Shared Automated Vehicle Toolkit: Policies and Planning Considerations for Implementation (2022)

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72 This chapter discusses pricing tools to support pooling and other trip characteristics. Tools for Pricing Tools included in this chapter: • Types of pricing strategies. • Description of pricing strategies. • Examples of pricing strategies. Managing roadway demand and limiting ZOVs, SOVs, and induced demand could poten- tially be supported through a variety of strategies, such as road pricing. Road pricing is a method for public agencies to charge road users (e.g., private vehicles, TNCs, SAVs) for their use of, and impacts on, transportation infrastructure. Public agencies can use pricing as a policy to ensure that users (including human-driven and automated private vehicles) pay their fair share for roadway use. In addition, road pricing can help agencies mitigate congestion and guide sustain- able outcomes (e.g., reducing ZOV and SOV trips). The public sector can use revenue from pricing schemes to maintain infrastructure, expand transit services, conduct research, and fund other transportation improvements (Bayen et al. 2018). Road pricing can help ensure that users pay their fair share for roadway use, maintenance, and impacts. As MOD and AVs develop, road pricing can help discourage ZOV and SOV trips. Road pricing can also support shared MOD and SAV trips, potentially resulting in a number of oppor- tunities. Figure 21 summarizes some potential opportunities and challenges of road pricing. In addition to supporting higher vehicle occupancy rates and ensuring road users pay for their use of infrastructure, pricing strategies can help agencies raise revenue. The revenue can help offset some of the costs public agencies face in integrating AVs into the transportation network. For example, this revenue can be used to finance AV-related infrastructure changes, such as creating larger passenger loading zones and implementing AV charging stations. Pricing Strategies A variety of strategies can be used to price MOD, AVs, private vehicles, and other transportation modes. These strategies can be generally classified into three types: congestion, trips, and incentives. Figure 22 provides further infor- mation on these pricing types. Pricing types and strategies may be enhanced by agreements between stakeholders. Appendix A-11: “Sample Policy Agree- ment for Pricing” contains a sample policy agreement that supports pricing C H A P T E R 1 1 Pricing

Pricing 73   strategies. In addition, Appendix B: “Sample Policies” contains an example policy that uses one of the following pricing strategies to decrease congestion and environmental impacts. Pricing strategies can be classified into one or more types. Understanding which type the various strategies are classified under can help agencies to use pricing strategies more effec- tively. For example, congestion pricing can be particularly useful for high-demand areas (e.g., downtowns, business districts) and during high-demand times (e.g., large-scale events, peak commute times). Effectively using pricing strategies can allow agencies to achieve goals, such as allowing ADVs and other freight vehicles to make goods deliveries during off-peak times. Table 16 summarizes potential road pricing strategies, their possible use, and which type or types they are classified under. Table 17 summarizes potential road, parking, and curbspace pricing strategies to encourage the use of alternative modes, such as shared rides or active trans- portation, rather than personally owned vehicles. The development of AVs may result in changes to traditional HOV pricing strategies. Table 18 summarizes potential different vehicle occupancy types for both automated and human-driven vehicles that new HOV pricing strategies may target. Adapted from National Association of City Transportation Officials. • Addresses congestion challenges by pricing zones; rights-of-way, curbspace, and loading zone use; or performance (e.g., time-based fees). Congestion • Prices trip types and distances differently to encourage the use of certain modes, vehicle sharing, trip sharing, or decreased trip distances. Trip • Supports the use of certain transportation modes, times of operation, trip types, or areas of travel by offering discounts or money back. Incentive Figure 22. Pricing types. SOURCE: Rice and Tomer 2017; Rainwater 2019; Jennings 2017. Figure 21. Potential opportunities and challenges of road pricing.

74 Shared Automated Vehicle Toolkit: Policies and Planning Considerations for Implementation Pricing Type Strategy Description Objective C on ge st io n Tr ip In ce nt iv e Congestion/ Temporal Fee for driving in a select area during high congestion times (e.g., 6 a.m. to 9 a.m.). Supports trips taken at different hours of the day, on different routes, and using different modes to reduce congestion. X X Cordon/ Zone Fees paid after entering a demarcated zone (e.g., central business district), exit location does not change fee. Reduces congestion in highly trafficked areas. X Flat Rate Fixed fee used for access to and driving on a particular road. Raises revenue for infrastructure maintenance, transportation expansion, and other projects. X Fluctuating Tolls Fluctuating fee based on variables (e.g., time of day, vehicle occupancy) for access to and driving on a particular road. Raises revenue for infrastructure maintenance, transportation expansion, and other projects. X HOV Lanes Allows modes with certain characteristics (e.g., 2+ passengers, EVs) to exclusively use lanes. Supports the use of specific modes (e.g., shared rides). X X X Means - Based Pricing based on income levels can be applied to other pricing approaches (e.g., congestion, road use). Attempts to more equitably charge and collect fees. X X Promotion Incentives provided for the use of certain modes (e.g., no tolls for EVs). Encourages the use of certain modes. X X X Road Use (VMT) Payment required based on distance traveled. Raises revenue for road-use and distance-based impacts (e.g., GHG emissions).a X X Vehicle Type Usage fee based on specific modes (e.g., TNCs, ADV). Dissuades the use of certain modes. X X Zone Pricing Fee based on driving within a predetermined area, which may vary on the entrance and exit points. Encourages the use of alternative routes to ease congestion. X a Road use fees can be revenue neutral and used to replace fuel taxes and/or can be used to reduce VMT. Table 16. Road pricing strategies.

