Pricing Urban Transportation A Critique of Current Policy

Abstract

Recent increases in the price of gasoline have influenced urban travel, but have reduced automobile travel volumes only slightly. This has occurred because the price of gasoline is only a small part of the total price of automobile travel. Incentives to automobile use, such as free parking at the work place, still make it an attractive option for most commuters. Pricing policy can be used to influence urban travel patterns, but uncoordinated pricing of transit and automobile alternatives merely corrects for inefficient and inequitable subsidies to one mode by adding inequitable and inefficient subsidies to others. As a result, all urban transportation modes are underpriced, and together they continue to encourage suburbanization and increasing travel volumes.