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Chapter 5 | Determining the charges

The ideal number of charging increments will depend on the costs of implementing

a scheme with small, gradual changes and the road users’ capacity to rapidly digest

the pricing signals. Technological developments increasingly allow the practical

application of graduated charges. For instance, London Transport’s ‘Oyster’ storedvalue

public transport card allows the application of charges that vary by location and

time of day. These cards would also allow charges to be differentiated across the day

to reflect the level of congestion. Such

profiling should be readily interpreted

by network users—for instance, noting

that charges rise to a peak between

08:00 and 09:00 and then subsides until

(say) mid-afternoon. Users will be able

to respond to the general pattern of

charges, which does not involve an

intimate knowledge of the detailed

charging rates.

Technological developments increasingly

allow the practical application of

graduated charges. Road users can

respond to the pattern of charges without

needing to understand detailed rates.

Charges should be based on the trip segment

As a rule, traffic over a trip segment provides a more accurate representation of

congestion levels than at a single observation point. However, while Vickrey is correct

in the narrow sense of achieving a more efficient level and distribution of road use

over time, there are trade-offs involved with the cost of the scheme.

A less sophisticated system, such as a facility toll at a single observation point, may be

more efficient overall in terms of a benefit-cost ratio.

Charges based on the actual cost rather than the anticipated cost

Vickrey reasoned the charges determined on an ex-post basis, for the actual impact

that a trip can be calculated to have had on the traffic as actually experienced, may be

superior to charging according to a schedule fixed in advance.

Charges that reflect the actual level of congestion rather than the expected level of

congestion would place the onus on road users to monitor congestion levels. The

appeal of such an approach is easily understood. A posted pricing schedule (based on

the expected level of congestion) would not allow for increased congestion caused by

weather, sporting events and the like, whereas motorists would have the opportunity

to inform themselves of these situations and adjust their trips accordingly. In the case

of adventitious events such as fires, accidents and the like, one could perhaps allow

a grace period of 15 or 30 minutes from the time the occurrence has been broadcast

before increased charges become effective, to avoid unduly charging motorists who

would have had no opportunity to alter their plans.

However, this is yet to prove practical with road users generally requiring greater

certainty of expected tolls when they embark on a journey. The difficulty is, in part,

that recognised by Vickrey: ‘where congestion threatens, traffic conditions seem

often to vary very widely from day to day even when there is no broadly recognisable

cause for the variation’. A part compromise would be posted congestion charging

that may vary within a range, on the assumption that the road user would have the

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