Congestion pricing,transit subsidies and dedicated bus lanes: Efficient and practical solutions to congestion

We analyze urban congestion management policies through numerical analysis of a simple model that: allows users to choose between car, bus or an outside option (biking); consider congestion interactions between cars and buses; and allow for optimization of frequency, vehicle size, spacing between stops and percentage of capacity to be dedicated to bus lanes. We compare resulting service levels, social welfare and consumer surplus for a number of different policies and find that: (i) dedicated bus lanes is a better stand-alone policy than transit subsidization or congestion pricing. The latter is marginally better than subsidization but has a negative impact in consumer surplus. (ii) Efficient transit subsidies are quite large since in many cases first-best transit price is negative; establishing dedicated bus lanes or implementing congestion pricing render subsidies unnecessary for high demand levels. (iii) Both subsidization and dedicated bus lanes would count with public support while congestion pricing would probably encounter opposition. (iv) Transit subsidies and/or congestion pricing do not induce large changes on optimal bus size, frequency, circulation speeds and spacing between stops in mixed-traffic conditions: dedicated bus lanes do. (v) In all cases analyzed, revenues from congestion pricing are enough to cover transit subsidies; the optimal percentage of capacity that should be devoted for bus traffic is around one third.     

How rural is too rural for transit? Optimal transit subsidies and supply in rural areas

The optimal supply of rail and bus in low density areas is studied by calibrating a demand and supply model with three modes (car, bus and rail) to an existing low density corridor. Varying the length of the network, the frequencies and the size of the populations, allows to study the trade-off between the consumer surplus losses of the public transport users and the transit operation and maintenance costs savings. We find that for an existing rail network, the optimization of frequency is the prime source of welfare gains. The rail network is marginally beneficial in the sense that keeping the network is welfare improving as long as there is no major repair or replacement investment needed. When population in the smaller towns decreases strongly, it becomes welfare improving to close the existing rail network but a bus service remains beneficial for at least part of the network.     

Fares and tolls in a competitive system with transit and highway: the case with two groups of commuters

This paper deals with pricing and modal split in a competitive mass transit/highway system with heterogeneous commuters. Two groups of commuters that differ in their disutility from travel time, schedule delay and transit crowding, select the transit or auto mode for traveling from a residential area to a workplace. We compare three pricing schemes: the marginal cost-based transit fare with no-toll (called ‘m’ for short), the average cost-based fare with no-toll (‘a’) and marginal cost-based fare with time-invariant toll for subsidizing transit (‘s’), and derive a socially optimal combination of transit fare and road toll which minimizes the total social cost of the competitive system meanwhile ensuring no deficit to the transit side (‘o’). The main findings from the analytical and numerical results are: (1) the ‘o’ policy generates the most total transit usage, then ‘s’, ‘m’ and ‘a’ in order; (2) the total usage of each mode is independent of the demand composition when group 1 uses both modes; (3) the group 2’s aversion to transit crowding does not affect total transit usage; (4) group 2 has relatively larger welfare gains from some changes in pricing policy, such as changing ‘m’ to ‘s’ or to ‘o’; (5) the a-policy results in the highest total social cost, then ‘m’, ‘s’ and ‘o’ in that order.     

Quantity price discrimination in the air transport industry: The easyJet case

This paper extends the literature on low-cost carriers' pricing strategies by investigating the presence of quantity price discrimination implemented through a two-part tariff in offered fares. By analysing Internet fares for all easyJet flights departing from the Amsterdam Schiphol airport between March and April 2015, we search for price differentials based on the number of seats booked by a single consumer. We find that the lowest average unit price is associated with a single consumer reserving 5 seats. On average, the per-seat discount for a single consumer reserving 5 seats is €9.48, which is 14% of the single-seat fare. Additionally, a multivariate analysis shows that quantity discounts are greater for flights with a larger fraction of available seats at the time of booking, the seats are booked longer in advance, and the destination's gross domestic product per capita is greater. Conversely, quantity discounts are lower for longer routes, larger destination airports, and routes for which easyJet's market share is higher.     

