Utilizing Congestion Pricing to Ameliorate Peak-Load Problems

How Do We Lighten Peak-Load Problems Using Congestion Pricing?

Glaister (1974) considers the properties of off-peak and optimal peak public road-transport fares in urban conditions where the transport operators have to cope with the simultaneous problems of road congestion caused by private motorists and of peak loading caused by the "rush hour" characteristics of demand. In the case where there is traffic congestion at the peak period and there is no shortage of buses or crews Glaister (1974) has discovered that it would be desirable to achieve a transfer of travelers to off-peak periods. This would reduce congestion on the road, speed up all journeys and reduce peak travel times and peak bus operating costs. Even more optimal would be a transfer from car to bus, since this also eases congestion and speeds up peak journeys because a car consumes more road space than a bus (Glaister, 1974).

Reducing public transportation's peak fare, therefore, should be useful in reducing the number of peak hour motorists, and thereby also reducing road congestion. On the other hand, if there is no congestion - but there is a limited number of buses or crews - the peak fare must be fixed so demand does not exceed the available capacity (Glaister, 1974). In this case fares should be arranged so as to divert some peak demand into the off-peak period. Furthermore, off-peak prices should equal marginal operating costs, and peak prices should be fixed so demand is equated with available supply. When off-peak fares fall below marginal cost, the desired switch of demand will be achieved (Glaister, 1974).

Dr. Ortner feels that the issue is not making public transit in Los Angeles more affordable - rather, it is finding a way to prevent it from becoming less affordable. "Transit is reasonably priced. The current MTA (Metropolitan Transit Authority) fare is $1.35 plus $0.25 for a transfer. Municipal bus lines in the metropolitan area charge $0.75 - $1.00. San Diego, for example is charging $2.00 per trip while Orange County Transportation Authority charges only $1.00 per boarding. Given economic conditions in Southern California, the issue is not making them more affordable; it is how to prevent then from becoming less affordable."

Amy Ford, graduate student researcher at UCLA, would like to give considerations to income levels to help improve fare equity in Los Angeles. "For those who are very poor and dependent on transit, it is probably a substantial portion of their monthly budget. We would like to see fare restructuring in Los Angeles that gives some consideration to income level. We would also like to see time-based fare structures that would give some discount to those who travel during non-peak hours. We imagine these are people who have a fixed income or non-white-collar jobs, as they have the flexibility to travel at off-peak hours. In addition, we would like to see distance-based fares in LA that would charge more for longer distances traveled. If we could combine distance, time, and income-based structures, we think we could come up with a fare structure that is more equitable, and hopefully more affordable as well."