Mobility Pricing

by Rachel Weinberger, Michael King, Tarun Sharma

Mobility – moving across cities, between regions, and around our neighbourhoods so we can reach our jobs, schools, customers, and family members, and to access important goods and services like groceries, housewares, our doctors and government offices — is an essential function of a productive and healthy society.  No one wants muddy, impassable roads and broken-down busses.  We achieve mobility in many ways including on foot, bicycle, motorbike, scooter, vikram, auto-rickshaw, bus, taxi, automobile, Metro, and the occasional pack animal.  To deliver goods we rely on trains, trucks and carts, sometimes pulled by camels.

People often take mobility services for granted but it costs money to build and maintain roads, purchase buses, and pay drivers.  Streets are seemingly “free”; however, taxes are required for construction, maintenance, traffic signals, policing, ambulances, and the like.  Fares and tolls contribute to the cost of transit and toll roads, but almost never the full amount.  It is fair to say that both users and non-users alike shoulder the financial burden of mobility.

In addition to funding how these services are provided, the relative prices impact how people choose which mobility option to use.  By aligning price with cost and by putting a heavier price on congestion and emissions, mobility pricing influences individual choices to create a collective outcome that yields the most efficient mobility best serving individuals and cities/regions at once.

In most locations, for example, infrastructure that supports automobile use –like roads and parking facilities— is free to the user or the cost is buried in other places –car parks that are mandated with construction hide the costs of providing parking stalls in the building.  Unless the cost of parking is separated, all residents regardless of whether they own a car pay for the parking. The greater the subsidy the greater the demand.

When establishing prices, local and national governments chose which options they want to privilege and which the wish to discourage.  Pricing the roads to alleviate congestion or to penalize greenhouse gas emissions serves the dual purpose of raising money to pay for transportation improvements and nudging the users to rethink their choices.

The city of Dehradun recently started charging automobile users for parking. About 460 ECS worth of parking spots are available on Rajpur Road, the main travel corridor in the city. This policy initiative reflects an effort to align costs of emissions and congestions with use of automobiles. These efforts are also reflected in Dehradun's Child Friendly CITIIS project which aims to make the school commute more child-friendly. Given the low costs associated with use of private modes, many wealthier parents use private vehicles to transport their children to schools. The Child Friendly CITIIS project aims to incentivize the use of non-motorised and public transport over private modes.

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