Linklist: March 30, 2012

Pioneer Press: St. Paul’s Union Depot won’t get Greyhound, after all:

“The St. Paul Union Depot, in the midst of a $243 million restoration, has lost one of its first major tenants before it officially reopens its doors.
Ramsey County officials had anticipated that the Greyhound bus line would relocate this year from near Rice Street and University Avenue to the refurbished transit hub overlooking Kellogg Boulevard.
Instead, the bus company has told the county it will leave St. Paul entirely.
“Rather than operate two stations in the Twin Cities, they will plan to close their St. Paul operation and consolidate service at their Minneapolis station,” said Josh Collins, a spokesman with the Ramsey County Regional Railroad Authority.”

[So the Union Depot will not really have buses and it will not really have trains, but it sure will be beautiful.]

Via Kottke: Railroad company logo design evolution

Kurzweil: The brain is wired in a 3D grid structure, landmark study finds :

“The brain appears to be wired in a rectangular 3D grid structure, suggests a new brain imaging study funded by the National Institutes of Health.
“Far from being just a tangle of wires, the brain’s connections turn out to be more like ribbon cables — folding 2D sheets of parallel neuronal fibers that cross paths at right angles, like the warp and weft of a fabric,” explained Van Wedeen, M.D., of Massachusetts General Hospital (MGH), A.A. Martinos Center for Biomedical Imaging and the Harvard Medical School.”

Linklist: March 28, 2012

BBC: Wireless highway charges electric cars as they go:

“Engineers in his lab are developing a way to wirelessly charge electric cars from magnetic coils embedded into the road. The car would pick up the power via another coil, meaning – in theory – that you would never have to make a charging stop again.”

Stephen Smith @ The Atlantic Cities: Why Tokyo’s Privately Owned Rail Systems Work So Well :

“Beyond the astonishing size and quality of the networks, Japan’s three major metropolitan areas, sometimes called the Tokaido megalopolis after its Edo-era road, are also home to a vibrant free market in transportation. Singapore and Hong Kong also have private companies, but competition is weak compared to Japan’s dizzying array of independent firms. Japan has by no means a completely free transportation market – even the private companies receive low-interest construction loans and are subject to price controls and rolling stock protectionism – but at the moment, it’s the closest thing this planet has.”

Linklist: March 27, 2012

Antiplanner: Semi-Driverless Cars Available Soon :

“Continental Automotive, a company that makes tires and other parts, has put together a semi-driverless car for Nevada. Under the rules in that state, which legalized driverless cars last year, a car must successfully go 10,000 miles without an accident before being marketed in the state. Continental’s car, which is based on a Volkswagen Passat, should pass that mark this week.”

KurzweilAI: New York to Beijing in two hours without leaving the ground? :

“The Evacuated Tube Transport (ETT) system (U.S. Patent 5950543, assigned to, Inc.) would take passengers from New York to Beijing in just two hours. Advocates of Evacuated Tube Transport (ETT) claim it is silent, cheaper than planes, trains, or cars and faster than jets.
How it would work: put a superconducting maglev train in evacuated tubes, then accelerate using linear electric motors until the design velocity is attained. Passive superconductors allow the capsules to float in the tube, while eddy currents induced in conducting materials drive the capsules. Efficiency of such a system would be high, as the electric energy required to accelerate a capsule could largely be recaptured as it slows.”

h/t Brendan Nee: Uber Blog » Uberdata: The Ride of Glory:

“One of the neat things we can do with our data is ask about rider patterns: are there weekend riders that only use Uber post-party? What about the workday commuters who use us every morning? It was while playing around with this idea of (blind!) rider segmentation that we came up with the Ride of Glory (RoG).”

Study: Zip Rail would boost state economy by $1 billion per year – Post Bulletin

I realize I just commented on this. The real study is here:
Summarized by Jeffrey Pieters the Post Bulletin: Study: Zip Rail would boost state economy by $1 billion per year – Post Bulletin:

