Researchers predict a gradual transition to mileage-based pricing for roadway funding

CTS Catalyst reports on our recent paper from the Transportation Futures Project on pricing:

There is agreement  in the transportation community that the way we pay for roads needs to change.

“The motor fuel tax has been the primary source of highway revenue since the 1920s and it has served us well over the years,” says Ken Buckeye, program manager with the Minnesota Department of Transportation (MnDOT) Office of Financial Management. “However, with the advent of new sources of energy and the increase in fuel efficiency that is now federally mandated, the motor fuel tax alone is not likely to be adequate in the future. These trends are making it clear that we must begin to chart a path toward a fair and rational mileage-based fee system if we are going to meet our future needs.”

In a report Road pricing infographicsponsored by MnDOT and the Minnesota Local Road Research Board, U of M experts examined the options for implementing user-based road fees and explore the future of road pricing in the United States. Options include mileage-based user fees, toll roads and bridges, truck-only toll lanes, high-occupancy vehicle lanes, and cordon-based toll areas.

Today, user fees are not the primary source of roadway funds nationally. This is especially true for local roads, which rely primarily on property taxes. Using general-revenue sources spreads costs across non-users as well as users and sends no signal about the appropriate amount of roadway that should be built or how scarce road space should be allocated.

“While the gas tax is better than the alternative of general revenue, or not paying for roads at all, it has several problems,” says David Levinson, a professor in the Department of Civil, Environmental, and Geo- Engineering (CEGE) and the principal investigator of the study. “It does not account for inflation and rising fuel efficiency and does not apply to vehicles that do not use gasoline. It doesn’t pay for the full cost of building and maintaining local roads, recover the full costs of pavement damage from heavy vehicles, or address roadway congestion. Nor does it account for the full social costs of air pollution and crashes.”

Among all the available options analyzed, mileage-based user fees are what Levinson believes to be “the seemingly inevitable end-state for pricing and funding of roads.” Eventually, mileage charges could be used instead of a gas tax to establish a much stronger user-fee principle by charging each vehicle by miles traveled, time of day, and the type and weight of a vehicle. This is especially relevant with widespread adoption of electric vehicles and alternative fuels, he says.

Using user fees rather than general tax revenue to support roads would roughly double the out-of-pocket cost of travel by car, Levinson says. However, other costs such as property taxes, health expenses, insurance, and congestion-related time loss would decline. “Depending on its implementation, pricing presents the opportunity to fully move roads off of general revenue and internalize congestion and possibly air pollution externalities,” he says.

The price increase for users would have a number of implications, such as reducing per-capita demand for travel (by about 25 percent), reducing peak demand for roads, spurring denser land-use development, increasing demand for non-auto modes and carpooling, substituting delivery for shopping, and increasing telecommuting.

“Unless there’s a sudden collapse of the feasibility of the gas tax for revenue,” Levinson notes, “this will be a slow transition. We anticipate years of pricing trials and policy discussions before pricing becomes mainstream.”

Levinson’s research is part of a multi-pronged study that analyzed the technological shifts altering surface transportation and the implications for Minnesota. Other contributors included CEGE assistant professor Adam Boies and Humphrey School of Public Affairs associate professors Jason Cao and Yingling Fan. Their high-level white papers are compiled in a final report: The Transportation Futures Project: Planning for Technology Change.

Related Links

Journal of Transport and Land Use 9(1)


The Journal of Transport and Land Use 9(1) is now available:


Vol 9, No 1 (2016)

Table of Contents

David M Levinson
Patricia L. Mokhtarian, David van Herick
Stephen Marshall
Basil Janis Vitins, Kay Axhausen
Patrick Michael Schirmer, Kay W. Axhausen
David M Levinson, David Giacomin, Antony Badsey-Ellis
Dena Kasraian, Kees Maat, Bert van Wee
Steven R. Gehrke, Kelly J. Clifton
Calvin P Tribby, Harvey J Miller, Barbara B Brown, Carol M Werner, Ken R Smith
David S. Vale, Miguel Saraiva, Mauro Pereira

Urban Endosymbiosis


Endosymbiosis in biology refers to the idea that organelles of eukaryotic cells (like mitochondria and chloroplasts) were originally free-living micro-organisms that combined symbiotically (to mutual benefit).

