Billing systems – necessary for roads to become utilities

I once read that AT&T was a billing system attached to a telephone network. The point was, the complexity of the phone network was incidental to the amount of technology and effort required to bill for the use of that network.

AT&T Phone Bill
AT&T Phone Bill

In contrast, road organizations often don’t have any billing system at all, and have no way interacting with their users. As they transition into road utilities, developing some form of revenue collection system from users (be it tolls or mileage fees, or indirect like fuel taxes) is essential to the operation and closing the loop so that users who benefit from the system pay for the cost of that system, and the revenue generated pays for the infrastructure users benefit from. It will become a core competency for which there will be a penalty to pay for outsourcing.

While discussion of money is often considered unseemly, if the benefits that transportation provides have economic value (and they do), users should be willing to pay for them, just as users pay for other utilities. Presently state DOTs typically have no direct revenue collection interaction with users. Turnpikes are often separate agencies, and gas taxes are similarly collected by third parties. But collecting revenue from customers is critical to transactions, and while once it was complicated to do anything other than coins or cash, today even food trucks and non-profit blogs can accept credit card transactions. (state agencies admittedly have trouble).

This is an important interaction with the consumer if done in person, or even remotely, an opportunity to manage the customer service aspects. While many utilities do this poorly (Comcast being the most obvious), it doesn’t have to be done poorly.

Initially we will think of transportation systems as charging per use. But there are many different services people may buy. For instance unlimited mileage, or unlimited off-peak mileage, or a limited number of trips per month with overage charges. All of these can be good for consumers, as it may save them money, or at least ensure the reliability of their price and travel time. It may also be useful for the organization operating the system, as they can adjust prices in advance (with fewer surprises) in order to smooth out demand. Pricing will be far more sophisticated than a simple marginal cost price charged in real-time. This implies a relationship with customers. Further, there may be value added resellers, who consumers can deal with, who each have a particular number of slots on the system, and can develop other pricing strategies.

Closing the loop between benefits and revenue has several advantages.

  • First it is confidence building, people will clearly see that their payments go to pay for the utility, and don’t get lost in the black hole of governmental general revenue. Even though gas taxes today are hypothecated to pay for roads at the federal and most state levels, many if not most consumers are unaware and disbelieving. Yet few doubt the electric utility keeps the money it collects monthly.
  • Second, it is educational to consumers, transportation users will see what transportation costs to provide at a particular level of service at a particular time of day. The resulting incentives can only reduce consumption.
  • Third, it is educational to the agency, the agency will see what it does that provides value, and what doesn’t. A revenue forecast will be coupled with demand forecasts. There will be a real penalty for mis-forecasting.
  • Fourth, it will lead to better investments, since the return on investment will be aligned directly with the agency’s decision making process.

The Future of the Federal Role in Transportation | Council of State Governments

Sean Slone at Council of State Governments writes about The Future of the Federal Role in Transportation

When the current federal surface transportation authorization bill, known as MAP-21, expires at the end of September, it likely will be replaced with a status quo plan.
Both the Obama administration and the Senate Environment and Public Works Committee recently have opted for a status quo approach to the role the federal government traditionally has played in sustaining the nation’s transportation system.
But a chorus of voices is once again advocating for a radical rethinking of those traditional federal and state roles in the transportation arena. Some see 2014 as a turning point since the federal Highway Trust Fund, which finances more than $50 billion a year in highway, bridge and transit projects, also appears past due for restructuring.
“The problem is the gas tax,” Rohit Aggarwala, an adviser to former New York City Mayor Michael Bloomberg and professor at Columbia University, wrote in a piece for Bloomberg View last year.
“(The gas tax) has declined in value drastically since it was last increased in 1993—even as the price of gas itself has tripled. As a result, both the main Highway Trust Fund and its transit account (often called the transit trust fund) are bankrupt.”

David Levinson, a professor at the University of Minnesota, also believes Congress should rethink and reprioritize what the Highway Trust Fund is used for. Levinson, another participant on this month’s webinar, co-authored a brief for the Brookings Institution’s Hamilton Project in 2011 with a title that gives a good idea of his position: “Fix It First, Expand it Second, Reward It Third: A New Strategy for America’s Highways.”
Levinson and co-author Matthew Kahn of UCLA propose that all revenues from the existing federal gas tax and tolls be redirected away from construction of new transportation projects and go “primarily to repair, maintain, rehabilitate, reconstruct and enhance existing roads and bridges.”
But new projects wouldn’t be left entirely high and dry under their proposal. They proposed a Federal Highway Bank to provide state funding to build new and expand existing roads. Funding would be contingent on strict performance criteria, such as a cost-benefit analysis.
“States would be required to demonstrate an ability to repay the loan through direct user charges and by capturing some of the increase in land values near transportation improvements,” they wrote.
The third prong of the duo’s proposal would involve rewarding states and local governments that exceed performance standards and achieve socially desirable outcomes on transportation projects in such areas as capacity, safety, equity and environmental improvement. A newly created Highway Performance Fund would reward states with subsidized loans and performance bonuses.

