Toll roads may exemplify the idea of supply and demand, but they existed long before anyone thought to put a name to capitalism.
From the time mankind thought to leave official trails linking places of prominence, there have been those who’ve earned their keep by charging travelers for the convenience of using the thoroughfares.
In the modern era, such costs are often intended—at least initially—to pay for the construction and upkeep of the highways. But a batch of new toll models, powered by a wave of technological advances, would set the charges not to cater to the supply of the roads, but the demand for a space on them.
In an increasingly traffic-clogged world, the pleasure of a direct route could be a hot ticket item—with a price that could rise at the whim of desperate commuters.
The Seat of Power
Washington, D.C. is no stranger to gridlock, whether it’s in the chambers of Congress or on crowded city streets. And that natural propensity for attracting congestion makes the city a perfect candidate for new road-pricing models.
Late last year, the Virginia Department of Transportation (VDOT) kicked off such a test, implementing a new demand-based toll system along a 10-mile stretch of Interstate 66. The program, which affects only the highway’s express lanes, uses algorithmic assessments of current traffic conditions to calculate a price for traversing the road—yet the results may not seem so fair to drivers.
In the initiative’s first day, tolls spiked as high as $40, dropped as low as $3.75 and spent the rest of the day vacillating anywhere between $11 and $34 for use of the same 10 miles, which lead from Northern Virginia into the capital. (To date, peak pricing for the popular corridor has topped out at $44.)
The price is refreshed by the computer every 6 minutes, with highway signs alerting drivers to the impending fee, and an app that posts the toll in real time. Still, many drivers couldn’t help but feel sticker shock when reaching for their wallets.
And according to VDOT, that’s the whole point, with the change designed to minimize pileups, rather than maximize profits.
How, exactly, does the system work? It’s called dynamic pricing, and it should be recognizable to anyone who’s ever dealt with surge pricing on Uber or Lyft rides.
Economically, when a fixed price is applied to a certain commodity whose demand varies widely over time, profit margins rise and fall in tandem with demand for the commodity, creating a graph filled with sharp spikes. But modifying that price to reflect the demand for a service at a given time works to round out and reduce the overall fluctuation, especially when stretched out over long periods.
Psychologically, the idea offers additional benefits for those seeking to change consumer behavior. Numerous studies show a commodity’s demand patterns tend to adapt over time to reflect new pricing rhythms.
The Virginia DOT is hoping to mimic those results on I-66, by grooming drivers to avoid the highway at peak usage hours through deployment of the hefty toll fees.
To help keep the roads clear, the program is designed to discourage solo commuting, allowing cars carrying two or more people—as well as hybrids—to pass through the tolls for free. The system is also only in play during weekdays between the high-traffic hours of 5:30 a.m.-9:30 a.m. and 3 p.m.-7 p.m.
And the program’s prices have already proved a potent repellant. On the first day of the experiment, about 12,000 vehicles passed through the stretch of road at an average speed of 54 mph—compared to the 37 mph morning commute for drivers the previous December.
The Virginia DOT isn’t the only agency employing the technique. Demand-based tolls can also be found on some highways in California, New York, Texas, Florida, and Minnesota. And with increasingly sophisticated technology to track human movements, those states won’t likely be the last to implement the new pricing model.
Like their fellow peers in the Internet of Things, new-age traffic tolls will be expert anthropologists and students of human behavior, and it likely won’t be long before the artificial intelligence knows us better than we know ourselves, making for artfully predictive pricing policies.
But even the cleverest computer would struggle to fine a car with no driver.
The rise of autonomous autos has put a question mark at the end of nearly every aspect of future transportation, including the idea of how to ensure roadway fees are paid.
Operated in fleets and employed on-demand, the communal vehicles may wipe out the concept of individual car ownership, eliminating with it any clear target for tolls. A similar grey area arises when dealing with the issues of insurance and liability in the case of an accident.
Google’s self-driving spin-off, Waymo, by far the leading operation in bringing self-driving cars to the fore, has already tacitly admitted that the passengers of tomorrow won’t have the same roadway responsibilities as the drivers of today. The self-driving start-up will adopt a precedent-setting insurance policy that covers riders during their trip, with all liability ultimately falling to the Internet behemoth.
Still, it’s unlikely the corporations behind the vehicles will want to take the hit for roadway fees—which totaled $13 billion in 2013.
And while the driverless cars have been tested on—and lauded for—their ability to traverse the tricky line-free roads surrounding toll plazas, the question of how they’ll navigate the confounding financial situation presented by the pay stations has yet to be answered.