ROAD PRICING AND PUBLIC TRANSPORT: LESSONS FROM LONDON

Sponsored by
ITS-Irvine, Department of Economics
Department of Planning, Policy and Design and
Program in Transportation Science
Time
04/15/2005 12:00–13:30
Location
Room 408, Multipurpose Academic & Administration Building
Kenneth A. Small
Department of Economics and Institute of Transportation Studies University of California, Irvine
Abstract
Road pricing can enhance public transportation by increasing its speed and service frequency. I examine these effects with a model of local bus service in London’s city center. The model focuses on four considerations: the cost savings to transit users and operators from reduced road congestion; the service improvements made feasible by increased ridership; the potential pass-through of operator cost savings as fare reductions; and the resulting multiplier effects on ridership and service offerings. I apply the model using data from the first few months of a February 2003 pricing program. Simulation results suggest significant effects even if pricing revenues had not been used to augment the transit budget as they were in London: a ridership increase of 11%, a service increase of 7% and user cost savings equivalent to 38% of the fare. Net benefits from these effects are equal to 39% of initial operator costs. These effects, but not the net benefits, are even larger in cities with more typical values for bus subsidies and initial modal share.