Wednesday, October 31, 2007

Paying for Our Roads

Right now, vehicle transportation infrastructure gets its user-fee financing from a few major sources:

Gas taxes
Road tolls
Residential parking permits
Vehicle registrations

The public belief is that gas taxes pay for road maintenance and road building of everyday roads – despite the fact that gas taxes haven’t been raised in the US since 1991.

The belief is that highway tolls pay for the building and maintenance of highways on which they are charged. Parking permits and registration fees are seen as mechanisms by which taxes are extracted for no good reason.

We can assume that people don’t like taxes. They don’t much like user fees. And they really don’t like what they perceive to be unfair or “double counting.” Nor do they relish falling unexpectedly into rivers, experiencing increasingly extreme weather patterns and brush fires, significant rises in sea level, or extraordinary species loss.

Unfortunately, the reality is that our transportation infrastructure is grossly underfinanced no matter what the public thinks.

We aren’t covering even basic levels of safety and standards for good repair. We don’t have funding for expansion. We don’t charge the real cost of parking. We don’t charge for congestion. We don’t charge for tailpipe emissions. We don’t charge for contributions to global warming. We also don’t charge for a large number of other externalities (adverse health effects; other air pollution, etc.)

A thoughtfully designed user fee system encourages the behaviors we want more of. With adequate revenue sources and drivers paying closer to real costs, better quality transportation alternatives would be both in high demand and fundable! impacting frequency and quality creating a virtuous cycle.

People will choose to drive (and own a car) on a much more rational basis because the costs of driving and owning a car will be overt and highly variable.

  • Drive more, pay more.

  • Drive less, pay less.

  • Drive a fuel efficient car, pay less.

  • Drive during off-peak times, pay less.

  • Shed the unused car stored on the street, pay less.
We’ll be doing more of our car errands at once; we’ll be sharing rides (GoLoco); we’ll be choosing to walk, bike, take transit when they prove to be cheaper than taking the car.

As we know, words matter. What happens when we adopt a tax and call it “congestion charging”? The public will assume that this tax covers the negative impacts of congestion and that its goal is to reduce congestion (by shifting travel to other time periods and by funding alternatives). If we are truly charging for congestion, then fees should be based on square footage occupied by vehicle (or a simple and effective proxy) and actual congestion on that road (such pricing systems are currently used in HOT lanes in California). In other words, vehicles are charged when the road they travel on is congested, irrespective of precisely what time of day it is, or exactly which geographic line is crossed. [OK, I do understand political necessities, I’m talking about policy here.]

Congestion charging should not be muddled with fuel efficient vehicles (which should not get confused with the word “hybrid”), or take into account the number of people within the vehicle (buses, taxis, and trucks should all pay the same rates based on physical footprint on the road). A congestion charged applied to a full bus and divided among 60 people comes out to a trivial amount, and a car with one person in it on an empty street – even if its 10am on a Tuesday -- should not be paying a congestion charge.

What's with incenting people to choose fuel efficient cars? Or taxing "SUVs" more than others to drive within the congested area? Everything! Fuel efficient cars still take up space and make the highway congested; SUVS should and will pay more than small cars inasmuch as they take up more space. If we start encouraging people to think that congestion taxes address all sorts of things, we will have a real battle when we need to increase fees to address financing needs.

The future holds the following requirements, so let’s plan for them.

Road Pricing. As we move toward fuel-efficient cars and alternative fuel cars, the already inadequate revenue generated under our current system of taxing by the gallon will become even more inadequate. A solar powered car still needs a road to drive on and still generates wear and tear yet wouldn't pass a gas tax. An appropriate way to get at wear and tear is based on vehicle weight. Vehicle weight and vehicle footprint can be generally related to each other, so the same piece of information can be used for both congestion pricing and road pricing. Taxing by the gallon is necessarily on its way out; taxing by the mile is the obvious solution. When we go to road pricing, we have to immediately drop gas taxes. No double counting, we’ll lose the public’s confidence. The system must appear fair and transparent to the public – as long as we don’t muck up the messaging of what our intentions are!

Carbon Tax or Tailpipe Tax. Some time in the near future, we are going to buckle down and address transportation’s contribution to global warming. In the US, transportation produces 33% of CO2 emissions. Our personal cars alone produce 20%. Cap and trade systems might be the right approach for power plants and heavy industry, but they have no effect on the 33% of emissions produced in the transportation sector.