Influence of varied parking tariffs on parking occupancy levels by trip purpose

The potential impact of parking-pricing on trip generation and modal choice is gaining greater acknowledgement within transport demand management research. However, although the aggregate effect of a transport demand management pricing measure is often noted or estimated, the potential varied impact of pricing measures on specific subsets of the market are often overlooked in the policy process. The variance of price impacts on different trip purposes, initially, and as tariffs increase progressively, is an important consideration for policy makers. Using the results from a survey on 1007 on-street parkers in Dublin, Ireland, this paper shows a progressively widening gap in price sensitivity between trips made for business purposes relative to non-business purposes, as the suggested parking pricing scenarios are increased. The results highlight the complication that the varied price sensitivity of particular market subsets can bring to development of a pricing policy and warns of threshold points where the gap between the price responsiveness of specific market subsets become considerably more pronounced.     

Analysing the spatial-temporal characteristics of bus travel demand using the heat map

As the basic travel service for urban transit, bus services carry the majority of urban passengers. The characterisation of urban residents' transit trips can provide a first-hand reference for the evaluation, management and planning of public transport. Over the past two decades, data from smart cards have become a new source of travel survey data, providing more comprehensive spatial-temporal information about urban public transport trips. In this paper, a multi-step methodology for mining smart card data is developed to analyse the spatial-temporal characteristics of bus travel demand. Using the bus network in Guangzhou, China, as a case study, a smart card dataset is first processed to quantitatively estimate the travel demand at the bus stop level. The term ‘bus service coverage’ is introduced to map the bus travel demand from bus stops to regions. This dataset is used to create heat maps that visualise the regional distribution of bus travel demand. To identify the distribution patterns of bus travel demand, two-dimensional principal component analysis and principal component analysis are applied to extract the features of the heat maps, and the Gaussian mixture model is used for the feature clustering. The proposed methodology visually reveals the spatial-temporal patterns of bus travel demand and provides a practical set of visual analytics for transit trip characterisation.     

The demand for reliable transit service: New evidence using stop level data from the Los Angeles Metro bus system

This study explores the role of service reliability in determining bus transit ridership. Using stop level service supply, demand, and performance data from the Los Angeles Metro bus system, I investigate whether reliability of a directional line serving a stop influences the number of passengers boarding the line at that stop, controlling for various other established factors affecting demand. This cross-sectional analysis of the variation in line boardings across about 1300 sample schedule time point bus stops served by about 300 directional bus lines over a six-month period uses a historical archive of real-time geo-referenced vehicle location data, and focuses on five different time periods, peaks and off-peaks, of a typical weekday. By evaluating two measures that capture different dimensions of bus service reliability, and by estimating a series of regression models, I find systematic evidence that higher average service punctuality (or schedule adherence) and lower variation in schedule deviation over time are associated with greater ridership, all else equal, particularly during the peak periods. This study also provides first empirical evidence that the effect of reliability on peak-period ridership is moderated by headway. The demand for reliability seems to be higher for lines with relatively longer headways. The findings indicate that service reliability influences transit mode choice and/or line/route selection, and suggest that system-wide ridership gains can be expected from reliability improvements. From an urban planning perspective, this study provides more evidence that good service quality can effectively compliment transformations in the urban fabric brought about by coordinated land use — transit plans to promote transit use.     

How large is the gap between present and efficient transport prices in Europe?

In this paper, we analyse the gap between present transport prices and efficient transport prices. Efficient transport prices are those prices that maximise economic welfare, including external costs (congestion, air pollution, accidents). The methodology is applied to six urban and interregional case studies using one common optimal pricing model. The case studies cover passenger as well as freight transport and cover all modes. We find that prices need to be raised most for peak urban passenger car transport and to a lesser extent for interregional road transport. Optimal pricing results for public transport are more mixed. We show that current external costs on congested roads are a bad guide for optimal taxes and tolls: the optimal toll that takes into account the reaction of demand is often less than one third of the present marginal external cost.     

Drivers of operational efficiency and its impact on market performance in the Indian Airline industry

India is considered to be one of the toughest aviation markets in the world, due to high fuel prices, overcapacity and intense price competition. It is therefore important to identify critical drivers of performance, which enable the airlines to survive and succeed in this emerging market with huge growth potential. In the current empirical study, we investigate the linkages between various performance drivers, operational efficiencies and market performance. An extensive data collection using primary and secondary sources enabled us to gather data on all the airlines operating in India, both private and public, for the period 2005–2012, on a variety of important parameters. We carried out a two-stage empirical analysis, which involved estimation of operational efficiencies during the first stage using Data Envelopment Analysis, and determination of performance drivers during the second stage using a two-way random effects GLS regression and also a Tobit model. Our findings suggest that while some of the structural and regulatory factors have an undesirable impact on airline performance, the low cost carriers in India have managed to achieve significant operational efficiencies. In addition, we find that, while cost efficiency is driven by a variety of factors, it is the technical efficiency which brings in better market performance through pricing power in the Indian airline industry.     