Nearly $1 billion per year in increased economic activity would result from a proposed Rochester-to-Twin Cities high-speed Zip Rail line, concludes an analysis produced for Rochester Area Economic Development Inc.
“We think this study makes it clear — the benefits are significant and net-positive,” said RAEDI Executive Director Gary Smith.
The study, prepared for RAEDI by R.L. Banks & Associates, an Arlington, Va., consulting firm, was commissioned to answer this “central question,” Smith said — “What would happen if we shrunk the time and distance between the Rochester-area economy and the Twin Cities economy.”
The purpose of the study, Smith cautioned, is not to establish the feasibility of the route and its estimated $1 billion construction cost. The study was merely a statistical analysis of the likely economic benefits, calculated using certain established formulas and assumptions.
“We thought it was important to weigh in, if you will, on the potential economic effect of this,” Smith said. “There’s enough economic benefit here this warrants further study and analysis.”
The study assumed a nonstop route between downtown Rochester and Minneapolis-St. Paul International Airport. Such a route would attract an estimated 1 million riders per year, the study assumed.
Trains traveling at speeds between 150 and 220 mph would shave 30 minutes off the travel time by car and make the travel time itself potentially productive for the travel freed from the task of driving.
Benefits accrue from that increased productivity, as well as from tying together the unique biomedical and research economies of the two metro areas, said Frank Loetterle, transportation planner with R.L. Banks.
“There’s a synergy that occurs here … that doesn’t occur other places,” he said.
Some of the specific findings of the analysis include:
• Statewide, economic activity would increase by $987 million per year, and by $84 million in Olmsted County alone.
• Increased employment, over 25 years, would total nearly 7,900 jobs, including 3,250 involved in the planning, design and construction. More than $7.6 billion in individual income is attributed to the job increase — again, over the 25-year time span analyzed.
• The value of time-savings from the high-speed link would approach $30 million in the first year of operation, and vehicle gas consumption would be reduced by 2.5 million gallons. An estimated 40 road crashes would be prevented.”

OK, to be more serious. Think about these results:
A line that carries 3000 people each way per day maximum (10 one-way trips of 300 passengers each) will generate 7888 jobs.
Only 610 of those jobs are in Olmsted County. So most people who benefit are elsewhere in the state because of the accessibility benefits given to the airport and the Mayo clinic … ? We have evidence of all this job growth from what? There is no US experience on which to validate job increases associated with HSR infrastructure.
Driving is assumed to be non-productive time. They have not heard of autonomous vehicles, which I hope will be quite available in well less than 30 years. Thus time savings is all of auto travel time, not just the difference in travel times. Passengers of autos seem to be counted as non-productive as well. The sick Mayo patients on-route will be productive. Nice to hear. Maybe they will want to rest up?
I will not comment much on the safety benefits, which are relatively small. It is a needlessly dangerous section of highway which could (and undoubtedly will) be fixed for less than the cost of this ZipLine. Nevertheless, cars will get safer over time for a variety of reasons, even if you don’t assume automation.
Petroleum use is assumed fixed, 2.5 million gallons. I.e. in 30 years, autos will still get 20.3 mpg and buses 3.7 mpg.
Tax revenue is counted as a benefit.
The annual ridership is assumed to be about 1 million, which exceeds the best-case forecast of the Minnesota Comprehensive Statewide Freight and Passenger Rail Plan of 750,000. In 2008, total trips between Twin Cities and Rochester where just under 2 million, so they expect to capture half of all of the trips.
Unless those trips are destined for the rail stations on either end, they will need to transfer. Most people do not live at the airport or in walking distance of downtown Rochester. Aside from Mayo patients flying in, there is not much market there. I would be surprised if that were anywhere near 1 million patients per year.
At present there is no congestion between Rochester and MSP on highways. A distance of 77 miles is covered in 75 minutes.
I am sure I am missing obvious critiques, since I am doing this on the fly. Feel free to chime in.

High-speed link between Rochester, Twin Cities could pay for itself, report claims  – Finance & Commerce

Finance and Commerce teases me: High-speed link between Rochester, Twin Cities could pay for itself, report claims  – Finance & Commerce:

“A high-speed rail line between Rochester and the Twin Cities would more than pay for itself with the extra economic benefits and tax dollars generated, according to a report released Monday by economic development officials in southern Minnesota. The report from Rochester Area Economic Development says a rail line would generate $27.54 billion in economic benefits, including …”

Alas, I don’t subscribe to Finance and Commerce, so I will have to make up the ellipsis
(1) $1 billion in added noise benefits. Since noise reduces property values, renters and new owners will be able to buy land for cheap.
(2) $10 billion in opportunity costs avoided. Since the HSR line will result in other bad construction projects avoided, and since we can’t afford everything, there is clearly a benefit here.
(3) $5 billion in added profits for the operators of the line. The line will cost billions to operate over time, so that must be a benefit to those paid to operate it.
(4) $3 billion in construction benefits. We are paying people to build the line, they benefit. Therefore all construction costs are benefits.
(5) $9 billion in development. There will be new development in Rochester and the Twin Cities. All of that can be attributed to the HSR.
(6) $.5 billion. There will be development taking place in Rochester that would otherwise take place in Mankato. That is another benefit.
(7) $35 billion. The Mayo Clinic won’t move to Phoenix.
Was I right?