Pricing 75   Strategy Description Objective Cash Outs Employee-based payments in exchange for free/available parking at employment locations. Decreases the demand for available parking. Curbside Management Repurposing of existing curbspace parking for other functions and modes. Reduces the availability of parking for vehicles and encourages the use of other modes. Dynamic Fees that fluctuate based on demand (i.e., fees decrease as parking availability increases). Helps control and match parking supply and demand. Navigation Tools Technology that assists in locating available parking using imaging or sensors. More efficiently matches parking demand and supply. Off-Street Taxes on parking facility developments and/or reduced parking requirements for developments. Decreases available parking to encourage the use of other modes. SOURCE: Shaheen, Stocker, and Meza 2019. Table 17. Curbspace and parking pricing strategies. Occupancy Characteristics Description Zero No driver or passengers in the vehicle. Fully automated vehicle driving to/from a parked location. Single One passenger in the vehicle. One passenger riding in a fully automated vehicle. One driver in the vehicle. One driver operating a non-automated vehicle. Delivery. ADV or freight vehicle carrying goods to be delivered. High- Occupancy Multiple passengers (2+). At least two passengers riding in a fully automated vehicle, may or may not share destination and origin. Multiple passengers (2+). One driver and one or more passengers in a non-automated vehicle. Table 18. Vehicle occupancy types. Technological Support Technological developments can support the implementation of pricing strategies. Developments including the computing, hardware, and location services required for AV operation can be used to track and pay for their entrance into areas priced for congestion. In addition, automated license plate reading and virtual trip lines may also assist in tracking and charging roadway users, although concerns have been raised regarding the collection of personally identifiable information (Bayen, Forscher, Shaheen 2018; Chase 2019). Moreover, technological developments can assist in addressing the imminent challenge of managing curb service (pickup and drop-off) when SAVs are successfully deployed. Technological developments provide opportunities for managing the curbside drop-off and pickup more efficiently through pricing strategies and policies that satisfy the needs of different competing modes (e.g., buses, delivery cars, privately owned vehicles, and SAVs) to achieve the intended goals while avoiding unintended consequences (NACTO n.d.).

76 Shared Automated Vehicle Toolkit: Policies and Planning Considerations for Implementation MOD and AV Pricing Strategies Many communities have already started experimenting with congestion, trip, and incentive pricing strategies to manage demand within their respective transportation networks better. These existing policies and strategies can be altered to include, or specifically target, MOD and AVs. Figure 23 summarizes some examples of existing pricing strategies that can be adapted for MOD and AVs. Key Takeaways • Public agencies can implement pricing strategies to ensure road users pay their fair share for their use of and impacts on transportation infrastructure. • Road and curb pricing are direct charges that are levied for the use of roads and curb frontage, such as road tolls, distance or time-based fees, and congestion charges. These charges are designed to discourage certain vehicles or behaviors, including higher-polluting vehicles and lower-occupancy vehicles. • Road-use, parking, and curbspace pricing strategies can target a variety of road uses, includ- ing road use by specific modes in select areas, and during certain times of the day. • Public agencies can use pricing strategies to influence how travelers use the transportation network (e.g., shifting travel time, encouraging mode shift to SAVs). • Effective use of pricing strategies can allow public agencies to achieve other policy goals, such as allowing ADVs and other freight vehicles to engage in goods delivery during off-peak times. • In 2003, London began leveraging a daily fee of approximately $15 for each vehicle that enters its 8-mile central zone between 7 a.m. and 6 p.m., Monday through Friday (Transport for London 2018). From 2002 to 2014 there was a 39% decrease in private vehicles entering the zone (Rainwater 2019). Cordon - Congestion Charge • In 2017, the Oregon Department of Transportation launched OReGO, a program where participants pay a per mile fee for driving on Oregon roads rather than paying the gas tax Oregon leverages (Oregon Department of Transportation 2019). The state DOT anticipates an additional revenue of $340 million from 2017 to 2027 as a result of the program (Miller 2017). Road Use - OReGO • From 2012 to 2014, Stanford University conducted a study on congestion reduction through monetary incentives (e.g., participants who altered their driving patterns were entered into a raffle to win prizes). The study found that incentives decreased congestion by 21.2% in morning commutes and by 13.1% in evening commutes (Bauer et al. 2018). Promotion - Congestion and Parking Relief Incentives (CAPRI) Figure 23. Pricing strategy examples.