I weary of hearing about hybrids and dual-fuel vehicles as the answer, and deserving of special treatment. We need to be outcome focused, not marketing focused. Cars that actually produce fewer CO2 emissions should get credit (a 5 year old Honda civic gets better mileage than almost every hybrid on the market, and offers close competition to the Prius. Several SUV hybrids get worse mileage than the average car in America today). A simple solution would be to add a per mile carbon tax based on type of car engine; a more complex solution would be to monitor what is actually coming out of the tailpipe. In the immediate term, we'll apply a carbon tax to gas.

So what would this look like in the future? A layering of taxes per distance traveled, with congestion pricing taxes being applied when appropriate.

What might we expect once we have installed in every vehicle the ability to bill per mile traveled?
  • Car insurance rates by the mile. Drive less, less risk, pay less

  • A portion of car lease payments by the mile. The value of a car is determined by fixed depreciation costs and the number of miles traveled. Leases will have fixed and variable costs.

  • On street residential parking and private parking rates by the hour and time of day, as well as weight (proxy for physical footprint taking up curb space). If you park in a neighborhood with high demand for on-street parking, you will be rewarded for getting rid of a car rarely driven, or freeing up that space for daytime business use.

And then what?

People will buy cars based on stickers that tell them what they can expect for road and carbon taxes per mile. Fuel efficient cars, space-efficient, and alternative fuel cars will be in high demand.

No individuals should feel they are unfairly bearing the burden because of their unlucky proximity next to arbitrary congestion pricing boundaries, or easily tolled highways that subsidize others. Poor workers with no good alternatives to driving can receive subsidies directly from their employers; car expenses can be shared through ride sharing; quality alternatives will now be demanded by a larger fraction of the population rather than being relegated to a problem of the poor.

What are the alternatives?
Bridges that fall into the river when cars drive over them. A system where one out of every four or five dollars earned pays for a car with no available options. A mixed up revenue plan that is not outcome focused and in which revenue shortfalls or outcome shortfalls are politically impossible to correct because people believe they have already paid and have already done their part.

Read more!

Keeping our Eyes on the First Milestone

In his most presentation to the UN in September 2007, John Holdren's slides had a stunning number:

If worldwide CO2 emissions peak in 2015 – that’s seven years from now – we have a 50 percent chance of avoiding catastrophic effects of climate change.

50 percent chance
of avoiding catastrophic effects

Those aren’t odds I like to play with given the stakes. What is catastrophic?

50-75% species loss this century
5 meter sea rise this century
10-20% reductions in corn, wheat, and rice yields this century

I imagine there are many many other things that could be added to this list.

Read more!

Tuesday, October 16, 2007

An overview of a system for implementing congestion pricing that preserves locational privacy

Our proposal for an implementation of a congestion pricing system that preserves locational privacy depends on the idea of "secret dynamic license plates.'' Here's how the system would process the interaction of a driver ("Irving'') and the state toll collection agency ("the DMV'')

At the beginning of the year, Irving privately chooses a collection of "secret dynamic license plates.'' This is just a long list of very large numbers, chosen in such a way so as to minimize the probability of overlap with any other driver's list.

Irving digitally signs the list of license plates, and gives the signature, but not the secret list of license plates, to the DMV.

As Irving drives around, the transponder in his car rapidly cycles through the list of dynamic license plates, at the rate of a new number each second.

When Irving enters the congestion pricing zone, monitoring devices record his current dynamic license plate number as he drives past.

At the end of the billing period, Irving settles with the DMV via the following process:

The DMV has a long list of numbers collected from drivers who have incurred tolls in the congestion pricing zone.

Irving has a long list of secret dynamic license plate numbers, some of which were picked up by the DMV's monitoring devices as he drove past.

Irving and the DMV engage in a secure two-party computation of the charges Irving owes the DMV.

At the end of the secure two-party computation, the DMV has not learned Irving's license plate numbers, only the amount Irving owes (see below for a discussion of how this works). Because the DMV has the signature Irving created when he chose the secret dynamic plate numbers, the DMV can be sure that Irving is paying the tolls accrued by his own secret dynamic plate numbers, even though it doesn't know what those numbers are.

This protocol preserves Irving's locational privacy. The information collected by the DMV does not personally identify Irving, nor does it allow them to actively track his vehicle. Nonetheless, complicated tolling information can be computed accurately during the final interaction. As a further advantage, this kind of implementation integrates well with solutions to automated traffic enforcement (e.g. stoplight cameras to catch red-light violators) that already preserve locational privacy.

