The case has been made for the benefits (lower miles driven, more equitable pricing) of pay-as-you-drive insurance (”Pay-As-You-Drive Auto Insurance: A Simple Way to Reduce Driving-Related Harms and Increase Equity,” by Jason E. Bordoff and Pascal J. Noel of Brookings; report here).

But one thing some of you may not know about, and which I was reminded about it by a notice to this event, tomorrow in D.C., is that the Netherlands, by 2016, aims to have the entire country wired for a radical new policy, as described by this report: “a price per kilometre on all roads for all distances travelled in the Netherlands, differentiating by environmental characteristics, time and place, abolition of the motor vehicle tax (MRB) and all or part of the tax on passenger cars and motorcycles (BPM).”

In essence, this system shifts the standard all-you-can-eat Las Vegas buffet that is automobile ownership (in essence, once you’ve paid for the car, you’re free to unthinkingly chow down on as many lane-miles as you’d like) to an a la carte system in which you will be charged for every nibble you take off the mobility menu. The lighter eaters will no longer be subsidizing the road hogs.

This will be, among many other things, a fascinating social experiment writ large, with no small amount of room for possible unintended consequences, which are all addressed (if not exactly solved) in the report.

For example, there’s the idea of “diversion effects”:

“Differentiation by time and place can have unwanted diversion effects. The rate system and suitable measures, such as applying time and place differentiation on evasive routes, prevent unwanted diversion effects. Because there is no actual experience with the effects and communicability of the effect of such differentiation, it is important to start simply. For example, at the start of the price per kilometre, there will be a small number of rate levels, national time windows and a limited number of locations.”

What about foreign cars?
“In principle, non-residents driving a passenger vehicle in the Netherlands with a foreign registration (mostly tourists) participate in the price per kilometre. The feasibility of participation by these road users will be explored at a later stage.”

Paradoxically there will be more cars…
“As a result of converting fixed burdens to a price per kilometre, the purchase price of new cars decreases and, depending on the configuration of the price per kilometre, the tipping point between
petrol and diesel cars. This causes the size of the fleet to increase. The way that the environmental component of the fixed burdens is variabilised in a rate per kilometre in the investigated variants results in changes in the composition of the fleet; the fleet becomes heavier and newer and there are more diesels. This occurs in all investigated variants.”

But congestion is reduced…
“In all variants investigated, congestion on the road network is strongly reduced. The decrease in vehicle loss hours is 20 to 60%. Even a price per kilometre without differentiation by time and place contributes to a reduction in congestion. Note that this refers to structural congestion. Total congestion reduction is lower because the price per kilometre does not affect incidental congestion (for example, as a result of a lorry tipping over and other accidents).

And the privacy question…
“A system that can, in principle, locate a vehicle everywhere and at all times presents privacy aspects, whether desired or not. Two variants of the vehicle equipment are relevant to the privacy discussion:
− Detailed movement information is converted to levy information in the vehicle equipment. Only the driver/registration holder has access to his or her movement data. This is a strong guarantee of
privacy. The drawback to this solution is that software management may be complex.
− Detailed movement information is converted in the back office. The guarantees are obtained through measures such as pseudonymisation and job separation. The party processing the movement data into data for invoicing cannot make a connection to a registration or physical person. The party sending the invoices has no access to the detailed movement data either. In this solution, it is important for the wall between positions/organisations to be set up such that no identities can be linked to movement data.”

This entry was posted on Wednesday, November 19th, 2008 at 10:00 am and is filed under Cars, Cities, Congestion. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.