Evaluating Various Road Ownership Structures and Potential Competition on an Urban Road Network

Abstract

Fundamental changes in road ownership and pricing have been viewed as possible remedies for the road usage and funding challenges in the transportation sector. To fill the gaps in our knowledge about the choice among different ownership structures, we develop a multi-level programming model that integrates system performance and profit maximization, game theory, and modified traffic assignment sub-models. Using this model, we provide a set of policy insights for policy makers. First, toll roads are interdependent in a complex manner since some pairs of roads are substitutes and others are complements, and because such cross effects can be reversed in different time periods and under different own and cross toll rates. Second, each toll road’s profit generally increases when more roads are tolled since roads commonly act as substitutes to each other. With such an insight, policy makers can ensure higher (and/or less risky) profits from toll roads and better deals with private operators of toll roads. Third, a mixture of private and public toll roads could generate significant profits while reducing transportation costs dramatically, thus contributing to sustainability. Finally, a comprehensive long-run transportation plan must investigate various road ownership schemes and examine their impacts on the profitability and the performance of the transportation system as a whole.