Some answers to technical questions about the implementation:

Q: What's a "secure two-party computation"?
A: A protocol for "secure two-party computation" is a modern cryptographic technique which solves the following kind of problem: I have a secret number, and you have a secret number. We want to compute the product of these numbers, but I don't want you to learn my secret and you don't want me to learn your secret. A "secure two-party computation" allows us to compute the product of both numbers without revealing either secret.

Q: This sounds like magic. How could it possibly work?
A: Well, it's complicated. This technology is closely related to the modern cryptographic tools that make secure internet purchases possible (e.g., https) and make ATM's safe for banking. Besides, everyone engages in a very familiar privacy-preserving computation --- voting! After I vote, even though my vote can be used to decide who wins the election, no one knows how I voted. Secure two-party computations work via analogous principles.

Q: How does the state know that Irving isn't lying about the secret list of license plates he chose when this protocol started?
A: That's the point of the digital signature that Irving gave at the beginning --- using it, the DMV can verify that Irving is telling the truth (via another secure two-party interaction).

Q: How does a digital signature work?
A: It produces a number associated with some piece of information (a list of license plates, for instance) that uniquely identifies that list without revealing any other information about it. Imagine that I have a "secret number'', and I tell you the sum of the digits but not the number itself. It would be very hard for me to change my number without altering this sum. Digital signatures work a little like this, only much more securely.

Some more answers to pragmatic questions about the system:

As a general response to concerns about enforcement and potential attempts to defeat this system, it's worth pointing out that the existing situation involving physical license plates is the current gold standard for traffic enforcement. If I physically removed my license plates from my car, it might take a while for the police to catch me, because enforcement would depend solely on visual detection by a passing police officer. Because this system employs many eyes (the system's monitoring devices) in conjunction with the eyes of law enforcement, toll violators should be even easier to catch than someone driving without a physical license plate.

Q: This seems enormously complicated. Won't it be really difficult to implement?
A: It is somewhat complicated; but so was the London congestion pricing system (which is still plagued by high costs associated with collecting the tolls). But all of the hardware we require is basically bootstrapped from existing devices; most of the innovation is in the software. And the basic software for the modern cryptographic tools already exists.

Q: Is each person really responsible for picking a huge list of dynamic license plates and then engaging in this complicated interaction to pay tolls?
A: Well, yes, but drivers will be able to obtain devices that perform these tasks automatically.

Q: What if I try to fool the system by leaving my transponder at home?
A: Just as the police stop people driving without license plates on their cars, they will be able to stop people driving through the congestion pricing zone without transponders. Furthermore, the tolling points can report that a "transponder-less'' car has gone through, alerting local law enforcement.

Q: What happens if I choose not to engage in a periodic interaction to pay my tolls?
A: Drivers already engage in periodic, enforceable interactions with the state to, for example, renew their registrations. Drivers who haven't reconciled their congestion tolls could have their registrations revoked. The state might provide financial incentives to encourage early settlements of toll bills. Or the transponders could be equipped with a time-stamped authorization to operate, which expires at intervals and is renewed as part of the bill-settling process.

Q: Does this mean everyone has to have a transponder?
A: Yes.

Q: What about tourists and people "just passing through''?
A: Tourists and other legitimate sporadic users can pick up transponders at gas stations, convenience stores, and rest areas and leave a deposit in addition to charging up the device. On exiting the congestion charging area, these transponders can be returned and the deposit and congestion pricing balance credited back to the driver. These prepaid transponders would likely not preserve locational privacy, although they could be designed to do so.

Q: How could the system be integrated with automatic traffic enforcement?
A: Once the "secret dynamic license plates'' infrastructure is in place, it's easy to build traffic enforcement systems (or retrofit existing ones) that respect locational privacy. For instance, when a stop-light violation is detected, the vehicle's current dynamic license plate could be recorded rather than the physical license plate. Once again, via a secure two-party computation, tickets can be assessed.

Q: Do we really want freight trucks to be anonymous?
A: This system is designed primarily for passenger cars on personal business. Freight trucks engaged in commercial shipping probably should be closely monitored and tracked at all times. The point of this system is to preserve the locational privacy of private citizens using personal vehicles, while at the same time allowing the collection of congestion tolls and other traffic-management fees.

Authors of this posting are Andrew J. Blumberg, Department of Mathematics, Stanford University, Stanford, CA 94305, email blumberg @ and Robin Chase, Meadow Networks, email robin @

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How to make EZ-pass preserve locational privacy

In many ways, the EZ-pass system of automated toll collection devices on highways, tunnels, and bridges throughout the Northeast has been a huge success. Penetration is impressive: A majority of drivers now have the devices. But the system has the potential to substantially compromise its users' privacy.

