The (pricing) culture that Washington is not

by on December 5, 2017 at 12:22 pm in Economics, Travel | Permalink

The Interstate 66 toll lanes opened Monday in Washington’s Northern Virginia suburbs with prices so steep they could be among the highest drivers have paid for the privilege of traveling on a state-owned highway in the United States.

Tolls in the high-occupancy toll lanes hit $34.50 — or close to $3.50 a mile — to drive the 10-mile stretch from the Beltway to Washington during the height of the morning commute.

Bravo, but we’ll see how this develops.

1 Al December 5, 2017 at 12:29 pm

“Motorcycles and vehicles carrying two or more people have free use of the lanes.”

The prices are entirely false. Get rid of the virtue signaling and we will see the actual prices.

2 Yancey Ward December 5, 2017 at 12:55 pm

Well, there is shortage of organs for transplant, so increased motorcycle use might be socially a plus.

3 Roy LC December 6, 2017 at 1:06 am

Maybe if we add an organ donor requirement… but restricted access highways are notorious for very low accident rate.

4 Mulp December 5, 2017 at 12:56 pm

Paying a hated coworker to share your ride to work for $20 becomes profitable?

5 Daniel Weber December 5, 2017 at 12:57 pm

Toll lanes already encourage car pooling. If I’ve got 4 people in my car a $20 toll becomes $5 a head. Why subsidize further?

There’s a name for paying people to ride in your car so you can use the HOV lane but I can’t google it. But it’s a job that shouldn’t exist.

6 John Thacker December 5, 2017 at 1:02 pm

In the DC area the practice is called “slugging,” but requires no payment, a simple willingness to ride.

What people not from the area are missing is that this stretch of road already made it illegal to travel alone during these hours. The entire difference is that instead of people risking a fine (and using mannequins and so forth), they have the option of paying a known amount of money in tolls. Some may still prefer to risk the occasional much larger fine.

Speaking of “getting rid of virtue signaling,” the one set of single drivers affected are drivers of hybrids, who used to be exempt from the carpool requirements (with a special license plate), but no longer. Therefore, if anything, it really seems that all the grumpy folks attacking this change should be applauding the relaxation of previously extremely strict carpool requirements (and elimination of questionable exemption), whereas the carpool advocates should be mad that now people can pay to evade the carpool rules.

7 Daniel Weber December 5, 2017 at 1:14 pm

Slugging was the term, thanks.

If people are slugging for free, that updates my previous point. The toll-exception is creating a market for these people to find each other and be more efficient, so while they should still eliminate the exception, it’s at least not moving in the wrong direction (like I thought earlier).

8 Jeff December 5, 2017 at 1:37 pm

>>this stretch of road already made it illegal to travel alone during these hours

Not quite. The hours are slightly expanded now. I have a coworker who used to come in from Manassas at 6am and leave at 3pm so he could ride I-66. With the new toll hours he either has to come in too early or leave too late to spend time with his family and so is exploring the side roads at more normal hours.

9 Hazel Meade December 5, 2017 at 2:03 pm

Let’s do some math. Assuming you can travel at the speed limit in the HOV lane during rush house, it should take about 9 minutes and some change to travel the 10 mile stretch in question. Now, let’s further assume that it only takes 2 riders to qualify to ride in the HOV lane. This is essentially an (almost perfect) ultimatum game – the driver offers the rider a percentage of the $34.50 savings, who can either refuse and neither gets anything, or accept whatever is offered by the driver. We can expect a typical split to be about 60-40 in that case, so a single rider would get paid $13.80 to spend 10 minutes riding in a car so that the driver can save $34.50, of which the driver keeps $20.70. Now, let’s say you can efficiently do this, say, 3 times an hour, getting in a car on each end, switching sides, riding back the other way, and getting in another car. At that rate, you can make about $40 an hour as a professional slugger, equivalent to around $83,000 a year salary.

I think we cna predict that there will soon be mysterious gatherings of loiterers at convenient locations near the I-66 stretch in question.

10 mkt42 December 5, 2017 at 4:58 pm

“I think we cna predict that there will soon be mysterious gatherings of loiterers at convenient locations near the I-66 stretch in question.”

I remember reading articles decades ago about such gatherings of wannabe sluggers. Not professional ones, but rather people who were essentially hitchhiking and knew that there would be single drivers who would be very glad to give them a ride.

I think I saw such a group on a visit to DC a few years ago. It was near a bunch of bus stops, but these people were not like the other groups who were waiting at the exact place where their bus would stop. These people looked like they were waiting for a ride. Possibly meaning they were waiting for their spouse or parent or whatever to pick them up, but my hunch was they were offering to be sluggers.

