Imagine that it’s 2030 and you’re planning a road trip. You pick up your phone and open an intuitive new app, connected to technology in your vehicle, that pays the associated maintenance, environmental and congestion costs of your trips. After all, that’s how our government is both driving forward its sustainability mission and funding new or upgraded infrastructure projects.
You tell the app your destination and preferred departure and arrival times. The app then provides you with the possible options, journey times and prices. Then, you select the fastest route and your required arrival time. The app confirms the quote and provides you with a guaranteed journey time.
Along the way, the app might offer you various incentives to switch your travel mode or alter departure time, with the goal of reducing demand on a congested route. You may also be given the option to pick-up other travelers to share the cost, as well as options to purchase add-on products, like parking at your destination. If enabled, the app may also send offers and advertisements for destinations that you may pass on your route, such as a discount for stopping off at a particular fueling station.
Perhaps best of all, if you’re not to your destination in time (within a 15-30 minute window) then you get a discount on your fee. If you’re more than 30 minutes past your originally quoted arrival, you’ll even be fully refunded.
Sounds cool? We think so too! Unfortunately for all of us here in 2019, technology and road governance across the industry isn’t quite up to speed…yet.
But what if we showed you how Jacobs and Volterra’s proposed solution for the U.K., which combines road pricing with modern technology, could make trips like these a reality – offering more reliable, sustainable and faster journeys, with a user experience like no other?
£ 51 B+
in estimated economic impact over 30 yearsgenerated by P4P solution
decrease in traffic recorded with use of similar road pricing systems in places like Singapore and Stockholm
“Current charges for road users in the U.K. are significantly higher than they would need to be to eliminate congestion. The problem is that the costs and charges are ineffective at changing behavior as they are mostly average or fixed costs. P4P creates charges that maximize the behavioral responses and hence better roads for less cost.”
The case for road pricing solutions
As the arteries of economic activity, roads connect workers to jobs, goods to markets and people to places. During the last half-century, traffic has risen by almost 400%, but road mileage has increased by only 30%. As a result, congestion (and its severity) has grown significantly, predicting journey times has become less reliable, trips have become more incident-prone and air quality has rapidly declined.
We pay high costs for using our congested roads. Through fuel duty and Vehicle Excise Duty (VED), British drivers pay just over £30 billion (US $37 billion) a year to HM Treasury, of which less than 25% is actually spent on roads. Not only are journey speeds declining, but so is the condition of the U.K. road network with an estimated 13 years’ backlog of essential maintenance. Today, there’s no link between what drivers pay and what is spent on the road network.
In 2017, Jacobs and Volterra – a consultancy specializing in the economics of transport and property development – set out to change the narrative, developing a road pricing system, with modern technology, to offer a long-term solution to the U.K.’s uncompetitive transport infrastructure.
Introducing our Pricing for Prosperity solution
Our solution, called Pricing for Prosperity (P4P), is comprised of an app and black box device that offers motorists choices of routes and prices depending on time of day, expected levels of congestion, type of vehicle used (to take into account pollution impact) and provides a guaranteed journey time. Any delays on the journey lead to either a partial or full refund, or potentially a compensation payment from the highway authority. In addition, motorists making regular trips could, when congestion is predicted to be severe, be offered money either not to travel or to do so at less busy times.
Within P4P, each trip is given a single monetary charge comprising three elements:
- A congestion charge – which will rise in line with, and hence reduce, congestion. No congestion means no congestion charge. All the money raised would be invested in improving the overall transport network.
- An environmental charge – the adverse effects of road use, such as noise and air pollution, would be paid for by drivers and spent on mitigating those adverse effects. For clean and quiet vehicles, the cost could be zero.
- A maintenance charge – which would cover day-to-day maintenance and operational costs and ensure all roads are maintained to a high and safe standard.
P4P can be implemented today, rolled out using ubiquitous mobile phone technology and an automotive black box with telematics capability which can receive and transmit information about the vehicle itself and its location. The black box will be a standardized device, reliable, able to operate in all weather conditions, crash and tamper-proof. With both the app and black box technology, our solution gives drivers the option to simply get in their cars and drive away, or enter their destination in the app and pay a lower price.
Embracing the innovations of tomorrow
P4P can accommodate technological advances – it can be both analogue and digital, for automated or human-driven cars, rural or urban areas, motorways or 20 mile-per-hour streets. Our system is flexible, adaptable and the pricing structure can be refined instantly. Since the 1990s, vehicles began to connect wirelessly to other sources to promote safety enhancements. Futher improvements in vehicle connectivity will make the management and implementation of the pricing scheme cheaper and easier, with most cars produced after 2010 having some form of telematics or connectivity features.
One of the major barriers to road pricing implementation is concerns related to privacy of user data. Blockchain technology, an integral part of P4P, can radically enhance privacy while ensuring secure transfer of data. By using the opportunities that blockchain technology can offer for transportation, road pricing and, in the future, self-driving technology, will become more palatable to the public. Blockchain technology is changing quickly and makes it possible for people to pay for their road use in a different way (including sharing or hiring a connected, autonomous vehicle (CAV), while safeguarding privacy and providing a secure method of payment at the same time.
With P4P’s blockchain technology, concerns surrounding privacy and data security in a ‘Big Brother’ society are minimized because all users’ journey data will be anonymized when used to manage the road network regarding congestion and road maintenance.
This real-time data from all vehicles and a good understanding of how people respond to pricing, based on data analysis and experiments, will result in enhancements toward network refinement and optimization. Machine learning and future artificial intelligence can potentially be used in the future to manage the system and monitor users’ behavior to keep traffic flowing at optimum speeds, all the time.
The app can even be imagined as a virtual personal mobility assistant, similar to how Google Assistant or Amazon’s Alexa have both become intelligent personal assistants to users. With intelligent personal assistance on devices, users could simply say a wake-phrase, such as “Okay, car” and head on their way to a smarter, safer journey.
The road to a prosperous future
P4P will fundamentally change how roads are paid for. It’s a holistic solution for better U.K. roads that ensures that the road network is self-sustaining, covering all of its costs (direct and indirect) from user charges; the revenues flow directly from drivers to the appropriate authority and for the appropriate purpose; and it will enable funds to be spent on catching up on the backlog of road maintenance and providing new and improved transport infrastructure in a transparent and effective way.
Additional investment in roads alone will not ensure safety, which is why P4P incentivizes highway authorities to make roads safer and ultimately lessen the amounts of fatal or serious injuries with a safety incentive fund. Additionally, the congestion element of P4P will not only reduce congestion and improve journey reliability, but also free up funds to develop more transport capacity to better serve travelers with enhanced options for rail and other transit types. The marginal pricing approach also sends better signals to users about the external impacts of their road use, encouraging smart, sustainable and economic decision when it comes to trips.
P4P is designed to operate with the technology available today but can easily be refined to account for future technology such as connected and autonomous vehicles. The technology behind our solution offers freedom of choice for drivers, whether to get in and drive or input their destination in the app before departure and enjoy the benefits.
Our P4P solution was honored as a finalist in the 2017 Wolfson Economics Prize, the most significant global economics prize after the Nobel Prize.
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