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San Francisco flirts with ’smart pricing’ (aka, the rush-hour tax)

By | December 22, 2010, 1:18 PM PST

You’ll need to bear with me a moment, because this post involves several emerging policies with brand-new catch phrases for yours truly. But here is the crux of the matter: The city of San Francisco has just delivered a study about the potential economic and environmental impacts of so-called “cordon pricing,” or the idea that transportation tolls and other fees should be higher in periods of congestion. Such as the peaks of the morning and evening rush hours that gridlock many urban centers around the world.

I just read about the latest developments in the Way2Go blog published by the Environmental Defense Fund. You might recall the New York City was flirting with a proposal to charge different fees for driving into Manhattan at certain times of day. But that idea got the kibosh at the state level. But that hasn’t stopped San Francisco County from exploring the ramifications for the Bay Area.

The San Francisco County Transportation Authority (SFCTA) is now considering a feasibility study for a congesting pricing plan that could get a demonstration by 2015, which actually seems pretty far away, but apparently the economy is a factor in waiting a while. But, long-term, the city thinks it needs to do something. According to the lengthy “Mobility, Access and Pricing Study” it has these overall goals:

  • Improve mobility by reducing travel time and improving “system efficiency” for motorists and transit passengers
  • Increase accessibility by providing more transportation options
  • Enhance quality-of-life in neighborhoods that are affective most by traffic or tailpipe emissions
  • Promote economic vitality

The San Francisco study holds up both London and Stockholm as examples of congestion pricing done right. London, for example, has been charging drivers a flat fee for driving within an 8.5-square mile region in central London. This program has been in place since 2003, and the city has reported a marked increase in the flow of traffic. Before the pricing scheme, it was 2 to 5 miles per hour, now the average is 10 miles per hour. The traffic has been reduced by about 30 percent, while greenhouse gas emissions have decreased by about 16 percent. Stockholm, which has been using congesting pricing since 2006, has seen a 22 percent reduction and a 14 percent reduction in greenhouse gas emissions.

Here’s why San Francisco is studying this idea:

  • On an average weekday, the city’s “transportation” system servers more than 4 million trips across all different travel modes. By 2030, that number could reach 5 million trips per day, based on projects in population and job growth.
  • Trips toward the various target delay zones in the downtown area already take twice as long during peak periods, versus off-peak periods
  • San Francisco estimates that the average “cost” of congestion in terms of passenger delay, fuel costs and commercial vehicle costs could be $2.46 billion by 2015. By 2030, however, these costs could reach $38.9 billion annually.

Here’s the crux of the matter, according to the study:

City goals, policy and investment will concentrate future growth in San Francisco’s most transit accessible areas–locations that are already the city’s most congested. This growth will present unique challenges and will differ in pace and character from previous generations of San Francisco development, which was dominated by financial district employment growth and was supported by major transit investments including the Muni Metro and BART systems. The city’s future development patters will include substantial quantities of housing and will occur as the trend in out-commuting to suburban job centers continues. If growth proceeds in a business-as-usual fashion–without new system management policies and funding strategies–traffic congestion will substantially worsen, bringing gridlock and stifling economic activity.”

There are a number of scenarios proposed by the SFCTA.

One, planned for both the morning and the evening, would collect $3 per crossing from cars entering or leaving the Northeast Cordon (border by Laguna and . (There would be a cap of $6 per day.) Another scenario would collect $6 per day from cars leaving the zone, during peak evening traffic. The money collected under both scenarios would be reinvested in the Bay Area transportation system. The SFCTA actually back-burned an option that would charge $3 per cross from cars crossing the San Francisco-San Mateo county line in both directions in both AM and PM peak hours (capped at $6/day).

The promotional video recaps the pricing plan and the potential impact, bringing it to life.

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Heather Clancy

About Heather Clancy

Heather Clancy is a contributing editor for SmartPlanet.

