We recently saw the release of Stuck in traffic? Road congestion in Sydney and Melbourne by the Grattan Institute in Australia (https://grattan.edu.au/report/stuck-in-traffic/).
The report used Google Maps travel time estimates to examine congestion in Sydney and Melbourne and then made a series of recommendations. The headline recommendations are that both cities should implement congestion charging on the most congested CBD roads and in Melbourne, a London style cordon charge should be used. The report asserts that this can be made appealing to the public by offsetting the new charges by providing a discount on registration charges and earmarking funds into public transport improvements.
Various media outlets picked up on the report, which also attracted commentary from some researchers. Some academics explained that a cordon style approach was not ideal, with the best approach being network-wide road pricing. This suggestion was made on the basis that it will tackle all areas with congestion, rather than only the CBD.
We welcome the continued focus on congestion, and the Grattan Institute’s work in the report contributes strong evidence-based analysis to this important – but complex – issue. However the solution proposed in the report doesn’t account for the overwhelming local and international experience in relation to cordon charges and road pricing schemes. In short, only a few cordon charge schemes have been successfully implemented – but are now struggling to sustain congestion reductions in the face of new transport services and consumer behaviour. Also calls for broader road pricing schemes have been avoided like the plague by governments around the world – including in Australia.
As the report highlights, cordon charges have been successful up to a point elsewhere, such as in London and Singapore so why not in Sydney and Melbourne. This seems reasonable. Unfortunately, it fails to look at the current performance of cordon charges. London (http://content.tfl.gov.uk/mts-challenges-and-opportunities-report.pdf) is seeing their cordon charge become less successful at preventing congestion – partly as a result of point-to-point on-demand services such as Uber.
The advent of affordable on-demand transport services is seeing people reduce their public transport use within the cordon in favour of services like Uber. In the near future, this is likely to become an even bigger problem as autonomous vehicles are widely expected to significantly reduce the costs of these types of services making them ever more appealing.
Both Singapore (https://goo.gl/32NwtS) and London have recognised the flaws in their existing systems and are planning to significantly amend their approaches to congestion management, subject to a politically viable pathway (a particular issue in London).
Put simply, traditional cordon charges are the way of the past, and alternative approaches to congestion reduction are required in major cities moving forward.
The report also suggests a pathway for gaining public support for road usage charging. Unfortunately, the idea of discounting registration and putting money into public transport falls into the trap of the ‘average person fallacy’. This fallacy uses averages to varnish over the impact on individuals.
Broadly speaking – in the case of a cordon zone with offsets to registration that is broadly revenue neutral – approximately one third of people will be better off, one third largely neutral and one third worse off. Politicians get a bad wrap but the best ones know that a policy where one third of people are going to be financially worse off is a tough sell (putting it mildly).
Unfortunately, things get worse from a political perspective. The one third who are going to be worse off are not spread evenly throughout a city. They are most likely to be people who have limited public transport alternatives, live on the outskirts of the cities and tend to have lower disposable incomes. If we now correlate where these financial losers reside against a political map, you will quickly discover that there is a strong correlation with marginal seats. A policy that disproportionately impacts people from marginal seats and lower socioeconomic groups will not be taken forward anytime soon.
In order for any approach to demand management to work, it needs to both be able to achieve what it is setting out to do and have a viable political pathway. Unfortunately, despite some excellent data analysis, the Grattan Institute’s proposed cordon charge and road pricing approach does not meet either of these conditions.