Road Pricing

HOT lanes

"HOT" is the acronym for "High Occupancy/Toll". It is a term used to designate certain special use lanes on an otherwise free highway facility. On HOT lanes, low occupancy vehicles are charged a toll, while High-Occupancy Vehicles (HOVs) are allowed to use the lanes free or at a discounted toll rate. Vehicles not meeting HOV occupancy requirements buy the right to use the HOV lanes. HOT lanes have been facilitated by the emergence of electronic toll collection technology.

Over the last 15 years or so, there has been a very wide range of success on HOV lanes in the United States. Some HOV lanes have been so successful that they became overloaded, requiring the operating agencies to increase occupancy requirements. Conversely, many HOV lanes have experienced substantially less use than anticipated. Among the best known of these cases is the perceived underutilization of HOV lanes that led to the decommissioning of the lanes in northern New Jersey. That action stemmed from political pressure generated by strong attacks from the press and from a public concern about perceived "empty" HOV lanes in the peak periods while adjacent regular lanes were severely congested.

HOT lanes use price to manage demand. In essence, congestion pricing creates an additional category of eligibility: vehicles with a certain minimum occupancy plus those paying a toll. This allows for more fine tuning of HOV lane eligibility because tolls can be varied to find the appropriate price to generate only sufficient additional demand to utilize any spare capacity. HOT lanes have been implemented on existing HOV lanes in San Diego, California and Houston, Texas. The HOV lane on I-15 in San Diego is a two-lane facility that was underutilized. Allowing single occupant vehicles paying a toll to join the toll-free HOVs resulted in substantial improvement in the use of the HOV lanes. In Houston, the HOV lane on I-10 (Katy Freeway) had experienced overutilization as an HOV-2 eligible facility, and had become congested.

Consequently, the eligibility criterion was raised to HOV-3 in the peak hours. However, the HOV-3 criterion severely limited the number of vehicles that could use the HOV lane, resulting in underutilization of the lane. Pricing of HOV-2 vehicles was used as a means to allow a controllable number of HOV-2s back into the lane.

HOT lanes can also be implemented on new lanes added to an existing highway facility. When the California Department of Transportation (California DOT) did not have sufficient funding to build a planned HOV lane in the median of SR-91, the California Private Transportation Corporation, responding to a legislative initiative, built a toll facility in the median. By agreement with the DOT, the toll is discounted 50% from regular rates for HOV3+ vehicles. Pricing allows individual travelers to decide whether the time savings on a particular trip are worth the toll. Extensive user feedback in San Diego and on the median toll road on SR-91 in California suggest that users consider HOT lanes an important "insurance" option to be exercised on those occasions when they need to be somewhere on time.

For more information, contact Angela Jacobs, Federal Highway Administration Office of Policy, at 202-366-0076 or angela.jacobs@dot.gov.

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Variable Tolls on Toll Facilities

In this form of pricing, tolls on congested toll facilities are varied by time of day with the intention of encouraging some travelers to use the facility during less congested periods or shift to other modes or routes. Any shift of travelers will benefit the remaining peak period travelers since travel delays will decrease. Ultimately, such shifts will result in less need for additional capacity on the toll facilities.

In Lee County, Florida, since August 1998 commuters have been offered reduced tolls on two bridges during the "shoulder" periods immediately before and after the peak demand times for those bridges. This project has been readily accepted by the affected residents. In order to receive the reduced tolls for using the bridges during the shoulder time periods, motorists must use an electronic transponder with a prepaid account. The project has successfully moved traffic out of the peak congestion period, providing improved service to bridge patrons. Anecdotal evidence suggests that, because trips using the bridges also use other facilities on the network, traffic pattern changes on the bridges are reflected on numerous highway facilities in the region, resulting in perceptible congestion reduction on a large portion of the network.