Restating modal investment priority with an improved model for public transport analysis

We compare analytically and numerically the optimised performance of different urban public transport modes for three objectives: total cost minimisation, profit maximisation, and welfare maximisation. We find that under optimal operation, buses provide lower waiting time and operator costs, therefore the only possible advantage for rail is providing a lower in-vehicle time cost if trains are faster. Using Australian data, we found that bus rapid transit provides a lower total cost, higher profit and welfare, up to their capacity. Introducing passengers dislike of crowding and train-specific attraction elements might make Heavy Rail the most cost effective mode for high levels of demand.     

Examining the cost structure of urban bus transit industry: does urban geography help?

The purpose of this paper is to expand empirical research on bus transit operation costs and test the hypothesis that physical and geographical characteristics are plausible explanatory cost factors. A translog cost function has been estimated, using a panel dataset of 1053 observations over 1996–2002 for a cross-section of 264 transit bus agencies in the US, combined with geographical and physical data processed with GIS technology. The results confirm the importance of geographical factors as determinants of bus transit costs. The trade-offs between geographical factors in shaping the frontier between economies and diseconomies of density are assessed. The implications of the results for public policy regarding competition are discussed.     

Making urban road pricing acceptable and effective: searching for quality and equity in urban mobility

Urban Road Pricing has been proposed many times as a powerful instrument to fight congestion in urban traffic, but has systematically faced a hostile political envirionment, due to lack of confidence on its promised (traffic) results and fear of its political consequences. Lack of action in this front is contributing to stable or even growing congestion problems in most large cities.This paper tries to address the problem with a fresh look at the objectives of road pricing and at the reasons for that political hostility. For managing and developing the urban mobility system, efficiency and equity are normally taken as the basic economic objectives. Sustainability objectives may be integrated in the efficiency objective if we are able to represent adequately the costs of the resources consumed in the process. Political hostility is normally based on having to pay for what was freely available, and on the risk of exclusion for those with little revenue available for the extra cost of driving into the city.Pursuit of efficency leads to suggestion of marginal social cost pricing but this is hard to explain to the public and application of this principle is fraught with pitfalls since some components of that cost get smaller as traffic grows (noise related costs for example). Pricing is still a good option but the objective has to be something easier to understand and to serve as a target for mobility managers. That “new” objective is quality of the mobility system, with a meaning similar to that of “level of service” in traffic engineering, and prices should be managed to across space, time and transport modes in such a way that provision of service is made with good quality in all components.Pursuit of equity leads to some form of rationing, which has often been associated with high transaction costs and abuse by the administrators. But the use of electronic road pricing should allow easy ways to address the rationing process without such high costs. The basic proposition is that all local taxpayers receive as a direct restitution of their tax contribution a certain amount of “mobility rights”, which can be used both for private car driving in the tolled areas and for riding public transport.These principles are easily applicable with a variety of technical solutions for road pricing, from the simplest cordon pricing to the more sophisticated “pay-as-you-go” schemes. The paper addresses this question of implementation and argues for increasingly sophisticated schemes, as people get accustomed to the principles and finer targeting of demand segments may be needed.     

Transport accounts—methodological concepts and empirical results

Although economic theory suggests social marginal cost pricing as the optimal pricing principle for transport infrastructure charging, information on the total (or average) social costs of transport and on the revenues from taxes and charges are important for pricing policy, for example for monitoring purposes and for the design of second-best prices. This paper provides empirical evidence on the total social costs and revenues for road, rail and air transport, covering all EU countries and Switzerland. It discusses methodologies to estimate the social costs of transport for all modes, focussing on practical experience with applying advanced methodological approaches both in the light of data quality and availability, and regarding the feasibility of conducting this type of research on a routine basis for transport policy.     

