Create performance standards for operational effectiveness of a pricing program, define business rules for back-office operations, and refine operations practices based on needs.

Experience from road pricing programs in Europe and Asia

Czech Republic; Germany; Sweden

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Lesson Learned

Congestion pricing programs face political, institutional, and public acceptance challenges and concerns everywhere in the world. Over a 12-day period, from December 7 to 18, 2009, a multidisciplinary scan team from the United States interacted with the experts in Europe and Asia to develop an understanding of factors that contributed to the successful implementation of road pricing. Based on their international experience, the scan team offered the following lessons learned on addressing the operations and enforcement issues of road pricing programs.
  • Create performance standards for operational effectiveness. Performance standards ensure operational effectiveness through requirements in system design and procurement, as well as in service-level agreements for operations. Performance standards cover a wide range of operating interests. For roadside operations, they often address system and roadway availability, traffic data capture requirements, and image reject rates of video equipment. For back office operations, typical performance standards include the error rate in invoicing, call center customer wait times, unprocessable image rates, and uncollectable transactions. The best practice in pricing programs is to establish service-level agreements with both external contractors and internal agency service providers to maintain operating performance with financial incentives. Careful selection of performance standards is critical to ultimate outcomes. Systems that have emphasized accuracy and availability over financial performance have experienced high-cost operations with redundant systems and processes.
  • Define business rules for back-office operations. Best practice for back office operations depends on translating operating concepts into clear business rules and refining practices based on operating experience. Business rules are the foundation of successful back office operations. Agencies involved in their development and refinement tend to gain advantages in managing operating performance and costs. For instance, Stockholm’s move to a complete video-based system has resulted in 47 business rules governing the optical character recognition aspects of image processing, driving performance in accuracy and collections. Germany’s decision to outsource the entire toll operation to Toll Collect has resulted in good system and operating performance, but relatively high operating costs.
  • Refine operation practices based on experience and need. Many programs have found the need to refine operating practices after implementation to manage costs more effectively. Over time, this has resulted in contractor changes in several pricing programs to best meet the operational and technical requirements at a competitive cost. London and Stockholm have both recently changed operators, while Germany and the Czech Republic face long-term contracts that provide less flexibility for managing operating costs more effectively. Stockholm has also adopted a policy of insourcing that seeks to identify elements of the operation that may be managed with effective performance and lower costs by in-house resources rather than by outside services.
Road pricing programs implemented in Europe and Asia offer important lessons on exploring the use of market-based approaches to address traffic congestion and improve mobility. European experience emphasizes creating performance standards, defining business rules for back-office operations, and refining operations practices based on needs.

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Reducing Congestion and Funding Transportation Using Road Pricing In Europe and Singapore

Author: Robert Arnold, Vance C. Smith, John Q. Doan, Rodney N. Barry, Jayme L. Blakesley, Patrick T. DeCorla-Souza, Mark F. Muriello, Gummada N. Murthy, Patty K. Rubstello, Nick A. Thompson

Published By: Federal Highway Administration, U.S. DOT

Source Date: 12/01/2010

URL: http://international.fhwa.dot.gov/pubs/pl10030/pl10030.pdf

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Firoz Kabir


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Benefits From This Source

After implementation of the congestion charge in London, the number of vehicles entering the charging zone decreased by 25 percent, travel speeds increased by 30 percent, trip times decreased by 14 percent, and traffic delays plummeted by 25 percent.

In Germany, vehicle-miles traveled using cleaner trucks (Euro 4 and 5) rose 60 percent from 2 percent in 2005 to over 62 percent in 2009 because of the nationwide heavy-goods-vehicle tolling program.

In Singapore, the Electronic Road Pricing program has enabled maintaining target speeds of 45 to 65 kilometers per hour on expressways and 20 to 30 kilometers per hour on arterials.

The Stockholm congestion tax project reduced traffic congestion by 20 percent and vehicle emissions by 10 to 14 percent in the Central Business District.

Lessons From This Source

Be prepared to face the opportunities and challenges posed by political timetables, project deadlines, as well as pricing-equity issues for road pricing procurement and implementation.

Beware that schedule and costs of road pricing projects are affected by various factors including legislative outcomes, clarity and specificity of scope, and contracting methods.

Consider advantages of open-source designs and beware of legal challenges in road pricing systems procurement.

Consider stakeholder outreach and education, transport modes that offer an alternative to driving, performance measurement, and area geography with high importance in the planning phase for road pricing programs.

Create performance standards for operational effectiveness of a pricing program, define business rules for back-office operations, and refine operations practices based on needs.

Define clear goals and pay attention to key institutional and technical factors for successful implementation of road pricing programs.

Develop a statutory and legal framework for as a foundational step for levying road pricing fees and utilizing revenues.

Develop public outreach programs based on the cultural and political context of the project location and provide clear, salient, and timely messages about the purpose and benefits of congestion pricing.

Enforce congestion toll collection and create integration linkages between pricing system and motor vehicle registries to process violations.

For successful implementation of a road pricing program, strive for simplicity in policy goals and strong championing of the program by the executive and legislative leaders.

Understand that while the viability of pricing programs is impacted by political actions, pricing signal is a potential tool for developing a sustainable transportation system.

Use business and functional requirements to guide technology selection for a road pricing program and understand that the technology selected initially evolves over time.


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Lesson ID: 2011-00593