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HOT Lanes

No. Not anything about the temperature, spicyness or physical attractiveness. High Occupancy Toll Lanes are a fairly recent phenomenon becoming increasingly widespread throughout the USA. A recent Atlantic Cities article covers the introduction of a pretty large scheme, implemented by way of a public private partnership (PPP) in Washington DC:

The expanded roadway – two lanes in each direction, from the I-95 interchange to Tysons Corner – will be made of High-Occupancy Tolls, or HOT lanes. Carpools of three or more, buses and motorcycles (but not hybrids) can drive them for free. Anyone else who wants in will have to pony up according to a dynamic pricing scheme, and there’s no limit to what that could cost.

The $2 billion system was built in a public-private partnership between the state and Fluor Transurban, an engineering and construction conglomerate. Virginia put up about $400 million. The private firms paid for the rest (with the help of a hefty federal loan) in exchange for the right to collect the toll fees for the next 75 years.

Fluor Transurban is guaranteeing a minimum speed on the HOT lanes of 45 miles an hour. That means the toll price will vary according to demand to maintain the steady flow of traffic. The companies estimate that the average ride will cost between $3 and $6 (tolls will be in effect at all hours of the day, not just during rush hour). But there’s no ceiling to what the system may charge drivers to achieve that goal, if it turns out everyone heading to Tysons Corner is willing to pay a ton of money to get there.

These lanes are an interesting convergence of trying to both increase car pooling (the high occupancy bit) as well as being some form of congestion pricing (the toll bit). Proponents of the schemes cite the lanes as not only providing a congestion free option for those using the lane, but also reducing congestion in the general traffic lanes (presumably due to the car pooling). But the scheme comes with its challenges:

If this infrastructure is now managed by private companies, will their interests always align with the public good? Fluor Transurban, for instance, stands to lose money with every carpool that enters the lanes for free. And isn’t there something ethically dubious about enabling drivers who’ve got the money to pay for faster commutes, while low-income commuters continue to pay for transportation with their time?

These toll lanes will offer the equivalent of driving in first class. But some public money did go into providing that premium experience, and the lanes will be patrolled by publicly funded state police.

For transportation engineers, the project poses just as many logistical questions as philosophical ones. Will people really use this system the way Fluor Transurban expects them to? How much will they be willing to pay? And how long will it take drivers to catch on to the new infrastructure? The technology itself is so complex the Washington Post even published a user’s guide for its readers (no, the price of the toll won’t change on you while you’re driving; yes, you will be caught – and pursued by collectors – if you try to beat the system).

I think I’d feel reasonably comfortable with HOT lanes being implemented in Auckland as long as they were done so in a relatively inexpensive way by converting an existing lane – rather than spending megabucks to add additional lanes. Though there’s still something a bit queasy around forcing lower income commuters to pay for transportation with their time. The fact that everyone gets stuck in congestion, no matter how rich or poor they are, has always seemed something of a leveller. But perhaps I’m being too ideological there?

What are your thoughts? Could something like this work in Auckland? Would it reduce congestion? Is reducing congestion really that important? So many interesting questions.

18 comments to HOT Lanes

  • Bbc

    I’ve always disliked this idea because it basically means that those that can charge it to the business eg John Key or the wealthy is general get congestion free transport and everyone else has to pay using their time as you say. Spend the money that it would cost to set this up on providing a congestion free option available to everyone – PT.

  • Ah the so called ‘Lexus Lanes’.

    That example you cite opens a whole bunch of cans of worms. The PPP deal makes me shudder; the fed gov loans the capex to a private company as well as directly funds it to build a road and allows the Priv. Co to tax road users for 75years at no known rate which is then policed by public funded agencies!?!

    But also there are provisions for free users too, variously defined.

    Could it be any more complicated? Will public good outcomes ever be able to be untangled or various costs and benefits meassured? I’m sure lawyers will be rich because of this.

    Americans are mad.

    • Greg N

      Have a listen on this BBC Radio documentary on the rise of the “priority queue” in the US http://www.bbc.co.uk/programmes/p00y2wt0 – talks about Lexus lanes and other “pay for quicker access” mechanisms.

      The HOT lane concept raises the ultimate question – what happens when everyone/almost everyone on the HOT lane is a “no charge” user – then the PPP can’t make money. Seems to me a recipe for a disaster of epic proportions.

      So, its only a matter of time before the National Government implements this with extreme urgency.

  • Mr Anderson

    Not just America. This scheme is how Treasury thinks we should solve Auckland’s congestion problem.

    • Bbc

      Yes because it suits trucks and businessmen who can easily externalise the costs – as well as national MPs in their government limousine. The rest of us have to then put up with even worse congestion and still no viable option that avoids congestion all the time.

      • jonno1

        I have no idea whether this is a good idea or not, but “Charge it to the business”?, “Externalise the costs”? I think most businesses pass on their costs to the end-users, otherwise they don’t stay in business for long (although I agree politicians don’t seem to be so constrained).