Heather Clancy

Heather Clancy

Contributing Editor

Heather Clancy has written for United Press International, ZDNet, Entrepreneur, Fortune Small Business, the International Herald Tribune and the New York Times. She holds a degree from McGill University. She is based in New Jersey.

Follow her on Twitter.

Heather Clancy

Heather Clancy

I am fascinated about how businesses of all sizes can transform their operations through technology -- not just to make themselves more efficient, but to rise above their competitors. That's the theme for my two ZDNet blogs, Small Business Matters and Next-Gen Partner. For SmartPlanet, I'm focused on profiling inspirational and controversial business leaders who have great leadership lessons to share. I also write regularly and passionately about corporate social responsibility and sustainability issues for GreenBiz.com.

Occasionally, I will pop up at an industry conference in some sort of speaking capacity. In cases where an engagement involves a sponsor that may be covered in this blog, that fact will be disclosed in coverage as appropriate.

My corporate writing work usually consists of crafting research white papers about some aspect of technology or moderating Webcasts. In the event that my commentary (in written, audio or video form) mentions a company for which I have provided consulting advice, I will disclose that fact. However, there is no connection between these projects and topics that I cover in my blogs.

She writes for SmartPlanet and is not an employee of CBS.

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+1 Vote
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RE: San Francisco flirts with 'smart pricing' (aka, the rush-hour tax)
I think this is a great idea. Granted due to the fungibility of money (the city will decrease funding from the general fund on transportation, that is transportation funding will stay the same with or with-out the toll) this will just improved traffic to though who would pay, and yes save time to thoughs who are willing to pay, gas and cause more people to use public transporation.
Posted by bcclendinen@...
23rd Dec 2010
+1 Vote
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RE: San Francisco flirts with 'smart pricing' (aka, the rush-hour tax)
In London they are removing HALF of the congestion (TOLL) Zone from 4th Jan after protests since it was started. It kills business in area & causes increased pollution on the peripheral roads around the zone. How do I know this.. I live about a mile outside the part of the zone they are removing. These things are a money making exercise it was ?8 for daily zone payment with ?60 fine for none payment! that is real reason did nothing for traffic in real terms. Now the other half of Zone ( London west end) toll has gone up to ?10 daily. But an automatic debit system for registered drivers should cut down on the fines, they are putting more traffic parking attendants out to get motorists that stop plus automatic cameras to catch you parking. All about making money ?120 fine for overstaying on meter or parking in wrong place This is reduced to ?60 if paid within 28 days but go?s up to ?180 if not! If you are towed away its about double.
They don?t bother to tow away very old cars as people just leave at pound! Then there is the clamp (Denver boot) ARGAAAAA??
Posted by ronangel
23rd Dec 2010
+1 Vote
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RE: San Francisco flirts with 'smart pricing' (aka, the rush-hour tax)
If politicians were as good at actually fixing problems as they are at finding new ways to squeeze us for more money, we wouldn't have half of these problems...
Posted by winddrift03
23rd Dec 2010
+1 Vote
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RE: San Francisco flirts with 'smart pricing' (aka, the rush-hour tax)
I think that you really have to look at the whole picture. That is hard because data might not be available.

Many commuters have no control over when they work. This will adversely impact middle class and lower minimum wage. Perhaps more emphasis should be given to flexible work schedules.

This could impact what hours some businesses are open, because it will keep people from heading in. They may choose to shop locally or on the internet.

However, I hate rush-hour traffic because I think about the gas I am wasting and the time.

Laws and regulations should be thought through more before they are mandated.
Posted by Joan279
23rd Dec 2010
+1 Vote
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RE: San Francisco flirts with 'smart pricing' (aka, the rush-hour tax)
Will this stop man-made global warming, and the NATURAL jet stream?

Bwahahahahahah
Posted by Albee_Freeoneday
23rd Dec 2010
+1 Vote
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RE: San Francisco flirts with 'smart pricing' (aka, the rush-hour tax)
Well. Maybe business will finally decide to move out of San Francisco and come to my state. California-a business free-zone.