The signal sent out by the EZ-pass transponder is unencrypted and could be read by anyone. Each transponder is uniquely linked to a particular credit card account. The states maintain databases of EZ-pass tolling data for indefinite periods of time. Uniform standards for access and use of this data do not exist. This data may be subject to demands by other private citizens, and has been successfully subpoenaed as evidence establishing the locations of alleged philanderers in divorce cases. In sum, as implemented, EZ-pass violates the locational privacy of its users.

There's no reason the system must expose its users to locational privacy violations. Over a decade ago, automated highway tolling systems which did preserve locational privacy were successfully implemented, notably David Chaum's Dynacash in Holland and Japan. Dynacash and others were based on one of the fruits of modern cryptography -- electronic cash.

Q: What's electronic cash?
A: Electronic cash functions like ordinary cash, but it is "virtual'' and stored in a computer. To use it, I go to a virtual "bank'' and buy some electronic cash using "real'' money. Later, I spend the electronic cash on goods and services. The vendor can then redeem it for "real'' money with the bank.

Q: What does "function like ordinary cash'' mean?
A: When I give you a twenty dollar bill, you know you were paid. You can exchange that bill with other people. But once that bill is in circulation, no one knows who gave it to you. Once I've given it away, that bill is gone. And I can't tell just by looking at my remaining money where that particular bill went. Finally, the bank that originally provided the specific bill never knows whether I spent it or to whom I gave it.

Q: How would this work in the toll-collection context?
A: Users would purchase electronic cash and use it "charge up'' their EZ-pass transponders. The transponder then pays tollbooths using the electronic cash. From the user's perspective, there would be almost no change in how EZ-pass works.

Q: But the bank knows I bought the electronic cash. Isn't my privacy violated?
A: No. Even if you buy the electronic cash from the state, the state knows only that at the beginning of the month a certain amount of money was purchased to be used for tolls -- not which tollbooths were used.

Q: This seems like magic. Does this really work?
A: Yes. In fact, electronic cash systems are widely used for internet purchases. And electronic cash based tolling systems were implemented temporarily in Holland and Japan in the early 90's. Modern cryptography is amazing. We trust it every day to secure our use of the internet (via https) and ATM machines. Modern cryptographic techniques have been proposed to help ensure the safety of electronic voting. Electronic cash is based on the same kind of technology.

Q: Could we use electronic cash to implement congestion pricing?
A: For simple congestion pricing systems, definitely! For instance, if a proposed congestion pricing plan charges a fixed amount to anyone who comes within a set boundary drawn around the downtown district during business hours, electronic cash would work well. But it doesn't work as well for more nuanced systems (e.g., the charge depends on the amount of driving within the downtown boundary), and it doesn't integrate well with privacy-preserving automated traffic enforcement solutions. For a richer approach to congestion pricing which preserves locational privacy, see our other posting.

Authors of this posting are Andrew J. Blumberg, Department of Mathematics, Stanford University, Stanford, CA 94305, email blumberg @ and Robin Chase, Meadow Networks, email robin @

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Congestion pricing poses a threat to locational privacy.

What this means and why you should care

Q: What does "locational privacy" mean?
A: "Locational privacy" means the ability to walk in public space and drive on public roads with the expectation that one's movements are not being tracked or recorded for later analysis.

Q: How will congestion pricing violate my locational privacy?
A: Congestion pricing systems track drivers in order to charge them for their road usage. In practice, congestion pricing systems use pervasive networks of cameras and electronic tag readers to charge drivers and catch violators. Some proposed systems require a GPS transmitter in every car to assess charges based on the car's recorded path. Almost all of the designs in use or under consideration require the tolling authority to build a giant database of tracking information that includes data for each driver who uses the congestion pricing zone.

Q: Aren't law enforcement agencies allowed to track my movements already? How is congestion pricing different?
A: The police have limited resources to devote to tracking your movements. As a consequence, they can't afford to track very many people at once. Besides, it's hard for the police to track you without your knowledge -- even if an unmarked car is following you, you'll probably become aware of it sooner or later. With a congestion pricing system, by contrast, a widespread network of inexpensive data-collection devices silently records everyone's movements in a central log, without anyone noticing. This quantitative difference in the ease of tracking and exploiting the collected data creates a huge qualitative difference in the tracking's impact. It's like wiretapping: there's a critical qualitative difference between single wiretaps that require a court order and disclosure, and the government secretly recording all phone calls for subsequent analysis.

