Skip to main content

Road Pricing Defined

Road pricing refers to a fee related to the use of a roadway facility. Revenue from these fees can be reinvested in capacity expansion or used to pay for operations and maintenance. Toll revenue, specifically, is also the primary source of repayment for long-term debt issued to finance a toll facility itself.

In general, tolling involves the imposition of a per-use fee on motorists for a given highway facility. Historically, these fees have generally been flat tolls that may vary by number of axles and distance driven, but not by time of day. Their primary purpose is to generate revenue.

The term pricing, as applied to road usage, entails fees or tolls that vary by level of vehicle demand on the facility. This type of road pricing is also called congestion pricing, value pricing, variable pricing, peak-period pricing, or market-based pricing. This pricing strategy follows that used in other industries to account for and manage demand - for example, airline tickets, cell phone rates, and electricity rates. While pricing generates revenue, as do flat tolls, this strategy also seeks to reduce congestion, environmental impacts, or other external costs occasioned by road users.

Road pricing imposes a price on a vehicle's use of the road based on time of day, location, type of vehicle, number of occupants, or other factors. Aside from the generation of revenues, proponents of road pricing cite the fee's potential to reduce the wasted time, fuel, and emissions associated with traffic congestion. Further detail on types of road pricing is also provided in this section.

To view PDF files download the Adobe Acrobat Reader®