Bwahahahahaha.
Posted by maoszman804
23rd Dec 2010
+1 Vote
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Proper development strategy..
If they had properly managed the regional development, instead of the chaos that happened, they would not have these traffic problems.

Traffic, pollution and a host of other social ills are what happens when you develop an entire state in a region mostly unfit for large-scale human habitation.

If Californians took a hard look in the mirror they would see the light and move half of them out of the state with the hope the remaining have enough resources to survive.
Posted by Hates Idiots
23rd Dec 2010
+1 Vote
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RE: San Francisco flirts with 'smart pricing' (aka, the rush-hour tax)
I am fortunate to live in a smaller big city that doesn't have as much of a problem, with this. I also do not work downtown, so I can drive the East-West (I-40) freeway at highway speeds most of the time. The North-South (I-44) one is usually a long parking lot at rush hour times, there again I don't have a need to be on it, and usually when I am it is in th eopposite direction of most traffic. We have Flex time where I work and I come in at 0730, however I do leave at 1700, so I run into traffic on the way home.many times it is just as easy to take arterial city streets @45mph as it is to try the interstate, just getting there to it can be a time consumer (about five miles distance, and 1/2 mile of vehicles awaiting favorable traffic lights). I would think that even in places like SF, one could take the "back roads" and make better time than the main drag and go 10 mph, if that much. Since the alternate routes I take are in rural areas of the city there is only a stop sign every mile or less on some streets. I don't understand why people don't take alternative routes, if they know they will be in a rolling parking lot.
Posted by dhays
23rd Dec 2010
+1 Vote
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RE: San Francisco flirts with 'smart pricing' (aka, the rush-hour tax)
As a note, The Netherlands is planning to start a use based tax
system, based on when and where you are driving. It is supposed
to replace the car property tax. However, the population does not
trust the politicians in their claims that it would be tax neutral. So far
it is been delayed.
Posted by jackvandijk
23rd Dec 2010
+1 Vote
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RE: San Francisco flirts with 'smart pricing' (aka, the rush-hour tax)
The idea is that only the rich people - all those that can afford to pay - will pay and everyone will be forced to use public transportation or stay in gridlock.
And of course they will raise the prices to the maximum "free market" price that people are willing to pay in order to get the most money from those people.
The excuse is enviromental and better transportation, but the reality is that the money will not be dedicated to transportation needs of cars - it will go into the general fund and be used for anything possible. After they did the fees in London the money collected was used to allow the musuems in central london to no longer charge addmissions - the car money was used to support the museums instead. Expect the same here.
Posted by TAPhilo
23rd Dec 2010
+1 Vote
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RE: San Francisco flirts with 'smart pricing' (aka, the rush-hour tax)
For years San Francisco has followed a policy that actively discourages auto traffic. Currently, the city is expanding bike lanes through out the city beyond downtown. Downtown is well served by BART, MUNI and CalTrans. One of the reasons Downtown is so congested is the geography, a large part of downtown is constructed on land fill. Another reason is that a lot of people who work downtown live as far as 100 miles away and BART, Muni and Caltrans are limited to the Bay area; therefor many people have to drive.

I am not keen on having a congestion toll charged. What I expect to happen if congestion tolls are collected is that the people who drive to work downtown will take the secondary and tertiary streets and just move the congestion outside of downtown. This has happened before when the central expressway was torn down; people found other routes to get around and it adds wear to the streets.
Posted by sboverie
23rd Dec 2010
+1 Vote
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RE: San Francisco flirts with 'smart pricing' (aka, the rush-hour tax)
This article fails to mention the blow-back from the San Francisco congestion pricing proposal. Since most of the downtown traffic is caused by out-of-town commuters who work in the city (because most of them do not make enough money to be able to afford to own a house or even rent an apartment in San Francisco), the County of San Mateo has threatened to impose their own toll charges on traffic to the San Francisco Airport (located south of the City in San Mateo County). In short, if the City of San Francisco follows through on this proposal, which will cause economic hardship on their citizens, many of whom have to commute to SF, the County of San Mateo will levy another toll to punish travelers (and by extension, tourists) who wish to get to SF International Airport from downtown.
Posted by terry.floyd@...
23rd Dec 2010
+1 Vote
+ -
I love it.
You do realize this is nothing but a money grab. They really do not care about controlling traffic. If they did they would limit development.

