Distance-dependent Congestion Pricing for Downtowns

Dissertation by Lewis Lehe
Adviser: Professor Carlos Daganzo 


Since 1998, six cities have implemented programs that wirelessly charge vehicles to drive in their central business districts: Singapore, London, Stockholm, Gothenburg, Milan and Valletta (Malta). Evidence shows this practice, which we refer to as “zonal pricing,” typically generates modest amounts of revenue while dramatically curbing downtown traffic congestion—a benefit of particular importance to buses and trams that easily fall behind schedule in slow traffic. Unfortunately, all the schemes implemented to date share a major potential drawback: vehicles pay the same toll regardless of how far they travel once inside the tolled zone.

The goal of this study is to develop a theory of zonal pricing that accounts for heterogeneous trip lengths. Such a theory is more complex than traditional accounts of road pricing, but its problems are made easier by the burgeoning macroscopic theory of traffic in congested networks. Through simulation and analysis, we show the gains from tolling long and short trips differently can be substantial. Additionally, an interesting result is such a system could free up traffic with tolls so low that they raise very little money—a piece of good news for drivers but perhaps bad news for underfunded transit systems. In the end, we offer advice for setting up a distance-conscious zonal pricing system in a real city.


The dissertation work is still ongoing.