1.1. Background .....................................................................................................1-1

1.2. Purpose and Overview ....................................................................................1-2

2.1. Singapore Area License Fees and Electronic Road Pricing............................2-1

2.2. Central London Congestion Charging...........................................................2-12

2.3. Congestion Charging in Center of Stockholm ..............................................2-20

problems. Individual countries, as well as the European Union (EU), have established

congestion pricing demonstrations and operational programs.

Southeast Asian countries and in Canada, Australia and New Zealand. Numerous cities

across Europe, Asia and Pacific region have set up limited demonstration projects.

U.K., France, Norway, Sweden, Germany, Switzerland, South Korea, Singapore and

Much like the U.S experience, overseas pricing projects are breaking new ground and

travelers are willing to pay for improvements in transportation service and that pricing

for the development of well designed and locally acceptable project plans.

environmental and energy costs, and providing new sources of funding for transportation

investments. However, despite the promise and potential shown in early pricing projects,

experience suggests careful planning, design, outreach and evaluation are still important

proposals and plans.

To further understanding of international pricing, this “Lessons Learned from

International Experience in Congestion Pricing” report provides a summary of selected

most relevant literature relating to the acceptability of congestion pricing based on more

traffic entering entire urban regions. Others have introduced congestion pricing on

Following this introduction, Section 2 provides a summary of selected projects with

lessons most relevant for U.S. officials. Of more than twenty pricing projects

implemented overseas, this report focuses on three comprehensive area wide projects that

have become operational after long gestation periods. The projects are in Singapore,

These projects have been selected because U.S. cities are beginning to look with much

promising pricing concept for the U.S. audience.

In addition to the lessons derived from the three key projects, Section 3 includes a

synthesized in Europe and United Kingdom and can provide valuable lessons for U.S.

General conclusions and lessons are provided in Section 4. In addition to lessons learned

related to mobility (driver behavior under pricing and the impacts on traffic throughput

and delay reduction), we also provide lessons related to revenues and costs; equity;

environmental benefits and impacts; and public acceptance.

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This section summarizes experience with area wide pricing in Singapore, London and

economy and high income levels.

far back as in the early 1970s. In this context, Singapore started pursuing automobile

for vehicles entering the 2.0 square-mile central business area (“Restricted Zone” - RZ)

between 7:30 and 9:30 in the morning. Buses, motorcycles, police vehicles and HOV 4+

The vehicles entering the RZ along any of the 28 entry points during the pricing period

Introduction of congestion pricing was accompanied by: provision of new Park-and-Ride

of 30% in RZ parking rates.

Since introduction, the Singapore congestion pricing program has gone through several

(Monday through Friday) and charge rates vary from zero to approximately US$2.00 per

crossing at a charge point. On expressways, the prices are in effect weekdays from

Vehicle Unit - IU” (a transponder) fitted on the dashboard with a “stored value smart

card” inserted in the IU and with a sufficient monetary amount stored on it. IUs have

visual displays and audio signals to inform the driver about deducted charges or low

balance. The “smart cards” are issued by a consortium of banks and can be topped off at

Introduction of ALS in 1975: In the early 1970s, the AM peak period was characterized

by bumper-to-bumper traffic on many streets in the downtown business area, which

subsequently became the Restricted Zone (RZ). The Area Licensing Scheme (ALS) in

1975 introduced an AM peak charge of about US$1.30s for vehicles (excluding HOV 4+,

worked smoothly with low violations (1-2%).

in 1975 had resulted in overall auto share for commuters to the RZ decreasing from 56 to

RZ declined by 54% and the AM peak traffic entering the RZ declined by 14 percent.

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effective between 7:00 AM and 6:30PM (modified in 2007 to 7:00-6:00). Numerous

pricing zone (90% discount). Buses, taxis, emergency vehicles, hybrid cars, and

February 2007, creating a single enlarged congestion charging zone (Through traffic

along Edgware, Park and Vauxhall roads continues to be exempt).

TfL (2003) reported that the average number of cars and delivery vehicles entering the

central zone was 60,000 fewer than the previous year. Around 50–60% of this reduction

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transportation users have enjoyed significant benefits resulting from the program. A very

large proportion of prior trips to the priced zone used (and continue to use) public

transportation and have benefited through significant improvements resulting from

pricing. A majority of businesses also perceive the charging scheme as a plus overall and

have had broadly neutral economic impacts. Annual surveys do suggest, however, that

businesses in the charging zone have outperformed those outside and a majority of

transportation is continued.

The experience from the Congestion charging scheme in London shows that business

support for congestion charging is generally positive but relatively mixed. Businesses

were, on the whole, more supportive of the scheme than opposed to it. A majority of

businesses continue to support the scheme, provided that there is continued investment in

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Nearly four decades passed after congestion pricing was first proposed for central

London before finally it became a reality in 2003. The intervening forty years generated

debated at length many times over. So, the public had developed a decent perspective on

and its potential role in London’s transportation plans. Then, in 1990s, London was

communications, a clear and well-composed presentation of the problem and the

proposal, and the development of first-rate communication tools, including a highly

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“The legislation that permits the Mayor to implement congestion charging in London

meant, the decision rested with the Mayor, without reference to a higher level of

government. Another factor that might have helped is the political stability. For example,

that congestion charging was implemented early in the Mayor’s term of office gave it

more chance to succeed. In summary, a high level of public acceptability together with

London.”

