$30 Toll to Use Express Lanes | Hacker News Reader

$30 Toll to Use Express Lanes

fox5dc.com

30 pointstomohawk106 comments

Seems like an example of supply and demand working as intended.

This is hardly a free market. The government has a monopoly on building roads and they unilaterally set the prices.

Prices are set dynamically based on usage, and there is competition from the free lanes that run parallel and serve the same locations.

The principle of supply and demand can exist outside of the context of a free market. As long as there's some mechanism to set the price based on a balance of the two variables.

But public roads are usually for the use of the public. At most there's a difference of a few dollars if you're just traveling a short distance. This arrangement just seems to be milking people for money, and I don't want to see public spaces go in this direction.

They built those roads specifically to be express lanes, and fund them via these tolls. Similar to the Triboro Bridge in New York, built to help commuters get to Manhattan faster/MUCH easier and infeasible to build without charging tolls.

These toll lanes were built and are managed by an Australian company, Transurban. In the linked article it mentions that sensors in the toll lanes adjust prices relative to demand.

???

There's plenty of private roads and bridges.

The 495 HOT Lanes were built through a public/private partnership. The private consortium, who paid for the expansion, received toll collecting rights from Virginia for the next 80 years. A for-profit has absolute control over this regressive tax...

"The companies, which will finance all but $409 million of the project, have an 80-year agreement that will allow the partners to collect tolls from motorists who use the lanes." [1]

[1] http://www.washingtonpost.com/wp-dyn/content/article/2007/12...

Ok, so a company has been delegated the authority to levy tolls. But the authority comes from the government.

It wasn't working 100%, at least. The dynamic pricing is supposed to keep traffic moving at a speed of at least 45MPH. I was going southbound past them at Tysons Corner and they were nearly at a standstill. Which means these high prices were too low!

I know nothing about this implementation, but I'd be extremely interested into how the pricing model adjusts itself.

I'd assume there has to be some delay built into the system to measure the impact that price increases have on user take up and lane speed, however it seems in this case that when delays increase faster than the model can adjust its pricing you get to a point where it fails to work (ie nearly at a standstill)

I would be interested to know as well. It certainly seems difficult in some cases, and this is far from the first time I've seen the express lanes below the "guaranteed" speed. It usually works pretty well, but not always.

Yes. $30 seems like a lot to me for this and it's kind of shocking, but we're not talking about price gouging for food, water, or some basic necessity. We're raising the price of toll lanes specifically built as express lanes and funded through these tolls. They just get people home faster than the regular lanes.

Additionally, I suspect that in these conditions if they charged the regular prices, so many people would take the express lanes that they would slow to a crawl like the rest of the road, frustrating their purpose.

> They just get people home faster than the regular lanes.

OR - the other people who can't use these lanes get to their destination slower?

No, the express lane also makes the non-express lanes faster than they would be otherwise, by increasing overall capacity (although that's ignoring induced traffic).

Yes and why is $30 the right price to do so?

As someone who lives in the region, the lanes are complete gouging. They diverted a tremendous amount of tax dollars to build them, and then turned them over to a private company to collect these dynamic tolls. Part of the deal is that cars with 3+ people don't pay tolls.

The 495 corridor is one of the worst traffic areas in the United States -- the number of lanes needs to be doubled to support current demand. In past snow storms, it has jammed up so severely that cars ran out of gas sitting in traffic. When severe weather occurs, Virginia needs to eliminate the tolls and open up as many lanes as possible. We paid for the lanes, and we should be able to use them when we need them most.

Yup. The inheritors of wealth and other rich people get to ride fast on nearly-empty roads, and the rest of the population has to be crammed onto fewer, slower roads, causing a positive feedback loop.

Works just as intended, provided you're one of the ones who can afford it.

Snark aside, "supply and demand" fails to fairly set price when the demand is inelastic -- e.g. when people need to drive home in the snow after work, and there are limited other options. As for the toll road being built "for that purpose," remember when the government was supposed to build roads for all it citizens, not just those who could afford it?