Linklist: March 26, 2012

PiPress: Mall of America plans $200 million expansion:

“that would add a second hotel, more retail space and a medical office tower at the megamall.”

[Because it is not big enough already. Economies of agglomeration]

Strib: $100 million in flour power to transform Pillsbury A-Mill :

“Now, a robust rental market and an ambitious plan from a local developer could mean new life for the site. Dominium Co. plans to convert the complex into 255 rental apartments for low-income artists, including studios and performance spaces. The project will cost more than $100 million, making it one of the most expensive residential construction projects on the books in the Twin Cities.”

[Maybe I misunderstand something, but why are we spending $392,000 per unit for low-income artists. Surely we can spend less to support low-income artists. It's not like we think low-income artists will pay $392K per unit, or will rent it for $4K per month. That is more expensive than my house. Low-income artists, like low-income non-artists, should be able to rent used housing in regular neighborhoods or industrial areas. I am suspicious that one can create an artists district, rather than having one emerge (as happened in NE Mpls or along University Avenue before the LRT priced the artists out). It's not like the preservation of the skin of the building somehow enhances the Twin Cities skyline. This is pseudo-presevationism at its worst.]

Reason supports privatizing the post, that is no surprise, but they dug up this “As Lysander Spooner, who challenged the government mail monopoly when he formed the American Letter Mail Company in 1844 noted in his essay, “The Unconstitutionality of the Laws of Congress, Prohibiting Private Mails,”:

Universal experience attests that government establishments cannot keep pace with private enterprize in matters of business (and the transmission of letters is a mere matter of business.) . . . [Private enterprise] is constantly increasing its speed, and simplifying and cheapening its operations. But government functionaries, secure in the enjoyment of warm nests, large salaries, official honors and power, and presidential smiles . . . feel few quickening impulses to labor, and are altogether too independent and dignified personages to move at the speed that commercial interests require. . . . The consequence is, as we now see, that when a cumbrous, clumsy, expensive and dilatory government system is once established, it is nearly impossible to modify or materially improve it. Opening the business to rivalry and free competition, is the only way to get rid of the nuisance.

Lysander Spooner is one of those great Americans about whom you should read the wikipedia article. E.g. he was an ardent abolitionist who supported the right of the South to secede.

HuffPo: Tacocopter Aims To Deliver Tacos Using Unmanned Drone Helicopters:

“Look, up in the sky! It’s a bird! It’s a plane!
It’s an unmanned drone helicopter shooting a taco from space down at you and your colleagues during lunchtime!”

Holian and Kahn: The Impact of Center City Economic and Cultural Vibrancy on Greenhouse Gas Emissions from Transportation. … “vibrant downtown areas are associated with lower greenhouse gas (GHG) emissions from driving, and with greater public transit use.”

We update Glaeser and Shaprio’s analysis using data from the 2000s. Unfortunately, the results do not bode well for dense cities, and by extension, the environment. While New York City grew by a little more than two percent, the population of Chicago fell by seven percent. We investigate the growth rates in over 1,000 cities in Section 1, and find that although density was not as bad for growth as it was in the 1980s, it was worse for growth than in the 1990s. Our results indicate that dense cities have quite a long way to go before we can say they are “back.”

When including our vibrancy measures, we find that downtowns with more hotels and more restaurants per capita are also associated with less driving.

Our findings with respect to the vibrancy-public transit connection show that places that have an educated downtown population, a low murder growth rate, and a high number of live-music performers are associated with higher public transit use.

