Tuesday, November 18, 2008

Back-door peak pricing

Lots of good comments about some of the challenges of peak pricing here, here, here, and here.

Let me propose a practical, feasible first step that addresses many of the concerns: raise Pike tolls, but only during peak periods. Leave the existing toll rate during off-peak periods. This gives people who want to avoid the toll hike an option. They can go earlier or later than the peak period.

Imagine the people who can't afford or don't want to afford the toll hike. They'll either stick with their current commute pattern, reducing the congestion benefit. Or, they'll take alternative routes, reducing congestion on the Pike, but creating new congestion on the alternative routes.

If the rate goes up just during peak periods, those drivers who don't want to or can't pay more have another alternative: avoid the toll hike and pay the current rate (which they are already willing/able to pay) by going at another time. This may not be possible for everyone, but it does create an alternative that may alleviate the impact on lower-income families of the hike and alleviate the impact of alternative-route seekers for affected communities. It won't take much of a peak-time reduction to ease congestion.

And, such a peak-pricing trial would prove out (or disprove) the anticipated benefits of market-rate tolls.

To make up the lost opportunity of additional revenue during off-peak periods, raise the gas tax.

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