Q: Don't EZ-Pass and similar existing electronic tolling systems already violate my locational privacy this way?
A: YES! The tolling data collected by EZ-Pass is linked to a credit card account (without being encoded to protect your privacy) and then stored in a single central location. In contrast, "electronic cash''-based highway tolling systems which preserve locational privacy have been deployed in the past, but are not widespread today.

Q: Won't the government keep the data safe and delete it as soon as it's no longer needed?
A: No. Many states keep EZ-Pass tolling data indefinitely, for example, and such data has already been (successfully) subpoenaed for use in divorce cases. Tolling authorities will be tempted to keep the data for ostensibly reasonable "law and order'' purposes.

Q: What kinds of tracking data misuse should we be afraid of?
A: It's easy to imagine civil-rights abuses based on data-mining. For instance, people who are tracked driving to a mosque might be referred to the FBI for careful observation. People who are tracked visiting the Riverdale Democratic clubhouse could be singled out for audits by the IRS. Neither of these examples is farfetched --- reports of officers recording the license plate numbers of cars parked at mosques are fairly widespread, and All Souls church in Pasadena was investigated by the IRS and threatened with revocation of its tax-exempt status based on an anti-war sermon delivered in 2004. And of course, such data could be used to pursue illegal immigrants. In addition to actual government abuses, the reasonable fear that visits to such locations might be tracked, stored and used later could have a chilling effect on legitimate political and religious expression.

Q: I frequently provide a lot of identifying information about my physical location --- for instance, to my credit card company. Why is this any worse?
A: It's hard to interact with the modern financial world without leaving a trace. And if you have a cell phone, you're probably already trackable by your cell phone company. But that doesn't make it right. The slow but steady erosion of locational privacy is a good reason to be concerned about further loss of privacy. Anyway, if you're worried about privacy, it's much easier to switch to cash, or turn off your cell phone occasionally, than to stop driving. Furthermore, these two examples involve the use of your data by private corporations, which -- unlike the government -- have no power to arrest you or take away your rights.

Q: Pervasive tracking of all vehicles will provide needed security in this age of terrorism. Shouldn't we be willing to sacrifice this kind of privacy for security?
A: No. We should no more have to sacrifice locational privacy for security than we should have to consent to the deprivation of any other rights. Residents of former Eastern bloc countries have written eloquently about the horrors of pervasive monitoring and surveillance. Even if it were reasonable to have cameras constantly watching high-risk areas (Wall Street, courthouses, and so forth), congestion pricing will cover the city and eventually the whole metropolitan area, and pervasive surveillance everywhere is fundamentally incompatible with a free and democratic society.

Q: Driving is privilege, not a right. Why shouldn't we demand the sacrifice of privacy in return for that privilege?
A: Particularly in areas that are poorly served by mass transit, it's such a hardship to refrain from driving that there's no reasonable way to opt out. In those situations, this proposition is coercive. As an analogy, suppose we demanded that people whose homes are connected to public sewer lines allow cameras in their bathrooms to track water usage. But there's really no need to use cameras for the purpose of monitoring water usage --- and the same is true of congestion pricing (see the next question).

Q: But we need congestion pricing systems to alleviate downtown traffic problems. What alternatives do we have?
A: There are ways of designing congestion pricing systems that preserve locational privacy! Using modern cryptography, a congestion pricing system could simultaneously protect our locational privacy and allow tolling authorities to collect revenue. This is the same technology that makes it safe to use ATMs or buy things online. See our other documents for more information on how this could work.

Authors of this posting are Andrew J. Blumberg, Department of Mathematics, Stanford University, Stanford, CA 94305, email blumberg @ and Robin Chase, Meadow Networks, email robin @

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Technology Recommendations for Congestion Pricing

For historical reasons, wireless systems for use in the transportation sector have taken a separate path for technology development. This divergence no longer makes sense. Every other sector in the economy is finding secure, reliable, and economical systems that use internet-protocol and are highly compatible. Continued insistence on separate radio frequencies, closed networks, and obscure proprietary standards mean that technology investments in transportation don't take advantage of low-cost high-volume components developed for the consumer market or advances in communications hardware and routing software.