11 TSB December 5, 2017 at 8:18 pm

Allowing multiple drivers to negotiate with multiple sluggers, and for entry and exit of sluggers, the wage will (I think) fall to the opportunity cost of not being in a car. Assuming good cell phone reception along the route, that wage will probably be quite low, but above zero?

12 Bob from Ohio December 5, 2017 at 1:46 pm

“But it’s a job that shouldn’t exist.”

Why do you hate America? Screwing with the heavy hand of government is an American tradition.

13 Married with children December 5, 2017 at 3:20 pm

If all the people in the car are economic dependent of me, should I split the bill between my left and right hands?

14 Jack December 6, 2017 at 11:29 am

In Jakarta they call the riders “jockeys”

15 Borjigid December 5, 2017 at 1:04 pm

“The prices are entirely false”

Try telling that to the toll booth attendant/police/judge.

16 John Thacker December 5, 2017 at 1:09 pm

Would you care to explain why you think that the HOV requirements are “virtue signaling,” or are you merely engaging in vice signaling yourself?

The eliminated hybrid requirements may have been a bonus for virtue signaling (especially as they applied to, e.g., high weight hybrid trucks and SUVs), but a discount for vehicles taking up less space may well be ineffective, but it doesn’t really seem to be signaling. Perhaps you are merely using the term as some sort of totemic phrase? Or perhaps you’re a secret leftist, trying to discredit the entire idea of virtue signaling through entirely inapt invocations of the phrase?

17 mkt42 December 5, 2017 at 8:42 pm

“Would you care to explain why you think that the HOV requirements are “virtue signaling,” or are you merely engaging in vice signaling yourself?”

Indeed, for some reason Republicans and conservatives seem to have a general hatred of HOV lanes. But it is not hard to produce a model where it is socially optimal to have a lane where the traffic moves faster than it does in the other lanes. And which cars should we permit to travel in that lane?

Absent a pricing mechanism, it’s easy to deduce that cars with 2 or more people should be permitted to travel in the fast lane, enabling two or more people to benefit. Instead of just a single driver.

In some cities, buses get an entire lane or roadway dedicated to them. Why should they be so privileged? Because it’s socially optimal; with a bus we’re talking about 20 or 30 or maybe 50 or more people if it’s rush hour who get to benefit from their speedy lane. Dragging down their speed so that every vehicle is traveling at the same pokey rate is … collectivist, forcing everybody to share the same congested lanes and travel at the same slow speed.

Better still is to have congestion pricing. But efficient pricing and collection of toll fees wasn’t possible until recent years, with electronic toll collection, cameras and sensors and calculation of congestion levels of optimal tolls, etc.

18 Harun December 6, 2017 at 1:39 am

What if I prefer equality to maximzing output?

19 Anonymous December 5, 2017 at 2:03 pm

I see a new summer job.

20 Trey December 5, 2017 at 12:44 pm

“Bravo”? Sorry, $34.50 is appalling.

21 Dzhaughn December 5, 2017 at 1:39 pm

It’s a better deal than paying $9 to spend an hour in a traffic jam.

22 Bob from Ohio December 5, 2017 at 1:49 pm

“$34.50 is appalling.”

That is what one gets for electing Democrats as governors. Always looking out for the poor.

23 Roy LC December 6, 2017 at 1:17 am

In Central Texas they might argue with you. Republicans are just as enamored of toll roads. Of course in Texas they converted existing untolled state highways and require RFID chips. I know rural places it takes 20 to 30 minutes more to get to than before tolling, and usually require 15-20 more miles than before.

24 Jeff December 5, 2017 at 1:55 pm

$34.50 is lower than it used to be. Previously, solo drivers were forbidden from being there at all. The biggest difference is the expanded hours.

People can still carpool for free, just like before.

25 Clay December 5, 2017 at 5:23 pm

It was reportedly over $40 today

26 Yancey Ward December 5, 2017 at 12:54 pm

Do we really have to think very hard about what will happen here? Isn’t pretty much certain that the Virginia legislature will greatly reduce and cap the tolls- especially once it becomes apparent it isn’t bringing any much revenue simply because it is too high? One should also invest in the local mannequin business, or if you are particularly enterprising, sell yourself as a riding companion at both ends of the toll sections.

27 John Thacker December 5, 2017 at 12:58 pm

These tolls apply only to single passengers, which previously were banned from using this stretch– and yet many did indeed use mannequins and pay the occasional enormous fine.

At a mere $34, we should see a lot fewer mannequins employed than at the previous higher fines.

28 TMC December 5, 2017 at 1:08 pm

I can’t get to the article, but how do they know how many people are in the car?

29 Ricardo December 5, 2017 at 2:33 pm

You have to put your EZ Pass in carpool mode. When you are in carpool mode and you pass a toll gauge, a light on the EZ Pass turns green, indicating that no toll was charged. A police officer sits at the off-ramp. If s/he sees the green light, but there is only one person in the car, you get a ticket.

