SAN DIEGO I-15 TRIAL Dynamic pricing flies, but not quite dynamic enough

The world’s first dynamic road pricing operation began for rush-hour commuters in the central two reversible lanes of 10-lane I-15 heading south into San Diego California, 5:45am Monday morning March 30. This was an historic event because it is the first realtime, real world application of a long-established idea for applying flexible market pricing principles to highways’ greatest operational deficiency — that in the absense of flexible pricing urban highways are chronically overcrowded in rush hours and become unpredictable and inefficient carriers. Absent variable charges to meter the inflow of vehicles beyond a certain usage level they progressively choke up, the addition of extra vehicles not only slowing all, but eventually diminishing total throughput according to a famous backward sloping curve.

The late William Vickrey, Nobel Prize winner in economics at Columbia Univ was writing and speaking about the potential of dynamic road pricing from 1959, and it became mainstream economic wisdom. A Transp Research Board panel led by Martin Wachs UCLA studied the idea in 1994 and endorsed it saying it has “great promise” in relieving congestion, improving efficiency of transp, and would provide major “net benefits” to society.

Since the late 1980s computer chip technology and advances in dedicated short range radio communications have provided the technical means to implement cost-effective highway-speed pricing of scarce roadspace. The San Diego area, with the support of the Federal Highway Admin, was the first political constituency to translate this powerful idea and the wondrous technology into a working system on real highway lanes with ordinary motorists. A lot of the credit is given to a local politician Jan Goldsmith, who campaigned tirelessly for the project, first as mayor of Poway, a town at the north end of the I-15 project, later as state assemblyman.

The actual startup of I-15 dynamic pricing has been rather uneventful, which is to say, successful.

Of course things did go wrong! Nothing so new happens without glitches. For the first several days the contractor TransCore had trouble establishing reliable data links between the main system computer which recalculates toll rates every six minutes in the service center and the five variable message signs that display the current toll rate to motorists approaching the decision point about whether to go free-&-congested or to pay-&-fly. Fortunately enough slop had been built into the price metering model, used to compute the appropriate toll, that some delays in changing the toll rate were not apparent to motorists. On the upswing of the rush hour, toll raises were delayed a bit. On the wind-down of the rush hour a few motorists were kept off the express lanes by tolls slow to be racheted down.

Another embarrassment was the discovery that every now and again a toll patron pulling under the electronic toll gantry would mistake an observation booth nearby for an old manual toll booth and pull up beside it expecting to pay cash to an attendant! SANDAG quickly installed “No Stopping” signs, afraid that the stopping vehicles might cause a rear-ender.

Motorists appear to accept the varying toll rates, and demand for enrolment in the scheme is quite strong. After 2 weeks 3,500 motorists have acquired the electronic toll transponders (e-tags) needed to use the system. The solo drivers are buying the right to drive 13km in a 2-lane reversed barrier-separated facility normally reserved for higher occupancy vehicles (HOV-2) and in which Level of Service C (near free flow and car spacings of 65m) is normally guaranteed. The project is scheduled to go through 1999 at which time decisions will be made as to how and whether it continues.

A team from the engineering dept at San Diego State Univ headed by Janusz Supernak is monitoring the project with before and after studies.

At the San Diego Assoc of Governments (SANDAG) which is running the dynamic pricing project, spokesman Sarah Lawrence says: “We want to be quite conservative what we say at this early stage. Public acceptance of the scheme is fair, I’d say. Staff are starting to see things that could be improved, but no more changes are urgent. It is a trial, and we want to let things sit for at least a few weeks while we watch it operating as designed, and then we’ll think about changes.”

The good news is that the dynamic toll calculation system for the variable pricing, as designed by TransCore, seems to be robust. Toll rates are being automatically adjusted throughout the 7.5hrs of operation each day according to algorithms based on traffic flows as measured by inductive loops in the pavement near the toll gantry. No human intervention has been needed. The dynamically changing toll rates do what they are expected to do — deter or attract sufficient motorists to improve utilization of the lanes. The extra traffic is being successfully carried in the HOT lanes without sacrificing level of service. Drivers seem to be happy, Lawrence says, commenting that it gives them an extra option when they are in a special hurry.

Time savings

Users say they save 20 to 40 mins. They almost always exaggerate but the time savings and greater comfort of driving free flow are obviously considered value for money, or there wouldn’t be the customers. A few vehicles are being taken out of the general lanes, though not enough yet to make a noticeable difference.

Toll rates are posted on variable message signs on five different approaches to the HOT lanes, giving motorists time to decide whether they want to pay the toll and ride the Express Lanes or take their chances in the free lanes. When the lanes open each morning at 5:45 the toll is 50c. The toll rate normally will stay the same, rise or fall an increment of either 25c or 50c every 6 minutes depending on the change in traffic volume as measured by the pavement loops. The algorithm involves some kind of moving average to prevent undue oscillations. Maximum toll rates have been set as shown in the schedule (above). The busiest hour is 7:00am to 8:00am and 4:30pm to 5:30pm when the maximum toll is $4.00 for the 13km trip. On the edges of the rush hours actual tolls are staying well below the maximum rates, but at various time during the rush hour traffic levels have sent the toll to the $4.00 ceiling. In times of extraordinary congestion on the mainlanes, such as when there is an accident causing a lane closure or a severe weather event, toll caps will be doubled so they may go to $8/trip and toll incremenets of $1 each 6mins will be allowed.

SANDAG managers are experiencing the difficulties of price controllers ever since the Pharoahs guards tried to control the prices of tributes at the pyramids 7 millennia ago. Whether it is a computer modelled system or a price control agent with a sword listening to the barter, any effort to enforce a price cap is inherently problematic. At that point of the cap the road’s managers risk overcrowding since they have lost the ability to use price to deter more motorists entering. It has not happened yet, Sarah Lawrence told us, but they are a little worried, she admits, that it may.

“Nothing is cast in stone. If our maximum toll rates aren’t right, we will have to discuss it with our board and make adjustments. People understand this is a trial and that we have to be flexible.”

SANDAG is committed to maintaining Level of Service C on the express lanes. Prior to the Mar 30 beginning of dynamic tolling, SANDAG operated a monthly pass system in which 900 drivers paid $70 each for unlimited access to the HOT lanes. There was a waiting list of drivers wanting to get the monthly passes. Clearly dynamic pricing will allow fuller utilization of the lanes, avoid the need to ration the passes, and generate more revenue — so long as the arbitrary $4.00 maximum does not get in the way.

The project is getting $8m in federal funding under the congestion pricing demonstration program and some of the proceeds are going to subsidize a new express bus service named Inland Breeze. (Contact SCAG 619 595 5300)

Dogmatic egalitarianism

Media coverage has been extensive and the reporting generally factual and neutral. However the SAN DIEGO UNION/TRIBUNE which supported the project earlier has turned against it, editorializing that “it would do far more people more good to simply rip down the concrete barriers separating the carpool lanes from the real world, and install reverse flow lanes” (with a single moveable barrier.)

But that kind of dogmatic egalitarianism denies people the option to buy their way through congestion, and denies everyone the benefits of the kind of flexible pricing that we use to social advantage in producing our foods, our fuels, our housing, and indeed most of our goods and services. Maybe everyone in San Diego could be taxed to support the SAN DIEGO UNION/TRIBUNE so it could be given away free like roadspace? Very democratic that would be, but it would ruin the newspaper, and deny customers choice and competition in their reading, just as they have been denied choice on the roads before the I-15 road pricing project. What is good for readers, choice and competition, is good for drivers too — we think.