Singapore’s congestion charge should serve as a template in how to keep  traffic moving.

Calling all drivers in Toronto. 

Singapore – the densely populated city-state at the tip of the Malay Peninsula – is moving ahead with a state-of-the-art road tolling system and, in the process, offering a valuable lesson to Torontonians in how to tackle congestion on the city’s roads and highways.

The city-state’s most recent plan is to move ahead with a road tolling system that uses a Global Positioning System (GPS) that will charge drivers based on how far they drive and how busy the road is at the time of travel. Officials say the new system, which it will roll out over the next couple of years, will be cheaper than its current tolling system and will be “fairer and more equitable” to drivers, ensuring that they pay a toll proportionate to the amount to they drive. Under the new system, drivers will only pay for what the amount of public roads they use – and the impact this use has on overall traffic conditions — rather than a blanket fee charged to all drivers that is typical under most congestion price schemes.

This is just the latest step by Singapore in ensuring that drivers in the tiny city-state don’t find themselves sitting in endless lines of traffic.

The country’s road-pricing plans started back in 1975, when Singapore’s leaders realized they had a problem: the country’s economy was growing dramatically, income levels were rising and middle class consumption, particularly of cars, was exploding. For a country that is only 10 percent larger than Toronto in size and with little room to expand roads, the result was predictable — traffic congestion. With the number of cars having doubled between 1960 and 1975, the city’s streets became clogged and the average travelling speed fell to around 20 km/h.

So the city’s leaders decided to do something dramatic and implemented the world’s first congestion charge. In fact, the city was so far ahead in its ideas in tackling congestion that the technology to implement a completely electronic system – that would eliminate the need to manually check if drivers had paid the charge – had yet to be invented.

Nonetheless, the manual system was a success. By 1991, the number of vehicles entering the city’s congested downtown core during the peak morning rush hour had fallen to 46,000 – compared to the 74,000 prior to 1975. Meanwhile, car ownership over that period continued to rise.

Eventually, technical innovations caught up with Singapore’s vision of slaying congestion and, by 1998, it was able to implement a fully electronic system, greatly improving the efficiency of the system and eliminating the need to physically check whether drivers had actually paid the necessary fee to drive in crowded areas of the city. In fact, to make it easier for the city’s drivers to get on board with the new system, the government paid for all drivers to have a transponder installed in their vehicles. Drivers then simply had to insert a pre-paid smart card that could be topped up at banks, post offices and gas stations to pay the fee each time they drive on a busy road.

Singapore’s congestion charge offered a very simple promise: when driving in the city drivers are able to post speeds of about 45–65 km/h on expressways and 20–30 km/h on other roads. Those conditions remain in place today.

And by all measures, the electronic system has been a success. The number of cars entering the city centre on any given day during the workweek fell by more than 15 percent and traffic speeds increased. To make the system easier, and cheaper, drivers are only charged each time they enter or leave busy parts of the city. By avoiding a blanket daily fee, the new system helped to cut back on the overall number of trips made by drivers and induce a more efficient use of the city’s roads.

Officials – concerned that citizens would see the congestion charge simply as a cash grab – insisted their true intention was to eliminate congestion, not raise revenue. The numbers backed them up. Revenue raised from the congestion charge after the new electronic system was installed was 40 percent lower than under the previous system. The electronic system allowed officials to raise prices only for a few peak travel periods, while lowering them for most of the other time periods. Overall, the average driver ended up paying less in congestion charges on any given day as most rates were reduced outside of the peak travel times.

In defending the new GPS congestion charge, officials have been adamant that it will not be used to hike road tolls and will continue to used as tool in taming congestion.

Toronto should pursue a similar policy where drivers internalize the cost of their travel. A congestion charge is another way to use a market-based system to improve traffic flows and ensure drivers have the ability to choose how much their time is worth when it comes to commuting.

Brady Yauch is an economist and Executive Director of the Consumer Policy Institute (CPI). You can reach Brady by email at: bradyyauch (at) consumerpolicyinstitute.org 

Related articles

• Drivers Hate Congestion Charges, but Does it Actually Work [Infographic] (urbantimes.co)
• Bringing the market to Toronto’s congested highways (cpi.probeinternational.org)
• Traffic congestion and loathing in Toronto (roadtrafficsigns.com)
• London Congestion Charge (wiki.openstreetmap.org)
• Analyst says congestion charge provides stable income (radionz.co.nz)
• Congestion Charging: Does It Work? (business2community.com)

Photo courtesy of beachdigital