analysis To Properly Reflect
  Bottleneck Patterns
• Twin Model Approach
• Regional Models To Estimate Total Demand In The
  Corridor
• Micro-models With Simulation To Estimate Share Of
  Traffic Between Free And Priced Lanes
• Distribution Between Free And Managed Lanes Is
  Highly Sensitive To Small Changes In Demand And /
  Or Capacity

70
Factors Affecting Motorists Willingness To Pay
To Use Manage Lanes

• Perceived Congestion Levels In GP Lanes
• Error Of Anticipation
• Perceived Time Savings
• Toll Amount
• Value Of Time
• Predictability Insurance Policy Concept
• Avoidance Of Trucks
• Feeling Of Security

71
Value of Time

• Most Critical Factor in Analyzing any Pricing
  Strategy
• Can be Estimated Through Stated Preference
  Surveys
• Varies Widely
• By Income
• By Trip purpose
• By Individual
• By Situation
• By Amount of Time Saved
• Also Influenced by Perceived vs. Actual Time
  Savings

72
Group Exercise 1
What Would You Do If ?- Response Forms On
Your Tables
73
Typical Managed Lanes Project
74
Typical Trip To Work

• 20 Mile Trip, 15 Miles On Freeway
• Trip Time - 30 Minutes Without Congestion
  - Up To 60 Minutes With Congestion
• Presently Driving Alone
• Choice Between
• 4 General Purpose Lanes (Toll Free)
• 2 Managed Lanes (Variable Toll)
• Electronic Toll Collection In Managed Lanes
• Regular User - ETC Equipped

75
Choice 1

• Which Would You Choose ?
• A - General Purpose Lanes
• B - Managed Lanes

Toll
Travel Time (Minutes)
45 30
- 0.50
76
Choice 2

• Which Would You Choose ?
• A - General Purpose Lanes
• B - Managed Lanes

Toll
Travel Time (Minutes)
60 30
- 2.00
77
Choice 3

• Which Would You Choose ?
• A - General Purpose Lanes
• B - Managed Lanes

Toll
Travel Time (Minutes)
60 30
- 3.00
78
Choice 4

• Which Would You Choose ?
• A - General Purpose Lanes
• B - Managed Lanes

Toll
Travel Time (Minutes)
45 30
- 2.00
79
Choice 5

• Which Would You Choose ?
• A - General Purpose Lanes
• B - Managed Lanes

Toll
Travel Time (Minutes)
45 30
- 1.00
80
Choice 6

• Which Would You Choose ?
• A - General Purpose Lanes
• B - Managed Lanes

Toll
Travel Time (Minutes)
35 30
- 0.50
81
Choice 7

• Which Would You Choose ?
• A - General Purpose Lanes
• B - Managed Lanes

Toll
Travel Time (Minutes)
35 30
- 2.00
82
Choice 8

• Which Would You Choose ?
• A - General Purpose Lanes
• B - Managed Lanes

Toll
Travel Time (Minutes)
60 30
- 5.00
83
Choice 9

• Which Would You Choose ?
• A - General Purpose Lanes
• B - Managed Lanes

Toll
Travel Time (Minutes)
45 30
- 3.00
84
Typical Trip Home From Work

• Afternoon Peak
• Son Or Daughter Soccer Game
• Driving Alone
• Same Choice Between Toll Free General Purpose
  Lanes And Tolled Managed Lanes

85
Choice 10

• Which Would You Choose ?
• A - General Purpose Lanes
• B - Managed Lanes

Toll
Travel Time (Minutes)
60 30
- 3.00
86
Choice 11

• Which Would You Choose ?
• A - General Purpose Lanes
• B - Managed Lanes

Toll
Travel Time (Minutes)
45 30
- 2.00
87
Choice 12

• Which Would You Choose ?
• A - General Purpose Lanes
• B - Managed Lanes

Toll
Travel Time (Minutes)
45 30
- 3.00
88
Suppose Express Bus Is Added To Managed Lanes

• Back To Trip TO Work
• Park And Ride Lot Available At Freeway Entrance
• Bus Stops A Few Blocks From Work

89
Choice 13

• Which Would You Choose ?
• A - General Purpose Lanes
• B - Managed Lanes (Drive)
• C - Express Bus In Managed Lanes

