Is congestion pricing -- charging more to use a facility when it's in high demand, in order to decongest that facility -- an unacceptable burden on the poor? Joshua Arbury of the Auckland Transport Blog asks this on my recent post on congestion pricing terminology:
Fundamentally though, there's a political question to consider. Is it acceptable to have a road pricing scheme that prices the poor off the roads to create more room for the rich? Because, in a nutshell, that's effectively what road pricing/congestion charging/decongestion charging is.
These discussions will never get anywhere until we can separate two completely different questions:
- What is the accurate price for this facility that arises from the relationship of supply and demand?
- For whom, and for what social purposes, should we offer discounts from that price?
Australian and British transit agencies offer a nice example of how to keep this clear. As in North America, transit in those countries routinely offers discounts to senior citizens and the disabled, because, well, we as a society want to honor those people. Those discounts don't serve any particular transit agency mission, but the society judges them to be important. Fine. So in both Australia and Britain, the cost of those discounts is added up and a central government reimburses the transit agency for that amount, as a "shadow fare." The transit operator can then count all riders as equal, and compete for all riders as being of equal value to it, because it experiences them as all paying the same fare.
That's very clean, because it separates transit's real purpose from a separate (perfectly valid) social agenda, rather than just expecting transit operators to pay the cost of the social agenda. Seniors and disabled persons get their discounts, but the transit operator continues to value their patronage as much as they would value that of a full-fare customer.
Meanwhile, back on the roads, our current prevailing road pricing policy is that "when demand for road space exceeds supply, government will subsidize everyone's travel so as to elminate any monetary cost." The effect, of course, is that instead of paying in money we pay in time. That's what congestion is. Something of value is being given away for free, so we have a long queue of people waiting for it. If you want to "fix congestion," you have to change the price.
Is that hard on "poor" people? Yes, it is, like many things. The answer may be to subsidize the price as an expression of a social objective, in exactly the way that British and Australian governments subsidize senior/disabled fares as something entirely separate from other transit subsidies, thus enabling them to more cleanly connect each spending to a public purpose.