30 JWatts December 5, 2017 at 6:42 pm

So the system can be defeated by burning out the bulb?

31 Chase December 6, 2017 at 12:29 am

There is no bulb on the EZPass transponder so he must mean the toll booth

32 John Thacker December 6, 2017 at 9:01 am

They might well add some additional systems since EZPass introduction means that they have cameras, but I’m not sure about it.

It remains that there was tons of cheating before when it was strictly illegal, so it seems unlikely that adding a new legal alternative would increase cheating.

33 Mulp December 5, 2017 at 1:04 pm

Why do you think all taxes and fees are about raising revenue?

The perfect Pigovian tax raises zero tax revenue. It is set at the cost of remediation the harm resulting in cheaper substitutes that cause progressively less harm being developed.

The ideal carbon tax will generate zero tax revenue because there will be zero net carbon emissions due to private substitutes.

The toll is for one purpose only: maximizing the number of people moved as fast as possible over the ten miles.

34 Matthew December 5, 2017 at 1:31 pm

> Why do you think all taxes and fees are about raising revenue?

Because we live in the United States, where it’s blatantly obvious that the government doesn’t give a flying fuck about people beyond how it can use them.

35 msgkings December 5, 2017 at 1:36 pm

Matthew, do you have a list of countries where their governments care a whole lot about their people? I can think of a couple, like Bhutan. But big real countries?

36 Brad_sk December 5, 2017 at 4:56 pm

“Govt”may not care….but people care. And same people end up working in govt or get elected. It laughable to say that not a single one such govt employee or elected official cares for people. Its laughable as well to say 100% of govt employees or elected officials care for people.

37 Harun December 6, 2017 at 1:42 am

If this were California, we’d come up with a subsidy for poor people so they could use the toll road and have some of the expense paid for by the taxpayer.

38 rayward December 5, 2017 at 12:55 pm

“The (pricing) culture that Washington is not”. One never knows when Cowen is being ironic. The Republican House and Senate recently have passed legislation they refer to as “tax cuts”. Of course, they aren’t “tax cuts”, they are “tax deferrals” (because they are mostly funded with debt). Is that “the pricing (culture) that Washington is not”? In the 1980s, a Republican president and Republican Senate passed a payroll tax increase that supposedly “saved” social security. Of course, it did no such thing, as the payroll taxes collected to “save” social security were spent on everything from wars to farm subsidies. Is that “the pricing (culture) that Washington is not”? As Al points out, the pricing for the toll lane strongly encourages car pooling, but doesn’t prevent someone willing to pay the toll to ride alone in her car. Is this “the pricing (culture) that Washington is not”? Cowen seems to enjoy writing hidden meaning in his text, amused no doubt by readers confusion and misinterpretation. But sometimes I get the feeling Cowen may be confused by his own hidden meaning.

39 Dzhaughn December 5, 2017 at 1:42 pm

I assume Cowen’s point is that this rational pricing system is not easy for the current culture to swallow.

40 peri December 5, 2017 at 12:55 pm

Around here, motorcycles are involved in so many fatal accidents it seems like they must tie up their share of traffic.

41 Bill December 5, 2017 at 1:12 pm

What’s interesting is that this is a node problem in a network, and explains why one would not want to have tollways on federal interstate highways through a point where everyone would have to travel, just as you would not want the owners of castles along the Rhine take a toll for each ship passing along the castle’s waterway.

42 athEIst December 5, 2017 at 2:04 pm

Some Holy Roman Emperors(powerful back then) destroyed castles and hanged barons to achieve this result,

43 Roy LC December 6, 2017 at 1:18 am

These are generally held to have been “Good Emperors” by history.

44 Matthew December 5, 2017 at 1:14 pm

At least this will be a good source of revenue to extract from myriad poorer people who’re just following google directions and accidentally end up getting dinged for $30.

45 msgkings December 5, 2017 at 1:37 pm

Mapping services always point out toll roads, and give you the option to avoid them.

46 Matthew December 5, 2017 at 2:22 pm

Thank you for the common knowledge.

But what they don’t have is an option to exclude only the fuck-me-in-the-A tolls. Unfortunately on the east coast, if you exclude all tolls, it’s not feasible to travel.

47 Anonymous December 5, 2017 at 2:53 pm

There are signs that say the amount of the toll

48 mkt42 December 5, 2017 at 5:02 pm

Right, but by that point it may be too late to take the exit 10 miles back that would’ve routed the driver away from the high-priced toll road. So does the driver now pull off (or pull a U-ee if it’s legal) and drive the 10 miles back so they can take the route they would’ve wanted to take if they’d known what the toll would be?

