Congestion Charging

Congestion charging, also known as ‘Congestion Pricing’ relies on charging to manage traffic demand in a congested area – for example, a Central Business District (CBD) and other well-defined area. The objective is to keep traffic demand under control with a balance between alternative transport modes. A major benefit for drivers is more consistent journey times (See Case Study – Congestion Charging).

Electronic charging for these purposes should be implemented in a way which minimises any wider negative impacts on other modes transporting people and goods through the congestion charge zone – since this could reduce economic activity within the zone.

Reducing traffic demand can free-up road capacity for reallocation to support other transport priorities – such as public transport (such as bus lanes), pedestrians (allowing longer green times at crossings) and cycling (dedicated or mixed-use facilities). This needs careful consideration and assessment of impacts since it can lead to unintended negative effects. For instance, any reallocation of the road space, reduces the residual space available to vehicles that have paid a congestion charge and could result in an increase in their journey time. This would be contrary to the initial objectives of the congestion charging policy.

Where the core policy is demand management – charges may be differentiated by congestion, vehicle type, time-of-day and other factors. Additional policies may include the reduction of emissions – in which case congestion charges will need to be differentiated by vehicle emissions as well.

The options for implementing congestion charging include:

• the “cordon charging” approach – it applies at the point where a vehicle enters or leaves a well-defined zone
• the “area charging” approach – which is applied to travel into, and within, the zone

Since congestion charging is usually introduced onto an existing road network, it needs to be accompanied by:

• public acceptance
• a robust enforcement process to ensure that road users comply
• clear visible and measurable benefits – such as reduced congestion, improved public transport and enhanced pedestrian facilities

A congestion charge may be unpopular with road users although the level of support may increase once the benefits have been sufficiently demonstrated (such as in Stockholm). A successful policy needs to be:

• clearly understood
• acceptable
• lawful
• and meet the original objectives to reduce demand on the road network

The operational strategy must support these goals. The objectives must be realistic and achievable – and measures of performance reported publicly at frequent intervals to retain public support. Alternative approaches to achieving them could include:

• limiting charges to peak hours
• applying charges on entry to a zone (‘cordon pricing’)
• applying charges on the use or keeping a vehicle within a zone (‘area pricing’)
• differentiation of charges according to the class of vehicles or their emissions profile (See HGV Tolling)
• applying charges comparable to the cost of public transport alternatives – to support modal shift
• variable pricing according to time of day, number of occupants and other factors (See Variable Pricing)
• exemptions from charges could be offered for some categories of vehicles or users – but this risks making the charging policy more complex and less understandable to road users

The number of road users willing to pay a fee to access a route or area will vary with changing fee levels. This is known as the ‘Price Elasticity of Demand’ (PED). A low PED means that a variable pricing policy is less efficient:

• users do not change the time of their travel
• there is no increase in the number of vehicle occupants
• congestion on priced routes (measured by journey time) does not vary with the fee
• alternatively – if fee changes have a large effect on behaviour – the PED is said to be high

The relationship between the speed of vehicles and the number of vehicles that pass a given point in an hour is known as a ‘backward bending curve’. It is illustrated in the speed-flow diagram below – and demonstrates that a reduction in demand (caused by imposing a fee) has the effect of increasing road capacity and speed. Since it is usually the peak load traffic that causes congestion, it doesn't necessarily require a huge traffic reduction to increase the traffic flow substantially. In light traffic, all vehicles can travel at similar speeds in free flow conditions but as the volume of traffic increases the speed decreases. As the traffic increases further, the speed and capacity both decrease until road users are stuck in congestion.

The relationship between price and demand is at the heart of the policy of congestion charging, as shown in Singapore, London (UK), Gothenburg and Stockholm (Sweden).

Technologies, Data and Resources

A vehicle may be identified by its number plate (read by one or more cameras) on entry to, and exit from, and within, a regulated area or defined route. Most commonly, reading a vehicle’s number plate will be sufficient to record a vehicle’s presence and to help match it with a payment (such as the systems in Stockholm and London). Alternatively:

• vehicles may be required to be equipped with a tag – particularly if the aim is to improve interoperability with local roads already employing ETC
• more sophisticated OBUs permit a smart card Means of Payment (MOP) to be used (such as the Singapore Electronic Road Pricing (ERP) scheme)

Typically, compliance is based on a vehicle being fitted with a valid tag, OBU or a number plate that is associated with a pre-paid account.

Images of non-compliant vehicles may be used as evidence for enforcement purposes – although users may be given a short period of grace during which they can pay the charges before any penalties or legal processes are started. As with tolling (See Toll Collection), a back office and enforcement processes are necessary to ensure compliance, to deter non-compliance and to recover revenues (See Back Office/Enforcement).

Advice to Practitioners

Congestion charging must be implemented within a clear policy framework – bearing in mind that:

• policies evolve and change over time
• there are alternatives approaches to managing traffic demand

policy change and Upgrade Issues

Alternative approaches

FURTHER INFORMATION

US Federal Highways Administration, HERS-ST Highway Economic Requirements System - State Version: Technical Report, Appendix C Demand Elasticities for Highway Travel: http://www.fhwa.dot.gov/asset/hersst/pubs/tech/tech11.cfm

Land Transport Authority (Singapore): http://www.lta.gov.sg/content/ltaweb/en/roads-and-motoring/managing-traffic-and-congestion.html

Transport for London (UK): http://www.tfl.gov.uk/cc

Swedish Transport Agency (Sweden): http://www.transportstyrelsen.se/en/road/Congestion-tax/

Transport for London (2003) Impacts Monitoring – First Annual Report, Transport for London (http://www.tfl.gov.uk/assets/downloads/Impacts-monitoring-report1.pdf)

Pickford A. and Blythe P. (2006) Road User Charging and Electronic Toll Collection, Ch2, Artech House.

Smeed R. (1964) Road pricing: The Economic and Technical Possibilities. UK Ministry of Transport, HMSO, London.

Vickrey, W.S. (1969) Congestion Theory and Transport Investment. American Economic Review 59 (Papers and Proceedings) pp 251-260.

Hau, T. D. (1990) Electronic Road Pricing: Developments in Hong Kong 1983-1989. Journal of Transport Economics and Policy 24 No. 2, May, pp203-214.

US Department of Transportation: http://www.etc.dot.gov/index.htm