Talk to a transport economist for more than a couple of minutes (seconds?) and the issue of road pricing will come up. “If only we could introduce road pricing, all our problems would go away,” says your transport economist. Congestion – gone. Greenhouse gas emissions – significantly reduced. Public transport efficiency – dramatically increased. And so on..
So why is implementing road pricing so difficult and so rare? The most common answer is “politics”, but essentially that’s just a proxy for the concept being considered unacceptable by most of the population. And one of the main reasons why road pricing is so unpopular is that it’s seen as unfair, particularly for poorer people.
In a recent Planetizen post, Canadian transport academic Todd Litman looks further into this assumption that road tolls and other means of pricing are unfair and harm the poor.
A major obstacle to efficient pricing is the common, but often inaccurate assumption, that such fees harm poor people. This is generally wrong, and reinforces automobile dependency (an automobile-oriented transportation system which offers inadequate alternatives to driving and therefore forces people to drive more than optimal), which tends to harm physically, economically and socially disadvantaged people overall.
While it is true that a given fee is regressive (each dollar represents a greater portion of income for a poor than a wealthy person), tolls are generally less regressive than other roadway expansion funding options because poor people drive relatively little on such highways: many poor people are retired or unemployed, lower-income workers often have local jobs that do not require highway commutes, and if they do commute on major travel corridors they are more likely to use alternative modes, or travel off-peak because they often have off-peak work schedules.
If the money raised from road pricing or tolls is spent on improving public transport or active transport, then the progressive nature of the funding is enhanced further:
As a result, road tolls are generally less regressive than financing urban highway expansion by increasing fuel taxes (which all motorists pay, not just urban commuters) or general taxes (which everybody pays regardless of how much they drive), and can be progressive overall if a portion of revenues are used to improve alternative modes, such as public transit, so lower-income travellers have better alternatives to driving.
Similarly, poor people often benefit from parking unbundling (paying directly for parking, rather than having it automatically included with building rents) and cash out (being able to choose cash instead of subsidized parking) because they tend to own fewer cars and value the opportunity for financial savings.
There are a couple of ares where Litman’s analysis doesn’t necessarily hold true for Auckland, particularly in relation to how the current debate about road pricing is happening – as an additional revenue raiser, rather than as a replacement of existing funding sources.
- Tolling or road pricing is probably only fairer if it replaces other, unfair, methods of funding transport – such as petrol taxes (which unfairly charge those travelling off-peak for infrastructure only required at peak times) or rates. If tolling or road pricing is just another tax on people to pay for a bloated transport programme then chances are they will be unfair because it will be the poor who end up suffering the most from the extra charges (as those charges will be the greatest proportion of their income).
- Auckland currently has a very different relationship between income and mode choice compared to US cities. In most US cities it seems that the poorest areas have the highest levels of public transport use – therefore improving PT using money raised from tolls or road charges has the potential to play a wealth distribution role. As illustrated by the map below – which shows car modeshare for journey to work trips in the 2013 census – Auckland seems to have the opposite patters, with poorer areas often being highly car dependent.
Overall, it seems as though road pricing could be introduced in a way that’s considered “fair” by Aucklanders – and therefore may be able to overcome political opposition. However, this would require a couple of pretty big changes to how it’s currently being proposed by the Council. Firstly, the money raised would need to be used instead of existing funding sources, rather than just being another tax. Secondly, some dramatic improvements in the attractiveness and affordability of alternatives to driving appear necessary to reduce car dependency in Auckland’s poorer areas.
The new bus network and the City Rail Link (which vastly benefit the south and west respectively) may meet the second hurdle. A whole pile of unnecessary roading projects need to be killed off to pass the first hurdle, reduce some of the regressive existing transport funding tools, and therefore make road pricing and tolling actually fair.