Is there a connection between electronic tolling and higher toll prices?

[papaT10932]

I don't have any evidence or data to back this up, but it seems logical to me. "Flying through" an electronic toll booth as opposed to having to stop and physically hand over cash are two very different experiences, psychologically. When drivers don't physically hand over cash, are they less aware how much a toll costs?

It's like using a credit card, usually the last question a consumer asks themselves is, "Can I afford this?" Does the same theory apply to tolling?

In short, do transportation agencies use "credit card psychology" as means of abusing toll hikes? 

[realjd]

I would say the opposite. Electronic tolls = lower costs due to not having to pay attendant salary.

Keep in mind that most toll roads (but not all) are government run and not looking to turn a profit necessarily.

[papaT10932]

I would say the opposite. Electronic tolls = lower costs due to not having to pay attendant salary.

Keep in mind that most toll roads (but not all) are government run and not looking to turn a profit necessarily.

Yes, the costs to pay toll collectors are eliminated, but don't forget that now you have to pay for the manufacturing of the tags, technical support, and an immense amount of paperwork for not only customer's bills and statements but also paperwork for and from credit card companies.

If you look at it that way, e-tolling may produce more overhead as opposed to simply hiring toll collectors.

[J N Winkler]

The capital costs of electronic tolling equipment are also not insignificant.  You hear loose talk of million-dollar toll gantries, etc.

[Brandon]

No, as far as I've seen.  In fact, we're still paying 1983 toll rates on the Illinois Tollway system when we use our I-Passes.  Cash rates are double the I-Pass rate.  ETC seems to work well when the majority of users use transponders of some sort.  Again, the ISTHA has about 80% of vehicles on the tollways using a transponder.

[mightyace]

Keep in mind that most toll roads (but not all) are government run and not looking to turn a profit necessarily.

Obviously, that does not apply to the Pennsylvania Turnpike Commission. 

No, as far as I've seen.  In fact, we're still paying 1983 toll rates on the Illinois Tollway system when we use our I-Passes.  Cash rates are double the I-Pass rate.  ETC seems to work well when the majority of users use transponders of some sort.  Again, the ISTHA has about 80% of vehicles on the tollways using a transponder.

ISTHA seems to be the exception.

When the Ohio Turnpike went to EZ-Pass it kept the old cash rates for EZ-Pass and raised cash prices 50%.  The aforementioned PTC is raising both EZ-Pass and cash tolls yearly and cash is now costing more.

[corco]

I think you're mixing up the cause with the effect. I'd surmise higher toll rates don't have anything to do with the electronic tolling equipment but rather with inflation, a lack of highway funds, and overall increasing gas mileage that decreases the revenue generated from fuel tax.

Toll prices are higher because toll roads are increasingly privatized and have incentive to turn a profit. The high rates exist because they are having trouble turning a profit and some in-house economists determined that those high rates are likely to turn the maximum profit. It has nothing to do with electronic tolling. 

Older toll roads that are already paid off and don't use electronic tolling have less reason to have high rates than the new ones that are struggling to pay off the construction of the highways because they are already paid off, not because they don't use electronic tolling.

[mightyace]

I think you're mixing up the cause with the effect. I'd surmise higher toll rates don't have anything to do with the electronic tolling equipment but rather with inflation, a lack of highway funds, and overall increasing gas mileage that decreases the revenue generated from fuel tax.

In short, do transportation agencies use "credit card psychology" as means of abusing toll hikes? 

I think you're both partly right.  Corco, I agree there are many reason more than "credit card psychology" related to toll rate hikes.

However, I think papaT10932 is right in that "credit card psychology" makes it easier for them to get away with it.

[J N Winkler]

I think you're mixing up the cause with the effect. I'd surmise higher toll rates don't have anything to do with the electronic tolling equipment but rather with inflation, a lack of highway funds, and overall increasing gas mileage that decreases the revenue generated from fuel tax.

I was thinking of traditional public authority toll roads, where introduction of electronic tolling seems to be correlated with price increases for some tollpayers (and, of course, that market segmentation is even more strongly correlated with the introduction of electronic tolling itself).  For a traditional public authority toll road seeking to introduce full ORT with the million-dollar gantries, I would expect the tolling infrastructure itself to form a significant component of ongoing capital expenditure.  For this class of toll road, you could then argue that the more sophisticated (and expensive) the E-tolling arrangement, the more likely it is that introduction of E-tolls is correlated with a sharp toll increase.

This said, most traditional public authority turnpikes operate closed-ticket systems and serve primarily interurban journeys, so there is both little need and little scope for full-on ORT.  The Garden State Parkway is a good candidate for full-on ORT while the Oklahoma turnpikes are less so.

New-build toll roads are a different case.  These tend to be planned and designed to price points which are significantly in excess of per-mile toll rates on traditional public authority turnpikes.  They are also more likely to be groomed for private management through CDAs, which are often structured in a way that encourages the private operator to jack up toll rates specifically to escape rehabilitation and other operating costs, even when far lower tolls would pull in much greater revenue.  These are much more important factors in setting the toll rates than the capital cost of the tolling infrastructure itself.  As an example, cash tolls on the Kansas Turnpike are currently about 5c/mile while the SH 130 turnpike in Texas was planned and designed for a 30c/mile toll.

Toll prices are higher because toll roads are increasingly privatized and have incentive to turn a profit. The high rates exist because they are having trouble turning a profit and some in-house economists determined that those high rates are likely to turn the maximum profit. It has nothing to do with electronic tolling.

This happens because risk is taken into consideration, at least implicitly.  Typically the toll operator can realize greater revenue but also faces greater risks of premature failure and other conditions of (costly) concession contract non-compliance if the toll rates are fixed to encourage large traffic volumes.  In contradistinction, very high toll rates keep the toll road pristine and so avoid risk, but deliver a return on investment inferior to the "best case" scenario corresponding to low toll rates.  This is more or less what has happened with the M6 Toll.

Older toll roads that are already paid off and don't use electronic tolling have less reason to have high rates than the new ones that are struggling to pay off the construction of the highways because they are already paid off, not because they don't use electronic tolling.

I broadly agree that for brand-new toll roads, the cost of the tolling infrastructure is a relatively unimportant consideration.  In general I think the current generation of 30c/mile toll roads is an exercise in cynicism.  For the ordinary motorist they are unaffordable, so they are hardly used, and are almost an irrelevance in the broader transportation network.  They are hugely beneficial to the construction contractors, the engineering consultancies, and the bond underwriters because they create paying work in vast quantity.  It is the landowners who lose out because they have to cope with the loss of householder's surplus for a white-elephant facility which is unlikely to be of any use to them in their lifetimes.  This is why the noisiest and most vigorous opposition to the Trans-Texas Corridor came from landowners.  It is also why the promoters spent a lot of time trying to placate them with half-baked and ill-defined "profit-sharing" arrangements.

The problem with modern toll roads, and the reason why the TTC "profit-sharing" arrangements failed to convince, is that there are so few undeveloped but toll-viable corridors left (as a result of the Interstates and previous toll road construction) that the most viable business model for a private toll road has become gradual retirement of construction debt, rather than profit per se.  If the TTC had been built, there would have been no profits to share.  Building toll roads on this business model does not qualify as prudential investment because, in order to be beneficial to the community, a road must be used, and in order to get the fullest use out of that road, the cost to users has to be as low as it can be while still covering construction cost and upkeep (even through amortization).