CSG Resources

Resources

Future of the Federal Role in Transportation: Thursday, May 29, 2-3 p.m. EDT

TransportationPolicythumbnail_3I am participating in a Webinar this afternoon on the Future of the Federal Role in Transportation organized by the Council of State Governments

Thursday, May 29, 2-3 p.m. EDT
CSG eCademy
Register Now!
MAP-21, the 2012 federal surface transportation authorization bill, is set to expire later this year. Meanwhile, the Highway Trust Fund faces an insolvency crisis due to rapidly dwindling gas tax revenues, and there appears to be little agreement in Congress on how to fund the federal transportation program. Some say that makes this year ripe for a reconsideration of the federal role in transportation and have proposed devolution of the federal program to the states. Many states continue to rely on the federal government for a significant portion of their transportation spending, however, and might be challenged to come up with revenues on their own from a limited tax base. This webinar will examine the pros and cons of devolution, the future of the federal role in transportation and what it could all mean for state and local governments.
Presenters:
Dr. Rohit Aggarwala
Principal, Bloomberg Associates
Full Bio >>
James Corless
Director, Transportation for America
Full Bio >>
Emily Goff
Policy analyst, Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation
Full Bio >>
David Levinson
Professor, University of Minnesota
Full Bio >>

Wanting to Drive and Quality of Driving

The Chevy Vega
The Chevy Vega

Our society has undergone many subtle and not-so-subtle changes in the past few decades. Among those related to driving, safety, and perceived safety, I believe there have been lasting effects.

When I was growing up, and I went for a ride with my mom, I would sit in the front seat of the car. I would wear a seatbelt (a habit formed because of the seat-belt ignition interlock on our Chevy Vega preventing the engine from starting without seat belts (a one-year experiment reviled by the driving public). My children sit in the back seat because of the rise of so-called child safety seats and air bags.

When I was growing up, I would walk down the block alone in pre-school and Kindergarten, and around the neighborhood by 1st grade, and all over town by 3rd grade. I would ride the ColumBus by 4th grade with my Package Plan card (giving me free rides in on the system, a benefit which has since been removed). Today there is a movement for Free Range Kids because such freedom has diminished.

Practicing pop sociology, I attribute this decrease in children’s freedom to the Atlanta Child Murders, the Missing Kids on the back of Milk Boxes, Adam Walsh, and Amber Alerts, all which are making child kidnapping seem much more common than it was before or than it really is. Couple this with the decreased number of children per family, meaning children are less disposable than they once were.

Milk Carton Kids
Milk Carton Kids

Today’s kids sit in the back seat, have a much diminished range, are more likely to be driven by parent or school bus to their school.

Drivers from other countries in the US are often derided as poor quality. However, keep in mind, they grew up seldom riding in a car at all if ever, and thus never learned the tacit rules of driving that many Americans are accustomed to. Perhaps the driving tests in the US are insufficiently stringent, but there are many things one can learn about driving just be riding in the front seat of a car, which immigrants, and today’s kids, fail to experience.

VW Drivers Wanted
VW Drivers Wanted

The net is that when you go through life as a passenger rather than a driver, your motivation for driving is lower, since you are not modeling driving yourself as you would watching through the front windshield, and your quality of driving is lower since you lack experience. These two factors presumably feed on each other, as people like doing what they are good at. I posit this as one of a number of factors that has led to a significant decline per capita travel.

Redesigning places and networks for autonomous vehicles (Fast Roads – Slow Streets)

Google has been secretly working on a car. We knew that they were working on autonomous vehicles, but they have also been redesigning the car for an autonomous world and came up with a pod car. The design will be familiar with those who have been following Personal Rapid Transit, though an important difference is that it is in principle trackless (or rather the entire road network has been sufficiently mapped in detail so the whole world is track, rather than bespoke track).

The promotional video is below:

Google Self-Driving Car Project Vehicle
Google Self-Driving Car Project Vehicle

The newest vehicle is designed for slow speed (25 MPH) on campuses, and is especially light. The low mass is important as it saves energy but also causes less damage when it accidentally hits something or someone. Combining the low mass with the lower likelihood of a crash at low speed will magnify its safety advantage for non-occupants in this environment compared with faster heavier vehicles (which privilege the safety of the vehicle occupants).

While I had been assuming the first market for autonomous or semi-autonomous vehicles would be the relatively controlled environment of the freeway, the relatively controlled environment of low-speed places makes sense as well. These are two different types of vehicles (high speed freeway vs. low speed neighborhood), and though they may converge, there is no guarantee they will, and perhaps today’s converged multi-purpose vehicle will instead diverge.

There has long been discussion of Neighborhood Electric Vehicles, ranging from golf carts to something larger, which are in use in some communities, particularly southwestern US retirement complexes. In Sun City, Arizona, for instance, people use the golf cart not just for golfing, but for going to the clubhouse or local stores.

Golf Carts in Sun City Grande, Arizona
Golf Carts in Sun City Grande, Arizona

They can do this because local streets are set with low speed limits, and there are special paths where they are not.

