How radical is road pricing?

Briar Lipson
Insights Newsletter
11 August, 2017

Elon Musk, of Paypal and Tesla fame, is boring a tunnel under Los Angeles. Musk believes he will be able to transport cars between L.A.’s West Coast and centre in five minutes.

Auckland is smaller than L.A., but perhaps it is time we raised our game.

Last weekend saw a flurry of pre-election announcements about Auckland transport; new roads and rail from National, and a new fuel-tax funded, light-rail line from Labour.

More of the same is all well and good, but it is also an expensive way to address Auckland’s reality: that too many people want to use the same roads at the same times.

Labour’s proposal, of adding a few cents to Aucklanders’ petrol prices will undoubtedly cut car usage at the margin, but it will not change the times of day when people want to travel. In fact, those people who travel off-peak will be penalised just as much as the others. And some drivers on low incomes will be taxed off the roads altogether.

So why does anyone, let alone Labour, push for higher fuel taxes, rather than road pricing?

Perhaps it has something to do with the egalitarianism of queuing. Everyone, no matter what car they drive, shares in the frustration of congestion. Superior wealth (unless perhaps you are Elon Musk) cannot get you to work any quicker than the next man. And in a country that aspires to equality, and a city where house-prices make a mockery of that aspiration, congestion does hold some appeal.

However, as seductive as this argument might sound, politicians would do well to ignore it. Queuing’s effectiveness, as a method of rationing, was disproven by the USSR.

If Aucklanders were ever reluctant to be early-adopters of road pricing, this argument is also long out of date. Singapore first introduced congestion charging in 1975; followed by London in 2003; and Stockholm in 2007.

Perhaps the hesitance is because rapid advances in technology, like electric cars and Uber, are changing the way we travel. But for every technology that might cut vehicle usage, there are another two that will increase it. And innovations will always be with us; such a reality should not paralyse decision-making today.

Musk’s futuristic prescriptions may be some way off, but governments should not wait for silver bullets solutions. Because in the meantime Aucklanders are waiting, and the efficiencies of road pricing are right here under our nose.

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