Benefit

Value pricing has been shown to increase revenue, reduce congestion by maximizing lane capacity and reduce travel time of highway transportation.


27 February 2003
Houston,Texas,United States; San Diego,California,United States; Orange County,California,United States; Fort Meyers,Florida,United States


Summary Information

The Federal Highway Administration began national efforts to evaluate the benefits of value pricing of highway transportation under the Intermodal Surface Transportation Efficiency Act in 1991. In May 1998, continued funding was approved through Congress, and the Value Pricing Pilot Program was established. Four operating projects conducted under this program were reviewed to evaluate benefits and extract lessons learned.

The four operating projects reviewed include:
  • San Diego I-15 Express Lanes – The I-15 Express Lanes are two reversible lanes, located in the median, that flow southbound in the morning and reverse in the afternoon. Phase I ExpressPass allowed single occupancy drivers to buy-in to the High Occupancy Vehicle (HOV) lane with a monthly pass. In March 1998, Phase 2 began instituting the FasTrack program that used an AVI transponder. The facility instituted a dynamic tolling structure which changed based on the congestion level, with tolls ranging from $.50 to $4, and possibly up to $8 in very unusual circumstances.
  • Katy Freeway in Houston, TX –The Katy HOV lane first opened in 1984 as a 13 mile, reversible lane on the west side of downtown Houston, flowing inbound in the morning and reversing in the afternoon. QuickRide was initiated in 1998 as a way of allowing HOV-2+ vehicles to buy-in to the HOV-3+ lanes during peak periods, allowing a way to utilize excess capacity.
  • SR 91 Express Lane facility in southern California -– The four lane toll facility, opened in December 1995, operates under a private-public partnership between Caltrans, the California Department of Transportation and a private company, California Private Transportation Company (CPTC). The 10-mile corridor is the main link between Orange and Riverside counties with two continuous lanes flowing in each direction, and no exits or entrances.
  • LeeWay in Lee County, Florida – In August 1998, Lee County Florida began a value pricing pilot on the Cape Coral and Midpoint bridges. Although neither bridge suffered from severe congestion, Lee County had two primary goals in implementing the Variable Pricing Project: to analyze the impact of variable pricing and to reduce congestion and prevent future congestion during peak periods.


METHODOLOGY:

The data collection process involved gathering information and existing reports from each of the project managers and associated research teams. Reports from the operating projects included the initial project proposal, pricing feasibility studies, pre-project data collection reports, and project evaluation studies. The studies used a combination of qualitative data, such as focus group information, traveler and telephone surveys, and quantitative data collected from vehicle and occupancy counts, speed demonstrations and modeling work.

Interviews with project managers and associated research teams complemented the published studies. Where necessary, follow-up interviews or correspondence clarified conflicting points.

RESULTS:

The study found a number of benefits from value pricing, including:

Increased Revenue – Revenue generation provides financial incentives to implementing value pricing. To the extent that value pricing can cover the capital and operating costs, it becomes a viable financing option.
  • The I-15 Express Lanes, initiated in part as a means to fund transit, is self-sustaining, with revenues between $1-1.2 M and total costs around $500,000, including electronic tolling equipment, administration and maintenance, and enforcement costs. The project produces enough revenue to operate the Inland Breeze, a new bus service established on the lanes.
  • After its start in 1998, Houston’s Quick Ride program is projected to break even in 2000, with additional revenue to be allocated to transit-related activities.
  • Operated by a private company, SR 91 Express Lanes are run with the intent of making a profit. In 1998, three years after opening, CPTC achieved a cash flow break-even point, where the company could cover operating capital and debt expenses for the earned revenue. The francisee has authority to collect tolls over a 35 year period.
  • In Lee County, there was a 1 percent revenue loss because of the way value pricing was implemented. Shoulder period tolls were lowered while the peak period tolls remained constant.
Reduced Congestion – Value pricing can potentially maximize the road capacity while maintaining a high level of service, induce travel mode changes, increase vehicle occupancy rates, and shift the times of travel.
  • The I-15 Express lanes carpool traffic increased 69 percent from 1996 pre-project level to June 2000. However, SOV traffic increased by 28 percent between 1997-1998. Transit ridership also increased on the corridor due to the addition of the Inland Breeze bus service.
  • On the Katy Freeway, more than half of users are former single-occupancy vehicles which have formed carpools and moved into the HOV lane. About one quarter of the 2-person carpools moved from the main lanes to the HOV lane during peak hours, and the number of 3+ carpool trips increased by 6.1 percent in the evening. About 18 percent of the morning trips diverted from high occupancy modes, but only 1 percent in the evening. Transit ridership showed a slight decrease after the QuickRide was implemented, but the absolute number of riders was minuscule.
  • On SR 91, a 40 percent increase in HOV-3+ traffic was evident within the first three months of opening. Although SOV traffic increased as well, a net movement from SOV to HOV occurred and the HOV count has been stable or growing ever since.
  • In Lee County, 300 trips per day were diverted from peak period travel to discounted shoulder periods.
Travel Time Savings – Travel time savings is estimated to accrue not only drivers using the value price lanes, but also to drivers in the general-purpose lanes, which achieve higher speeds as traffic is diverted to the toll lanes.
  • San Diego I-15-Experienced small but significant savings during morning peak , but not in evening.
  • Katy Freeway in Houston – Average daily time savings of 20 minutes.
  • SR 91 Express Lane – An average of 12-13 minutes saved per trip on normal traffic days.
  • Lee County – No significant change.

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Source

Value Pricing: A Synthesis of Lessons Learned

Author: Jennifer L. Ward

Source Date: 27 February 2003

URL: http://www.hhh.umn.edu/img/assets/8460/AppxACrossCaseSynthesis.pdf

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Typical Deployment Locations

Metropolitan Areas

Keywords

congestion pricing, value pricing, variable road pricing, managed lanes, electronic toll collection, ETC, smart tags, EZ Pass, E-Z Pass, EZPass, Value pricing, variable pricing, HOT lanes, HOV lanes

Benefit ID: 2010-00647