Authors: Tom Vanderbilt
In traffic, the basic model has been a state-subsidized, all-you-can-eat salad bar. Take as many trips on the roads as you like, whenever you want, for whatever reason. It may be a good deal for society—a loss leader, like Costco’s cheap televisions—but it’s such a good deal that everyone does it. Recently, however, as we have been running out of money and space for new roads, the thinking has turned from “How can we get more people on the roads?” to “How can we get fewer?” The answer, of course, is congestion pricing. As an idea, it’s hardly new. The idea of taxing people for the “externalities,” like congestion, that they create goes all the way back to economists like Arthur Pigou, who talked about the problems road users create for other road users in his 1920 book,
The Economics of Welfare.
Later, the Nobel Prize–winning economist William Vickrey led a long, lonely crusade to get people to accept the idea that urban roads are a scarce resource and should be priced accordingly. After all, as Vickrey pointed out in 1963, hotels charge more for in-season rooms, railways and airlines charge more for peak travel periods, and telephone companies charge more during the times when more people are likely to call—why should roads not cost more when more people want to use them? (Vickrey was a bit ahead of his time: Told in the early 1960s that there was no way to track where people drove, or how much they drove, Vickrey, the story goes, built a cheap radio transmitter and installed it in his car, displaying the results to friends.)
Congestion charging, in cities like London and Stockholm, has been shown to work because it forces people to make a decision about—and gives them a precise benchmark against which to measure—whether a given trip is “worth it.” We may have been paying before, in
time
—which hardly helps fund the roads—but the human mind handles time differently than money. We seem less sensitive to the value of time, even if, unlike money, time can never be regained. It is easier for people to rationalize its loss. The problem with the crowded highway is that everyone suffers the same loss of time, even if some people’s use of the highway might be worth more to them—to take an extreme example, think of a woman about to give birth on the way to the hospital, stuck in a traffic jam alongside someone who simply “needed to get out of the house.” They may each feel that their trip is valid, but is that really how a scarce resource should be distributed?
When people are forced, by means of how much it will cost them, to think about when, where, and how they are going places, interesting things begin to happen. You might assume that a rush-hour highway is filled with people driving to work who have no other way to get there—and no other time they can travel—but studies suggest that this is not the case. When researchers have exhaustively tracked the license plates of every car traveling on rush-hour highways and matched the results to other days, they have typically found that only about 50 percent are the same people each day. Sometimes people’s patterns emerge when you look deeper into what would seem to be random behavior. In what the English traffic researcher Richard Clegg calls the “See you next Wednesday effect,” research has found that when people use a rush hour on Wednesday of one week, they’re more likely to be on that same highway on the next Wednesday than on another day.
Not everyone is so rigid in their habits. In 2003, a group of drivers in Seattle were outfitted with electronic devices that would tell researchers where and when they had driven. Baseline data was collected on these people’s typical habits. Then the drivers were informed that they would be given a hypothetical cash account. They would automatically be charged more for driving in the most crowded places at the most crowded times. Matthew Kitchen, director of the Puget Sound Regional Council, the group that sponsored the program (called Traffic Choices), said he was struck by how differently people acted day to day even
before
they were charged tolls.
Once the tolls kicked in, things really began to change: People left sooner, took different routes, took buses, “collapsed” trips into shorter bundles. “The reality which is emerging is that I think people are very intelligent agents, working on their own behalf,” he said. “They understand the unique trade-off they face between time and money. The range of response is extremely broad. For instance, my willingness to pay to save ten minutes today might be very different than tomorrow.”
How much did the charging affect driving? The total “tours,” as they are called in transportation-planning lingo, dropped by 13 percent. That may not seem like much, but in the world of bottlenecks, small changes can have big effects (a 5 percent drop in traffic, it is said, can increase speeds by 50 percent, even if that only means going from 5 to 10 miles per hour). With traffic jams, Kitchen noted, “Once you start falling off the cliff, you fall pretty fast and pretty hard. That’s why between 5 and 10 percent less traffic restores what are really credible speeds on the network. You don’t have to hit people over the head with something that is punitive. You can achieve reasonable results with incentives that result in fairly modest behavioral response.”
By getting just some people to change their behavior, congestion pricing can help reverse a long-standing vicious cycle of traffic, one that removes the incentives to take public transportation. The more people who choose to drive to work, the worse the traffic. This raises the time buses must spend in traffic, which raises the cost for bus companies, who raise the fares for bus commuters—who are being penalized despite their own efforts to reduce total traffic. As the bus becomes less of a good deal, more people defect to cars, making things worse for the bus riders, who have even less incentive to ride the bus.
It doesn’t take much to set this avalanche in motion. The historian Philip Bagwell notes that in 1959, only 7 percent of the total traffic entering London was via private car. But if just 1 percent of the people taking public transportation shifted to cars, the percentage of car journeys would rise 12 percent, and the number of cars in the traffic stream would jump by 5 percent. Which is exactly what happened, and London soon had “traffic thrombosis.” Everything engineers did to ease the flow just seemed to make it worse.
Congestion pricing reverses the cycle. Driving becomes more expensive, so traffic is reduced. The fees raised by pricing go into buses, which benefit in time and in money from the reduced traffic. This makes buses cheaper, and thus more popular. Small changes in traffic levels make all kinds of other things possible. In London, a familiar lament was the decline of Trafalgar Square, the city’s symbolic heart, home to Nelson’s Column and countless demonstrations through the years. But on most days it merely seemed the elaborate centerpiece of a busy traffic circle, a noisy and noxious holding pen for pigeon-feeding tourists. Then came a plan to close the street between the square and the National Gallery, uniting the two entities into a grand civic space. This was deemed, from a traffic point of view, impossible. As Malcolm Murray-Clark, the director of London’s congestion-pricing program, told me over tea in his office, congestion pricing changed all that. By removing the “background levels” of traffic from London, as he put it, planners had the wiggle room to remove the Trafalgar road without catastrophic consequences. “Eighteen percent of the traffic through Trafalgar Square did not have a destination in central London,” he said. “It was just a through trip. Those were the first to go, if you like.”
