Regulating Travel Demand for Sustainable Transport: Road Pricing Versus Incentive Schemes

Abstract

One of the approaches to sustainable traffic management is regulating the demand for travel. Traditionally, this is implemented using road pricing schemes across the world to discourage motorists from travel during peak periods, thereby reducing traffic congestion. Different forms of road pricing schemes such as cordon pricing, variable pricing, HOT lanes are currently being experimented with in different cities to tackle congestion. An alternative approach, instead of charging drivers, is to reward motorists for desirable travel behavior. This can take the form of providing incentives to motorists for avoiding peak period travel or encouraging the use of public transport. Incentive schemes to influence travel behavior have been studied in the Spitsmijden trials conducted in the Netherlands, and a similar pilot project was conducted in India. Further, questions are also explored as to whether road pricing and incentive schemes can be combined to increase public acceptability of such schemes. This paper compares road pricing and incentive schemes to reduce traffic congestion and provides a framework to evaluate the effectiveness of such schemes. Pricing and incentive schemes are also investigated in the context of recent developments in the transport sector like ride-sharing services, car, and bike rentals, and taxi services like Uber which are revolutionizing the way people travel. The paper also explores how these developments influence the cost of travel and suggests solutions to create tailor-made pricing or incentive schemes that ensure sustainable use of existing transport infrastructure.