A socio-economic assessment of proposed road user charging schemes in Copenhagen

Road pricing, congestion charging, toll-systems and other road charging instruments are intensively discussed in many countries. Although many partial analyses of the consequences have been published, few overall socio-economic analyses have been carried out. The article presents such a socio-economic analysis of four different proposed road pricing schemes for the Copenhagen area. The purpose was to assess all benefits and costs involved, including impacts on traffic and environment, maintenance and financing costs as well as tax distortion effects. It was concluded that the socio-economic surplus of the projects depends crucially on the congestion level. With the current traffic level, road pricing will not yet be socially expedient in Copenhagen. However, if the opening year is postponed to 2015, the two most favourable schemes will turn positive. The analyses also showed that the magnitude of demand response by introducing road pricing is likely to have significant impact on the project surplus. This is an important observation because most short-term driven traffic models will then underestimate the projected surplus. Finally, it was found that the degree to which benefits outweigh costs depends considerably on the use of revenue. Although it may contribute to decreasing road congestion, recycling all of the revenue back to the transport sector turned out to be inefficient and costly.     

重庆轻轨票价方案研究

从理论上分析了影响重庆轻轨票价的主要因素,提出用拉姆齐(Ramsey)定价模型和“高峰负荷定价法”确定介于边际成本和盈亏平衡之间的最优票价。同时运用计量经济学的方法对轻轨价格需求弹性系数和运营成本做了近似估计,并为重庆轻轨制定出分段计程制票价方案。     

城市轨道交通的公交换乘问题与对策分析

城市轨道交通车站与公交线路车站的衔接设施按其规模和等级可分为3种类型:综合枢纽站、大型接驳站和一般换乘站。乘客换乘的主要问题可概括为设备接续和组织协调两大类,合理规划换乘设施可提高乘客的换乘方便程度及整个公共交通系统的运转效率。针对城市轨道交通的公交换乘问题给出了相应的优化对策。     

The impact of carbon emission fees on passenger demand and air fares: A game theoretic approach

The implementation of an environmental market-based measure on U.S. aviation industry is studied. Under this policy, each airline pays a carbon fee for the carbon dioxide emissions it generates. The impact on ticket prices and corresponding market shares is investigated via the joint estimation of an air travel demand model and an airlines' behavior model. In the demand model, aggregate air traffic data is used to determine the marginal effects of flight attributes that are specific to itinerary, airline and airport on market share. The airline's behavior model incorporates the carbon fee in the airline marginal cost. After the implementation of the carbon policy, the increased cost forces airlines to adjust ticket prices in order to maximize profits. The results obtained by the proposed model indicate a moderate price increase which strongly depends on the per tonne carbon price. Air travel demand falls from 2.4% to 21% depending on the carbon price level.     

Value-of-time distributions and competitive bus services

The effect of value-of-time (VOT) distributions on price and quality competition among differentiated bus services in a simple corridor is investigated. Three travel modes are considered: private car; higher-quality, higher-fare minibuses; and lower-fare, lower-quality conventional buses. With a given continuous distribution of VOT, users are assumed to minimize individual generalized trip cost and divide themselves among the three travel modes that are differentiated in travel time and monetary cost. Competitive equilibrium is established in terms of each bus firm's optimal frequency and optimal fare; also, the profitability of the two types of bus service is examined.     

Evaluating public transit services for operational efficiency and access equity

Assessing the performance of public transit services has long been an important yet challenging issue for transportation agencies and researchers. Transit service performance measurement reflects a very first step towards an efficient and proactive management, where public transit agencies are increasingly pressured to provide high-quality services in spite of constrained resources. However, the performance evaluation of transit services is complicated by an array of quantitative measures available to assess the goals and the diversity in the goals themselves, which usually include improving operational efficiency and providing equitable access. While much previous work has examined public transit services for achieving optimal operational efficiency and/or access equity separately, the interplay of the two has rarely been investigated to date. This article proposes a new method for evaluating the overall performance of public transit services via a combination of data envelopment analysis (DEA), Geographic Information System (GIS), and multi-objective spatial optimization techniques. The new method is applied to assessing the performance of fixed route bus services operated by the Utah Transit Authorities (UTA) in the Wasatch Front, Utah. Results demonstrate that the proposed method can effectively account for operational efficiency and access equity in an integrated framework, providing a more comprehensive assessment for transit service performance.