In Chapter 7: Good Roads of The Transportation Experience: Second Edition, we identify an example of what we might call techno-endosymbiosis, when we write:

Charles Kettering developed the electric starter, which temporarily over- loaded the motor. Interestingly Kettering modeled his innovation on the self-starter with the his work on motorizing the cash register when he was an engineer at National Cash Register in Dayton, Ohio. Kettering later founded Dayton Engineering Laboratories Company (DELCO) soon acquired by Gen- eral Motors. The self-starter eliminated the disease of “Ford’s Fracture” a broken arm resulting from cranking accidents 160.

After Kettering, the automobile become an electric system in miniature: Its generator (with the battery) was the central station, which distributed current through a network to uses like starting the car, but also for headlights, and later radios and other purposes. Surprisingly, battery makers boomed not from selling batteries to makers of EVs but from selling to makers of gasoline-powered cars containing an electric self-starter 161.

… The internal combustion engine adopted the battery as a self-starter, and is a technological version of this biological process [endosymbiosis]. Hybrid vehicles, which ramp up the battery so that the vehicle can travel on either electric or gasoline power, are another version of this.

Technologies are analogous to species in many ways. Cities are not, rather they are analogous to colonies in the insect world. Where the complex of technologies called cities, with their people, can reproduce by spawning what are appropriately called colonies. Rome famously did this two millennia ago, with its colonia.

Cities, or somewhat more precisely, metropolitan areas, are not simply legal jurisdictions, but have an economic definition. Wikipedia writes:

The U.S. Office of Management and Budget defines a set of core based statistical areas (CBSAs) throughout the country. CBSAs are delineated on the basis of a central urban area or urban cluster – in other words: a contiguous area of relatively high population density. CBSAs are composed of counties and county equivalents.[2] The counties containing the core urban area are known as the central counties of the CBSA. Additional surrounding counties, known as outlying counties, can be included in the CBSA if these counties have strong social and economic ties to the central counties as measured by commuting and employment. Outlying counties are included in the CBSA if the employment interchange measure (total of in- and out-commuting) is 25% or more, although these numbers are estimates and exceptions are made.

One can certainly imagine the whole country, or large swaths of it, becoming large megaregions with overlapping flows, particularly as individual central cities decline in importance and networks of subcenters arise. Nevertheless, we are looking historically here:

Cities (commuting regions) grow spatially and incorporate formerly independent cites and towns that  become subcenters. They also spawn their own colonia, often local, that are called suburbs.

To illustrate the concept locally (though the same process happened everywhere I have lived*), consider the Twin Cities. St. Paul and Minneapolis were once somewhat independent market areas, connected by the river and trails, but for which transport costs were expensive to go between them. With the advent of the horsecar, then the streetcar, and finally the motorcar, interaction costs declined and the cities were bound together as a single economic unit, even if governance remains divided. But these are not the only two cities in the region ultimately forged into a single unit by urban-endosymbiosis.

There are places that existed before the Twin Cites, or before the Twin Cities became “The Twin Cities”**, and were later incorporated, and those that were spawned by the Twin Cities.

Just among the counties in the 7 county Metropolitan Council region.

County, County Seat (year county seat founded as continuous European settlement) [1860 Population]


Anoka, Anoka (1844) [*1880 population 2,766*]

Carver, Chaska  (1851) [*1880 population 1,068*]

Dakota, Hastings (1833) [1,642]

Hennepin, Minneapolis (1838) [5,809]

Ramsey, Saint Paul (1838) [10,401] [[1850 population 1,112]]

Scott, Shakopee (1851) [1,138]

Washington, Stillwater (1837)  [2,380]


In general, the county seats are on one of the major rivers (Mississippi, Saint Croix, Minnesota), and were founded from downstream to upstream as places continued to develop and settlers moved farther inland in search of unclaimed land and resources. Which of these County Seats (or any other early town) was to be the eventual winner  (the title of which is now held by the primary city: Minneapolis) is contingent both on geography and history. Hastings, for instance, was promoted as a “New Chicago” by Ignatius Donnelly until 1857. Minneapolis grew because of the power of the St. Anthony Falls waterfall, which was important only because electric grids were not yet developed. Had history been a little different, Minneapolis might be a suburb of Hastings or farther afield, Red Wing (1853) [1,250].

St. Paul - Minneapolis Minnesota Twin City Map. By 1891, Minneapolis and St. Paul had grown together into a single unit, the opposite of Mitosis.
St. Paul – Minneapolis, Minnesota Twin City Map. By 1891, Minneapolis and St. Paul had grown together into a single unit, the opposite of Mitosis.

At some point after the construction of intercity railroads (beginning in the 1850s) streetcars (beginning in the late 1880s) and paved state highways (from the 1920s), these semi-independent outposts, firmly attached to their location in the ground, became more and more mutually inter-dependent. Today development is contiguous and people are as likely to identify with the metropolitan area (or state) as they are with their most local level of government.