Toll
Travel Time (Minutes)
60 30 40
- 3.00 2.00 (Bus Fare)
90
Choice 14

• Which Would You Choose ?
• A - General Purpose Lanes
• B - Managed Lanes (Drive)
• C - Express Bus In Managed Lanes

Toll
Travel Time (Minutes)
60 30 40
- 2.00 2.00 (Bus Fare)
91
Suppose Carpools Were Permitted To Use Managed
Lanes For Free

• Current Mode Is Drive Alone
• Would Need To Get Travel Partner To Carpool
• Park And Ride Lot Available At Freeway Entrance

92
Choice 15

• Which Would You Choose ?
• A - General Purpose Lanes
• B - Managed Lanes (Drive Alone)
• C - Managed Lanes (Carpool)

Toll
Travel Time (Minutes)
45 30 35
- 2.00 -
93
Choice 16

• Which Would You Choose ?
• A - General Purpose Lanes
• B - Managed Lanes (Drive Alone)
• C - Managed Lanes (Carpool)

Toll
Travel Time (Minutes)
45 30 35
- 3.00 -
94
Suppose Your Trip Is To The Airport

• Running Late For Flight
• Driving Alone
• Same 20 Mile Trip
• Bus And Carpools Not An Option

95
Choice 17

• Which Would You Choose ?
• A - General Purpose Lanes
• B - Managed Lanes

Toll
Travel Time (Minutes)
45 30
- 2.00
96
Choice 18

• Which Would You Choose ?
• A - General Purpose Lanes
• B - Managed Lanes

Toll
Travel Time (Minutes)
45 30
- 3.00
97
Finally, Suppose Your Trip Is To The Shopping Mall
98
Choice 19

• Which Would You Choose ?
• A - General Purpose Lanes
• B - Managed Lanes

Toll
Travel Time (Minutes)
45 30
- 2.00
99
Choice 20

• Which Would You Choose ?
• A - General Purpose Lanes
• B - Managed Lanes

Toll
Travel Time (Minutes)
45 30
- 3.00
100
Thanks For Participating !Forms Will Be
Collected From Each Table
101
Analysis Tools and Resources

• By
• Angela Jacobs, AICP
• Patrick DeCorla-Souza, AICP
• Federal Highway Administration

102
Planning Analysis Tools

• Detailed analysis
• Four-step models
• STEAM
• Quick-response
• SMITE-ML
• SPRUCE

103
STEAM

• Inputs are outputs from four-step models
• Person and vehicle trip tables by mode
• Network with assigned traffic
• Outputs are performance measures
• Delay reduced
• User benefits
• External cost changes
• Toll revenue
• NPV and B/C ratio

104
STEAM Outputs

• User benefits
• Travel time savings
• Fuel cost/ vehicle operating cost savings
• Crash cost savings
• External costs
• Noise
• Emissions
• Crash costs

105
Sketch Planning Tools

• Regional analysis
• SPRUCE
• Corridor analysis
• SMITE-ML

106
Resources

• Regional planning process
• Corridor planning process
• Public involvement
• Analysis procedures

107
Resources

• Peer-to-Peer Program
• Regional workshops
• Knowledge exchange web site
• Other web resources

108
Implementation

• William R. Stockton, P.E.
• Associate Director, TTI
• Chris R. Swenson, P.E.
• President, CRSPE

109
Overview

• Purpose of the Implementation (or, Project
  Development) Phase
• Defining the Operating Scheme
• Typical Timeline
• Cast of Characters
• Critical Issues

110
Before you do anything.

• .Clarify project objectives
• Policy objectives
• Operations objectives
• .and, clarify project constraints
• Fiscal constraints
• Policy constraints

111
Compare Objectives with Technology

• Identify What Can be Done and HAS Been Done
  Before
• Identify What Should be Able to be Done with
  existing technology and programming but HAS NOT
  been Done Before
• Identify What Cannot be Done without Significant
  New Effort (software and/or hardware)
• Communicate Findings and Refine Objectives if
  Needed

112
Purpose of Project Development Phase

• Convert a public policy decision into a
  successful operation
• Interactive phase, connecting planning, design,
  construction and operation
• Complex process, requiring multiple iterations
• Phase ends when system is working smoothly
  (probably several months after operating phase
  begins)

113
Example Task Interaction Based on Houston Value
Pricing Project
114
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115
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116
Define the Operating Scheme

• Physical, operational parameters
• Toll collection requirements
• Enforcement needs and options
• Communication with drivers and customers

117
Physical and Operational Requirements

• What is the target level of service?
• How much capacity is available?
• To what group(s) will capacity be sold?
• What is the potential that demand will exceed
  capacity?
• How will the level of usage be controlled?
• How many entry/exit points are there?
• If time-of-day is a factor, how will lead or lag
  times be accounted for?