> Snark aside, "supply and demand" fails to fairly set price when the demand is inelastic

I wish more people could peek under this hood rather than simply posthoc rationalize every price increase with "demand-supply" theory. For the concept to work, you need to have many things in "control". Therefore, I simply ask everyone who uses that argument to justify me that price that they rationalize. In other words, you can use the "demand-supply" argument for any price $60, or $100. How is $30 the actual price that demand-supply has set?

The point of the supply/demand curve is that there is a price at which revenue is optimized.

In this case $30 is the price they've determined they will make the most money. Charge more and too many customers will drop out to justify the increase. Charge less and you're leaving money on the table.

> where they've determined they will make the most money

But is that supposed to be the goal of surge-pricing on a public, state-built road? Or is it supposed to be about easing congestion?

If the aim of the government was to always find the price at which they could make the most money possible, we'd live in a very different place.

>If the aim of the government was to always find the price at which they could make the most money possible, we'd live in a very different place.

Exactly! And I cringe every time I hear people talk about how "if government was run more like a business" and how government would/should then make profits and ...

BS alternate side parking tickets in the "winter" when there isn't any snow nor any forecast for snow is bad enough where I live. It's just a BS alternative revenue source and crap like it would only happen more and become more asinine. "Just following orders and doing my job..."

The road in question isn't really a public, state-built road.

https://www.expresslanes.com/project-background

> In 2007, VDOT finalized a long-term partnership agreement with Capital Beltway Express, LLC – a consortium led by Transurban that would design, build, operate, finance and maintain the $2 billion HOT lanes project. Transurban and its partners provided a substantial upfront equity commitment to help fund construction and financed the rest of the project through private activity bonds and a TIFIA loan. The partnership enabled Virginia to leverage private capital to translate every one state tax dollar into four dollars of transportation improvements.

>Construction, managed by Fluor-Lane, began in 2008 and the new lanes opened for business in 2012.

>In 2014, Transurban invested an additional $280 million of equity to put the project on solid financial footing following impacts of the global financial crisis. The private sector has assumed the long-term financial risk for the project, including full responsibility to pay back all project debt.

That's just privatization of the government's sphere. It was still done on public lands, under the state's direction and in the state's interest. It was a deliberate choice to have someone else build it -- and allow price-gouging -- than to build it themselves.

I don't think privatized prisons charging $14/minute for phone calls is a good thing either, even if the "market" (prisoners needing to call their lawyers, and having no other options, etc.) allows it.

The term of art is "public private partnership".

It's a ridiculous notion -- the government has the ability to raise capital far more cheaply than private capital markets, and revenue from toll-roads is one of the most reliable revenue streams that exist. It's not zero-risk, but pretty close.

It's just a scheme to move debt to somebody else's books, and make more money for various parties. It also provides fertile ground to re-direct anger from government operational incompetence or underinvestment, like plowing in such a way that you create miles of gridlock instead of doing things like pre-treating the road surface to avoid plowing during peak travel times.

In this case it also happens to be the point at which the road is fully utilized.

The purpose of the express lane is that you don't want congestion. So you keep raising the price until enough people bug out that it's not congested while still maximizing the number of cars going through and paying you the toll.

> The purpose of the express lane is that you don't want congestion.

Call me cynical, but if there was no congestion, who would pay to use the express lanes? Sounds like a good excuse to do some "traffic "studies""...

> Charge more and too many customers will drop out to justify the increase. Charge less and you're leaving money on the table.

You'd have to prove that to me for this particular instance. Here, you are post hoc rationalizing it and it's much like a circular argument.

Whether they're doing it effectively isn't entirely relevant. That's the goal of the variable pricing system in place here though.

Keep raising the price until enough people are no longer willing to pay that the road isn't congested.

The price is set artificially. During congested periods it is set high to reduce demand for the regulated access based on the presumption that people will pay for faster transit.

So supply and demand is not setting the price, the operator is. But the operator is setting the price based on the idea that demand for the fixed supply (space in the regulated lanes) will vary based on the price charged for access. It's at least true at the limits, everyone will be willing to use the lanes if they cost $0 and (practically) no one if they cost $1000000.

The 'economic' behavior for the toll operator is to set a price that meets the various obligations set out for it while maximizing revenue.

