When talk turns to road pricing (RP), it revolves around two primary issues: declining government revenue and road congestion. There’s no telling which of these concerns will eventually be great enough to prod regulators to finally begin charging for road usage, but according to The Economist, it’s inevitable. Virtually no other solution can solve both problems.
Road Pricing Unmasked
Basically, RP is any scheme charging motorists for miles driven. Toll roads like the Pennsylvania Turnpike are crude examples of RP. Tolls are calculated based on the length of the road used. Toll roads can be found all over the place. For the most part, motorists are used to them. Paying the toll is a function of using the highway. If you don’t want to pay the toll, find an alternate route.
Road pricing as it’s debated today will be significantly more intrusive. It’ll involve larger swaths of the highway system, perhaps even all paved roadways. Motorists are likely to be charged by the mile driven. The amount of the per-mile fee could be flexible based on the time of day, the route traveled or some combination of variables. Eventually, regulators might use a vehicle’s GPS to track where, when and how far a motorist drives to determine fees.
Impact on Congestion
Helping to drive the RP debate is growing congestion on our downtown streets and highways during peak times, like morning rush hour. Many experts view RP as a way to nudge motorists to use mass transit alternatives to get into the city; thereby reducing the crush of individually owned vehicles. Likewise, charging a premium to use a highway or street during peak drive times should encourage motorists to postpone their errand-running to a non-peak time.
The old chestnut holds true: If you want less of something, tax it more. In this case, it’s vehicles on the road. Ultimately, RP would be something akin to rationing a limited resource; here, that resource is highway space. RP simply forces those using this precious resource to pay for it.
Show Me the Money
Governments at all levels hear hearing alarm bells clanging away like the klaxon on a diving submarine. If you’re a government, taxing every gallon of gasoline pumped at the corner Quickmart is big business. The government recognizes that a variety of factors are colluding to reduce the number of gallons motorists are pumping.
Today’s vehicles are simply more efficient than those of 20 or 30 years ago. They travel farther on a gallon of gas. Better gas mileage translates into fewer tax dollars collected at the pump. Not only are gasoline-fueled cars more fuel efficient, but electric vehicles are gaining popularity. At some point, most of us will probably drive an electric vehicle. Even today’s crop of ride-hailing/ride-sharing services mated to fully autonomous vehicles are expected to mean fewer cars on the road in the future, translating into less demand for gas.
Revenue-starved governments will need to make up the lost taxes somehow. Road pricing is a convenient solution.
What it means to you: Road pricing is too new and untested to draw any serious conclusions about its effect on congestion, but the possibility of reducing congestion makes sense. It doesn’t really matter, though. Declining revenue from gas taxes will force the issue if congestion doesn’t. The Economist is probably correct: road pricing is inevitable. And like most things, people will eventually accept it.