118
Current HOV Lane Eligibility
Closed
QR
QR
119
Example Capacity Analysis
120
Example of Potential Changes to HOV Lane
Eligibility
Closed
QuickRide SOV
QuickRide
QuickRide
 
121
Toll Collection Requirements

• Will toll be static, variable, dynamic or a
  hybrid?
• All facility users pay toll, or are some exempt?
• Required Accuracy
• Single Lane
• Multiple Lanes
• Automatic Vehicle Classification
• Reporting Requirements for Users
• Real Time?
• Record Keeping
• Integration with Enforcement

122
Enforcement Needs and Options

• Toll Payment Enforcement
• Manual or automated video
• Legislation (state or local) required?
• Occupancy Enforcement (aaarrrrgggghhhh!)
• Are HOVs exempt from tolling?
• Do occupancy exemptions change?
• Enforcement locations
• Supporting technology
• Miscellaneous ILEVs, motorcycles, etc.

123
Information Dissemination

• Users Real-time information
• Facility status, current tolls/eligibility, etc.
• Customers and general public marketing
  information
• Purpose, availability, enrollment, access, usage,
  etc.
• Policy makers and operating agencies
  performance information
• Realistic and achievable expectations
• Regular, credible feedback

124
Signing
QuickRide Lane Rules
Regulatory information separated from occupancy
and hours of service Need to inform that
QuickRide needs a toll tag -gt same as EZ Tag ?
HOV or 2 and 3 symbols QuickRide METRO Tag
Required No Trucks or Towed Trailers
HOV LANE STATUS
Could use this design as advance and at
gore Consider Logo for QuickRide
OPEN
CLOSED
2.00
3.00
125
Regulatory Signs
Simplified
All the gory details, driver information overload
!!
126
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127
Typical Timeline

• Estimate longest conceivable time required then
  double it
• Development and refinement of operating scheme
  12 months
• Procurement, installation and testing of
  supporting technology 8-12 months (can overlap
  development step)
• Initial operation and adjustment 6 months

128
Project Development Team

• Two primary groups
• Those who will contribute to successful operation
  (i.e., those who will have to live with the
  project)
• Those who will be inclined to throw stones
• When to involve them
• Early and often
• Heed their advice when possible
• Give them credit, publicly

129
Critical Issues

• Match operating scheme to objectives and plan to
  adjust
• Plan for enforcement
• Identify opportunities and keys to success

130
Operations For Priced Roadway LanesTRB
Workshop on Best Practices in Value
PricingSunday, January 11, 2004

• Presented by
• Wayne Berman, FHWA
• Benjamin G. Perez, PB Consult

131
Overview

• The Importance of Operations
• Setting Operational Goals and Objectives
• Understanding Operations Issues
• Defining Operational Issues Group Exercise
• The Role of Technology in the Operation of Priced
  Lanes
• Operational Issues for the Next Generation of
  Priced Roadway Lanes

132
Agenda

• The Importance of Operations (10 min)
• Setting Operational Goals and Objectives (10 min)
• Understanding Operations Issues (25 min)
• Defining Operational Issues Exercise (15 min)
• The Role of Technology in the Operation of Priced
  Lanes ( 15 min)
• Operational Issues for the Next Generation of
  Priced Roadway Lanes (10 min)
• Wrap up (5 min)

133
The Importance of Operations

• Roadway Lane Management Can Encourage a Range of
  Vehicle Related Policies Including
• Carpools, Vanpools, and Transit to encourage
  higher occupancies
• Trucks to improve goods movement and freight
  management
• Low Emission Vehicles (ILEVs) to Improve Air
  Quality
• Vehicles Equipped with Electronic Toll Collection
  to Improve Operation Efficiency
• Vehicle with Other Special Designations

