Fortune on congo pricing

“If nothing is done about congestion on the nation’s highways, Americans will spend seven billion hours in traffic jams in 2005 — more than quintuple the time wasted in 1985. But help may be on the way. Planners are starting to apply economic rationality to traffic management.

Congestion pricing, first suggested in 1849, is being used or is under consideration in New York, San Francisco, Los Angeles and other cities. Drivers would be charged premium prices to travel in underused car pool lanes. Thanks to recently introduced technology, road authorities can now hand out credit-card size transponders that when mounted on dashboards pay tolls to overhead computers without necessitating a car stop. On a privately-built and operated ten-mile stretch of four-lane highway in Orange County, CA about 24,000 motorists pay as much as $2.75 per trip every day to avoid a congested alternate road. The California Private Transportation Company, which owns the road, is so pleased with the results that it is looking for other opportunities to build similar roads.” (Kim Clark, “How to Make Traffic Jams a Thing of the Past,” Fortune, 3/31/97)