21(46): 264-310.

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Report, April 2004, Transport for London, London, U.K

Report, April 2005, Transport for London, London, UK.

TfL (2005b), Central London Congestion Charging Scheme, Impacts Monitoring,

Summary Review Jan05, p. 35

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was enacted in 2004 with focus on demand management and environmental protection

[CURACAO (2007)].

In order to achieve political consensus and public support, it was agreed that a six-month

trial project would be implemented and decision about permanent program would be

made after evaluating the experience of the trial application and holding a referendum.

from January through July of 2006 and detailed evaluation was carried out.

The central city area of approximately 20 square miles (including about 10 square miles

of the river and sparsely developed land) was designated as the priced zone. It covers the

of the city area is 756,000 out of the total county population of 1.8 million. The three

elements of the program are shown in Exhibit 3a (Charging Cordon, Expanded Transit

the 18 pricing points are shown in Exhibit 3b.

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if equipped with On-Board Transponder Unit (OBU – unique for each vehicle) and

allowed automatic charge deductions from pre-set accounts. License plate photos (front

and rear) were captured for all vehicles with and without OBU. Vehicles without pre-set

were set at 70 SEK (US$10) for the first reminder and went up to 500 SEK (US$70) for

The capital investment totaled 3.0 billion SEK ($410 million), and the operating costs

were running at the annual rate of 760 million SEK ($100 million) implying annual

convinced car use causes grave environmental problems, the more they perceived the

proposed pricing measure favorably (and supported it).

Jaensirisak, Wardman and May (2005) analyze results of a stated preference survey in

two UK cities. As part of the study, they review previous acceptability findings from

jump from 30 to 55% from no explicit revenue plan to revenues dedicated to auto

options. The finding appears to be roughly consistent across cities. Another finding was

Of course, since the author’s research, a London road pricing scheme has been

implemented. A key acceptability finding is while initial reaction to the Mayor’s proposal

was mixed, surveys by Transport for London three years after start showed that more

percent of companies say they would consider relocating to a site outside the zone

because of it [Streetsblog (2007].

pricing and investment options for purposes of solving traffic problems. As expected,

proposal based on:

pricing and taxation measures. Research entailed 104 stakeholder interviews with

planners, interest groups and decision makers in 9 European countries, focus groups with

the general public in 3 European countries and a Delphi survey in 5 European countries,

as well as an extensive quantitative survey of public attitudes in 6 European countries

favored using revenues to reduce general taxes (transit managers and planners favored

interurban road and parking pricing. For road pricing, policy makers preferred

The public survey in Link’s work revealed skepticism about reducing congestion through

pricing, support for pricing of trucks and discounts for “green modes,” and support for

revenues spent on transport. On equity, the public gave little support for user pay

principles. There also is suspicion of government motives in proposing user charges,

belief the real purpose may simply be money raising and concern government is not

transparent in decision making. Regular car users are reluctant to support the use of

revenues outside transport (roads and transit), except to reduce income taxes. In two

countries, acceptability of pricing was largely determined by use of revenues. Support for

eventual implementation. After summarizing public acceptance in Oslo, he suggests

politicians. The national government supplemented toll revenues to support transportation

the author concludes local, state and national government agreements may be an

important necessary but not sufficient step toward successful implementation. Reviewing

initial agreement among political parties in Stockholm leading to a withdrawn proposal in

infrastructure improvements to various political parities at least in a setting where such

proposal toward serious consideration, each party (Conservatives, Liberals and Social

selective exceptions and concessions (e.g. reduced off peak charges, “free” shopping

The importance of decision makers to devising acceptable schemes also is stressed by

Jones (2003) in a review of Oslo and Trondheim ring road pricing. He observes “support

was greatly enhanced by the inducement of matched funding from the central

government.” In both cities, Jones indicates city politicians formed a cross-party alliance

opposition. Jones also emphasizes the importance of returning revenues to transportation.

transportation versus traffic reduction, though Trondheim differential pricing by time of

day recognizes travelers may switch travel times due to pricing.

and the UK. Clearly not all the influences on acceptability are within the control of

or sink a planned program, as Ison notes. Demographic variables such as residential

location or interest group affiliation may be important determinants of acceptability

among the public, as Vrtic finds. However, planners and decision makers working on

pricing plans have little control over such variables. Most important are conclusions with

In particular, the review suggests public and/or stakeholder acceptability may be

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other preferences elsewhere. Planners need to understand and pay heed to such

road construction and observe the same support in Trondheim largely is due to funds for

early London surveys hinges on support for better public transport. He echoes Tretvik in

concluding emphasis on revenue for improved transportation versus traffic reduction was

acceptance as the nature of their pricing proposal(s). Already mentioned is Schade for

