Seems like an example of supply and demand working as intended.
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?
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?
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.
As it stands now all of the volatility in transit times is externalized to the commuter.
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.
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.
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.
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.
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.
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 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.
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""...
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.
Keep raising the price until enough people are no longer willing to pay that the road isn't congested.
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.
We also don't allow our fire departments to price-gouge.
I don't get the comparison to fire departments. This isn't a safety issue.
Equal access meets some definitions of fair, priority for payment meets others.
Especially in DC, so close to the maggots' nest.
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.
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.
OR - the other people who can't use these lanes get to their destination slower?
"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...
There's plenty of private roads and bridges.
That said, it's probably reasonable snow trucks get extremely high priority.
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)