An alternative to reduced tolls during shoulder time periods is to increase tolls during peak time periods. Increased peak period tolls are considered less favorably by the public because, while they have the same economic incentive as reduced tolls during less congested periods, they place an increased cost burden on motorists and ignore the difficulties some travelers have in changing the time when they use the facility. Primarily to raise revenues for infrastructure improvements, the New Jersey Turnpike and the Port Authority of New York and New Jersey recently raised toll rates on their facilities and introduced differential peak/off-peak toll rates. The Turnpike increases went into effect in September 2000, and the Port Authority increases went into effect in March 2001. On the Turnpike, peak period toll rates are now 8% higher than off-peak rates. Peak rates are scheduled to increase further by 10% in 2003. Recent data suggest that some travelers have shifted their time of travel to take advantage of lower off-peak rates. On the toll bridges and tunnels of the Port Authority, peak period toll rates are now 25% higher than off-peak rates. In response, traffic in the hours before the morning peak period has increased significantly, while traffic in both the morning and afternoon peak periods has decreased.

The potential number of projects of this type is large because many existing bridges and tunnels in the U.S. are already toll facilities, and the U.S. has almost 5,000 miles of toll highways. Also, new toll facilities are under construction or being proposed in many areas in the U.S. Offering reduced tolls during periods of less congestion provides an incentive to those motorists who can be flexible and take advantage of the opportunity to shift the time when they use the facility. Varying the tolls by the day of the week or by season is another possibility, particularly in resort or recreational destinations.

For more information, contact Angela Jacobs, Federal Highway Administration Office of Policy, at 202-366-0076 or angela.jacobs@dot.gov.

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FAIR Lanes

"FAIR lanes" is an innovative congestion pricing concept which seeks to alleviate public concerns about conversion of existing free lanes on a freeway facility to value priced lanes. The concept involves separating freeway lanes, using plastic pylons and striping, into two sections: Fast lanes and Regular lanes. The Fast lanes would be electronically tolled express lanes, where tolls are set in real time to limit traffic to the maximum that can be accommodated at speeds close to free-flow speeds. Motorists are advised of the toll rate changes using electronic message boards located in advance of the entry points to the Fast lanes. As traffic volume in the Fast lanes approaches the maximum that can be accommodated at speeds close to free-flow speeds, tolls are increased to deter entry by additional vehicles into the Fast lanes. This ensures that the lanes offer a faster and more reliable trip than the Regular lanes. Privately operated limousine and jitney services use the Fast lanes to provide fast, reliable, safe, comfortable and courteous door-to-door service for a total commute time, including pick-ups and drop-offs, no longer than it would take a low-occupancy vehicle on congested lanes. These services provide more choices to commuters, filling the huge gap in service quality and price that currently exists between low-cost fixed route transit and high-cost exclusive ride taxi service.

In the Regular lanes, constricted flow would continue, but drivers would be compensated with credits. Credits could be used as toll payments on days when they choose to use the Fast lanes, or as payment for transit, paratransit or parking at commuter park-and-ride lots in the corridor. The credits would compensate motorists for giving up their right to free use of the lanes converted to Fast lanes. The credits would be funded from toll revenues from the Fast lanes. Motorists in the Regular lanes would also need electronic toll tags, so that their use of Regular lanes can be recorded and their accounts credited.

The most significant benefit of FAIR lanes is that travelers would have increased choices. Motorists could choose to continue to be stuck in traffic (as they were before) but be compensated. They could choose to zip along without delays and pay for the premium service. Or they could choose to use much improved transit, paratransit or ridesharing services. Buses, paratransit vehicles and carpools could use the Fast lanes and not have to contend with congestion. Fast lanes could carry more people and more vehicles per hour than they did under prior constricted flow conditions, increasing people throughput and vehicle throughput during peak hours with minimal or no addition of pavement or right-of-way. FAIR lanes would also result in significant reductions in overall delay and emissions, and would generate surplus funds to pay for improved transit and paratransit services in the corridor.

FAIR lanes could be established on any existing congested freeway facility, preferably a facility with 3 or more lanes in each direction. When adding new freeway lanes, an existing adjacent free lane can be combined with the added lane to create a wider Fast section. On congested toll roads or bridges, higher tolls could be charged on Fast lanes, while other motorists could be given discounts. Where there are underutilized HOV lanes, an existing adjacent free lane can be added to the HOV lane to create a two-lane Fast section.

Click on the link to obtain a copy of a report published by the ENO Foundation from a conference on FAIR Lanes in the New York Metropolitan Region that was held in September 2001.

For more information, contact Patrick DeCorla-Souza, FHWA Office of Transportation Policy Studies, at 202-366-2425 or e-mail: patrick.decorla-souza@dot.gov.

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