Alexis Madrigal @ The Atlantic: Guess What’s the Fastest-Adopted Gadget of the Last 50 Years:

“When we think about the great consumer electronics technologies of our time, the cellular phone probably springs to mind. If we go farther back, perhaps we’d pick the color television or the digital camera. But none of those products were adopted as fast by the American people as the boom box. “

Metafilter: Traffic jams without bottlenecks—experimental evidence for the physical mechanism of the formation of a jam :

“The mathematical theory behind shockwave traffic jams was developed more than 20 years ago using models that show jams appearing from nowhere on roads carrying their maximum capacity of free-flowing traffic – typically triggered by a single driver slowing down. After that first vehicle brakes, the driver behind must also slow, and a shockwave jam of bunching cars appears, traveling backwards through the traffic.”

Linklist: March 23, 2012

Seriously Steve Dornfield at MinnPost? Minnesotans are driving less, MnDOT says :

““It appears that as gas prices increased motorists began taking fewer trips, carpooling and using more public transportation,” it said. Transit ridership in the metro area grew from 67.2 million in 2004 to 94 million in 2011, an increase of nearly 40percent.”

[2004 was the year of a 6 week transit strike. of course ridership was low. Claiming a 40% increase in ridership off a distorted base is just misleading.]

Brad Plumer @ WaPo:
Why can’t we just leave infrastructure spending to the states? – The Washington Post

Yesterday, I pointed out that Rep. Paul Ryan’s GOP budget proposal would require the federal government to spend less and less on transportation over time. Reihan Salam asks whether this is really such a bad thing. Can’t state governments just pick up the slack?

That’s possible, sure. But it hasn’t happened so far. As a recent report (pdf) from the Congressional Budget Office detailed, the federal government’s share of infrastructure spending has already been shrinking since the 1960s and 1970s. And the states, which still provide the vast majority of spending on roads and highways, haven’t made up the difference. The end result? There’s less infrastructure spending overall as a percent of GDP:

Reihan Salam @ The Agenda on National Review Online: The Implications of the Path to Prosperity’s Long-Term Spending Trajectory:

Upgrading our transportation networks may well cost between $200 and $262 billion over the next decade, or perhaps even more. It’s not obvious, however, that all of this money has to come from federal coffers. Other approaches might involve relying more heavily on state governments and private investors, as Edward Glaeser has suggested, and perhaps focusing federal efforts on a “fix it first” agenda. This doesn’t mean that Ryan’s approach is the only answer. But it’s worth decoupling federal spending from transportation spending — the categories do not and should not overlap, and it seems entirely reasonable to argue that the non-federal share of the transportation spending pie should grow over time.

David King @ Getting from here to there: Crude Measures of Density:

“Density is a somewhat nebulous concept. It seems straightforward but it isn’t. Recently many proponents of increasing residential density (Glaeser, Avent, Yglesias among others support economic arguments for density) point to the constraints that land development regulations have on denser development. I am sympathetic to these arguments and agree on general terms, though I doubt that regulations are as onerous with respect to density in places like Manhattan. I’ll mention two reasons today and return to these issues in future posts.”

Urban Demographics: Motorways and slime mould’s rationality (!?) [A topic long-time transportationistas are long familiar with.]

James Meek at London Review of Books blog: Human Revenue Stream:

“The commodity that makes water and roads and airports valuable to an investor, foreign or otherwise, is the people who have no choice but to use them. We have no choice but to pay the price the tollkeepers charge. We are a human revenue stream; we are being made tenants in our own land, defined by the string of private fees we pay to exist here. If it’s not obvious that we’re being sold to investors, it’s partly because the idea of privatisation is sold so hard to us, in a way that is hypnotically familiar. First, the denigration of the existing service, as if a universally accepted truth is being voiced: the schools/hospitals/roads are crumbling/failing/ second-class. Then, the rejection of government responsibility: we’ve no money/bureaucrats are incompetent. Finally, the solution: private investment.”

Diamond Geezer on the new Exhibition Road Shared Space by the Museums and Imperial College in South Kensington.:

“It wouldn’t work in every street, nor would there be £29m to make it happen, but Exhibition Road’s transformation appears to have brought about an effective and efficient co-existence.”

Londonist (h/t Annie Mole) gives us a: A 3-D London Tube Map | Londonist:

“Every time a new addition is made to the Tube map, it gets a little more crowded. The clean lines of Harry Beck’s original get a little more confusing. Where will we be 100 years from now, when additional lines, stations, cable cars, hover rails and levipads are added to the diagram?
Slapping a third dimension onto the map could be one solution. The extra depth allows for extra layers of information.”

