Houston turns to prices to solve congestion woes

Officials in Houston are using the power prices to tackle congestion on a busy stretch of highway.

The power of prices is solving congestion on one of Houston’s busiest highways.

Officials in the sprawling Texas city – home to 2.1 million people – last month raised the peak toll by $2 on the 12-mile stretch of Interstate 10 to $7 in order to ease gridlock. The highway uses a dynamic pricing model, where the price of tolls increases with demand and falls when traffic is light. The goal of the toll is to ensure that the average speed of traffic doesn’t fall below 53 miles-per-hour.

The impact of the price increase is already evident.

During the afternoon rush hour the number of solo drivers (carpools, motorcycles and buses use the lanes for free during peak periods) using the toll road fell to 1,792 from 1,922, a near seven percent decrease, according to officials that oversee the road.

The price increase is also having an impact on public transit use. One bus route that travels along the toll road has experienced a 15 percent increase in the number of riders since officials hiked the toll.

Using the lanes helps drivers avoid time spent sitting in traffic. Recent studies on the tollway show that drivers can shave 5 minutes off of their commute to work in the morning and another 14 minutes on their way home. The average speed during busy travel periods is 20 mph faster in toll lanes than in general purpose lanes.

The recent move by officials in Houston is part of a near 20-year experiment to tackle congestion on the highway in the fast-growing city. Officials initially installed a carpool lane, which allowed those driving into the city in morning and returning home in the evenings to drive in a specially-marked lane. But by the mid 1990s officials declared the design of the highway obsolete, as the maintenance costs were more than four times the average highway in other parts of Texas.

After extensive studies and construction, the new toll lanes – two in each direction – opened in 2009 and soon neared their peak carrying capacity. Prices, then, became the tool that policymakers used to ensure that traffic moves smoothly along the 12-mile stretch of road.

And according to a recent study, the toll lanes have been a “success,” with the number of drivers using the lanes more than doubling between 2009 and 2011 while traffic largely flowed freely.

The tolls have also been well received by the public, who say they use them not only to save time, but also because they feel safer due to the lack of trucks – who aren’t allowed to use the lanes. Other drivers say the toll lanes are less stressful.

The toll lanes also offer drivers a choice, with many travelers opting to use the lanes only when it’s most convenient to them. In fact, only 3% of all drivers surveyed who use the highway say they only drove on the tolled portion – meaning most drivers decided when their time was most valuable for them and made a choice on whether it was worth the cost to avoid congestion.

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 or at (416) 964-9223 ext 236.