Pricing the Road By Vehicle’s Cost
COVID-19 is revealing why cities should be charging you more for your Mercedes
To solve the looming crises of transit revenue shortfalls and post-COVID traffic, we need a new approach to funding mobility. Cost-of-Vehicle Road Pricing, i.e., charging for driving based on vehicles’ values, is the simplest, quickest, and cheapest solution.
The Coming Carpocalyspe: COVID-19 and the Resurgence of Driving Alone
The surreal experience of empty & quiet streets and crystal clear air of the early days of COVID has given way to a return to near pre-pandemic traffic volumes. This reversion occurs even though most offices remain closed, and most retail is operating at partial capacity. Absent a dramatic intervention, pervasive congestion and soul-crushing traffic delays are in store once businesses reopen.
COVID-19 represents the most significant shock to city budgets, including transportation, in generations. Transit ridership has fallen off a cliff everywhere, leading to a projected $40 billion drop in revenue, roughly 20 times larger than experienced during the Great Recession! Without new mechanisms and revenue streams, cities and agencies will be caught in a transit death spiral, a feedback loop of simultaneously raising fares and cutting service, leading to diminished ridership and reduced revenue.
Avoiding a “Tale of Two Cities”
Shunning public transit in favor of cars’ safe haven is an understandable, though misguided, response to personal safety concerns. Yet shifting preferences don’t change cars’ negative impacts: worsening climate change, driver, and bystander health outcomes, and increasing inequality.
COVID has highlighted societal fault lines with disparate impacts on communities of color and low-income populations, who see higher rates of infection, hospitalizations, and deaths. Similarly, the divergence in exposure and risk for essential and remote workers could not be starker. Allowing transit’s decline compounds the discrepancy, leading to the least equitable outcome since current riders are the most likely to have few alternatives and suffer most from less frequent and less accessible transit.
For cities to avoid “Tale of Two Cities” outcome, they must simultaneously:
fund transit, manage traffic, increase equity
Cost-of-Vehicle Road Pricing
Congestion pricing, as implemented in cities such as London or Stockholm, can be a panacea for solving these challenges and cities’ other mobility ills, providing traffic reductions — including faster speeds for cars & buses, funding for transit, and equity benefits. But actually implementing these systems is a Herculean task even in the best of times, and now cities no longer have the luxury of upfront cash or the time for multi-year planning and engagement processes.
Cost-of-Vehicle Road Pricing is a rapidly deployable and more capable alternative for cash-strapped cities deliberating between painful cost-cutting and new revenue measures. Such a system would charge drivers with congestion and per-mile fees proportional to their car’s value as a proxy for drivers’ ability-to-pay. So, a 2020 Lexus ES’s value being ten times larger than a 2005 Honda Civic might mean that a driver of the former is charged twice or three times that of a driver of the latter. This means-testing approach to transportation funding takes inspiration from Finland where speeding tickets are linked to income, as well as recent polling showing the popularity of infrastructure spending when wealthy people pay for it.
Rather than requiring last year’s taxes to demonstrate income (which some people are sensitive about), off-the-shelf and in-vehicle technologies can automatically interpret the necessary odometer and Make & Model values. ClearRoad has already deployed these technologies for per-mile fees in several states and elsewhere ramped up pilots in as little as two weeks.
Conclusion: The Future of Equitably Pricing the Road
Pre-COVID, cities across the country have been exploring ways to integrate social & mobility goals into planning for congestion and other types of roadway pricing. TransForm provides a detailed framework with step-by-step instructions (see image at left), while Seattle’s Congestion Pricing Plan describes a range of possible policy combinations with the most equitable being: Variable pricing + targeted exemptions + focus on transit and vulnerable communities.
Cost-of-Vehicle Road Pricing is a simpler path for achieving all of these simultaneously, integrating a lesser burden on households with few transportation options, reduced driving overall, incentivized smaller car purchases, and, most of all, funding for alternatives to driving. With this approach, it’s also easy to incorporate more specific policies, such as around vulnerable communities and exemptions.
ClearRoad’s Cost-of-Vehicle Road Pricing is — in stark contrast to status quo solutions — 10 times cheaper, deployable in months, endlessly customizable, and responsive to changing conditions over time. Rather than anxiously await a new stimulus and next administration’s infrastructure bill, cities can take the steps now for a fairer and more sustainable (both environmentally and infrastructure-wise) transportation future.
Contact Us to Take the Next Step
At ClearRoad, we’re always exploring the many ways our Road Pricing platform can meet cities’ unique challenges and needs. We’d love to hear what challenges your city is facing and show how ClearRoad’s Road Pricing platform can help!
We understand the dire challenges that COVID is bringing to cities, so we’re now offering a free pilot to qualifying cities. Contact us to learn more!