Annie Mole at Going Underground’s Blog has some 3D posters and other diagrams.

KurzweilAI reports: The ‘birdman’ is FAKE: Filmmaker behind wing suit flight video admits footage was a hoax and says it was ‘online storytelling:

“The Dutch “bird man” who posted a video showing a successful “test flight” of a wing suit contraption has admitted that the amazing feat was a hoax all along.
Viewers became sceptical after it emerged that no scientists actually knew “Jarno Smeets,” who claimed to have created the technology.
Now Smeets has confessed that he is actually a “filmmaker and animator” named Floris Kaayk, and has described the faked footage as “online storytelling.”

Perils of Privatization and Pricing as Proposed – Towards a Public Utility Model of Roads

The 2012 proposal by David Cameron to “privatize” UK roads, by contracting out management of the roads in exchange for a stipend of taxes (but notably not tolling existing roads, only new construction) (Watt, 2012) is interesting, and promises a short-term revenue fix (and possibly better managed roads) in exchange for less funds downstream. In Great Britain, after World War II public corporations managed most utilities (electricity, gas, water, and rail) while others remained within the public sector (post and telecommunications, roads). The Thatcher administration successfully privatized British Telecom in 1984 and other public utilities in subsequent years, including bus transit and some rail transit, but not roads. The government retained the power to regulate these natural monopoly industries.

In many countries, freeways are operated by private sector firms under a franchise or concession agreement with the government, which usually retains underlying ownership of the road (Daniels and Trebilcock, 1996; Poole, 1997; Poole Jr and Fixler Jr, 1987). As of 2004, more than 37 percent of motorway length in the EU25 plus Norway and Switzerland was under concession, and 75 percent of that was privately operated (Albalate et al., 2009).
There is even limited experience in the US with contracting operation of existing roads, which has not been without controversy, the most notable examples are the long-term leases of the Indiana Turnpike and Chicago Skyway (Samuel and Poole, 2005). New toll roads built and operated by private firms are much more widespread, and include the Dulles Greenway and Pocahantas Parkway in Virginia, the Adams Avenue Turnpike in Utah. This experience applies well to toll roads, and variants such as High Occupancy/Toll (HOT) lanes (Poole et al., 1999) and Truck-only Tollways (Samuel et al., 2002). California’s SR-91 median toll lines were privately built on public right-of-way, and later bought out by a public toll agency. Presently, the MnPass HOT lanes in Minnesota manage toll collection under a concession to private organizations. A large share of the few new limited-access roads built in the US have adopted the toll model, and more could follow suit (Fields et al., 2009; Poole and Samuel, 2006; Poole and Sugimoto, 1995; Staley and Moore, 2009).

Yet, most roads, and even most freeways, in the US are not toll roads. Strategies such as mileage-based user fees or vehicle mileage taxes, which replace and improve upon existing motor fuel taxes have been vetted, and may ultimately be implemented. But allocating funds to particular roads, while technologically straight-forward, may face resistance from privacy concerns.
There are technical solutions to privacy issues, but implementing these, in the face of the desire of security agencies to be able to track individuals, will be difficult. It may turn out with cameras, mobile phones, and other devices, we lose privacy about our whereabouts well before road pricing is implemented. The solution may be as Brin (1998) suggests a Transparent Society, where everyone can watch everyone, the state does not have a monopoly on monitoring. Based on historical experience (Levinson, 2002), implementing tolls on existing untolled roads is likely to be politically difficult and unpopular. A 2007 petition in the UK to then Prime Minister Tony Blair beseeched:

“The idea of tracking every vehicle at all times is sinister and wrong. Road pricing is already here with the high level of taxation on fuel. The more you travel the more tax you pay.
It will be an unfair tax on those who live apart from families and poorer people who will not be able to afford the high monthly costs.
Please Mr Blair forget about road pricing and concentrate on improving our roads to reduce congestion.”
– The petition, now closed, could previously be found at:

This petition to scrap “the planned vehicle tracking and road pricing policy” was signed by more than 1.8 million UK residents by 2007, more than any other petition in history. It clearly has informed Cameron’s proposed policy.