134
The Importance of Operations

• Key Strategies Used to Priced Managed Lanes
• Occupancy Requirements
• Pricing
• Access Point Control
• Technology
• Toll Collection Procedures
• Vehicle Types

135
The Importance of Operations

• Priced Managed Lanes vs. Traditional Lanes
• Physical Separation
• Pricing Policies
• Payment System
• Information Systems
• Variable Number of Lanes
• Accommodation for HOVs
• Ownership Structure

136
The Importance of Operations

• Key Benefits of Priced Manage Lanes
• Trip Time Reliability
• Travel Time Savings
• Reduced Vehicle Hours Traveled
• Revenue Generation
• Transit Productivity
• Enhanced Corridor Mobility
• Improved Lane Efficiency and Productivity

137
Agenda

• The Importance of Operations (10 min)
• Setting Operational Goals and Objectives (10 min)
• Understanding Operations Issues (25 min)
• Defining Operational Issues Exercise (15 min)
• The Role of Technology in the Operation of Priced
  Lanes ( 15 min)
• Operational Issues for the Next Generation of
  Priced Roadway Lanes (10 min)
• Wrap up (5 min)

138
The Implementation Process

• Pre-Planning
• Planning
• Design
• Procurement
• Construction
• Operations

139
Priced Lanes are Different

• Unique Concerns
• Technical
• Institutional, and
• Consensus Building
• Factors Affecting Operations
• Use price to provide reliable service
• Provide a new and desirable option
• Generate revenues
• Require considerable attention to roadway
  management
• Require traffic management and toll collection
  technology
• Require Interagency Cooperation and Public
  Outreach

140
Possible Operational Objectives

• Maximize overall time savings
• Maximize vehicle throughput
• Maximize person throughput
• Maximize profit

141
Establishing Operational Objectives
Considerations

• Management Strategies to be Applied
• Eligibility of Vehicles size and type
• Toll Collection Policies
• Toll Collection Technology
• Intermediate Access for Buy-In Vehicles
• Lane Separation Treatments

142
The Implementation Process

• Pre-Planning
• Planning
• Design
• Procurement
• Construction
• Operations

Operational objectives defined by this process
then help to guide the outcomes of the process.
143
Agenda

• The Importance of Operations (10 min)
• Setting Operational Goals and Objectives (10 min)
• Understanding Operations Issues (25 min)
• Defining Operational Issues Exercise (15 min)
• The Role of Technology in the Operation of Priced
  Lanes ( 15 min)
• Operational Issues for the Next Generation of
  Priced Roadway Lanes (10 min)
• Wrap up (5 min)

144
Lane Management

• Maximum Capacity verses Managed Capacity
• Need to establish LOS standard for the managed
  lane
• How much additional capacity can be made
  available to paying vehicles?
• Managed threshold HOVs
• Establish strategy for managing the flow of
  additional paying vehicles on the facility

145
Managed Lane Tools

• Pricing
• Occupancy
• Eligibility
• Access

146
Testing Management Strategies

• Surveys to determine elasticities
• Traffic Models to forecast flows
• Validate the operational benefits of different
  strategies
• Forecast anticipated revenue streams
• Identify management strategy the best meets goals

147
Pricing options

• Real Time Variable Pricing
• Based on congestion levels in parallel SOV lanes
• Fixed Time Variable Pricing
• Based on time-of day/peak flows

148
Ongoing Management and Operations

• Constant need to monitor flows on the HOT
  facility to verify that LOS standards are
  maintained
• Modify management strategies if operational
  thresholds are threatened
• Price
• Occupancy
• Eligibility

149
Incident Management

• Access for Emergency Services
• Plans and Procedures
• Typical Response Plan Issues
• Construction Period Response Plan Issues
• Snow Removal

150
ITS Operational Tools

• Variable Message Signs
• Lane Use Signals
• Closed Circuit Television
• Video and Loop Detectors
• Radar
• Microwave Speed Sensors
• Travel Advisory Radio

151
Toll Collection / Registry Procedures

• Pilot Period Monthly Permits
• Automated Variable Priced Toll Collection
• Issuing Transponders
• Registry Procedures
• Reciprocity