        Time is money, so for many businesses it would actually represent a cost-saving – I know if I paid say a $6 toll and saved 10 minutes of chargeable time then my clients would be winning big time, and hence their ultimate customers. The same applies for salaried/waged employees – even if your hourly rate is only $25 you will be costing your employer close to $75/contact hour.

    • Mr Anderson

      Yes agreed. Though interestingly even Treasury can’t bring itself to formally suggesting road pricing in a general way. The latest infrastructure reports from them are a hilarious hand-wringing exercise when it comes to road pricing. That might have to be my next post.

  • Matthew

    I think HOT lanes might be a natural progression of failed transport policies that puts all our eggs in one basket, ie motorways, and then a better solution of tolling the whole motorway as a public good (rather than granting 75 years of private revenue collection!!!!WTF!!!) and using that revenue to build effective Public Transport isn’t politically palatable to certain types.

    HOV lanes to me mean failed transport policies. HOT lanes mean to me failed tolling priorities. If you have either in your city your city has got it all wrong on some basic level. It’s not all about mobility, it’s should be about accessibility.

  • Greg N

    “I think I’d feel reasonably comfortable with HOT lanes being implemented in Auckland as long as they were done so in a relatively inexpensive way by converting an existing lane – rather than spending megabucks to add additional lanes.”

    Except in the US examples it seems that existing HOV lanes are replaced with HOT lanes, so you are in effect privatising part of the existing public road for a private benefit – while not actually solving the congestion problems.

    The whole concept we are told that makes PPPs superior is supposed to be growing the capacity (roads, prisons, schools, you name it), by using PPS to create *new* capacity where the public purse could not afford it.

    “Fixing” congestion using HOT lanes by removing normal/HOV road lanes is a big step backwards – doesn’t actually add anything to the transport mix and reduces the options for those of us who cannot or chose not to pay and as a result “fixes” the congestion alright – by “fixing” those who cannot use the HOT lanes into a life of being stuck in congested lanes.

    Instead of HOT lanes, why not focus on HOV/Bus lanes lanes where appropriate?

    If you’ve got a cogent argument for them lets hear it, but I doubt any American example of HOT lanes is directly comparable for this country, no matter how idealogically pure or appealing it seems it is to The Government and or The Treasury.

    if you can show that PPPs can actually work in an environment where they add to the solution, not merely reallocate the existing portions around so the PPP gets a lions share – and provided *all* the financial risk is assumed by the PPP- no Government loans to the PPP – while the benefits accrue to the state/public – maybe I’d consider it too.

    But thats a pretty big ask, and certainly not with a 75 year license to mint money as per your example gave the PPP.

    • Filde

      Firstly, “privatising part of the existing public road for a private benefit”. Private benefit can be good for society! If you really need to travel quickly, you can. Plus don’t forget that the users are prepared to pay. Could be a really nice revenue stream for the council in order to pay other transport. Also, it incentivises people to use the bus even more. Which leads to your next point which is just plain silly.

      Secondly, “while not actually solving the congestion problems”. How so? It will encourage car pooling or bus use because people travelling with people pay less. That sounds like a win?

      C’mon guys sharpen up.

  • Rob Mayo

    HOT Lanes – a very bad idea. HOT lanes and PPP…even worse. Learn from the PPP disasters in Australia and Japan. Dont let any form of PPP for transport or road tolling for that matter, take hold in NZ.

  • Filde

    This makes perfect sense (lanes, not ppp). Yes the wealthy maybe able to afford to use it a lot more than the poor but that will always be the case with any resource! They key thing is, that if you do need to travel quickly you have that option. I would guess that the lane will be priced so that only people under exceptional circumstances require it perhaps once a month. Even if you were ‘that’ rich you wouldn’t want to pay 5 times a week still!

    Regardless, as long as the rich pay enough to validate their use then they are paying US money! Consider it an optional tax wealthy people can pay. Sound very progressive to me.

    Of course, there are other modes of transport which the poor can start to use (or demand increase their demand for).

  • I don’t want to live in a New Zealand where even the morning commute along the motorway is divided between the haves and the have nots. If there are ever to be any changes to Auckland’s motorway network, they should be available to everyone. Not that I believe adding to or adjusting the motorway network is the answer anyway.

    • Filde

      Whilst I do agree equality is a big issue, transport is not the place to try and sort it out. Priced lanes will be available to everyone, if they choose to use it.

  • SteveC

    my understanding of the “Lexus lanes” in practicve was that there was a perverse effect (which I’ll see if I can source) where it wasn’t the wealthy who used them, but the “battlers” who held down two or three jobs and were at risk of loosing a job if they were consistently late

    the wealthy were less under threat and could afford to spend the extra time and save the cash

  • How do they count the occupants through tinted windows?

    Plus- there’s already those “inflatable lumberjacks” single women ride around with in the passenger seats to avoid looking like a victim. I guess you just buy two- and bingo- triple occupancy car…

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