Rest-of-the-World Trends: Open networks, Device Convergence, Open Standards, Extensible/Interoperable, Consumer products/parts (high volume, low cost), Redundant networks base, Robustness/Redundancy


Intelligent Transportation Systems: Closed network, DSRC (Dedicated Short Range Communications), Single-purpose devices, Proprietary, inflexible, lock in, high cost, path dependency, can’t leverage others’investment, centralized command & control (single points of failure)

Below are our recommendations in priority order. Wireless infrastructure investments for congestion pricing, open-road tolling, and road pricing should be:

  • Open networks (the data transmission required for user-fees is very small, meaning that a huge amount of excess capacity in these networks is available and should be made available to the public given that this infrastructure is being paid for with taxpayer dollars).
  • Open standards (making these networks open is only interesting and useful to others if open standards are used).
  • A mesh network be employed.
  • An open source mesh network be employed.
  • An extensible/interoperable network should be deployed (creating opportunities for user-driven innovation, add-ons -- think Google open API model)
What would this system look like? What are the benefits of a system so configured?

Imagine a mesh "white box" in every car that travels through the city. The device would cost between $30-$50 in the volumes needed and be built using low-cost, widely available standard hardware components and open source software. (EZ passes hardwares cost $28). Each car would become a node in a dynamic mesh network, routing and repeating packets of data. People who purchase and install the devices in their cars can be given the first $100-$150 in congestion fees for free. System security requirements would be no different than any other wireless infrastructure, and preserving ample bandwidth for the purpose of collecting fees can be assured. Implementers would need only be responsible for providing key backhaul nodes (e.g., at critical intersections, exits, etc.) while end-users would drive the node density necessary to expand the network. The implications:
  • The amount of capital required to implement, maintain, and extend a congestion pricing system is reduced in several ways:
    • Congestion pricing hardware, and the majority of the wireless infrastructure, is financed and installed by end users.
    • Less infrastructure installed means less to maintain
    • This dramatically reduces the debt burden required and the cost of financing it.
    • Because the devices are self-configuring, there are reduced engineering costs.
    • Reduced installation costs (simply plug them into the vehicles).
    • The system can come online and be operational in less time than a system of tags and beacons, and therefore the free premium given to drivers would be a net revenue wash.
    • Very low on-going communications costs because the system relies primarily on free peer-to-peer data transmission.
  • System redundancy is inherent in such a network. There would be no single point of failure and no need for redundant systems to be designed and included.
  • Car location and charging could be based on GPS position or triangulation of vehicles relative to other vehicle and gateways (where the data enters the internet) similar to systems used by Loki and TomTom. [A discussion of protecting locational privacy is discussed in another paper.]
  • An in-vehicle mesh-based system allows infinite flexibility in the congestion pricing system.
    • The initial pricing cordon chosen by the city can be changed over time without additional on-street hardware investment (At considerable expense, London expanded its cordon from the CBD to a larger section of London after 4 years).
    • A dynamic real-time congestion pricing could be implemented covering all city streets, eliminating undesirable edge effects created by a cordon, charging based on actual congestion, increasing public perception of system fairness (charges based on real congestion, not arbitrary geography)
  • Enforcement would not be based on cameras and license plate photography, but rather on-the-ground enforcement officials determining whether individual cars in their proximity have an active device. High fines/tickets can be given to those vehicles without the device that are within the congestion pricing zone.
  • "Tourist" vehicles passing through the congestion pricing zone can pick up a device at gas stations, highway rest areas, and convenience stores. The cost of the device would be required as a deposit (in cash or by credit card) with an additional amount paid for anticipated fees. On exiting the congestion pricing zone, these devices can be returned with the deposit and unused funds returned to the driver. Those who choose this system would not be eligible for locational privacy, nor the free service premium given to those individuals who buy the device outright.
  • Facilitates layering of additional services and applications on a de-prioritized basis vis-a-vis congestion pricing/network data, creating additional potential revenue sources and value to users (e.g., internet access, social networking software, geolocational advertising, real-time traffic/congestion data for drivers).
  • Can be utilized to send emergency communications messages to all cars, cars in specific areas, etc.
There are considerable positive "externalities" that this system would give to the city that adopts it:
  • Because the network is open to all, within the congestion pricing zone, Manhattan would effectively be one dynamic wireless hotspot
  • A ubiquitous wireless network throughout the city, open to all, will generate an untolled/untold amount of innovation and economic development.
  • Over time one can anticipate other devices joining the mesh created by the vehicles. Each one of these devices leverages the existing investment of all the previous devices, contributes to the mesh, and gets the full advantages of zero cost peer-to-peer communication within the city. These new devices might be those purchased by other city departments (homeland security, police, emergency vehicles, education, health, social services), or by city residents (mesh-enabled laptops, cell phones, PDAs). The result is a scalable, resilient communications system. Different user classes and/or prioritization schemata can be utilized to ensure critical communications have access to this robust and redundant communications infrastructure.
  • An open tech system avoids path dependencies and ensures maximum extensibility during a time of rapid technological innovation and evolution.

