Comparing Dynamic Pricing Strategies for Managed Lanes
A project by: Jorge Laval, Ph.D., Georgia Institute of Technology; Yafeng Yin, Ph.D., University of Florida; and Yingyan Lou, Ph.D., Arizona State University
(2012-089S - Comparative Analysis of Dynamic Pricing Strategies for Managed Lanes)
The United States has more than 20 Express Toll Lanes currently in operation, where drivers have the option to pay a toll to travel faster. It might seem that express lanes are beneficial only to toll payers, but they actually also benefit the users in the general purpose lanes.
Researchers in this study focused on the pricing strategy that would maximize the benefits to all users, and found that minimum total system delay can be achieved in many different ways. This gives operators flexibility to allocate traffic to either alternative according to its specific objective while maintaining the same minimum total system delay. They also found that maximum revenue is achieved by keeping the toll facility at capacity and without queues-- which is typically the main objective in practice-- but that near the end of the rush hour a queue should be allowed to form also in the express lanes.
The research team analyzed ways to improve the negative attitude towards pricing of express lanes. In order to improve travellers’ experiences, the study explored a refund option for express lanes pricing. Simple but reasonable models are adopted for express lanes usage and traffic dynamics. Mathematical methods were developed to determine express lanes operational parameters, including the toll rate, the refund amount, the premium for the refund option, and the travel time saving guaranteed by the operator.
The preliminary results of the study indicate that the models are able to capture important uncertainties and the proposed approach is able to achieve express lanes operational objectives.
Dr. Laval and his team have proposed a scheme that motivates firms to implement staggered work schedules to reduce bottleneck congestion in the morning commute. In this scheme, “mobility credits” are allocated to employees or traded among firms at a credit market. The results show that such a scheme can improve social benefit without causing much loss to commuters.