152
Maintenance

• Traditional Needs
• Technology Needs
• Barrier Maintenance

153
HOT Lane Enforcement Issues

• Toll Payment
• Vehicle Eligibility
• Violation Processing Protocols
• Legislative Requirements
• Toll Levels
• Facility Design

154
Automated Toll Violations Processing

• HOT Toll Collection must be fully automated
• Anomalous transactions trigger camera
• Violation with photo sent to vehicle owner
• Requires enabling legislation

155
Occupancy Verification

• No reliable technology available
• Must rely on visual inspection
• Best to provide highly visible police presence
  near tolling points
• Physical presence and heft tolls are the best
  deterrent

156
Other Enforcement Tools

• Good police is arguably the most effective
  deterrent
• Violation Penalties Need to be Sufficiently High
  in order to be an effective deterrent.
• Fines currently vary from 50 in FL and MA to
  over 270 in California depending on the number
  of citations
• Washington States HERO program enlists motorists
  to report HOV violators

157
Fine Levels in Georgia

• First Offense 75, plus court fees
• Second Offense 100, plus court fees
• Third Offense 150, plus court fees
• Fourth Offense 150, plus court fees and one
  point on the driver's record

158
Agenda

• The Importance of Operations (10 min)
• Setting Operational Goals and Objectives (10 min)
• Understanding Operations Issues (25 min)
• Defining Operational Issues Exercise (15 min)
• The Role of Technology in the Operation of Priced
  Lanes ( 15 min)
• Operational Issues for the Next Generation of
  Priced Roadway Lanes (10 min)
• Wrap up (5 min)

159
Defining Operational Issues Group Exercise

• Purpose Given the scenario used in this course
• Develop a list of identified operational issues.
• Prepare a set of operational strategies to
  address the issues.

160
Agenda

• The Importance of Operations (10 min)
• Setting Operational Goals and Objectives (10 min)
• Understanding Operations Issues (25 min)
• Defining Operational Issues Exercise (15 min)
• The Role of Technology in the Operation of Priced
  Lanes ( 15 min)
• Operational Issues for the Next Generation of
  Priced Roadway Lanes (10 min)
• Wrap up (5 min)

161
Intelligent Transportation Systems Defined

• The use of various technologies to improve
  transportation system performance, efficiency,
  and safety

162
Management Strategy and Technology Match

• Restricted or limited access
• Variable message signs (VMS)
• Lane use signals (LUS)
• Ramp meters
• Camera surveillance/enforcement (e.g. VES)
• Automated gate controls
• Detection devices

163
Management Strategy and Technology Match

• User eligibility
• Automatic vehicle identification (AVI)
• Automatic vehicle classification (AVC)
• VMS, LUS, VES
• For HOV, presently no technology for automated
  occupancy checks

164
Management Strategy and Technology Match

• Pricing
• AVI, AVC, VES
• Dedicated Short Range Communication (DSRC)
• Global Positioning Systems (GPS)
• Telecommunications
• Central Computer Systems

165
Technology for a Pricing Application Defined

• User identification
• AVI passive, active
• DSRC emerging standards
• GPS use being researched
• User/vehicle characteristics
• AVC single or multiple devices
• Enforcement
• VES triggering/lighting are key
• Data center
• Centralized or decentralized
• Telecommunication links

166
Pricing Implementation Drives Technology

• Spot, facility, and corridor pricing AVI, DSRC,
  traditional tolling
• Spot, facility, and corridor variable pricing
  TOD, dynamic, mileage
• Area and regional pricing AVI and DSRC with
  odometer, GPS
• Area and regional variable pricing yes with GPS

167
Technology Comparison

• AVI and DSRC are mature and proven in toll
  industry
• Non-toll transaction opportunities
• Emerging DSRC standard will improve marketplace
  and uses
• Less flexible pricing schemes
• Higher deployment cost
• Lower consumer cost
• Possibly most successful ITS to date

168
Technology Comparison

• GPS and GIS accuracy continues to improve
• Integration for fee collection unproven
• Privacy concerns must be addressed
• More flexible pricing schemes
• High consumer cost, but could be offset by
  additional uses

169
Key Technology Considerations

• Interoperability
• Compatibility
• Additional uses
• Owner
• User/consumer
• Scalability
• Redundancy/fault-tolerance
• Data protection
• Enforcement
• Cost