Now they will have a battle of the taxes and the citizens lose.

California will never control development because it has been a stated goal of California Politians for over 100 years to grow the state population and gain more seats in Congress.
Posted by Hates Idiots
24th Dec 2010
+1 Vote
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RE: San Francisco flirts with 'smart pricing' (aka, the rush-hour tax)
dhays, I'm not sure there are many streets you could consider "back roads" in San Francisco. Situated as it is on a peninsula you have the Golden Gate Bridge coming in from the north, the Bay Bridge coming in from the east and a couple of freeways coming in from the south. That really limits your options. If you already live in the city it has pretty good public transportation but it's an expensive place to live. Anyone coming from outside the city has pretty limited options on getting in.
Posted by riverat1
24th Dec 2010
+1 Vote
+ -
Another Great Idea from CA
When are the stupid lefties going to understand that taxes are regressive and do not help the economy. People will get angry and ultimately find ways around it. People don't always have control over their work schedules.

The way things are going in CA they won't need to worry about congestion. They are losing businesses at an astounding rate ! A bunch of software companies just moved to Utah.

This is about as good an idea as the restrictions put on Happy Meals and big screen TVs. They are nuts in CA. This idea is solely to raise money because CA is bankrupt.

Don't come to us CA for a bail-out. You are on your own !
Posted by pizzaman7
27th Dec 2010
+1 Vote
+ -
RE: San Francisco flirts with 'smart pricing' (aka, the rush-hour tax)
Readers in China set off a wave of madness, I thought the book can
replace the ordinary, in fact, people more often chose books, and
later China's R & D team discovered from the htt://www.vornline.com
Posted by chinavornline
30th Dec 2010
+1 Vote
+ -
Another piece of (non) wisdom from the right
When are stupid righties going to understand that taxes have little to do with how well an economy does. If they do then how come the economy did so well in the 1950's when the top marginal rate was 91%? Or how does Europe which has higher taxes than the USA do as well as it does?
Posted by riverat1
30th Dec 2010
+1 Vote
+ -
Why do politicians grab money?
They can't get rich off of it without the citizens being ignorant of
their doings. They are our representatives and we should be able
to demand of them what we want for our city. The problem is that
short-sighted, narrow-minded selfish idiots keep electing the
guys who promise something for nothing. So the politicians have
to find a way to raise money without actually taxing everyone.
Everyone wants the roads to themselves and doesn't want to pay
taxes to keep the roads in good shape. What are we? A nation of
perpetual 2-year-olds!
Posted by technology@...
3rd Jan 2011
+1 Vote
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Please keep in mind riverat1..
Please keep in mind that the top marginal rate in through the 1950s and early 1960s, set at as high as 91 percent, with paid ammounts capped at between 77 and 90 percent by statue depending on year, applied to people earning over $400,000, or over $3 million in 2010 dollars.

That is a far cry from the $250,000, 2010 dollars, which President Obama wants to tax at the top marginal rate. A top margin set at $3 million would cover about .02 percent of wage earners.
Posted by Hates Idiots
4th Jan 2011
+1 Vote
+ -
RE: San Francisco flirts with 'smart pricing' (aka, the rush-hour tax)
Of course. That's why I included the word "marginal" although the distinction is often lost on people.

A top margin set at $250,000 would cover less than 1.5% of wage earners.
Posted by riverat1
4th Jan 2011
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