Report on the Value Pricing Pilot Program Through April 2018

Executive Summary

Congestion pricing works by shifting some rush hour highway travel to other transportation modes or off-peak periods and by encouraging solo drivers to carpool or forgo making a trip altogether. By removing a fraction (even as small as 5 percent) of the vehicles from a congested roadway, pricing enables the traffic to flow much more efficiently, allowing more vehicles to move through the same physical space.¹

Although drivers unfamiliar with the concept initially have questions and concerns, drivers who are more experienced with congestion pricing usually support it because it offers them a reliable trip time. Transit and ridesharing advocates also appreciate the ability of congestion pricing projects to generate revenue and the financial incentives that make alternatives to driving more attractive.

The U.S. Congress established the Congestion Pricing Pilot Program in 1991. It was subsequently renamed the Value Pricing Pilot Program (VPPP) under Section 1216(a) of the Transportation Equity Act for the 21st Century (TEA-21) in 1998 and continued through the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU). The VPPP purpose is to demonstrate whether, and to what extent, roadway congestion may decrease through the application of demand-based pricing strategies. Seeking to measure the impact of such policies on driver behavior, traffic volumes, transit ridership, air quality, and availability of funds for transportation programs, the original program included discretionary grants funding for demonstration projects. The program awarded approximately $65 million in discretionary grant funds between 2008 and 2012, after which no additional discretionary grant funds were authorized. However, since 2012, the United States Department of Transportation (DOT) has retained the ability to grant States authority to enter into cooperative agreements for projects that require tolling authority under this program.

Although the Federal Highway Administration (FHWA) no longer actively solicits VPPP projects, States and local governments continue to explore value pricing and the potential of deploying tolling strategies with FHWA. The FHWA staff continues to provide significant technical assistance to all project partners for project development, implementation, and pre-implementation activities. The FHWA staff also oversees the development and distribution of quarterly reports detailing VPPP accomplishments.

Key Findings

Through a comprehensive Congestion Pricing Program that includes the VPPP, as well as follow-on initiatives, such as the Congestion Reduction Demonstrations (CRD), Urban Partnership Agreements (UPA), and Express Lanes Demonstration programs, FHWA has now funded more than 135 congestion pricing projects and studies across 21 States and the District of Columbia. The VPPP-supported projects demonstrate the technical feasibility of congestion pricing and, where implemented, have influenced user decisions to change their travel behavior. The VPPP projects and studies have provided many valuable lessons, with several findings demonstrating the significant progress made in the past few years toward successful deployment of comprehensive congestion pricing strategies and programs, especially in congested urban areas:

• The VPPP helped to spark a rapid increase in priced managed lane deployments and the continued acceptance and deployment of this strategy in major metropolitan areas across the United States. During the late 1990s, only four priced managed lane facilities operated in the United States. Very few transportation professionals had experience with implementing and operating congestion pricing on managed lanes. However, as of April 2018, 47 corridors nationwide operate with priced managed lanes, with an additional 23 managed lane projects under construction. All VPPP projects with High-Occupancy Toll lanes have experienced a marked increase in new accounts/transponders, tolled trips, and gross revenues, all of which are indicative of the public's growing acceptance of pricing.
• Pricing can have a positive effect on transit ridership. Express buses using tolled lanes had faster speeds and shorter travel times. For example, the 95 Express in Miami, Florida, added express bus service for both Miami-Dade and Broward Counties, including 22 new articulated buses and 10 new express routes from Broward County to Downtown Miami. Average express bus ridership before the 95 Express Project was 1,746 passengers per day and, as of July 2017, average ridership increased 323 percent to 5,645 riders per day.
• The VPPP created interest and enabled deployment opportunities within congested urban areas for other demand-based pricing strategies, broadening the incorporation of non-driving transportation alternatives. The deployment of non-toll congestion pricing strategies—such as parking pricing, pay-as-you-drive insurance, car sharing, bike sharing, and dynamic ridesharing—has grown and experienced further successes. As an illustration, the goBerkeley Travel Demand Management (TDM) Program survey results showed an overall 3.1 percent reduction in automobile use, with 94 percent of participants reporting that they were walking more, 90 percent indicating that they had increased transit use, and 19 percent stating they were biking more. Among almost 500 Easy Pass program participants, 82 percent said they upped Alameda Contra-Costa Transit use because they had the pass, and nearly half said they deployed their pass at least twice a week. The carshare program included 15 businesses and over 60 participants. Results indicated that more than 10 percent of participants used carsharing as a new travel alternative.
• Efforts to integrate value pricing with parking have led to increased usage of previously underutilized parking spaces. Efficiently pricing parking spaces, as part of the SFpark pilot project in San Francisco, California, led to a gradual reduction of fully occupied blocks and the increasing occupancies for underutilized areas. Staff who led the LA Express Park project in Los Angeles, California, also observed a similar relationship in occupancy after the implementation of value pricing.
• Equity impacts have proven to be minimal, yet remain a concern to the public. In early 2018, the National Highway Cooperative Research Program (NCHRP) released research report 860: Assessing the Environmental Justice Effects of Toll Implementation or Rate Changes: Guidebook and Toolbox. The document shows the practitioner when and how to apply the tools in the toolbox that provide a framework to measure the impacts of tolling, as well as the means to engage low-income and minority population in the decision-making process.
• The VPPP has been a tremendous asset to partners in the transportation industry during the past two decades. Project partners often express their perspectives that priced managed lanes would not be as widespread without the program's influence. The program has enhanced the visibility of these projects, partly through its consistent involvement with industry forums, such as the Transportation Research Board (TRB), the American Association of State Highway and Transportation Officials (AASHTO), the International Bridge, Tunnel and Turnpike Association (IBTTA), and FHWA-sponsored workshops.

Moving Forward

The FHWA continues to regard congestion pricing as a critical congestion management tool. The FHWA anticipates that, in the future, connections between multiple demand-based pricing approaches will enhance the effectiveness of comprehensive and coordinated regional programs. Second-generation pricing approaches are likely to combine regionwide pricing strategies, such as vehicle miles traveled fees, cordon pricing, and regional pricing, along with a non-toll blueprint. The goals of these strategies are 1) mainstreaming demand-based pricing into the mindset of transportation professionals as a viable option, and 2) expanding public acceptance of demand-based pricing as one part of a suite of transportation choices. The FHWA will continue to use proven outreach strategies to educate and inform State and local agencies about demand-based pricing strategies, including tolling and non-tolling efforts.