Mobility Pricing: An idea whose time has come?

April 16, 2018

In a few weeks, the Mobility Pricing Independent Commission will release its final report to TransLink and the Mayors’ Council. The commission has been reviewing new options for pricing Metro Vancouver roads and bridges in order to manage congestion and support investment in the overall transportation system.

This work follows on the success of congestion charging zones in London, Stockholm and Singapore, where drivers pay a fee to get into the central city.

In Metro Vancouver, congestion-induced delays have become the norm, costing both time and money for households and businesses. If the number of vehicles on the region’s roads and bridges grows in line with our population, the future is one of perpetual gridlock.

Enter mobility pricing.

The biggest obstacle to mobility pricing is political. Asking drivers to pay more for their trips is going to be a tough sell. While Metro Vancouver’s growing congestion problems may make many drivers more amenable to new solutions, willingness to pay is another matter.

In London and Stockholm, initial opposition turned into support once systems were up and running: drivers saw a 20 per cent reduction in congestion with shifts to transit or changes in driving patterns. And new investments in transit meant riders experienced better service. In Stockholm, after a six-month trial voters supported the new system in a referendum.

Exactly what mobility pricing in Metro Vancouver would look like is still to be determined, including rates at different times of day, exemptions for certain vehicles, and how the revenues are used.

The Metro Vancouver commission is considering two models of mobility pricing: congestion point charges, which would likely result in tolls on most regional bridges and key choke points on highways, and distance-based charges, which would price each kilometre driven but could vary by time and location.

No region has implemented per-kilometre charges although several US states have pilot projects underway. This option could be costlier because of new technology requirements and it also raises privacy concerns. Congestion point charges, on the other hand, would be similar to the tolling systems recently removed from the Port Mann and Golden Ears bridges, but would be spread more broadly through the region.

Mobility pricing will likely fail if it is perceived to be unfair.

A key equity concern is that low-income households with no option but to drive are adversely affected while affluent drivers can travel more quickly without noticing much of an impact on their budget. 

Some people cannot immediately change their behaviour and/or may live in areas where it is hard to even imagine alternative ways than driving to get around. This is related to the high cost of housing in Metro Vancouver, which forces low-income households to move further away from the central city to find affordable housing. These users already pay because of the increased time spent travelling, which can add up to hundreds of hours per year.

Mobility pricing can learn from BC’s carbon tax experience. A low-income credit is funded out of carbon tax revenues and a similar mechanism for mobility pricing could target low-income drivers or, more broadly, all low-income households. The key point is that low-income households would be compensated while still facing the congestion charge.

Ability to pay is a core fairness principle for low-income households, and fairness for other disadvantaged groups including people who are precluded from driving due to age or disability must also be considered by investing in mobility to meet their needs.

In Metro Vancouver’s auto-dependent areas, a major expansion of public transit should also be part of the revenue recycling regime. London and Stockholm made transit investments a centrepiece of their congestion charging systems. Both already had well-developed public transit systems before their congestion charges came into effect with the share of trips made by public transit over 30 per cent prior to congestion charging.

Metro Vancouver needs to catch up because only 20 per cent of commuter trips in 2016 were made by transit. Using mobility pricing revenues to expand public transit would further benefit many low-income households because they are more reliant on public transit.

Drivers in Metro Vancouver may not be happy about additional charges, but it is important to note that they currently do not pay the full cost of their trips. The public costs of driving include building and maintaining roads and bridges, policing and related public services, subsidies to fuel production and parking spaces. There are also external costs imposed on society as a whole: carbon emissions, air pollution, sprawl, noise, and the environmental costs of upstream fuel extraction and processing.

It is entirely reasonable, therefore, that it should cost more to get behind the wheel.

Any increased cost, however, would be accompanied by much faster travel times due to reduced congestion. And ideally, significant changes in travel patterns would arise from discretionary trips being shifted outside of charging hours or multiple trips being combined into one.

Metro Vancouver transit users already experience mobility pricing with transit fares and distance pricing on Skytrain and Seabus. Translink is reviewing the pricing structure for public transit and is likely to make transit rides more distance-sensitive.

If the political hurdles can be overcome, well-designed mobility pricing—with credits for lower income people and public transit investments—could be an important part of the solution to manage congestion and accelerate the shift away from auto-dependency. But the devil is in the details: attention must be paid to the equity aspects of whichever design is chosen. 

Marc Lee is a senior economist at the Canadian Centre for Policy Alternatives BC Office and writes on a variety of economic and social policy issues.