Further the problem of rates differing by route (such as marginal cost prices, the theoretical ideal from a micro-economics perspective), would undoubtedly increase system complexity and distrust, with likely only small gains from system efficiency. Our best estimate from computer models is that moving from a user equilibrium solution, where each driver selfishly chooses his or her own route, to a system optimal solution where each driver chooses a route that is best for society is less than 5 percent reduction in total Vehicle Hours Traveled in the Twin Cities. This suggests the “price of anarchy” (the ratio of user equilibrium to system optimal travel times) is not large on real road networks, despite externalities such as congestion, and imperfect competition among roads. Much larger gains are to be had if travelers shifted to different times of day, but that need not be route-specific.

If the rates were set by private firms in an unregulated manner, monopoly links would have higher prices and be rightly perceived as exploiting their position. In a robust network, monopoly routes are scarce, often there are many viable paths between given origins and destinations, but local monopolies remain, especially on poorly designed, or geographically constrained networks. While there are innovative economic solutions it is likely that a disjoint system of too many road operators, in addition to being complex and unpopular, may be inefficient as economies of scale and network externalities are not fully realized.
Albalate et al. (2009) describe recent toll road privatizations as indicating a change in government intervention which sees “transitions from internal control on processes and inputs to external control on performance outputs.” Toll privatization results in an increase in price regulation. In Europe, privatization entails transfer of management and operation (through concessions) for a time period, while underlying asset ownership is retained by the government. It is widely observed in the public management literature that found that more agency autonomy is accompanied by an increase in external controls. Still focusing on the outputs (the performance measures) rather than on how those measures are achieved should, by decentralizing decision-making, produce a more efficient outcome.

Economic solutions to the monopoly problem include auctions for the privilege for operating routes which would allow the public to recover these monopoly profits, or reverse auctions where firms would bid to charge the lowest rate to operate the route. Future franchising such as Present-Value of Revenue (PVR) auctions may entice government agencies to reconsider the toll finance mechanism. The PVR auctions are similar to the so called Demsetz auctions (used in the Build-Operate-Transfer (BOT) approach) with the exception that private firms compete through bidding for the present value of toll revenue they want to obtain from the project. In this way, the consequences of these auction are: no renegotiations (franchise terms are lengthened or shortened to meet bid PVR); no special clauses such as competition (the governments may build additional competing infrastructure projects because of previous consequence); incorporated buyout option (private firms receive their PVR bid, and governments acquire the infrastructure without bargaining behavior); and others. However, disadvantages of PVR auctions include: no incentives to increase demand (if demand increases it shortens the franchise term), and thus projects that require higher service quality may not be appropriate for PVR auctions (Engel et al., 2006).

A model that has been insufficiently explored in the US is that of public utilities. Many utilities share with transportation systems the characteristic of having a networked structure. Most, if not all, of these utilities are operated on the basis of a payment-for-use system. Utility pricing varies regionally, some locales vary prices by time of day, and users often have the option of choosing different rate plans. These models are never strict marginal cost pricing, but they may improve upon average cost pricing. There are strong parallels between public utilities and transportation services, though some differences exist in the nature of the services consumed, the role of technology, and the structure of institutions and decision making (Hillsman, 1995).

Water faces similar difficulties to transportation in the ambiguity of appropriate property rights. Institutional reforms began in the 20th century to better allocate water resources and to improve the efficiency of water use. The perspective of water changed from being perceived as a free good to a scarce economic good took place around the world (Saleth and Dinar, 2004). Institutional reforms differ by political setting and social environment (Saleth and Dinar, 1999), who observed that decentralization (from central to state and municipal governments) took place in Mexico, Brazil, while corporatization and privatization occurred in Chile, Brazil, France, United Kingdom, Australia, and New Zealand, among others.
Hillsman (1995) suggests four categories in which utilities have developed to manage demand:

  • Altering infrastructure,
  • Packaging services,
  • Substituting technologies, and
  • Changing the price of service.