170
Summary

• Technology choices exist for pricing applications
• Pricing technology investment should be leveraged
  for other applications/uses
• Enforcement is a must

171
Agenda

• The Importance of Operations (10 min)
• Setting Operational Goals and Objectives (10 min)
• Understanding Operations Issues (25 min)
• Defining Operational Issues Exercise (15 min)
• The Role of Technology in the Operation of Priced
  Lanes ( 15 min)
• Operational Issues for the Next Generation of
  Priced Roadway Lanes (10 min)
• Wrap up (5 min)

172
Challenges for the Next Generation of Priced
Roadway Lanes

• Multiple Entrance Points
• Moveable Barriers
• Integrating Bus Rapid Transit
• Distance Based Tolling
• Signage

173
The Next Generation of HOT FacilitiesHouston IH
10 Katy Freeway
Existing HOV
Proposed Managed Lanes
Note Final design of managed lanes not
determined at time of publication
174
Multiple Access/Egress Points

• Katy Freeway 4 direct access points
• San Diego I-15 5 direct access points
  Intermittent access point every 2
  miles
• San Diego I-5 Up to 16 access points

175
Signage Challenges of Distance Based HOT Tolls

• Too Much Information to Convey
• Need to Establish New MUTCD Guidance
• Collapse to bare bones information No More than
  Next Segment
• Need to Provide Detailed Information Off-Site
• Excellent Application for Heads-Up in Vehicle
  Displays

176
Bus Rapid Transit and HOT Lanes I-405 Bellview
Transit Center Connection
177
SANDAG I-15 Expansion

• 20-mile corridor
• Four-lane HOT facility with moveable barrier
• Multiple access points from SOV lanes
• Direct access ramps for buses from five transit
  centers
• Bus Rapid Transit (BRT)
• Pricing a skewed per mile rate, with tolls
  varied based on entry point

178
I-15 Corridor Managed Lanes/BRT Project Progress
EscondidoTransit Center
SouthEscondido
LakeHodges
Stage 1Managed Lanes/ BRT Project
RanchoBernardo
Stage 1 Project BRT Stations/ Direct Access Ramps
Sabre Springs/Penasquitos
Future Phases BRT Stations/ Direct Access Ramps
Mira Mesa/Miramar College
Construction of Stage 1 began late summer
2003completion set for December 2007.
163
179
Major InitiativesI-15 San Diego Concept
MANAGED LANE TRAFFIC
MANAGED LANE TRAFFIC
MANAGED LANE TRAFFIC
MANAGED LANE TRAFFIC
180
Major InitiativesI-15 San Diego Concept
MANAGED LANE TRAFFIC
MANAGED LANE TRAFFIC
MANAGED LANE TRAFFIC
181
Major InitiativesI-15 San Diego Concept
MANAGED LANE TRAFFIC
MANAGED LANE TRAFFIC
MANAGED LANE TRAFFIC
182
SANDAG I-5 Concept
183
I-15 Rancho Bernardo Direct Access Ramp Station
Main Lanes
Park-and-Ride
ManagedLanes
Direct AccessRoad to Arterial
BRTStation
DirectAccess Ramps
Direct access ramps will be open to buses,
carpools, FasTrak.
184
Managed Lanes Intermediate Access
Main Lanes
Merge Lanes
FasTrak card readers
Managed Lanes
Movable Barrier
Merge lanes provide safe access to and from
managed lanes.
185
Future Value Pricing Strategy
QuestionHow to handle valuepricing with
multipleaccess points?
SolutionSkewed rates strategy
This strategy offers the best demand
management complexity can be handled through
education.
186
Future Managed Lane Options May Include

• FAIR Lanes
• Dynamic User Group Restrictions HOVs in Peak,
  Trucks in Off-Peak
• Vehicle Guidance Automated Roadways

187
Agenda

• The Importance of Operations (10 min)
• Setting Operational Goals and Objectives (10 min)
• Understanding Operations Issues (25 min)
• Defining Operational Issues Exercise (15 min)
• The Role of Technology in the Operation of Priced
  Lanes ( 15 min)
• Operational Issues for the Next Generation of
  Priced Roadway Lanes (10 min)
• Wrap up (5 min)