Read more!

Ride Sharing Advice for Cities & Others


  • Very fuel-efficient means of motorized transport (very high passenger miles to the gallon)

  • Reduces congestion (time, excess fuel costs and emissions, reduced highway and road infrastructure)

  • Reduces parking demand

  • Leverages the existing investment in rolling stock(cars) paid for by people themselves, and existing road and parking infrastructure

  • Solution to the very difficult problem of providing affordable high quality HOV/transit services in low density geographies.

  • Can be implemented immediately.
Define ridesharing at state (and federal) level

A definition protects ridesharing, and makes sure that it is not confused with other transportation services that carry specific insurance, licensing, or zoning requirements. Here is one possibility that seems to capture the essential issues, adapted from SECTION 3. 10–4–707.5 (2), Colorado Revised Statutes

“Ridesharing” means the vehicular transportation of passengers traveling together with a commonality of route or destination (e.g. work, shopping, health, educational, religious, athletic, sports facilities, leisure, or any destinations) if the vehicle used in such transportation is not operated for profit by an entity primarily engaged in the transportation business and if no charge is made therefore other than that reasonably calculated to recover the direct and indirect costs of the “ridesharing” including, but not limited to, a reasonable incentive to encourage accommodation of the needs of the elderly or disabled. However, nothing in this subsection (2) shall be construed as excluding from this definition an arrangement by an employer engaged in the transportation business who provides "ridesharing arrangements" for its employees. The term includes ridesharing arrangements commonly known as carpools and vanpools.

Ensure no ambiguity in state car insurance requirements
  • Make sure that state car insurance policies cover everyone in the car if trip meets ridesharing definition (already happening with most insurance policies but definition at federal level of ridesharing would make this reality more easily defensible if challenged).
  • Protect companies that broker ridesharing from liability stemming from what happens on the ride between riders (driver and passengers).
Enable ridesharing to accommodate giving rides to elderly and disabled
  • Allow for additional modest fees to incent driver (owner of vehicle) to offer ridesharing with the elderly or disabled up to $x per person/ride (could be included in the definition) and make sure that such fees are allowable under definition of ridesharing and do not abrogate “ridesharing” definitions in insurance policies.
  • Protect these drivers from liability if elderly or disabled injured in ways not covered by their personal car insurance.
Make sure that tax incentives offered for commuter benefits include ridesharing

“Change Section 132(f) of the Federal tax code to include carpooling/ridesharing. This section enables employers to underwrite the cost of their employees' transit or vanpool commutes, up to $110 - and offset qualified parking expenses up to $215 - per employee, per month. These benefits are not considered taxable income for the employee, and employers may write off these costs as a transportation expense.

Alternatively, employer may allow employees to set aside pre-tax dollars to purchase transit passes, pay vanpool fares, and to cover qualified parking costs. Pre-tax set-asides are subject to the same monthly limits.”
  • Make benefits for going in high occupancy vehicles (HOV) equal to that of traveling in single occupancy vehicles (SOV). i.e. the parking benefits should not exceed those allocated for transit, vanpool, or ride sharing. In fact, incentives should be reversed. [Better would be make parking ineligible for this program.]
  • Best would be to make all ridesharng – not just for commutes -- costs to be tax deductible (with documention).
  • Ridesharing expenses have traditionally not been included because of perceived lack of ability to monitor and provide proof that the ride was shared. Change laws tso that those who can provide third-party documentation that ride was shared and expenses incurred can also participate in the program, just like any other tax deduction requiring a receipt.
Support one ride-sharing program online

This is difficult for me to say, as a provider of an online ridesharing service (, but I believe it is true. In order for ride sharing to be successful, it needs a critical mass of postings within a specific geographic area. Institutions, universities, “green” websites, cities, and states that promote “carpooling” and don’t tell you where to go are just not very helpful to prospective carpoolers. And promoting a large number of sites will just result in any one site not having very much traffic, again, a disservice to people who actually are trying to share rides.

