Tolling and TDM: friends or foes?

At a first glance tolling and transportation demand management (TDM) do not appear to have much in common, but congestion pricing could be a useful mechanism linking these important transportation policy tools.

Tolls have been used for centuries as a revenue generating tool to fund new road infrastructure. TDM, on the other hand, focuses on the application of strategies and policies to reduce travel demand or to redistribute this demand in space or in time. Despite their differences, both policies do not need to be mutually exclusive. Congestion pricing represents a holistic approach which can meet both their objectives, as it aims to reduce congestion and apply revenues collected to transportation improvements (roads and/or transit).

However, the challenges of congestion pricing should not be underestimated as evidenced by the limited number of cities around the world that have actually implemented it. The impacts to be considered include:

• Public response — the general public often see congestion pricing as another tax/ charge and this makes it an inherently unpopular approach as evidenced in referendum ‘losses’ in Edinburgh and Manchester in the UK, and New York City
• Equity — it can be seen as unfair to low-income users and people living in affected areas
• Economic impacts — it has the potential to distort effects on economic activity by shifting away
  from the congestion pricing area
• Traffic effects — the impact of traffic re-routing to avoid charges can be deemed disruptive
• Implementation – determining the body that will be responsible and how the funds generated will be spent will be scrutinized

Evidence from London and Stockholm, where congestion pricing has been introduced, shows that if the funds generated are reserved for transportation and that investment in transit alternatives is implemented, this can result in greater public acceptability.

Steer Davies Gleave has extensive experience in estimating the traffic and revenue impacts of toll, shadow toll and express lanes, and all aspects of TDM.