There is no exact date for which an independent town becomes more part of the metropolitan system and less an isolated entity. The change is a process that develops over time, not an instantaneous phase shift.

There is also no obvious threshold (25% out-commuters, 50%?) for in– vs. interdependent. Yet at some point a town is so enmeshed in a larger urban web it can no longer simply stand alone if its links were cut off, or returned to earlier (say 1860s) levels. The urban area as a whole may not existentially need Shakopee, which, among other things, notably exports entertainment like Racing and Amusement Parks to the pleasure-seekers in the rest of the region, but Shakopee does need the rest of the region. The body can cut off the hand and survive, if diminished. The hand cannot cut off the body.



* Some examples from other cities I have lived: London and Westminster (among dozensn of towns) now form a fully integrated unit; Atlanta economically absorbed Decatur; Baltimore connected to once far-more separate Ellicott City with the B&O railroad in 1830, but is slowly being drawn into the faster-growing Washington, DC system; San Francisco, Oakland, and San Jose have grown together.


**Why are the Twin Cities called the Twin Cities. InfoPlease says:

The Answer:

According to the Minnesota Historical Society, the nickname “Twin Cities” originally had nothing to do with St. Paul, the state capital of Minnesota.

The term was first applied to two settlements on either side of the Mississippi River—St. Anthony’s Falls on the east and Minneapolis on the west—in the 1840s.

The two towns were later linked by a suspension bridge. Minneapolis was chartered as a city in 1867 and in 1872 it and St. Anthony’s Falls were united to form one city. As a result, nearby St. Paul assumed the nickname while it and the new Minneapolis grew during the 20th century to become Minnesota’s two biggest cities.

—The Editors


Autonomous vehicles and the decline of the emotional brain

The End of Traffic and the Future of Access: A Roadmap to the New Transport Landscape. By David M. Levinson and Kevin J. Krizek.
The End of Traffic and the Future of Access: A Roadmap to the New Transport Landscape. By David M. Levinson and Kevin J. Krizek.

This post is more speculative than usual.

Autonomous vehicles are coming. Someday soon drivers will pay even less attention to the road in front of them than they normally do. Today, vehicle control is largely an emotional task. In traffic engineering, one of our many abbreviations is PIET:

  • Perception – driver sees object
  • Identification – driver identifies object (understands stimulus)
  • Emotion – driver selects action
  • Reaction (Volition) – driver executes action

But this is all very fast, not contemplative, operating in what Kahneman would call System 1 rather than System 2. In short, if we start to think intellectually about whether to apply the brakes, we are already dead. I suspect one of the causes of road rage is the continued operation within this emotional rather than rational brain for extended periods.

With autonomous vehicles, an hour or two a day for the average driver will be taken out of this high-risk emotional decision context, and into a more relaxed, less stressful mode, where the most difficult decision will be whether to listen to Pandora or Spotify. In short, the car trip of the future will be more like an office or home than then the uncertain dangers of the open road.

As an admirer of Spock (Mr., not Dr.), moving towards a more considered, this less emotional world of the future is a good thing, something humans have been doing for millennia as we evolve from the apes.

As we take out what is often the most stressful element of the day, will we “stress-compensate”, just as we risk-compensate now, and find some other activity to make needlessly emotional? Or will we take our gains in a more civilized society?

Indifference bands for boundedly rational route switching

Recently published:


The replacement I-35W bridge in Minneapolis saw less traffic than the original bridge though it provided substantial travel time saving for many travelers. This observation cannot be explained by the classical route choice assumption that travelers always take the shortest path. Accordingly, a boundedly rational route switching model is proposed assuming that travelers will not switch to the new bridge unless travel time saving goes beyond a threshold or “indifference band”. Indifference bands are assumed to follow lognormal distribution and are estimated in two specifications: the first one assumes every driver’s indifference band is drawn from a population indifference band and the second one assumes that the mean of drivers’ indifference bands is a function of their own characteristics. Route choices of 78 subjects from a GPS travel behavior study were analyzed before and after the addition of the new I-35W bridge to estimate parameters. This study provides insights into empirical analysis of bounded rationality and sheds light on indifference band estimation using empirical data.


Bounded rationality Indifference band Empirical estimation GPS study Route choice

On the Deployment of Hyperloop

I appeared briefly at 13:oo CDT today on CNBC to talk about Hyperloop, which is in the news because one of the Hyperloop companies (Hyperloop One) had a press release yesterday, changed their name, raised a lot of money, and had a seemingly successful test run today.