188
Monitoring and Evaluation WorkshopWhat Have We
Done?

• Mark W. Burris
• Kiran Bhatt

TRB Value Pricing Workshop
189
Workshop Outline

• The importance of monitoring and evaluation
• Monitoring and evaluations integration with
  other items you have covered today
• Activity 1 determine your projects goals
• Activity 2 determine the impacts of your project
• Activity 3 how do you measure these impacts
• Activity 4 develop the monitoring and evaluation
  plan

190
Importance of Monitoring and Evaluation

• Why is tracking the impact of the project
  important?
• Cant we just say?
• people use the HOT lanes, therefore they are a
  success or
• Londons toll reduced congestion, therefore it
  is a success

191
Importance of Monitoring and Evaluation

• Its not enough because
• Unsure if it was a wise investment of any public
  funds required
• Unsure if it was the best use of public funds
  would a different option have been better?
• Unable to tout the exact benefits of your project
  and therefore defend it if under attack
• Important aspect of receiving funding
• And what may be most important in this era of
  exploring pricing

192
Importance of Monitoring and Evaluation

• Paving the way / support for future projects
  (benefits are real, not just theoretical!)
• Providing guidance (what works/does not work) for
  potential projects
• Estimating expected benefits of potential
  projects
• Avoid repeating failures

193
Importance of Monitoring and Evaluation

• "The Congestion Pricing Pilot Program was
  authorized under section 1012(b) of ISTEA with
  the objective of encouraging testing and
  evaluation of congestion pricing projects in a
  variety of settings nationwide." The pricing
  program was reauthorized as the Value Pricing
  Pilot Program under Section 1216(a) of TEA-21.

Source U.S. DOT, FHWA, A Report to the U.S.
Congress, Report on The Congestion Pricing Pilot
Program, April 1996.
194
Importance of Monitoring and Evaluation

• "The Secretary shall monitor the effects of such
  projects for 10 years and shall report to the
  Committee on Environment and public Works of the
  Senate and the Committee on Transportation and
  Infrastructure of the House of Representatives
  every 2 years on the effects such programs are
  having on driver behavior, traffic, volume,
  transit ridership, air quality, and availability
  of funds for transportation programs."

Source U.S. Congress, Intermodal Surface
Transportation Efficiency Act (ISTEA) of 1991
(P.L. 102-240), Section 1012(b). Congestion
Pricing pilot Program.
195
Importance of Monitoring and Evaluation

• "The role of the Pilot Program has been to assist
  State and local governments in evaluating
  alternative pricing strategies, designing pricing
  projects ..... and developing comprehensive
  project monitoring and evaluation plans."

Source U.S. Department of Transportation,
Reducing Traffic Congestion Using Market Prices
to Enhance Mobility, Report to Congress on the
Progress and Accomplishments of the Congestion
Pricing Pilot Program, 1998.
196
Where Does Monitoring and Evaluation Fit In?

• Everywhere!
• In the planning for road pricing workshop
• Public Acceptance and Public Resistance
• gather data on the acceptance of
• operational projects to calm
  peoples
• and politicians fears
• Finance and Revenues
• did the project make money?
• Analytical Tools
• based on monitoring and evaluation
• results from previous projects

197
Where Does Monitoring and Evaluation Fit In?

• In the developing road pricing projects workshop
• What toll collection equipment had the best read
  rate OR works best for data collection?
• What enforcement operation had the least
  violation rate?
• What response can you expect from Low Emission
  Vehicles?

198
Where Does Monitoring and Evaluation Fit In?

• Determine societal costs and benefits
• Equity How were different groups impacted by
  the project?
• Public awareness What method works best? What
  is the message? What can you say the success of
  earlier projects (as measured by monitoring and
  evaluation)?
• Without knowledge gained from monitoring and
  evaluation you are constantly reinventing the
  wheel plus trying to convince agencies to fund
  this reinvention without proof that the wheel
  works.

199
Building a Monitoring and Evaluation Plan

• Follow a 4-step process to get a sense of what is
  in a monitoring and evaluation plan
• Project Goals
• Project Impacts
• Measure Impacts
• Develop Plan

200
HOT Lane Example

• 6 main lanes, 1 reversible, barrier separated HOT
  lane
• 10 miles from suburbs to downtown
• multiple entry and exit points on both the main
  lanes and
• the HOT lane

201
Step 1 Project Goals

• After x years of operation, you would hope your
  project would have accomplished specific goals.
• What would be some of the goals of a HOT lane
  project?