How many places already fit this bill:

  • Campuses
  • Retirement communities
  • Neighborhoods in master planned communities
  • True parkways
  • Others?

Note that many of these places have gotten a bad rap from the current flavor of urban planning which decries non-gridded networks. However keep in mind that non-grids have the advantage of discourage through traffic. Perhaps roads are too wide or too fast in these places, but that is much easier to fix through traffic calming than a too connected network.

We will not only be able to deal with such ideal places. We will also need to do retrofits.
How many places could fit this bill:

  • Cities designed before the automobile, where the grid can be retrofitted to disallow high-speed traffic
  • Anywhere there is space to retrofit a slow network in parallel with the existing fast network
  • Others?

So will people buy such cars with limited speed? Many will as a second or third vehicle, as they already do with golf carts. The arguments are very similar to those about electric vehicles.

The opportunity arises with Cloud Commuting, when such cars, as they are autonomous, come to you. They will be dispatched when they are practical for the trip at hand, which may either be a short distance within a `slow space place’, or can travel along a `slow path’ between nearby places.

This slow path is of course faster than bike paths and sidewalks, but slower than Principal Arterials and freeways.

Retrofitting cities for transportation has a long history, cities and transportation co-evolve. We redesigned our cities, which had originally emerged with human and animal powered transportation, first for streetcars, and then for the automobile, and in some larger cities for subways. We have also redesigned our taller buildings for escalators and elevators.

We did not however redesign cities for Segways.

We have already differentiated speed on links, and setting speed limits is one of the key jobs of the traffic engineer in ensuring safety. This is not only on the link in question, but important for other links as well. Travelers shifted away from freeways and onto less safe rural roads when the speed limit was set to 55 MPH in the 1970s, and back when it was raised in the 1980s, improving overall safety, though not necessarily safety on the freeways themselves (See Lave and Elias 1994).

The issue continues to be debated:

If you need a sign to tell people to slow down, you design your street wrong (via Strong Towns)
If you need a sign to tell people to slow down, you design your street wrong (via Strong Towns)

Minnesota lawmakers demand higher speed limits on more miles

As part of an expansive budget bill signed into law last week, state lawmakers nudged transportation officials to boost the speed limit to 60 miles per hour on lane miles where it can “reasonably and safely” be done. By 2019, traffic engineers must examine every mile of road with a 55 mph limit and determine if it is prudent to go higher.

It’s an enormous undertaking. There are 6,771 miles on two-lane/two-way state highways now covered by a 55 mph limit. Officials figure they’ll get through about one-fifth per year, starting as soon as next month. They will analyze each stretch’s crash history, design, lane width, sight lines and ditch slope.

“The fact we’re studying the roads does not mean you can jump to the conclusion that all roads will be raised to 60 miles per hour,” said Peter Buchen, assistant state traffic engineer at the Minnesota Department of Transportation.

But the agency has been moving in that direction. In 2005, the department bumped the limit to 60 mph on 791 miles of two-lane highways and added another 750 miles last year. Buchen said those were prime candidates — straight, wide-open stretches with clear sight lines and low incidence of crashes. He said limits on hillier, curvier highways probably won’t budge.

So I will posit several Axioms about transportation

  • Axiom 1: Some roads should be fast – The aim of transportation is connecting people with destinations. They can connect with more destinations if they can do so in less time. Ceteris paribus, faster roads will take less time.
  • Axiom 2: Some roads should be slow – Some roads serve neighborhoods and have traffic that is not just motor vehicles. Ceteris paribus, slower roads are more likely to ensure safety, a high quality of life, and increased interaction within the neighborhood. Without loss of generality, let’s call these roads streets.
  • Axiom 3: Fast roads attract traffic from slow roads – In general, people prefer to spend less time traveling, and will spend less time on faster roads. These roads will attract more people. There will be net reductions in traffic on streets that are made slower and net increases in traffic on roads that are made faster.

We thus should redesign our road hierarchy with these axioms and the possibility of slow vehicles becoming mainstream, developing a slow network so that these neighborhood vehicles cannot not only travel within neighborhoods or on campuses, but between them.

Speed Control in Israel (updated)

The following appeared across the email transom. The source is unknown. The forwarder stated:

One of my Internet Buddies sent it claiming it to be an Isreali invention. Who knows. Maybe it’s a joke, but none-the-less it appears to be a great idea, unless of course people swerve out of their lane and cause an accident!

When drivers pass by, they almost stop  completely due to the holes and to avoid car damages.
When drivers pass by, they almost stop
completely due to the holes and to avoid car damages.
This is a strategy currently used in Israel as a high-speed control. It is more economical than using cameras, radar, police officers, etc.
This is a strategy currently used in Israel as a high-speed control.
It is more economical than using cameras, radar, police officers, etc.
They move them around every day!
They move them around every day!

Update: part of an ad campaign by Pioneer Suspension.

Hi Dr. Levinson, I searched for the message that was written on the road in the pictures and came up with this:

http://www.hoax-slayer.com/fake-potholes.shtml