Following the free-market analogy (for better or for worse), there needs to be an options market, where drivers can lock-in a price for the year, say $5 for that ($2 to $30) route. That way commuters can make better planning decisions. Then during periods when drivers don't exercise their right to take the express lane toll, Transurban (or the option-holders) can sell off their unused passes on-site.

As it stands now all of the volatility in transit times is externalized to the commuter.

Just like Global Entry and TSA Pre Check.

Your mention of "nearly-empty roads" clearly demonstrates that you neither read the article nor understand supply and demand.

FTA:

> Tolls can range from as low as $0.20 per mile during less busy times, and up to approximately $1.00 per mile in some sections during rush hour. However, rates may rise significantly above the typical range for periods of time in the event of unusually heavy congestion or a specific event like a traffic accident or lane(s) closure.

It gets expensive exactly because the road is congested.

I lived in that area for 10 years and one of the biggest problems was knowing how slow a route was before you commit to it. Any signaling in advance will make it a little better for the next people and potentially clear out sooner. There are plenty of ways around - not many good ways around normally - but based on that ~10 mile trip taking 30 minutes, suddenly those "not good" ways will become "ok" based on the times alone.

The demand for road space is only inelastic for people who drive themselves. For everyone else, choosing to share a ride with more people and accept a route with more stops is a good way to consume less road space. Express lanes make that trade-off possible.

But that's a perfect-information decision. Going to work and discovering at the end of the day that going home costs 30x as much isn't something people account for - we're losing market inefficiency because pricing information isn't available until after people make their decision.

The prices are displayed before you enter the express lanes. If they're too high, you can divert.

Right. Traffic is unpredictable, and the only way to adjust for it is if far fewer people bring their cars with them in the morning so they have choices on the way back. Traffic is a choice we've made as a society, and we need to create more ways for people to opt out of it. Capping tolls just forces everyone to deal with traffic.

The solution would be for Transurban (or another party) needs to sell options to allow drivers to lock-in fares ahead of time, and if they decide not to use them, allow them to sell off the options to drivers on the spot the same-day. Of course managing this options market would be a headache.

Fair is a loaded word though, it doesn't have an objective meaning.

Equal access meets some definitions of fair, priority for payment meets others.

As opposed the the situation without any express lanes, where everybody is crammed into slower roads, made even worse because none of that traffic is diverting to express lanes? Everybody is worse off, but hey, at least it's fair.

Many states actually build highways for their citizens without needing to charge $30 tolls.

We also don't allow our fire departments to price-gouge.

We have large non-toll highways following the same route already.

I don't get the comparison to fire departments. This isn't a safety issue.

Well then -- revolt. Don't drive to work on a snow day. Make your employer feel the pain.

Especially in DC, so close to the maggots' nest.

The Feds already close any time there's enough snow to cause trouble.

It wasn't due to demand though. It was due to price being calculated by sensors that detect lane speed. The lane was ridiculously slowed by two snow trucks, so it computed a high price.

That said, it's probably reasonable snow trucks get extremely high priority.

supply and demand can also dictate a 5c/hr wage. or 10k for a black market kidney. doesn't mean it's the end all truth or that it's the best way to go

Almost before anyone cites supply/demand:

> the company (said) two salt and plow trucks were working on the southbound Express Lanes on I-495 and I-95, causing traffic to slow and increasing the toll on those lanes.

So no one was going anywhere because of salting and plowing yet the tolls were unaffected and they increased the premium - which would have changed... nothing.

So the problem here is more of a faulty algorithm?

You wouldn't know, you'd have to audit the algorithm to reveal the details.

Less a "faulty algorithm" and more a moral hazard. The intent of the rules is to limit usage during periods of congestion not caused by the road operators themselves. The distinction is that human actors are not moral-free mechanisms.

Right, traffic density increased without a corresponding increase in throughput.

Honestly, I only saw a few flurries. I think everyone saw that and hopped on the express lanes. The day before a little rain fell and there were accidents everywhere. Guessing it was fresh on our collective minds.

