T4America Blog

Vancouver mobility pricing study reveals why pricing is such a hard sell

One of the main themes in this year’s Smart Cities Collaborative is how communities can price roadway and curb space as part of their strategy to achieve their long-term outcomes, such as reducing congestion, lowering emissions or shifting trips to transit or other mobility options. A recent study out of Vancouver reveals some of the main challenges communities face as they consider these new pricing strategies.

While there are a number of different pricing strategies that cities can apply, one of the most frequently discussed is congestion pricing—which broadly refers to charging vehicles a fee based on where they’re traveling, distance, time of day and more.

Given the myriad negative impacts of congestion on the local economy, the environment and everyone’s quality of life, effective pricing strategies can help reverse these trends by reducing single occupancy vehicle trips, encouraging pooling of rides and shifting trips to transit or other modes such as walking or biking, resulting in lower emissions and leading to faster, more reliable travel times for everyone, including those driving. This has been the case in cities such as Stockholm, London and Singapore where congestion pricing has produced the intended results. But, for various reasons, pricing has struggled take hold here at home in the US.

This April, for the second time in a decade, a fully-fledged plan designed to reduce congestion in the busiest parts of Manhattan fell short of being implemented. The most recent plan addressed some of the major challenges the city is currently facing; a growing population, increasing congestion in its core business district and a transit system losing ridership—one that Governor Andrew Cuomo declared was in a state of emergency last summer. The plan proposed a charge on vehicles entering the downtown area to alleviate congestion and would then largely use that revenue to invest in transit maintenance and upgrades to provide greater options.

But even when the need for, and benefits of, congestion pricing are clearly articulated it still takes a big political lift to pass into law, let alone discuss as a serious policy proposal. Failure to enact often comes down to a lack of political will. This can be especially difficult, as it was in New York, where both of its proposals required state authorization, as the city does not have authority to implement pricing on its own. Like any new policy or technology, cities will need to take time to figure out how it will work best for them and determine how they will address any potentially negative impacts. But, based on the need for it in New York City or the benefits it’s provided to cities abroad, it’s a conversation worth having.

Understanding these potential benefits, Vancouver, BC has begun to study congestion pricing as well. The Metro Vancouver Mobility Pricing Study, released last month, highlights a number of challenges cities and regions face as they consider implementing a pricing scheme.

Vancouver today

Vancouver, situated a few miles north of the Canadian border over Western Washington, has a population of over 630,000 and is roughly akin to Boston in its density. The region has slightly fewer than 2.5 million people and is expected to add one million new residents and 500,000 new jobs by 2040.

The majority of this growth is happening outside of the City of Vancouver to the south and east in regional centers such as Surrey, Burnaby and Richmond. Since downtown Vancouver also sits on a peninsula, most trips in and out require crossing a bridge or using a tunnel. These turn into chokepoints, especially during morning and afternoon commuting hours.

Congestion is already having a significant impact in Vancouver today, costing between $500 million and $1.6 billion per year, according to the report. If new residents moving in bring the same proportion of cars as residents today it will be an increase of 600,000 cars and would likely increase congestion 40 percent by 2030, causing further negative impacts to the regional economy and residents’ quality of life. And, despite planned investments in transit, they’re worried it might not be enough to mitigate all the coming growth.

Metro Vancouver Mobility Pricing Study

With an eye to managing this growth and pushing it toward their desired goals of creating more dense, walkable neighborhoods that are connected by transit, the Mayors’ Council—composed of the 21 mayors in the Greater Vancouver Region who review and approve TransLink’s (the regional transportation authority) transportation plans, established the Mobility Pricing Independent Commission to study how congestion pricing could work in the region.

The report itself was not intended as an argument explicitly for or against congestion pricing, but to serve as a feasibility study to assess the potential impacts of a pricing strategy and identify areas for further research. As a result, the report gives a thorough and sober account of the challenges associated with implementing congestion pricing along with a host of questions that need to be asked in order to comprehensively address these concerns.

But, while the report identifies the necessary challenges with congestion pricing and provides a clear idea of how much residents would have to pay, it’s far less clear in describing the benefits and what residents will get in return. The report notes the potential reduction in congestion and the larger economic benefits of pricing, but doesn’t articulate the tangible benefits to individual households or how it will help the region achieve its long-term goals, whether it’s safety, equity, emission reductions or something else.

The process: setting a vision

The report begins by re-establishing the outcomes agreed to in the region’s long-range transportation plan, Metro 2040, which calls for continued development of diverse and dense neighborhoods that are walkable, connected by high-frequency transit and with successful demand management strategies.

