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Techniques For Mitigating Urban Sprawl |
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| Pricing Strategies - Automobiles / Roadways |
| Distance-based Taxes |
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Distance-based taxes are designed to charge drivers in direct proportion to the distance they drive both to increase equity in the application of transportation fees and to discourage excessive consumption of transportation. VMT (Vehicle Miles Traveled) Tax is one such example in which the state or local government collects the tax based on odometer readings taken at the annual registration or inspection, or by using electronic tracking methods. The Puget Sound Regional Council estimates that a VMT tax could produce up to a 11% reduction in VMT and a 10% reduction in vehicle trips with a $0.05 per mile charge (PSRC, 1994. pp. 25). No examples of VMT taxes are currently found anywhere. Pay-as-you-drive vehicle insurance has been proposed as a way of tying insurance costs to distances driven and of converting an indirect cost of driving to a direct, out-of-pocket cost. Case/Example: cents-per-mile pricing for vehicle insurance in Texas; Bill 3871 introduced in the 2001 Oregon legislature provides tax credits to insurers that offer Pay-As-You-Drive pricing. Source/Reference: WSDOT, 2000, pp. 75,Victoria Transport Policy Institute
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Texas House Bill 45, passed in 2001, gives insurers permission to offer cents-per-mile pricing for vehicle insurance. The bill requires insurance companies to separately track and report the claim losses and premium revenues for mileage-based and time-based premiums. The North Central Texas Council of Governments (NCTCOG) is implementing a pilot study to quantify reductions in vehicle mileage and emissions, and other changes in driver behavior, resulting from Pay As You Drive (PAYD) insurance pricing. Initial data indicate that the PAYD program may decrease total miles driven.
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http://www.capitol.state.tx.us/BillLookup/History.aspx?LegSess=77R&Bill=HB45
http://www.nctcog.org/trans/air/programs/payd/MidTermResults.pdf
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www.centspermilenow.org
Distance-Based Pricing — “Distance-Based Pricing (also called Pay-As-You-Drive, Mileage-Based and Per-Mile pricing) means that vehicle charges are based on how much a vehicle is driven, so the more you drive the more you pay and the less you drive the more you save. Such fees tend to be more economically efficient and fair than existing pricing practices (Market Principles). Converting fixed costs into distance-based charges (called Variabilisation, see INFRAS, 2000) gives motorists a new opportunity to save money when they reduce their mileage. Below are examples of distance-based vehicle charges:”
Distance-Based Insurance — “Vehicle insurance is generally considered a fixed cost with respect to vehicle use. Motorists do not usually perceive insurance cost savings when they reduce mileage. Distance-based insurance pricing converts insurance to a variable cost with respect to vehicle travel so premiums are directly related to annual mileage. Distance-based pricing makes vehicle insurance more actuarially accurate (premiums better reflect the claim costs of each vehicle) and gives motorists a new opportunity to save money when they reduce their mileage. It can help achieve several public policy objectives including equity, road safety, consumer savings and choice, congestion reduction, facility cost savings, energy savings and environmental protection. This paper compares several distance-based insurance pricing options, and evaluates concerns and criticisms. The analysis indicates that distance-based pricing is technically and economically feasible, and can provide significant benefits to motorists and society.”
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Envision Central Texas  6800 Burleson Road, Building 310, Suite 165 Austin, TX 78744 Mailing Address: P.O. Box 17848 Austin, TX 78760-7848 |
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