The case for a roadway user fee and a congestion fee
Left unchecked, driverless cars are likely to expand the size of our cities and metros significantly. They will increase the speed of travel, reduce the mental cost of travel and potentially reduce the marginal cost of travel (if they are also electric vehicles). Each of these changes has been shown to (or can reasonably be expected to) increase travel and greatly expand our urban environments. But driverless cars won’t occur in a vacuum. They’ll occur within a political environment. And just as with previous transportation innovations, the policies of that political environment can exacerbate or mitigate the unintended social and economic costs of a new technology.
In the case of driverless cars (as well as all previous transportation innovations), the risk is sprawl. And, unfortunately, sprawl is not a benign artifact of transportation innovation. While sprawl can be helpful under specific circumstances and in moderation (it helped solve urban health and safety challenges during the industrial revolution), in excess it bears a heavy cost. This isn’t the place to delve into the pros and cons of sprawl, but there are two costs of sprawl that are particularly relevant to driverless cars: road infrastructure and traffic congestion.
Road infrastructure is expensive to build and maintain and unfortunately we’ve never had a very rational way to pay for it. The gas tax, which is the closest thing we have to a user fee for roads, only makes up a quarter of total revenue for roads in the Twin Cities, which is typical. The rest of the revenue comes from property taxes, income taxes, special assessments, etc, which are mostly unrelated to driving. The problem with this is that people who drive less than average are subsidizing those who drive more than average. The rewards people for living further and further away from their destination at everyone’s expense, but especially at the expense of those driving short distances. As a result, we have a transportation network that we can no longer afford to maintain. Roads and bridges consume far too much of our tax revenue and reduce resources for other important services.
Congestion is another potential consequence of driverless cars. Driverless cars are expected to travel more efficiently, but they are also likely to dramatically increase vehicle miles travelled. The problem is that roads are designed to handle only a certain amount of traffic. As soon as you add one more car to that road, it slows everyone down. Everyone loses time out of their day as a result of that extra car. Some may be familiar with this dilemma as the ‘tragedy of the commons.’ When people don’t pay a price for using a public good all too often we use to much of it and everyone suffers.
Solutions to both of these problems are simple, but they aren’t new and they’re politically fraught. To pay for road infrastructure, we should charge the people who use it. This would be a user fee based on distance driven and the weight of the vehicle. To alleviate congestion, the price of driving on a road should fluctuate based on demand. Thus, prices would be highest at rush hour, which will reduce congestion. Basically, by charging for congestion, those who can avoid rush hour will do so; those who can take a different route will do so; and those who can take a different mode (transit, bike, etc.) will do so. Overall the transportation system will be used more efficiently and effectively
Transponder technology would allow us to implement these policies today but politics have prevented anything other than very limited application. Driverless cars present a unique opportunity though, because they do not yet have the constituencies that exist for today’s (non-autonomous) cars. And if they are connected, they will be embedded with technology that would make deployment of these policies relatively seamless.
Ultimately, a user fee and a congestion fee would encourage us to make more thoughtful decisions about when and where we drive, as well as where we choose to live. As a result, we would discover if our roads are truly worth the enormous cost required to build and maintain them. Some roads will be clear winners, and others will not. Finally, those that are worth keeping will produce the revenue necessary to maintain them while mitigating the consequences of congestion.