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VTPI News - Fall 2004

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  • Todd Alexander Litman
    ... VTPI NEWS ... Victoria Transport Policy Institute Efficiency - Equity - Clarity ... Fall 2004 Vol. 7, No. 3 ... The Victoria Transport Policy
    Message 1 of 1 , Dec 3, 2004
      Victoria Transport Policy Institute
      "Efficiency - Equity - Clarity"
      Fall 2004 Vol. 7, No. 3

      The Victoria Transport Policy Institute is an independent research
      organization dedicated to developing innovative solutions to transportation
      problems. The VTPI website (http://www.vtpi.org) has many resources
      addressing a wide range of transport planning and policy issues. VTPI also
      provides consulting services.

      We have updated our website (http://www.vtpi.org). The new format is easier
      to read and navigate, and contains a search feature. Thanks to our Web
      Wizards Nathan Kelerstein and Christopher Stevenson for their excellent work!

      Pay-As-You-Drive (PAYD) means that fixed vehicle charges are converted into
      distance-based charges, giving motorists a new opportunity to save money
      when they reduce their mileage. Recently, Polis Direct, a major Dutch
      insurance company, introduced their "Kilometre Policy"
      (http://www.kilometerpolis.nl), the first PAYD insurance based on simple
      odometer readings.

      With this policy, per-kilometer premiums are calculated by dividing current
      premiums by the current policy's maximum annual kilometer value. A motorist
      who currently pays €500 (Euro) with a 20,000 maximum annual kilometer
      policy will pay €0.025 per kilometer, and one who pays €1,000 with a 25,000
      maximum annual kilometer policy pays €0.04 per kilometer. Participants pay
      an "advance premium," which is 90% of their current premium, so a motorist
      who currently pays €500 pays an advance premium of €450. At the end of the
      policy term the motorist receives a rebate or pays extra based on how much
      they drive, up to 50% of their premium.

      Current Policy: €500 premium with 20,000 maximum annual kilometers.

      Per-Kilometer Fee: €500/20,000 is €0.025
      First Year Advance Premium: €500 x 90% = €450
      Year End Adjustments:

      If the motorist drives 14,000 kms they receive a €100 rebate, for a total
      annual premium of €350, a €150 savings. If the motorist drives 18,000 kms
      they have no end-of-year adjustment, for a total annual premium of €450, a
      €50 savings. If the motorist drives 20,000 kms they pay an additional €50,
      for a total annual premium of €500, the same as they previously paid. If
      the motorist drives 22,000 kms they pay an additional €100, for a total
      annual premium of €550, a €50 increase.

      Mileage data are collected during annual vehicle inspections and recorded
      in the national vehicle registration database. Odometer readings can also
      be obtained through service stations, for example, if a vehicle is
      transferred to a new owner.

      This policy is available to any motorist in the Netherlands who is at least
      24 years of age, has a car worth less than €42,000 new, and drives less
      than 40,000 kms annually.

      It is the result of three years of research and development by the TNO INRO
      research organization, with help from government agencies, private
      insurance companies, and the Victoria Transport Policy Institute (see
      http://www.ce.nl/eng/pdf/03_4224_35_summary.pdf). The Dutch government is
      promoting PAYD pricing (what they call vehicle fee "variabilization") to
      help reduce congestion, accident and pollution emission problems. VTPI
      helped plant the seed for this program when Todd Litman visited the
      Netherlands a couple years ago as a guest of TNO, to share information on
      transportation pricing reforms such as PAYD insurance.

      Dutch research on PAYD insurance included a market survey (N=906, October
      2004) which found that:
      . 71% of motorists want PAYD (woman 74% and men 69%).
      . 54% say that car insurance price is the most important reason to choose
      an insurance company.
      . 39% wants to be able to influence directly how much they pay for insurance.
      . 33% would be more considerate about using the car if they had PAYD insurance.

      It will be interesting to see how this affects the Dutch insurance market.
      We expect the Kilometre Policy to attract many new customers, since this is
      a unique new product that offers many motorists significant savings. Other
      insurance companies will need to offer comparable products or lose market

      For more information on PAYD insurance see:

      "Pay-As-You-Drive Vehicle Insurance," Online TDM Encyclopedia

      "Distance-Based Vehicle Insurance as a TDM Strategy"

      "Pay-As-You-Drive Pricing for Insurance Affordability"


      "Safe Travels: Evaluating Mobility Management Safety Benefits,"
      This paper investigates the traffic safety impacts of mobility management
      strategies. Mileage reductions resulting from pricing and land use reforms
      tend to cause proportionate or larger reductions in crashes, and mode
      shifts also tend to provide significant safety benefits. Because most
      crashes involve multiple vehicles, reducing vehicle mileage reduces risk
      both to motorists who drive less and to other road users. This analysis
      indicates that mobility management can be a cost effective traffic safety
      strategy, and increased safety is one of the largest potential benefits of
      mobility management, but these benefits are often overlooked in
      conventional transport planning.

