Paying the Toll for Traffic Congestion
I’ve had two chilling traffic experiences in 1998: one in Manila in the Philippines, the other on the San Diego Freeway in Orange County.
Manila in February proved easily to have the worst congestion I’d ever experienced, surpassing both San Juan, Puerto Rico, and Bangkok. It is overwhelmed by its traffic, and every trip is an ordeal. A five-mile taxi ride to the airport can take three hours. It showed, even to someone who loves driving like I do, what happens when motoring is left unrestricted.
Then, at the beginning of July one evening, I was driving my mother from Irvine up the San Diego Freeway to Los Angeles. For several miles near the John Wayne Airport and through Costa Mesa, it was a terrible shock: The carpool lanes were full. They were moving slower than the regular lanes.
It was a vision of a Manila-like future.
What could be done? I put that question to Jim Drago, chief spokesman for Caltrans.
“If a two-person carpool lane becomes too loaded, then you go to three,” he said.
He did not add, “or four, or five, or six.” But that could follow, for all we know. To avoid congestion, the carpools could be required to be larger and larger. Eventually, we’d need an oversized car to use them.
Maybe, as planner Rod Rose of Los Angeles suggests, computerized freeways may eventually be a partial answer.
And then there is the ongoing congestion-relieving experiment on display in Orange County: toll roads.
The 10-mile 91 Express Lanes, operated by the California Private Transportation Co. from the Riverside County line into urban Orange County, are the best known among California’s few such roads.
The express lanes, known as FasTrak, are supposed to represent congestion-based pricing, with 11 different rating bands, depending on hour, day and week, fixed in accord with traffic loads to avoid the lanes becoming congested.
The top band has already gone from $2.50 per one-way trip to $3.20 since the lanes opened in December 1995. So this is an expensive toll road, and could become more so.
Frequent users pay a $15 monthly surcharge in exchange for a 60-cent discount per one-way trip. If they drive it 13 days a month or more, they save something.
The lanes are fully automated with about 110,000 frequent or occasional users carrying a transponder (obtained for a $35 deposit) on their dashboards, allowing charges to be billed to their accounts. There are no tollbooths.
Since the $130-million system opened, there have been three price increases. For the first two years, carpools of three or more drove free. Now, they pay a half-rate.
I started paying attention to 91 Express Lanes after getting a complaint from Mrs. Joseph Schwartz of Los Angeles.
The 76-year-old widow, who is undergoing chemotherapy, said she had originally obtained a transponder to use the road while going to see her son in Temecula.
When she didn’t use it much, the operators started charging her $1, then $5 a month, for not using it; although she said she notified them that she didn’t want it any more and told her credit card carrier not to pay, the operators kept adding up charges and late fees and finally sent her case to a collection agency. By the time she contacted me, she owed $114.
The company, to its credit, canceled all her charges within an hour of receiving my fax of her written complaints.
“This is how we help if a customer has a problem,” said Greg Hulsizer, the general manager.
Hulsizer talked to me at length about the toll road. But he didn’t answer all my questions, citing business reasons that he said mandated confidentiality.
It turns out, for example, that despite all its price increases, the road continues to lose money.
This is ominous. If the project isn’t successful after all these increases, we probably need corrective action now.
Hulsizer told me “hundreds” of new customers sign up each week.
How many are quitting, I asked. The general manager said this was “proprietary information” and he wouldn’t give it out. But he finally said there is an average gain of transponders of 2,000 a month.
Hulsizer wouldn’t tell me how much of the recent price increases were due to meeting debt payments for development of the road versus attempting to stem traffic congestion by discouraging some economy-minded users. But since the low, late-night toll, when there is no congestion, has gone from 25 cents to 60 cents, it’s obvious that cutting financial losses is a serious factor in the increases.
Hulsizer said the toll road reports its financial status once a year to Caltrans, with less comprehensive quarterly updates.
He sent me the last annual statement, dated last September, but it was confusing.
The statement listed a “taxable loss” in the last fiscal year of $21.5 million, a “net loss for financial reporting purposes” of $11.1 million and an available cash flow balance of minus $8.8 million.
Hulsizer said the three parent companies of the California Private Transportation Co. last year had to ante up a total of $6.6 million to pay the debt and overcome what he termed “the deficit.”
Last year, he said, “half of our debt payments were reimbursed by the parent companies.”
Although Hulsizer had been quoted in The Times last year as saying, “We anticipate that we will break even by the end of 1998,” that is not his opinion now.
“We will not be profitable through 1998,” he told me. “We have a goal of being profitable in the future.”
What is your target date for profitability, I asked.
“We don’t share the goal publicly,” Hulsizer responded.
When businessmen start talking about finances in such a fuzzy way, there is certainly cause for skepticism and concern about a project’s viability.
We may not be close to Manila traffic now, but even with computers, I fear we’ll get there.
Ken Reich can be contacted with your accounts of true consumer adventure at (213) 237-7060, or by e-mail at firstname.lastname@example.org