Drivers can’t pay enough on popular Florida toll way

A Florida toll way has been so popular with drivers that the price to use it has repeatedly hit a politically-imposed cap.

A politically-imposed cap on the amount drivers can pay to use the I-95 highway heading north out of downtown Miami, Florida is curtailing the success of the toll way and resulting in a build-up in congestion and slower driving speeds. The highway, which aims to keep traffic flowing at a minimum of 45 mph, does so by raising prices during times of heavy use and lowering them when demand for the highway drops.

But in order to get politicians on board with the project before it opened in 2008, officials in charge of the highway had to agree to put a $7 cap on the toll charged to drivers – which worked out to drivers, at most, paying $1 per mile travelled. One long-time transportation specialist that helped introduce the idea of using prices to fight congestion calls that deal an unfortunate political compromise.

New data suggests that by limiting the price drivers are willing to pay in order to avoid sitting in traffic, officials are actually undermining the whole project. After all, a system that uses prices as a way to avoid congestion must be able to fluctuate according to the demand for that service. The price must be able to truly match demand.

The number of trips during the busiest travel times that are above the 45 mph threshold has, in recent months, been trending lower. While at the same time the number of times that the so-called price ceiling has been hit has been increasing. The maximum $7 toll has been hit more than 80 times so far this year, compared to just 73 times over the past three years.

Transportation specialists say this is not a coincidence. The toll lanes have been very successful in attracting drivers – with ridership levels above forecasts – who are willing to pay in order to avoid congestion. Prior to the recent trend of hitting the $7 price ceiling, the tolled lanes maintained free-flowing traffic conditions through nearly all rush hour periods, when demand for the highway is strongest. The average driving speed in the tolling lane, for example, has been consistently 10 mph to 15 mph higher in the tolled lanes than the free lanes.

But by putting a ceiling on the amount drivers are willing to pay to avoid sitting in traffic, politicians are undermining the very system they set up. In order for a market to develop prices have to be able to match demand – which was exactly what was happening on the I-95 expressway until the region’s politicians began meddling in the project.

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