So what can be done to preserve competition, allow for the best services to rise to the top, and still make sure that only one database/service is being promoted on any given website?
  • Choose one provider based on some known standards: (ability to make end users happy; trust mechanisms, ability to transfer money, website ease of use, audit trail of shared rides, protection of privacy, ease of communications between travelers, successful matches, etc.) and give them the contract/right to be listed for 1-2 years.
  • Be willing to change who you support based on transparent metrics. If another company is doing a better job, switch who you promote.
  • Require that the database/service you do market is “scrapable” by other ride-sharing companies. i.e. rides posted into that database would be accessible by all ride-sharing companies and available for matches within their own databases.
This system gives the maximum benefit to people who want to share rides. They can choose services that suit their particular needs, or that have successful marketed themselves, and get access to the rides posted on the state or city-supported service.

Set-aside carpool parking locations

Ideally, we want the carpool parking spaces to be the most desirable ones (even more desirable than car-sharing parking spaces). Anyone who carpools – regardless of company used to match the service – should be able to park in these spaces. I envision this sort of like credit card companies. “Reserved, Carpools. Accepted: GoLoco, etc.” To get onto the sign, perhaps the company has to meet some standard. To park at the sign, drivers would have to put a print-out of their matched trip on their dashboard with date, time, etc. readable from someone outside the car. I don’t believe an attendant actually has to monitor who parks here on a regular basis, but the ability to “audit” and fine people who shouldn’t park there is now overt and possible.

Is this a double standard? Online the city, company needs to choose one company, but on the street, several are supported? This allows for competitors to play, and if the city hasn’t chosen the best provider, the best provider can succeed and rise to the top.

In some locations – park and ride lots for example – these signs might say “carpool parking only, until 9:30am.” This way, if no one is carpooling, these spaces are available after peak demand.

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Saturday, October 13, 2007

Car Sharing Advice for Cities

(this post was originally written in 2006 for
How can and should a government support the development of Car Sharing Organizations (CSOs)? As I write this, I note that many things revolve around the major cost items of running the business.

1. Car insurance. Insurance is very difficult to obtain in this nascent industry since the insurers have no experience with the risk basis, and it is a major cost to the CSO. It took years of accumulating data to finally get our insurance rates down in line with reality. If the government (city? state?) could establish some kind of pool for just the catastrophic incidents, this is an important way in which insurance risk can be tiered, making insurance affordable.

2. Parking. Parking ranks right up there as one of the largest variable costs. CSOs compete with individual's costs of maintaining and parking their own vehicles. If private parking is available on-street (cheaply), this makes the CSO service relatively more expensive than owning your own car and parking it on-street for free or close to free. Likewise, the convenience of on-street parking can make car-sharing (or private ownership) that much more (less) appealing than the alternative parked deep in large garages. This can swing both ways in supporting or creating an additional hurdle depending on where (and price) of the residential housing stock.

My best advice here is: Offer up some parking spaces (municipal lots or on-street) for one year agreements to whichever car-sharing company wishes to bid on them. In the early years, you will likely have only one company bidding, and their bid will be close to zero $/month. As the business gets more established, and as competition enters the market, the value for specific parking spaces to specific companies will rise: the city will enjoy the additional revenue, and more than one company can compete in specific locations (especially if you can offer up more than one space in a location). This seems like the most fair way to both nurture a budding industry, as well as accommodate success and competition.

3. Marketing. This is very very dear to both starting and existing companies. The city has lots of resources to get the word out to residents at very low cost. Providing this ability, whether the area has one or many competing companies is critical, and keeps the costs of providing the service down. For example, on bus, subway adverts, or information mailed out to residents that renew vehicle registrations, etc. Again, please make sure to offer this service if there is only one company, and quickly accommodate the addition of other competitors as they arise.

4. Taxing, Zoning, Plating, Parking Permits. Zipcar operates in many cities, counties, and states across the US and now Canada (Toronto). Obstacles have included: residentially zoned neighborhoods where the inclusion of a car-share parking space could be construed as "business" and thus not allowable; a business tax applied on each and every parking location as if it were a separate "business establishment"; per transaction taxes meant for car rental that make the economics of hourly rental impossible (i.e. $10/rental tax ... if you rent for just a few hours that makes it economically unreasonable); are these vehicles plated commercial or residential? In Boston, commercial plates pay a higher rate at the toll booths, and get to park in loading zones. We would like to pay residential rates at the tolls and not be allowed to parking in loading zones... In any event, you can imagine how these can cause issues, some of which are easier to resolve than others.

5. Geographic carve-outs. If my memory from 3 years ago serves me, London offered up its support for carsharing on a borough by borough basis (?). I think this is problematic because, like most businesses, carsharing does best when it can scale. Also, users very much stand to gain from competition (improved quality of service) and a large network (i.e. a member can pick up a car from both work or home, without having to join two companies). Again, this is an easy issue to correct going forward."

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