urban congestion

Reducing urban congestion with a carrot, not a stick 

Traffic congestion is expensive. On a macro-economic level, congestion reduces productivity and costs businesses billions of dollars per year. But it also increases the pressure on road infrastructure, leading to higher maintenance costs and pricey upgrades to meet growing demand.

While some cities (most notably London) have developed road pricing schemes to reduce urban congestion, the Dutch are trying a very different approach: paying drivers to stay off the road. The project is a huge success.

Urban Congestion - map

Paying for results

Run by BNV Mobility B.V. (BNV), a 50-50 joint venture between Brisa and NedMobiel, the 'SpitsScoren' program aims to change the behavior of drivers through a mixture of financial incentives and value-added services. In effect, drivers are offered EUR5 for every day that they choose an alternative to driving on the highways during rush hour. To monitor driving habits, each participant is furnished with a GPS-enabled smart phone and a personalized web page that helps track their use of highways during key periods.

The Rotterdam program, one of two that are currently ongoing, aimed to reduce traffic by five percent during rush hour periods. The program surpassed that goal in the first month, and has already changed the behavior of more than nine percent of road users and almost 60 percent of the participants currently enrolled.

Running the numbers

But does it make financial sense? The project requires around €3 million in annual funding (in Rotterdam's case split between national and various local governments). When compared against the estimated €150 million that is required to widen 40 kilometers of highway, one starts to see the simple logic behind the innovative project.

And while financial incentives are a very strong motivator for behavioral change, the company is also very focused on providing the tools and information to reinforce the change. For example, BNV has leveraged social media sites such as Facebook and LinkedIn to connect potential car-pool users, developed real-time text alerts about traffic congestion, and even opened 'flexible office spaces' at the entry to major highways to offer professionals a place to work until rush hour ends.

Extending the impact

BNV runs a number of national and local schemes that emulate a similar principle. For example, the AnnAways program works with corporate car fleet managers to help reduce road use by reversing the traditional 'company car' structure. The program transfers both the costs and the budget for car leasing, maintenance and fuelling to the vehicle users, who are then encouraged to find ways to reduce costs and - ultimately - pocket the difference. The expected result is a considerable reduction in the amount of kilometers driven and therefore fuel used. Vehicle owners are also expected to select more fuel efficient cars which will further reduce the overall cost and CO2 emissions.

The success of the system will have important implications for urban centers around the world. The programs could be expanded to cover entire regions or countries, or reduced to specifically focus on one road or special event (say, for example, to reduce road use during an Olympic Games).

And although questions still remain as to the programs viability in emerging markets, it is clear that urban administrators now have two options in their 'congestion-reducing' belt: a carrot and a stick.

Reducing Urban Congetion Graphic

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