They asked me some things on the interview, I gave some answers, it’s all sort of a blur.


This is what I intended to say. These were the producer’s preliminary questions (in blockquote) and my preliminary answers (in bullets).

Let’s start with the assumption that the Hyperloop works as advertised.  What are the potential benefits of a technology like this?  Are there any transportation infrastructure projects – for example, Japan’s high-speed rail system – that are analogous to this type of transportation, or have we never really seen anything like this before?

  • I think the best analogy is with the development of the railroads in the first place back in 1825. Hyperloop requires both new tube technology (the track) as well as new vehicles. One question is whether it is a series of isolated runs (like elevators), or a comprehensive network (like roads, rail, or air transportation).

Let’s talk challenges.  What would have to happen for a private company to be able to run a tube from, for example, Los Angeles to San Francisco?  How difficult would it be to add a hyperloop to America’s existing transportation infrastructure?

  • They would need to acquire right-of-way. If it is tunneled this might be easier than at grade or elevated. There are already trains and highways between major US cities, so borrowing right-of-way from highway or rail agencies is probably a good place to start. One of the issues will be curvature though, at high speeds, hyperloops likely will need, or at least want, more gentle curves than automobiles or trains require, and so need land beyond existing rights-of-way. Tunneling is more expensive than elevated or at grade, so this adds costs.

Do you personally see this technology being implemented over the next 20-25 years or not?

  • Major technologies like trains and highways and aviation took decades to reach maturity, nearly a century in the case of rails. While there might be some selected niche lines built over the coming decades, it will not be an important element of the US transport system for decades if ever.

Measuring Winners and Losers from the new I-35W Mississippi River Bridge

Recently published:


The opening of the replacement for the I-35W Mississippi River Bridge on September 18th, 2008 provides a unique opportunity to evaluate the impacts generated by this additional link on network performance. Using detailed GPS data to estimate travel times on links and for origin-destination pairs, this research finds that while on average travel time improved with the reopening of the bridge, the subsequent restoration of parts of the rest of the network to their pre-collapse configuration worsened travel times significantly on average. In all cases, the distribution of winners and losers indicates clear spatial patterns associated with these network changes.


Network disruption Travel time GPS data

A model of two-destination choice in trip chains with GPS data

Recently published:

1-s2.0-S1755534515300555-gr9.smlAbstract: Studying trip chaining behavior has been a challenging endeavor which requires the support of microscopic travel data. New insights can be gained given real-time GPS travel data. This research introduces a framework that considers two-destination choice in the context of home-based trip chains. We propose and empirically compare three alternatives of building choice sets where we consider various relationships of the two destinations (such as major-minor destinations, selecting one first, and selecting two concurrently). Our choice set formation alternatives use survival models to determine the selection probability of a destination. Our results reveal that trip chaining behavior is shaped by the features of retail clusters, spatial patterns of clusters, transportation networks, and the axis of travel. This research supports our hypothesis that not only the spatial relationship but also the land use relationship of the destinations in a trip chain affect the decision making process.

Keywords: GPS data, trip chaining, axis of travel, destination choice

Waiting time perceptions at transit stops and stations: Effects of basic amenities, gender, and security

Recently Published:


Waiting time in transit travel is often perceived negatively and high-amenity stops and stations are becoming increasingly popular as strategies for mitigating transit riders’ aversion to waiting. However, beyond recent evidence that realtime transit arrival information reduces perceived waiting time, there is limited empirical evidence as to which other specific station and stop amenities can effectively influence user perceptions of waiting time. To address this knowledge gap, the authors conducted a passenger survey and video-recorded waiting passengers at different types of transit stops and stations to investigate differences between survey-reported waiting time and video-recorded actual waiting time. Results from the survey and video observations show that the reported wait time on average is about 1.21 times longer than the observed wait time. Regression analysis was employed to explain the variation in riders’ reported waiting time as a function of their objectively observed waiting time, as well as station and stop amenities, weather, time of the day, personal demographics, and trip characteristics. Based on the regression results, most waits at stops with no amenities are perceived at least 1.3 times as long as they actually are. Basic amenities including benches and shelters significantly reduce perceived waiting times. Women waiting for more than 10 min in perceived insecure surroundings report waits as dramatically longer than they really are, and longer than do men in the same situation. The authors recommend a focus on providing basic amenities at stations and stops as broadly as possible in transit systems, and a particular focus on stops on low-frequency routes and in less safe areas for security measures.