Every 15 minutes for the past nine months, an algorithm has been setting and resetting the price of the express lanes on I-495 in Virginia – part of the Washington D.C. Beltway – based on the number of cars using the lanes. When more cars enter the lanes, the toll rises, and when traffic density falls, so does the toll.
Dynamic pricing is a key component of many High Occupancy/Toll (HOT) lane systems like the 495 Express Lanes. HOT lanes emerged as a response to the perceived underutilization of High Occupancy Vehicle (HOV) lanes. HOT lanes sought to address this by allowing not only high-occupancy vehicles into the express lanes, but also drivers who pay a toll. The HOT lanes on 495, however, were built as new lanes, rather than converted HOV lanes.
Already, the HOT lanes on 495 seem to be avoiding the problem of low utilization, presumably due to the toll option. With 91 percent of the drivers in the express lanes paying tolls (meaning only 9 percent are high-occupancy vehicles), toll revenue has been steadily growing since the lanes opened.
This dynamic pricing is managed from the 495 Express Lanes Operations Center in Alexandria. While staffers monitor video feeds looking for accidents and disabled vehicles, the actual pricing algorithm requires minimal human involvement on a regular basis. The pricing algorithm allows Transurban, the Express Lanes’ private operator, to ensure that rush-hour speeds in the lanes stay above a contractually-required 45 mph. The algorithm helps Transurban understand traffic trends over time, enabling better management of the Express Lanes and how a given toll change will affect the number of drivers who enter the lanes.
While the entirety of the data on traffic volumes and tolls has not been made accessible to the public, it is possible to draw some preliminary conclusions from the Historic Rates tool on the 495 Express Lanes website. This tool gives anyone access to any toll from the past 30 days.
The graph below uses data from the Historic Rates tool to show the pricing algorithm in action. Tolls can be seen to almost constantly stay at the $2.05 mark, which is likely a minimum set by Transurban to ensure a degree of revenue predictability. It is only during peak commute periods that traffic volumes cause the algorithm to increase tolls above the minimum.
In the debate over whether a vehicle miles traveled (VMT) tax can fund America’s crumbling roads and bridges better than the unpopular and ineffective gas tax, a central question is whether drivers will be willing to accept a per-mile fee for road usage. The data above, while preliminary, seems to suggest that many Capital Region drivers are open to road pricing, at least when they can see clear benefits.
Transportation demand management advocates should take heed of the lessons that can be learned from the 495 Express Lanes.
- First, with the right investment in technology, price can be an effective lever to reduce demand for a road and manage traffic. And even in a metropolitan area that often tops the list of America’s most congested cities, that price doesn’t have to be astronomical to work.
- Second, drivers seem to be much more willing to pay for the convenience of reduced traffic rather than finding more passengers in order to qualify as an HOV. This may be because carpooling requires rather significant behavior change for drivers, so they may find that a solo car ride to work is worth a few extra dollars.
In the months and years to come, hopefully we will be able to learn more about how HOT lanes like those on 495 affect travel choices more broadly, both on and off of the express lanes themselves.
Photos by Virginia Department of Transportation and Henry McCaslin