A visit to the road price store

Hello and welcome to the Road Price Store.

If you need a road price, you're in the right place. We have a full range and can offer a price to meet your needs.

Have you chosen a type of road price before, or should I briefly explain the three main types?

Let’s start with this one, Revenue One.

If you aim to raise revenue, this is the system you need. It is our most popular product used in over a hundred countries and on more than a thousand facilities.

The base model Revenue One system charges a flat fee for each trip and deposits the money into your account. Clients often use Revenue One to pay off construction loans; for example, one client in the States paid off the Holland Tunnel project in record time. Others collect revenue one location and build elsewhere. One of our Australian clients used Revenue One on a Harbour Bridge to successively fund several nearby tunnels.

Revenue One is completely reliable. It ensures every trip is charged, including lonely late-night trips and everyone stuck in peak congestion.

I should point out that this is the base system. With the base model you must choose and adjust the fee yourself.

Setting the optimal fee is challenging. A West Coast customer (I will not mention their name) tried to fund a new road tunnel with the Revenue One system but set the fee too high, causing user numbers to drop significantly. Now they face a dilemma: increasing the fee could further reduce traffic, while lowering it might not boost revenue enough to cover loan payments. We advise clients to avoid loan commitments until they determine actual revenue.

The Advanced Package for Revenue One helps you adjust fees over time. Customers often neglect fee adjustments for inflation and other factors. For example, the Harbour Bridge fee in Australia remained unchanged for a decade and then again for a decade leaking revenue all the time.

Over here is our Flow Two system. We assign a number to each product to prevent customers from installing the wrong price.

The Flow Two system is ideal for eliminating congestion during peak times, improving travel speeds, and maximising throughput during these periods.

Prior to installing the Flow Two system, we calibrate each road to determine the maximum throughput achievable before overloading occurs. Each road has a different tipping point. We then enter this maximum load into the system and connect it to a vehicle counting sensor. There are several types of sensor available in our inventory. Finally, we link the counting sensor to the payment gantry.

The brains of the Flow Two system is our proprietary fee-adjustment package.

The goal is to set a fee that keeps peak traffic a touch below maximum capacity. If the fee is too high, road space will be underused during peak times. On the other hand, if the fee is too low, the number of cars trying to get down the road will be greater than the road can handle. Drivers will be sitting in congestion, and you will have taken their money for nothing.

Optimising fees with Flow Two boosts throughput. One of our West Coast customers increased throughput by a third with the Flow Two system.

When Flow Two is activated, it monitors road usage and proposes a table of fees that align the rising and falling loads across the day. It will set a zero fee when the load is low, such as at 2 am. As traffic increases towards the tipping point, fees rise to prevent the load exceeding the maximum.

When you are ready, you switch on the fee collector to start charging people. You can watch the fees influencing the flows.

The Flow Two system adjusts fees quarterly (or every 5 minutes if you prefer), raising or lowering them as appropriate. The algorithm ensures the fees are as low as possible but as high as necessary.

Revenue from the Flow Two system is variable and unpredictable. During off-peak times, you may not earn any income.

Flow Two is useful for any congested road, but surprisingly it has not been a big seller despite operating smoothly in Singapore for decades.

Funnily enough, most of our Flow Two sales are to the electricity industry. They use it to prevent blackouts by reducing peak loads on the generation and distribution system. They call the system time-of-use fees. Several times we have explained that Flow Two is a level-of-use system, but they insist on their term. Of course, they are the customer, and they can call it what they like.

Finally, over here we come to the Reduction Three package.

Reduction Three helps you reduce consumption. You use this dashboard to choose the factor you wish to reduce, such as total vehicles, heavy vehicles, or diesel engines. All options are available in the pull-down menus.

You set the reduction level with this dial, moving it to 10% or 20%. It goes up to 100% if you want. Reduction Three will then charge the fee needed to meet the target you have dialled in. Higher reductions mean higher fees.

The Reduction Three system is popular in Europe. Customers use it to reduce air pollutants like particulate soot and nitrous oxides. Clients often target older, heavier diesel vehicles. Others aim to cut overall traffic, such as reducing through traffic in an area.

One of our long-standing clients, in Sweden, is about to implement Reduction Three to achieve dual objectives: decreasing pollution levels and reducing the number of vehicles.

Reduction Three has an optional Rule package. Some customers, like London, choose to write their own rules. Unfortunately, London's rules had many exemptions, allowing vehicles like taxis and delivery vans to fill the space freed up by the Reduction charge. If you are writing your own rules, try not to have too many exemptions.

I should warn you that Reduction Three may not generate significant revenue. That should not matter if your main aim is to ensure that no horrible old diesel engines pass under the gantry. It would be valuable to shut out all diesels, but to achieve that you would have to accept revenue of zero dollars.

Before I get out of your way so you can explore the packages, I will leave you with a final thought. Above all, make sure you select the road price package that matches your aim.

You can think of Revenue, Flow, or Reduction as tools like a knife, fork, and spoon – each excels at one task but not others. It is difficult to eat soup with a fork.

I say this because recently, an East Coast customer came into the store. They needed funds for transit upgrades, so we recommended the Revenue One system. That looks good, they said, but they also wanted to optimise traffic flow and reduce congestion, so we introduced them to the Flow Two pack. Excellent, they said, but we also want to reduce vehicle numbers in the centre. OK we said, then you need Reduction Three.

They went away to have a think about which of their three aims was most important to them. It will be interesting to see which one they choose.

Lead image: https://www.modelemporium.com.au/

Harry Barber is a transport consultant in Melbourne, Australia

He is writing the Inside Guide to Congestion Pricing for roads & parking and publishing it episodically and free of charge on Substack.

https://insideguide.substack.com/

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