Distance-dependent congestion pricing for downtown zones

• Trip heterogeneity is introduced in congestion pricing models of the morning commute problem.
• A quasi-optimum formula for a usage-based, time-dependent congestion toll is given and tested.
• The proposed usage-based toll delivers greater user benefits than trip-based tolls.
• The proposed usage-based toll extracts minimal user fees.
• Toll payers are found to benefit from the toll.

A growing literature exploits macroscopic theories of traffic to model congestion pricing policies in downtown zones. This study introduces trip length heterogeneity into this analysis and proposes a usage-based, time-varying congestion toll that alleviates congestion while prioritizing shorter trips. Unlike conventional trip-based tolls the scheme is intended to align the fees paid by drivers with the actual congestion damage they do, and to increase the toll’s benefits as a result.The scheme is intended to maximize the number of people that finish their trips close to their desired times. The usage-based toll is compared to a traditional, trip-based toll which neglects trip length. It is found that, like trip-based tolls, properly designed usage-based tolls alleviate congestion. But they reduce schedule delay more than trip-based tolls and do so with much smaller user fees. As a result usage-based tolls leave most of those who pay with a large welfare gain. This may increase the tolls’ political acceptability.