Final Report Spotlight: Comparative Analysis of Dynamic Pricing Strategies for Managed Lanes

The necessity of express lanes has been widely accepted by users who spend a great deal of time on congested highways every day. It might seem that high-occupancy toll (HOT) lanes or express toll lanes (ETL) are beneficial only to their users, but they actually also benefit general purpose (GP) lanes users if a toll is set properly.

Dr. Jorge Laval of Georgia Institute of Technology (GaTech) and his research team focused on a pricing strategy that would maximize the benefits to all users by minimizing the total system delay. The team proposed a “Real-time linear pricing strategy”, where tolls are proportional to the delay and found that it is superior to time-of-day or flat toll pricing strategies, both in terms of total delay savings and revenue.

They also discovered that when bottlenecks are active in the GP lanes and HOT lane, and bottleneck discharge rates are changing because of the weaving activity at the end of the HOT lane, their pricing strategy is more reliable than the conventional, constant bottleneck capacity approach. These findings strengthen their proposed pricing strategy and suggest DOTs can implement practical toll systems that integrate the real-time traffic.

The research team also analyzed ways to improve the negative attitude towards pricing of express lanes. In order to improve travelers’ experiences, the study explored a refund option for express lanes pricing. Simple but reasonable models are adopted for express lanes usage and traffic dynamics. Mathematical methods were developed to determine express lanes operational parameters, including the toll rate, the refund amount, the premium for the refund option, and the travel time saving guaranteed by the operator.

Dr. Laval and his team also proposed a scheme that motivates firms to implement staggered work schedules to reduce bottleneck congestion in the morning commute. In this scheme, “mobility credits” are allocated to employees or traded among firms at a credit market. The results show that such a scheme can improve social benefit without causing much loss to commuters.