A Misguided Approach to Road Pricing  

WorldChanging has a post on a Dutch scheme to reduce congestion and vehicle emissions via a national monitoring scheme to track car usage and dynamically charge road users based on a range of criteria. While their intentions are good, this basically amounts to a massive, nationwide surveillance system, which means it gets a big "thumbs down" from me I'm afraid - Netherlands Plans Massive Road-Pricing Scheme.

How did I miss the fact that the Netherlands is planning to wire up the entire nation for a massive road-pricing scheme, starting in 2011? Sort of the love child of a congestion pricing program and a gasoline tax, the scheme will use satellite technology* to track every vehicle in the country and charge them per-mile-driven according to a flexible rate schedule. Initially the program will cover just commercial trucks, expanding over time to all vehicles by 2018.

According to the (surprisingly lucid) government proposal, the road pricing will be “differentiated by time, place and environmental characteristics while proportionally eliminating fixed charges.” It’s worth unpacking this a bit:

* Fees will vary according to time and location, so that the program can specifically target congested areas. This is similar to the congestion pricing scheme that has been successful in London, on a much larger scale. A similar scheme was recently rejected in New York City, and is now under consideration in San Francisco.

* Fees will vary according to the fuel efficiency of the vehicle, to encourage drivers to switch to cars with a lighter footprint.

* The entire program will be revenue neutral. As the program ramps up, the Netherlands will phase out its stiff motor vehicle tax. Such a system is inherently more fair: people who drive infrequently will actually pay less under the new system. Heavy drivers will pay more.

That last point is worth underlining. The knee-jerk reaction to such programs is that they’re regressive intrusions that saddle all drivers, but particularly low-income drivers, with new fees in the pursuit of some lofty environmental goal. This program is revenue-neutral, and will help to make roads more accessible to low-income drivers by charging people for actual road use rather than for car ownership. The system will also benefit drivers by reducing the amount of time stuck in traffic.

One interesting quirk of the system: because a straight vehicle tax is being swapped for a per-mile fee, cars will actually become cheaper and car ownership should therefore go up. Total miles driven, on the other hand, will drop. This sort of “mobility as a service” arrangement may become more common in the future. For example, Shai Agassi has been on a tear recently with Better Place, which aims to sell electric vehicles on a pay-as-you-go cell phone model.