NMA Article: Why Havenít Toll Road Charges Been Reduced?
By James Baxter, NMA President
The proponents of toll roads and the use of variable pricing to mitigate congestion seem to be sending mixed signals.
Not very long ago the use of new technology to charge motorists a fee every time they hit the road was being touted as the cure for every ill known to man, including congestion, energy depletion, dirty air, and inadequate infrastructure.
If the roads became too crowded the price for using the roadway would shoot up and vehicles would evaporate from the highway, and traffic would roll along, unimpeded.
The concept was pretty simple; lots of people want to use the road at the same time, raise the price until the cost drives the cake eaters off the system. When traffic density declines, the prices are reduced so the unwashed masses can get to their jobs, go shopping, see the doctor, and visit friends at times that donít inconvenience those of us with places to go and people to see, and for whom cost is no object.
Just when our elected keepers were warming to this idea, high fuel prices and a tanking economy took a real nick out of traffic congestion. People just arenít traveling as much as they were, for obvious reasons.
But, maybe weíre in luck as far as the toll roads are concerned, those good folks who were going to reduce charges if traffic was light? You know, use lower prices to attract traffic when the system is being under-utilized.
Thatís what competitive private businesses do, when customers are few they reduce prices to attract customers back to their shops and businesses. Havenít we been repeatedly told that toll roads are the private sector utopian answer to poorly maintained and congested public highways?
But wait, wait, something is wrong. The toll road operators are not lowering their prices to spur demand for their facilities. Theyíre raising their prices because traffic is down!
How can this be? Real private competitive businesses donít raise their prices when demand is down.
The only institutions that have the leverage to raise prices when revenue is down are governments and government-sponsored monopolies.
Does this mean toll roads really arenít private enterprise in action? Is the tooth fairy really dead?
Why Haven’t Toll Road Charges Been Reduced?
Further Reading: © 2009 NMA