Roads Are Fine, But They're Not Everything: the Value Pricing Program Misses the Chance to Support Innovation

The Federal Highway Administration's Value Pricing Program (VPP) is a small fish of serious innovation in a wide and deep pond of roadbuilding mediocrity.  Created by President George W Bush, the VPP has supported many, many pilots of important transportation reforms around pricing and "getting the price right" in transportation. From congestion pricing, to High Occupancy Toll (HOT) lanes and parking, the VPP has gotten behind efforts throughout the country to increase the knowledge base and technical capacity in this extremely important area of transportation policy and finance.

Readers of my blog will undoubtedly know of my deep affection for pay as you drive (PAYD) insurance, a simple approach to auto insurance that lowers transportation costs, helps the environment, cuts congestion and increases road safety.  The pricing and provision of parking is also dear to my heart.

So, imagine my glee, then, when the VPP announced last October that they were "especially interested" in funding non-road tolling projects and programs, specifically calling out PAYD and parking pricing (not to mention dynamic ridesharing).   While PAYD insurance is slowly gaining traction, we really need to pick up the pace.  Setting the pace and proving feasibility are perfect roles for the Federal government here.  This was promising.

Unfortunately, last week, when over $417 million in FHWA funding was announced by Secretary Ray LaHood, all $8 million of VPP money went to road projects.  Not what I was hoping for, and definitely not all that's needed.

Now, don't get me wrong: innovative road and congestion pricing are good, quick and proven strategies to reduce congestion and transportation-related pollution.  Yet we need more than just one approach to meet our transportation challenges, and PAYD can cut pollution while saving people money without building any new infrastructure.  

It could be true that none of the PAYD applications were worth funding. But there were also no parking applications funded, nor any dynamic ridesharing projects funded.  It looks like there was a strict "roads only" order in place for this funding round.  

That's really too bad, and its a missed opportunity.  The FHWA should take a second look at these worthy projects--the ones they were "extremely interested in" just ten months ago.