I passed a lot of cars in the express lanes on my way home. Cringing at the though of what car accidents lay ahead, but everything was clear.

Arguably though, if the capacity of the road is reduced, then charging more for what remains is supply and demand, right?

In that case, one could charge $100 right? The capacity of the road is reduced then as well.

No, I'm not saying the price increase is reducing capacity. I'm saying the trucks are reducing capacity (i.e. supply) and so the price is rising in response.

> I'm saying the trucks are reducing capacity (i.e. supply)

Source?

The comment I was originally replying to?

>> the company (said) two salt and plow trucks were working on the southbound Express Lanes on I-495 and I-95, causing traffic to slow

Now, I go back to my original question : Why is $30 the price that will do so? It could be $5 or $100.

Well I don't know exactly how their algorithm works, but I'd guess they keep track of average travel times by scanning licence plates, and then raise prices when they go below the target speed, and lower them again when speeds increase?

Unfortunately, "guesses" and "algorithms" built by humans are not good enough. The larger point is again the same - you can post hoc rationalize ANY price with that argument.

Well, we can measure efficacy here by seeing how far average speeds differ from the target speed over time. If they match closely, then I think it's reasonable to say it is "good enough".

This is not ONLY about speed. There are two variables here - speed and price. You've got to tell me the point at which you get the best speed at the best price.

>You've got to tell me the point at which you get the best speed at the best price.

What does that even mean?

People value speed differently, and so are being charged differently. If people value speed highly enough, they can pay for the express lane, and if they don't they can take a presumably slower non-express lane. Making this distinction allows everyone to get closer to their own individual "best speed at the best price".

It means that $30 may or may not be the optimal price. People may value the same facility at $1 or $100. The onus is on the entity who justifies the price to prove that $30 is indeed the best price point. At this moment, I've seen no justification for the $30 price point.

Optimal in what sense?

I think perhaps it worked as intended right? The goal seems to be to keep traffic free flowing in the lane.

> Tolls for the Express Lanes are dynamic, meaning they change periodically based on real-time traffic conditions to keep the Lanes free-flowing.

> However, rates may rise significantly above the typical range for periods of time in the event of unusually heavy congestion or a specific event like a traffic accident or lane(s) closure.

So because the trucks were slowing things down the price raised deterring more vehicles from entering and slowing this down more. It makes sense to me. ¯\_(ツ)_/¯

Maybe I misread this but my understanding is that the algorithm is intended to have all lanes have the same flow rate. If one lane is slow, charge more on that lane to incentivize people to use the other lanes instead. If all lanes are flowing equally, they will be priced (mostly) equally.

In this case, the slowness was based on weather conditions and plow trucks not because all the traffic was on express lane and all other lanes were empty. Clearly, their algorithm needs to take road conditions into account when creating this prices.

I didn't read this as a premium to use the express lane or only allow rich people to get home, just an unintended consequence of a beneficial program finding an edge case.

There aren't separate charges for separate lanes. There's a set of express lanes, which get a dynamic per-mile charge based on conditions, and a set of normal freeway lanes which cost nothing.

The intent is to set the express lane pricing to a level that keeps their speed at 45MPH or more. The free lanes just do whatever.

Yet another money grab by the government, as if the nearly 60% tax rate isn't enough (federal, state, sales, fuel, DMV, etc).

They did this the classical way too, introduce it at ridiculously low prices <$1 just to get the system in place and then they've wasted very little time in raising prices.

Ive used them in the SF Bay Area and Los Angeles where they converted car pool lanes to be express ways and carpool lanes.

It would be great if they were forced to provide evidence that they actually work because to the casual observer they don't work.

To those arguing that driving is a privilege, supply demand etc, get off your high horses. It's tough getting to work in these cities without a car, it sucks seeing lanes taken away and give to the wealthy, and it sucks even more to have the government take even more money without evidence of results.

I live in the DC area and what people don't understand here is last year we had a massive congestion disaster when the first snow hit during rush hour. People were trapped on the roads for hours as the conditions got worse. I had a coworker leave work at 4:00pm and didn't get home till 11:00.

I would have had no problems what so ever paying $30 to not be stuck in that again. $30 less than going out to dinner here.

