Connected and Sustainable Mobility
Smart Transportation Pricing Overview
To create an urban development infrastructure that increases efficiency of traffic flow and ultimately lowers emissions from vehicles and other transportation systems
Smart Transportation Pricing (STP) encompasses a set of pricing reforms intended to encourage more efficient travel behavior. In recent years, transportation pricing reforms—especially congestion charging—have gained consideration as a means of conserving energy and reducing both emissions and traffic congestion.
STP systems employ flexible, area-wide, time- and distance-based road-charging schemes, and feature a universal mobility account as an integrated transportation payment system. STP systems incorporate Geographical Positioning System (GPS) transponders and onboard units (OBUs) installed in each vehicle to track when and where it is driven.
STP systems are designed to increase public acceptability of road charging by improving travel options and providing positive incentives for using efficient modes of transportation. STP will allow more flexible pricing, reduce transaction costs, and encourage the modal shift from personal vehicles to public or cleaner transportation. In addition, it will increase economic returns for cities by increasing transportation system efficiency and avoiding the need to add capacity.
- Reduce the carbon impact of personal car transportation vehicles from congested roadways
- Reduce traffic congestion using area-wide, time-based, and/or distance-based flexible road pricing
- Increase public acceptability of road charging by improving travel options and providing positive incentives to use efficient modes
- Encourage modal shift from personal car to public transport by smart incentives linked with reward/loyalty programs
- Increase economic returns for the city by increasing transport system efficiency and avoiding the need to add capacity
Features
Smart transportation pricing requires several key capabilities.
- It should be capable of locating the vehicles so as to get the accurate data around time, itinerary, and distance. They are essential data for the city government to design or revise the road use pricing scheme. GPS is the key element for the feature.
- It requires the capability to design and deploy road use pricing schemes flexibly, which can be done by the pricing tool integrated with the standard electronic city map. Smart transportation pricing is basically transportation demand management tool and the price is the magic lever to do that. However, it is not the objective to eliminate the demand but optimize or disperse the demand in order to keep sustaining development while minimizing the environmental impact.
- It requires integration of the transportation services payment system. For the drivers, self driving is just one element of whole travel experience. Knowing the total cost, including road tolling, parking and public transportations, is more important for the drivers to make a right decision on his travel method. Also, the service users can conveniently pay the transportation services through a universal transportation account.
- Effective mobile communication infrastructure is a critical element for smart transportation pricing. Unlike current road use charging practices, smart transportation pricing requires very solid mobile communication infrastructure to exchange the data in real time.
Geographical Positioning System (GPS) and Wireless Technology
To levy road use charge, we should be able to create the evidential record that shows the vehicle was in the charging area at the certain time. “Pay as you drive pricing” is designed to charge vehicles depending on their real congestion or environmental impacts, which obviously proportional to the distance they run. For the reason, GPS is widely considered as a solution for this application in many cities such as Seoul, Amsterdam, Singapore, Dubai, London and Stockholm. The biggest advantage of GPS for road use charging is that it doesn’t need any infrastructures except for the On Board Unit (OBU) with GPS chipset in it.
Flexibility in Pricing Design and Deployment
GPS based smart transportation pricing grants two key benefits to the city government.
- It allows the government to develop the demand management strategy with true intelligence around the vehicle traffic patterns by location, time, types of vehicles and possibly the demography.
- It gives great flexibility in terms of designing and deploying pricing tactics. Pricing schemes can be designed and also deployed by the pricing design software integrated with the electronic city map. Based on the policy direction or the situation, the city government may change variables like unit charge per distance, charging time and area, weights by the types of vehicles, etc. Also, you can add the other variables if necessary.
Integrated Pricing and Payment System
Pricing integration doesn’t mean simple summation of several service charges. It rather means pricing strategy for the combined charge so that the city government leads the citizens to travel in more desirable ways. By doing so, the government will be able to manage the demand for roads, parking lots and the public transit services.
Payment system is another key element in realizing the pricing integration. By utilizing a universal account, that is, a virtual payment account associated with the OBU ID, integration with a variety of the payment methods, like credit cards, debit cards, Giro and bank account can present a seamless payment system. In addition to the convenience, it gives the service users a visibility around their historical service usages and hence to open a change to rethink and improve their transportation patterns.
Urban Mobile Communication Infrastructure
Mobile network infrastructure for the communication between the vehicles and the operation center is an essential part of smart transportation pricing. Unlike the current congestion charging schemes that communicate through the wired network on the event basis, smart transportation pricing absolutely requires mobile network infrastructure.
Travel Impacts
Smart Transportation Pricing travel impacts depend on several factors:
- Scope. When and where the fees are applied.
- Price structure. The magnitude of the fees, and how they vary by vehicle type, location and time.
- Analysis time period. In general, pricing effects tend to increase over time, so short-term impacts (less than two years) are typically a third of the magnitude of long-term impacts (typically more than five years).
- Travel flexibility. Some travel activities are more flexible in terms of time, mode, route and destination. For example, congestion pricing, with higher fees during peak periods, will cause a greater reduction in peak period travel if more employers offer flextime (they allow employees some flexibility in when they can arrive and depart).
- Quality of alternatives. The better the quality of alternative modes and destinations, the more willing travelers will be to shift, and therefore the lower the fee needed to achieve a given reduction in vehicle traffic.
When it is integrated with other pricing reforms, parking or public transit, Smart Transportation Pricing can provide more total benefits, because they have lower transaction costs (and avoid privacy concerns) and affect a greater share of total vehicle travel.