49 BJ dubbS December 5, 2017 at 1:36 pm

There are actually two bottlenecks getting from the Nova suburbs to DC, I-66 and the one track subway line under the Potomac. Does this mean more people shift to Lee Highway and other side streets? Because Lee Hwy in the morning is pretty good until you get to the I-66 exit near Rossllyn. It wouldn’t take much more than paint to turn I-66 into six lanes so the high tolls might increase demand for that. But the real solution is a gondola from Rosslyn to Georgetown.

50 msgkings December 5, 2017 at 1:37 pm

Jet packs!

51 Chris December 7, 2017 at 11:44 am

There is a third way: VRE

52 Dzhaughn December 5, 2017 at 1:45 pm

Why can’t I just rent a passenger on my Uber or Lyft app? (Or is that Unter or Lowyr?)

53 Lewis December 5, 2017 at 2:08 pm

Bring it on. People pay money to save time via taking direct flights, taking taxis instead of the bus. Why not the roads?

Also important to note the advantages that buses and vanpools derive from this. These lanes would not exist were it not for the toll revenue. They are a public private partnership.

54 mkt42 December 5, 2017 at 5:37 pm

If we’re optimistic, this may work out. Uber has created greater awareness of surge pricing, peak pricing, congestion pricing, etc. So maybe people will see the advantages of the new situation.

OTOH Uber’s surge pricing has created resentment too, and it will be interesting to see how strong the knee-jerk anti-high-price reaction will be. This is one of the times when a place is better off if more of its citizens have taken a microeconomics class.

55 Sam P December 6, 2017 at 9:48 am

This is an expansion of surge pricing on HOT (high occupancy/toll) lanes in the Washington DC area, not a new thing, so Virginia commuters are used to it now. The I-495 (Beltway) Express Lanes have been in operation for 5 years.

56 Student December 5, 2017 at 2:53 pm

This is going to jam up 66 inside the beltway as people jerk over at the last second and cause accidents to get off when the toll suddenly shoots up at each 6 minute interval. Some person goes damn it just went from 8 bucks to 15, and cuts over.

57 Hadur December 5, 2017 at 2:57 pm

Basically, this highway used to be carpool-only during rush hour, and now the wealthy can pay $30 to not have to find a second passenger. This may actually increase congestion.

58 Anonymous December 5, 2017 at 4:35 pm

But they’re generating a lot of revenue they can use for the new I-66 express lanes

59 Anon7 December 5, 2017 at 5:22 pm

If too many people with a higher willingness to pay (who may be “rich”) take advantage of it and congestion increases, then increase the toll. Voila!

60 Mark Thorson December 5, 2017 at 5:47 pm

Fixed price is suboptimal. There should be an auction market.

61 RustySynapses December 5, 2017 at 9:07 pm

There is – toll is supposed to fluctuate to keep traffic moving above 45 mph. Not sure why it got to $40 today-average speed was reportedly 57 mph

62 Chase December 6, 2017 at 12:30 am

I thought the target speed was 55, which might explain it

63 PaulD December 5, 2017 at 6:10 pm

Before the change, the wealthy could travel alone by purchasing a Lexus hybrid or Tesla subsidized by taxpayers. Now they won’t have that option.

64 Clay December 5, 2017 at 5:22 pm

Well, if the various message boards i’m Seeing are any indication, the tolls are having the presumed desired affect of generating revenue while pushing people towards metro or carpooling. Whether that affect is desirable itself is of course debatable.

Personally, I paid 75 cents for a short stretch of the road yesterday afternoon, which I can live with.

65 John Thacker December 6, 2017 at 9:03 am

Ah, you must have done the short stretch of I-66 from the Beltway to 7?

66 Impolitic December 6, 2017 at 1:07 am

Why are poor people even allowed on the highway at all?

67 Steve December 6, 2017 at 7:34 am

I carpool. I don’t pay any tolls.

68 Efm December 6, 2017 at 8:41 am

Are most of you pissed that this scarce resource (highway space) is now being priced at a higher rate or are you pissed because you think the pricing structure sucks? I would especially like to hear from some VA commuters.

69 RustySynapses December 6, 2017 at 10:23 am

I’ve now seen the target as 45 and 55 in different press reports. 55 seems crazy, given that without restrictions it would probably be 5 mph – I would think (unscientifically) you could move a lot more people at 45, and even make more money with a lower toll.

70 RustySynapses December 8, 2017 at 8:47 am

WaPo article today explained: original plan presented to public was to target 45 mph. they are currently targeting 55 mph, although not explained why (it’s a little unclear but may be suggesting they have “new algorithm” (I assume that’s beyond just different target – maybe they think it’s better and can get better throughput?)

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