The crazy thing is, AFAIK, it's based on real-time demand on the expressway itself and makes it more expensive when that is more crowded. So you get to pay more, just to drive behind other people. You'd think it would be slightly different, where if it's clearer than the road it's bypassing and traffic on that road is really slow, then raise the price.

I take this road, and while I feel a free market is great (which this isn't, there are only really 2 choices, my way or the highway), this is absolutely ridiculous. The problem is if I decide to take this route I have to go out of my way to get there. Then if I see that it's $30 I need to turn around and backtrack for like 10 minutes to take another route.

And we aren't talking about a long stretch of road. If it was 20 miles and it saved me an hour, awesome! We are talking about A FEW MILES and for my route it saves about 15 minutes.

And I might even sing a different tune if EZPass wasn't such an awful system. When you take a trip on the east coast and you forget to fill your stupid EZPass up manually beforehand, get ready for a ton of tickets! Oh, you remembered the morning of your trip, thank god! NOPE. F U. It takes like 2 days to process your payment.

F EZPASS AND THE HORSE IT CAME IN ON.

Not that I am mad or anything.

>> and you forget to fill your stupid EZPass up manually beforehand

Why aren't you on autopay? This is a problem of your own making. I have the same, exact EZPass you have and I never have this problem.

I'm on autopay! If you use too much in one day it hits the bottom and then takes 2 days to process the new payment.

That makes zero sense. Are you sure you're tickets weren't from speeding through the EZPass kiosk?

I know, that's why I hate it! I am looking at one now and I see no indication it was speeding.

I got 4 tickets when I drove up to Maine during the summer. Luckily, since it autopayed AFTER that day driving up it was full for the ride back.

Oh, you can contest the ticket, that sounds great! So you contest it, get a confirmation email, then 30 days later they send you another bill with a late fee. Absolutely nothing happens.

Want another awesome EZPass story? They have a version with a switch so you can ride HOV if you have 3 people in the car in certain circumstances. So I got one. Since I didn't actually use that feature in the first 30 or 60 days or whatever they told me I had to send it back.

Yeah, but the EZPass flex option is pretty clearly stated that you have to send it back if you don't use it...

No indication? What does it say it was for?

I was just thinking "this can't be right," I am very sure I have bottomed out my account before, I have it so low that a single trip to NYC will do that. Hell, I can bottom it out with a single trip over the George Washington Bridge. It costs $12.50 to get over the George Washington and my EZPass is set up to charge $20 if I go under $10.

So I just tried to make a one time payment, with a card I've never used on EZPass before to see if my balance will update right away and I got this message:

>Thank you for using E-ZPass! Your payment has been credited to your account and will be available for toll usage in 48 hours. If you have an email address on file, you will receive a confirmation email for this transaction. Please print this page for your records. View printer friendly version.

It does say two days to process payment!

But when I checked my toll balance the amount I charged is already added to the toll balance, so I actually CAN use it right away despite what it says.

In fact, in December I've had two EZPass autofills happen on consecutive days (I just checked) and unless I am mistaken that's impossible if the first payment took two days before I could drain it a second time to trigger a second auto payment.

So it looks like it happens at their discretion? It says it takes two days, in my experience it is immediate.

My EZPass account is 15+ years old, for what its worth. 15-20 or whatever years ago I set the auto-refill to be double the toll of the road I regularly took at the time so I'd never run out. Well now I've moved hundreds of miles away so my roads are different and the tolls on that road have more than doubled since then anyways. But I never changed my EZPass setting because it was never a problem!

I'm not sure about you, but I have the option of having my EZPass balance refilled automatically after it gets below a certain threshold -- I have mine set at $10, but I don't go through a lot of tolls everyday. I get a statement every month saying when it refills itself from my bank account. Never have to worry about it, even when going on long trips!

Elastic pricing is whole point of the toll lanes. They are supposed to be stupid expensive when traffic is heavy; otherwise, it would just be another lane

That said, I use them all of the time during non peak hours so I can drive 75-80 without being 10+ over speed limit. (Most express lanes in the DFW are set to 75. The express lanes in the Delmarva area are pretty lame in this regard. They don't even give you a speed bump. It's purely a "pay to suffer less" service.)