Congestion pricing is really just another spin on making the system optimal, or, to put it another way, saving people from their own instincts: How do you persuade everyone not to go to the same place at the same time? Cities like London are, in effect, learning from Disneyland. That may seem like a stretch, but consider that Disney theme parks open each day to a flood of people, many wanting to first go on the most popular attractions. Cities “open” each day with people all wanting to go to the same “attractions” at once. Disney executives are as much in the traffic business as the entertainment business: moving people around, from ride to ride (and through the shops and restaurants), in the most efficient manner and with the least customer grumbling. They hire talented engineers, like Bruce Laval, to manage these flows and queues.
Laval, now retired, joined the company’s industrial engineering department in 1971. His master’s thesis was on traffic signal coordination, and his first task at Disney was to figure out a way to reduce the wait times on its popular monorail. “Management wanted to put together justification to buy a sixth monorail train,” he told me. “They figured they needed more capacity to move more people.” But Laval ran simulations that came to a counterintuitive solution: Disney could move people faster by
removing
a train, not adding one. The reason was that each train had a buffer zone, for safety, in front of it; as it neared another train, it slowed or stopped. Reducing the number of trains meant they all moved faster (one of those “slower is faster” effects that show up so often in networks).
Early on, Disney realized that as the park grew in popularity, managing the queues of people would prove difficult, particularly on the marquee attractions like Space Mountain. What could you do? Disney could take the approach of our traffic networks, which is simply to let an inefficient kind of equilibrium take hold. Let people wait, and if the line is too long, they may decide on their own not to get in line (or get on the highway), and thus be diverted to other rides (roads). The queue will regulate itself. You can also make the line not seem as long, through various psychological tricks (like posting longer wait times than are really the case or having the queue itself wind through mini-attractions). But that still means people are waiting in lines (i.e., in traffic) and not being as productive as they might be, rather than shopping and eating (i.e., working or spending time at home). Disney could, and sometimes did, add capacity to its rides. But that, too, had limitations. “It costs a lot of money to add capacity,” Laval said. “If you eliminate wait times during your peak days, you’re over capacity for the other ninety-five percent of the year. You don’t design a church for Easter Sunday.”
So Disney tried a form of congestion pricing. It issued ticket books in which the tickets’ values reflected the capacity of the rides. Popular rides like Space Mountain required E tickets, which were more expensive than A tickets, good for tamer attractions like the Horseless Carriage on Main Street. The idea was not only to prevent people from simply lining up for the top attractions but to spread people out across the park, avoiding traffic jams at places like Space Mountain. “One way of increasing capacity is rerouting demand,” Laval said. This was successful to a point, but the signals that prices send can work in different ways. At Disney World, Laval explained, where 80 percent of park entrants were first-time visitors (Disneyland has more repeat visitors), many of whom had no particular itinerary of which rides to go on first, the E tickets were like a big red flashing sign saying, “Ride me first.” Everyone wanted to get their money’s worth, so they immediately gravitated to the most expensive rides. The rides were not only expensive because they were popular, they were popular because they were expensive.
Phenomena like this shows up in traffic as well: The HOT lanes in Southern California charge more as more people enter them (in order to help keep them from becoming congested); yet sometimes people enter a tolled lane precisely
because
it is expensive—they think the toll must be so high because the untolled lanes are really jammed. (This sort of behavior subverts the normal economics principle of “price elasticity,” in which the number of users should drop as the toll goes up.)
Disney finally hit upon the ultimate solution in 1999, when it introduced the FastPass, the system that gives the customer a ticket telling them when to show up at the ride. What FastPass essentially does is exploit the idea that networks function both in space and in time. Rather than waiting in line, the user waits in a “virtual queue,” in time rather than space, and can in the meantime move on to other, less crowded rides (or buy stuff). People can take a chance on the stand-by line, or they can have an assured short wait if they can simply hold off until their assigned time. Obviously, FastPass could not literally work on the highway. Drivers do not want to pull up to a tollbooth and be told, “Come back at two-thirty p.m.” But in principle, congestion pricing works the same way, by redirecting demand on the network in time.
Traffic can be made to flow better by redirecting demand in
space,
of course, if traffic engineers know what the demand and available supply are on a network at any given time—and if they can find a way to get that information to drivers. In the past, this has been a necessarily crude process, hindered by delays in getting and sending the information, and the ability to see the network at once with all its interacting flows. Surely you have had the experience of listening in vain to a rapidly spoken traffic report, hoping against hope to get the details on the jam you’re sitting in (and by some law, you never can). And as we saw in Los Angeles, traffic information often comes too late for us to do anything about it, or is not even accurate.
Rather than surgical strikes at congestion, one can always try carpet bombing. Sam Schwartz (a.k.a. “Gridlock Sam”), New York City’s former traffic commissioner, claims that by declaring “gridlock alert” days, he could “knock fifty thousand or sixty thousand cars out of traffic” by plastering the airwaves with dire warnings. “The Heisenberg principle exists in traffic. If you look at it and announce and tell people about it, it has an effect.” When he wanted to reduce traffic on one parkway so construction crews could work on an overhead rail link, he rolled out more horror stories. “I was able to scare away forty percent of the vehicles from that corridor,” he says. “We measured it. I was amazed at how effective we were. Sometimes when you hear on the radio, they talk about how terrible the traffic is—it’s really me, like the Wizard of Oz behind the curtain.”