202
Project Goals Worksheet

• Enter goals on worksheet 1.

203
Step 1 Project Goals

• X reduction in delay on mainlanes

204
Step 1 Project Goals

• .

205
Step 2 Project Impacts

• You have listed several goals for the project,
  but there will be ancillary benefits and costs /
  impacts
• Lets try to list those as well, realizing we
  wont spend the bulk of our monitoring and
  evaluation funding trying to measure them
• Example
• Increased / decreased
• slugging

206
Ancillary Impacts Worksheet

• Enter ancillary impacts on worksheet 2.

207
Step 2 Ancillary Impacts

• Increase or decrease in slugging

208
Step 2 Ancillary Impacts

• .

209
Step 3 Measure Impacts

• How do we measure
• Our progress towards the goals we listed?
• The other impacts of the HOT lane?

210
Measure Impacts Worksheet

• Enter measurement methods on worksheet 3.
• Keep in mind the following would need to be
  considered
• Test versus control data
• Accuracy / sample sizes required
• Costs
• Dates
• Locations

211
Step 3 Measure Impacts
212
Step 3 Measure Impacts
213
Step 3 Measure Impacts
214
Step 4 Develop Monitoring and Evaluation Plan

• Examine results of step 3 for potential overlap
  and, therefore, cost reductions
• Develop plan incorporating all of remaining step
  3 items adding
• Sample sizes
• Costs
• Dates
• Locations
• Get feedback on plan
• Include how results will be documented and
  published

215
Conclusions

• Monitoring and Evaluation is a critical aspect of
  value pricing projects particularly projects
  implemented early.
• Carefully define your objectives / goals.
• Measure the impacts of YOUR project not
  underlying trends or impacts of outside
  influences.
• Document and report the results.

216
Resources
http//www.hhh.umn.edu/centers/slp/projects/conpri
c/index.htm http//www.transport-pricing.net/ http
//ceenve.calpoly.edu/sullivan/sr91/sr91.htm http
//www.leewayinfo.com/ http//www.cutr.usf.edu/its/
varprice.htm http//argo.sandag.org/fastrak/librar
y.html http//www.quickride.org/ (soon)
217
Vehicle Use Pricing Reforms

• By Todd Litman
• Victoria Transport Policy Institute

218
Vehicle Use Pricing Reforms

• Vehicle use pricing reforms can help achieve
  various transport improvement objectives
• Congestion reduction.
• Road and parking facility cost savings.
• Consumer savings and benefits.
• Increased transportation safety.
• Reduced pollution emissions.
• More efficient land use.
• Equity objectives.

219
Parking Cash Out

• Employers who offer free parking also offer a
  comparable financial benefit to employees who use
  other commute modes. For example, employees who
  current receive free parking might also be able
  to choose a 50 per month cash benefit or transit
  subsidy if they do not drive to work.

• Creates more neutral transport incentives and
  increases commuter options

220
Parking Cash Out

• Cashing out free parking typically reduces
  automobile commute trips 15-25 among affected
  employees. Put another way, a significant portion
  of peak-period automobile trips result from bias
  in current commute benefits that favors driving
  over other modes.

221
Pay-As-You-Drive (PAYD)

• Also called
• Distance-Based Insurance
• Mileage-Based
• Per-Mile
• Usage Based
• Cent-Per-Mile
• Variabilization

222
Pay-As-You-Drive Vehicle Insurance

• Motorists pay for insurance by the
  vehicle-mile rather than the vehicle-year, so a
  500 annual premium becomes 5/mile and a 1,000
  annual premium becomes 10/mile. An average U.S.
  motorist would pay about 6/mile.
• This could be optional, so motorists would
  choose which type of pricing they want, just as
  consumers currently do with telephone and
  Internet services. It involves an annual
  odometer audit during emission inspections or
  oil change.

223
Pay-As-You-Drive Vehicle Insurance

• This gives motorists a financial incentive to
  drive less. It is equivalent to a 65 increase in
  fuel costs, but its not a new fee at all, just a
  different way to pay an existing fee.
• It involves an annual odometer audit during
  emission inspections or oil change.