With congestion pricing suggested as a possible solution, the Commission set out to solicit feedback from the community to understand possible concerns and questions about, and goals for, a pricing strategy. Over 17,350 residents and over 300 stakeholders and government officials participated in online public engagement and in-person workshops. Through polling they also learned residents are evenly split on congestion pricing—one-third are opposed, one-third are in favor and one-third are undecided. Much of their stated concerns largely revolved around the potential equity implications and how the revenue would be managed.

From these conversations, the Commission established a set of three core principles while developing a coordinated regional mobility pricing policy: reduce congestion, promote fairness and support transportation investment.

While these principles do not include explicit goals such as reducing single occupancy vehicle trips or shifting more trips to transit or other modes, this is still a good example of clearly identifying problems and developing outcomes—something that many communities have struggled with as they look to implement everything from automated vehicles to microtransit pilots to pricing schemes. By identifying their problems, setting outcomes and engaging the community, the Commission sets a strong example for how other communities should approach new policies and projects that they’re considering for themselves.

Recommendations

With its principles laid out, the report recommends two different charging mechanisms to reduce congestion throughout the region along with policy options for each.

The first is a point-based charge where drivers pay a fee when passing certain fixed points in the region, with the fee varying depending on the time of day and the direction of travel. These charge points would primarily be located on the bridges and tunnels leading in to downtown areas, which turn into congestion hot spots. These charges are reflective of what the report calls the user cost principle, where drivers pay based on how much they contribute to congestion.

The second is a distance-based charge, where drivers are charged based on how far they travel, with fees varying depending on the zones they travel between. These are aimed at what the report calls the user pay principle, where drivers pay based on how much they’re using the road network. In order to address congestion in the worst areas, prices increase the closer drivers get to the core city and during peak commuting hours. To promote fairness, the report suggests getting rid of the fuel tax if a distance-based charging system is implemented.

In addition to the two charging mechanisms, the report also lays out two price thresholds: the lowest charge necessary to realize any meaningful impact of congestion reduction and a slightly higher charge that would realize additional benefits and congestion reduction. Depending on the pricing mechanism and the threshold for congestion reduction, the report proposes a fee schedule that would result in a median cost per family of anywhere from $1,000 to $2,700 per year.

This is a significant fee, and the report authors don’t downplay it. Instead, they argue that this is the scale at which a charge needs to be implemented to have a real impact. In the report’s opening letter from the Commission Chair, it states, “it is easy to characterize a decongestion charge as a ‘money grab’ or ‘just another tax.’ The paradox is that the less you charge, the more it would be just that. The charge needs to be set at a level sufficient to unlock the considerable benefits of reduced congestion and more efficient mobility.”

Addressing equity

One of the biggest questions for any pricing program, both operationally and politically, is the impact on equity. The report clearly identifies that this will be an ongoing challenge. This is especially important as the report notes a charge of $2,700 per year would be up to 8 percent of some household incomes. This is a major concern with any congestion-pricing program, as lower income families tend to pay less in total, but a much larger share of their total income.

While this shouldn’t be a deterrent for congestion pricing in general, it does mean that there needs to be a comprehensive plan in place to address or correct the issue to avoid disproportionately impacting those who can least afford it. The report does not shy away from these concerns and suggests a number of measures that could correct the imbalance including tax credits, eliminating the fuel tax and reducing transit fares, but doesn’t recommend a specific solution and states the need for more research to understand what approach is best.

Selling the benefits

While the report makes it clear how much congestion pricing will cost the average household, it’s not as clear what the tangible benefits will be, both for the individual user and the region. The report identifies estimated travel time improvements from the charge, but congestion charging is about more than just a reduction in travel times, it should be a tool that can help a city or region achieve its long-term goals, everything from safety to health to access to resources and amenities.

Convincing a skeptical public about pricing, as with any policy or technology that’s new or different, isn’t about selling just a shorter commute time, it’s about articulating the personal benefits to them (and their community) in a way that connects with their core values and communicates the clear benefits for their quality of life. With a report in hand that does a poor job on this count, various officials from local mayors all the way to the British Columbia Premier have been reluctant to signal their support or say much more than that the idea needs more study.

Congestion pricing is a critical step we need to take in our cities in order to reduce the negative economic and social impacts of traffic congestion, emissions and much more. With this report, Vancouver has laid the foundation for what pricing might look like in their community. The report should do more to outline the tangible benefits of pricing or reducing car trips and investing in transit, but the commission has done a good job at starting the conversation, raising some of the necessary questions in an open and objective way and setting the region on a path forward.

They’ve started a dialogue that few cities have even considered that will hopefully provide lessons for others to learn and lean on in their own deliberations.