OECD pointing to procedural fairness in the planning process. In the same paper, Schade

finds when government is perceived as the main reason for the congestion problem

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points to suspicion of government motives in pricing for revenue raising purposes may be

a block to proposals. He cites a Swiss referenda process as one way to counteract doubts

about government pricing planning. Tretvik echoes the finding about government

“already pay enough tax/duty,” pointing to the importance of governmental image as a

taxing entity with already sufficient resources to deal with congestion. Link also found

suspicion of government motives in public surveys across nine European countries, belief

money raising may be the real motive. Link also finds concern government is not

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Ison Stephen (1993), “Congestion Metering in the city of Cambridge: A case of so near

Olof Holzer (2003), “Which Role Does the Objective Play – Empirical Findings From

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Armstrong-Wright, A.T., 1986. Road pricing and user restraint: Opportunities and

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Oxford Economic Forecasting, 2005, Time is money: The economic effects of transport

Still, B., May, A.D. and Bristow, A.L., 1999. Transport impacts on land use: predictive

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Nevertheless, analysts have attempted to assess equity impacts variously defined and

more general literature on the subject.

The purpose of this sub-section is to provide a brief summary of the current state-of-

knowledge on this topic. Much of the material below is taken from the discussion on the

are covered under economic impacts in the previous sub-section.

To quote CURACAO (2007), “Road pricing will change the costs of travel by car and by

adversely affected, but lower income residents are more likely to use buses, which will

benefit, and walk and cycle. Horizontal equity impacts depend on the location and nature

carrying bulky loads.”

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revenues are spent. Road pricing attracts much equity based opposition on the basis that

high-income motorists and commercial traffic constitute the “winners” predominately.

income and car-dependent families. The most commonly used solution here is to use pricing

the cordon. A small cordon would negatively affect residents inside the cordon most

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cordon. In is argued by some analysts that this problem may be reduced by the

(2003) also used the accessibility ratio between car and non-car from different zones for

in the city and classes of users.

design of road pricing systems. “Mayeres and Proost (2001) have proposed a weighted

charging. Bus service improvements should have been planned earlier in order to

demonstrate the degree to which all communities would benefit. The Edinburgh’s

neighbouring authorities opposed the concept of road pricing as proposed.

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yet not receive any benefit through the revenues. The neighbouring authorities had no

The scheme was contested on the premise that city residents would receive huge

exemptions but would be the main benefactors. City residents would also have benefited

disproportionately more from the public transport improvements. The issue of the

exemption given to outer city residents of Edinburgh was a critical acceptability problem,

controversial in terms of the specific outer cordon exemptions.

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Else, P., 1986. No entry for congestion taxes. Transportation Research, 20A(2): 99-107.

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Gomez-Ibanez, J.A., 1992. The political economy of highway tolls and congestion

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Trondheim Input to EUROPRICE Technical Paper II: Policy Issues).

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The evidence suggests that acceptability of areawide pricing schemes increase after

to it. A majority of businesses continue to support the scheme, provided that there is

continued investment in public transport.

Based on project experience and public opinion studies on pricing, certain key factors

Singapore Area License Scheme (ALS) windshield license and manual enforcement

system worked well. The Electronic Road Pricing (ERP) system, based on Direct Short

Range Communication (DSRC) and In-vehicle Unit (IU) transponders with stored value

“Smart Cards” technologies, is working seamlessly. It allows open road, multilane

variable tolling at 120 KPH speeds and addresses privacy concerns.

pricing schedules. The DSRC and IU based system, supplemented by ANPR also worked

The areawide pricing programs abroad parallel several lessons stemming from U.S.

pricing programs about how to conceptualize, plan, discuss, and carry out a successful

pricing project:

groups, public opinion surveys and media campaigns have all contributed to project

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making transportation decisions, just as they do in other aspects of their economic lives,

and those responses can help diminish congestion and support alternatives to driving.

The projects have also been a test-bed for the technologies that enable pricing to be used,

as well as a discussion forum for important issues related to economic and environmental

impacts, equity and public perceptions.

Whereas areawide pricing was once something talked about by a small corner of

academia, it is now front-page news all over the World, and is openly discussed by

transportation professionals, interest groups, and elected officials. Areawide pricing has

come to be viewed as an innovative way of coping with recurring congestion problems

revenue-generating effects of pricing have also been an equally important reason for

interest overseas in this approach to reducing congestion. In contrast to the pricing

projects in U.S. that have focused on single facilities and generated moderate revenues,

areawide pricing programs overseas are more than self-supporting and generate large

a time where transportation agencies are struggling to find new and robust approaches for

financing transportation programs. Moreover, it has been shown that, with proper

equitable part of a road user charge program.

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proceed are shown in this report.

sources of funding for transportation investments. Yet, despite this potential, the concept

new approach to dealing with congestion problems and charging for road use. However,

the overseas programs demonstrate favorable outcomes are possible with careful and