Google maps consistently attempts to route you onto these lanes if you are travelling on the west beltway, which is annoying. They have an option to "skip tolls", which might work but isn't the same thing -- there's a difference between opt-in tolls and tolls that are required to use a bridge or highway.

Does anyone know of other cities / areas using this type of pricing? It sounds like this is pretty new, and I'd be interested in seeing any research / studies on the long term impact of this kind of pricing.

I could see how it is both useful and could have a disproportionate, negative impact on lower social-economic classes.

Express lanes have been popping up around Fort Worth.

https://en.wikipedia.org/wiki/Congestion_pricing

I remember reading a while back about a European city that was using it with great success. I don't remember which one though.

London has had a congestion charge for quite a while: https://tfl.gov.uk/modes/driving/congestion-charge

Anyone know the actual results of that?

I've heard both ways, that it helped considerably and that it didn't. (Because London doesn't have many through roads and few vehicles were there that didn't have to be?)

I-95 has them all over

Some of the highways in and out of Minneapolis, MN have HOV lanes with this kind of pricing model. It currently maxes out at $8.

http://www.dot.state.mn.us/mnpass/howmnpassworks.html

MnDoT also added it to I-35E northbound out of St. Paul. There's talk about adding it to I-35W northbound out of Minneapolis, too. I think MNPass entirely managed by the state of Minnesota, though, which may help keep the prices down.

IMHO MnDoT has actually been doing a pretty good job over the last 15-20 years at smoothing out traffic flows considerably in the north metro without adding much in the way of metering/tolls. SW Metro traffic flows still suck from what I hear, although to be fair the topography has something to do with that (i.e. HOW many bridges do we need to build over the Minnesota River?)

I-95 in South Florida. Currently it maxes out at $10 but I heard they are increasing it to $20.

Not sure if there has been any research, but yes I have heard on the radio how some people are against the express lanes because it does have a negative impact for those who can't afford it, and it's quite dangerous.[1] The latter might be due to a bad implementation however.

[1] https://www.kairelaw.com/car-accidents/lane-diving-make-i-95...

It seems like a positive impact for people who can't afford it here in Northern Virgina. The express lanes didn't take capacity away from the normal lanes, but they do take away some traffic, so in theory people who don't use them should still be better off.

Ah, right. I think down here the problem is that the capacity for normal lanes did get reduced.

Yeah, that's a substantial difference. If it's purely additive then at worst there's some sort of opportunity cost. If they transform normal lanes into paid lanes then it's a whole different sort of thing.

Austin, Texas has dynamic pricing on TX-1 express lanes.

I think the algorithm there is probably similar to this one and would ratchet up the price if a slow truck/construction/plow created a condition that looked like congestion.

Couple weeks back due to ice and accidents, the toll got up to $60. People were still willing to pay.

And they are HOT-3 lanes. With the proper EZ-pass transponder and 2 passengers, you flip a switch and pay no toll.

I used to commute to Alexandria for work. Would spend about $15 a day for tolls to use the Express Lanes. Totally worth it.

At first I was appalled.. but then -- screw you and your cars (myself included). It is a horrible solution that we've had for decades, and something has to change. There's no better way than a suplex to the wallet.

Wonder if there will be any exemptions for high occupancy or EVs or whatever. Not necessarily saying there should be, but wouldn't be the first time a 'special' lane has exemptions.

I was just thinking yesterday that I wish there was some way to "call in" with a time to have the toll removed when car pooling.

Everyone needs the EZ Pass to use, but drivers in cars with three or more people in them do ride for free, incentivizing carpooling.

The lanes are HOV-3 if you have an appropriately equipped transponder to signal that fact.

Because toll prices are based on demand, it is difficult to predict exactly what the tolls will be at any given time.

Why should toll prices be based on demand?

Because the whole point of these express lanes is that they're (supposed to be) always moving quickly and never congested. The price is set to whatever it takes to achieve that. People who don't want to pay can take the normal lanes.

Sounds like NoVa/DC. Nothing to see here.

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