Transportation agencies have considered all of these, but implemented them weakly. In reverse order: Prices are largely invariant, technological (modal substitutions) are not viable for most passenger or freight users, bundling and packaging of services is not considered when looking at pricing, and infrastructure is hidebound to engineering standards, and difficult to modify. One could easily imagine more creativity on the part of road providers in all of these aspects. The constraints on the application of creativity are due to the engineering culture in a public agency, where risk-taking is discouraged if not punished, and certainly never rewarded.
With some modification, it seems possible to transfer the utility model of governance to road transportation. This model separates the organization delivering the service from the client, is subject to rate regulation, and implements a more direct, user-pays system of financing. This model could depoliticize management of the existing transportation system. Whether rate regulation is in fact economically necessary is the subject of debate; for instance Stigler and Friedland (1962) argue there is no difference in prices in the electrical sector due to regulation, because electricity is competitive with other energy sources in the long run. One expects from experience with other utilities, toll roads, and road concessions in other countries that it would be politically necessary to have some public guarantee of an upper bound on the rates a road utility could charge, as provided by a regulatory agency. The risk is that an upper bound on revenue would be too tight, resulting in financial losses (and one of the causes of municipal takeover), as occurred in the then private mass transit sector throughout in the US in the early to mid 20th century.

Such a system would transform but not replace public highway or transportation authorities as the party responsible for providing and maintaining roads. One example of a transportation system that has transitioned to more of a utility-based model is the road authority in New Zealand (Starkie, 1988). This system was designed to be self-financing, with what was originally called the National Roads Board allocating charges among users on the basis of costs incurred. Three types of costs were identified: load-related costs, capacity-related costs, and driver-related costs (covering signing and other costs not related directly to road use).

There are other elements of costs not included, such as access costs (the cost of accessing the network from land and the cost of a connected network, which can be separated from capacity costs (related to the width of the roadway), and load costs (related to the thickness of the roadway), and environmental costs (both how the system deteriorates due to weathering independent of use, and how the environment is degraded due to use).
Vehicles are split into two classes on the basis of weight, with vehicles less than 3.5 tonnes paying a charge in the form of a fuel tax. In the US, Oregon has a weight-mile tax for heavy trucks. Heavier vehicles pay a distance license fee, which is essentially a form of weight-distance tax. Such a system is relatively straightforward and requires minimal new technology, leading to low collection costs compared with most proposed road pricing systems. (Newbery and Santos, 1999) have also estimated the costs and relevant charges for a similar, though hypothetical, system of user charges for the UK.

These types of road user charging schemes contrast with user charges based on a mileage tax concept utilizing GPS systems (Forkenbrock, 2008). There are a variety of potential technologies for assessing mileage taxes, most use GPS (or an equivalent such as cellphone triangulation) to identify location, since one of the advantages of these types of systems is the ability to charge different rates for different locations (city vs. country, freeway vs. local street, congested vs. uncongested road). GPS receivers do not normally transmit information. GPS-equipped vehicles can log the vehicle location internal to the vehicle. Some additional communication technology, which might report a reduced form of information (e.g. total amount owed) would be used to complete the transaction. For instance, a pilot study in Oregon (Zhang et al., 2009) had a chip in the vehicle log distance traveled by zone (an aggregated version of location) and time of day, without storing the precise location. The chip only reported to the external source the total charge owed, calculated by an onboard algorithm. So no detailed tracking information was shared. Simpler technologies such as a mileage based user fee would simply record the odometer reading, but this would not allow differentiation by time of day or location.

While the road user charging concept remains an attractive prospect, its application may still be many years away due to a combination of privacy concerns, implementation and transaction cost issues (Levinson and Odlyzko, 2008), and technological development issues. Some of these concerns might be obviated under a different governance structure, where it was neither the legislative nor executive branch of government making these decisions. Public utilities have a “mean level of trust” of 42%, (Jenkins-Smith and Herron, 2004), which is much higher than the trust in the federal government, which hovers in the 20% range (Pew Research Center for the People and the Press, 2010). Dynamic pricing, as suggested for toll roads, significantly reduces consumer’s trust in an organization (Garbarino and Lee, 2003), as prices are no longer predictable and feelings of price gouging take place. Other US surveys suggest that the public feels dedicating the gas tax to transportation (hypothecation in the British jargon) would be a good idea. Of course this already occurs in most states and at the federal level, the public just does not realize it, and the political debate does not help. Hypothecation does not occur in localities, where roads are in fact funded out of general revenue, typically property taxes.

The discussions of road pricing for financing and congestion management in the US are still largely under the guise of existing institutions doing the pricing. To date, this has essentially been a non-starter. Perhaps with institutional reforms, reconfiguring state and local DOTs as public utilities rather than departments of state and local government, the logic the public applies to roads will change, from one of a public service paid by the pot of general revenue to a fee-for-service proposition paid for by direct user charges.


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