      "Rail Transit In America: Comprehensive Evaluation of Benefits"
      This report evaluates the benefits of rail transit based on a comprehensive
      analysis of transportation system performance in major U.S. cities. It
      finds that cities with larger, well-established rail systems have
      significantly higher per capita transit ridership, lower average per capita
      vehicle ownership and mileage, less traffic congestion, lower traffic death
      rates and lower consumer transportation expenditures than otherwise
      comparable cities.

      "Evaluating Rail Transit Criticism" (http://www.vtpi.org/railcrit.pdf)
      This report evaluates criticism of rail transit. It examines claims that
      rail transit is ineffective at improving transportation system performance,
      that rail transit investments are not cost effective, and that transit is
      an outdated form of transportation. It finds that critics often
      misrepresent issues and use biased and inaccurate analysis. This is a
      companion to the report "Rail Transit in America: A Comprehensive
      Evaluation of Benefits."

      "Financing Transit Systems Through Value Capture: An Annotated
      Bibliography" (http://www.vtpi.org/smith.htm), by Jeffery J. Smith and
      Thomas A. Gihring
      This paper summarizes the findings of nearly 100 studies concerning the
      impacts of transit service on nearby property values, and the feasibility
      of capturing this additional value to finance transit improvements. The
      results indicate that proximity to transit often increases property values
      enough to offset much or all of transit system capital costs.

      We had such a wonderful time at the ProWalk/Bike conference earlier this
      fall that we updated ournonmotorized transportation documents. These are
      now available on our website.

      "Quantifying the Benefits of Nonmotorized Transportation For Achieving
      Mobility Management Objectives" (http://www.vtpi.org/nmt-tdm.pdf)
      This paper investigates the ability of nonmotorized travel (walking and
      cycling, and their variants) to help achieve transportation planning
      objectives such as congestion reduction, road and parking facility cost
      savings, consumer cost savings, and various environmental and social
      benefits. This analysis indicates that nonmotorized travel provides
      significant benefits, and that these benefits can increase with cost
      effective incentives. Conventional transportation evaluation practices tend
      to overlook many of these benefits and so undervalue nonmotorized
      transportation improvements and incentives.

      Whose Roads: Defining Bicyclists’ and Pedestrians’ Right to Use Public
      Roadways " (http://www.vtpi.org/whoserd.pdf)
      The paper investigates assumptions that nonmotorized modes are less
      important to society than motorized modes, and that roads are funded by
      motorists. It finds that nonmotorized modes play a critical role in an
      efficient transportation system, and that local roads, the roads used most
      for walking and cycling, are funded primarily by general taxes, which
      residents pay regardless of how they travel. Since non-drivers impose lower
      roadway costs they tend to overpay their fair share of roadway expenses.

      "Economic Value of Walkability" (http://www.vtpi.org/walkability.pdf).
      This paper describes ways to evaluate the value of walking (the activity)
      and walkability (the quality of walking conditions, including safety,
      comfort and convenience). Walking and walkability provide a variety of
      economic, social and environmental benefits. More comprehensive analysis
      tends to justify increased support for walking and other nonmotorized modes
      of travel.

      "Understanding Smart Growth Savings: What We Know About Public
      Infrastructure and Service Cost Savings, And How They are Misrepresented By
      Critics" (http://www.vtpi.org/sg_save.pdf)
      Various studies show that Smart Growth can save hundreds of dollars
      annually per capita compared with providing comparable public services to
      sprawled destinations. Most current development charges, utility fees and
      taxes fail to accurately reflect these location-related cost differences,
      representing a subsidy of sprawl. This paper summarizes estimates of Smart
      Growth savings, and critiques claims that such savings are insignificant.

      ONLINE TDM ENCYCLOPEDIA (http://www.vtpi.org/tdm)
      The VTPI "Online TDM Encyclopedia" is the most comprehensive resource
      available anywhere to help identify and evaluate innovative management
      solutions to transport problems. We continually update and expand the


      Todd Litman, "Transit Price Elasticities and Cross-Elasticities," Journal
      of Public Transportation, Vol. 7, No. 2, (www.nctr.usf.edu/jpt/pdf/JPT 7-2
      Litman.pdf), 2004, pp. 37-58.

      WBCSM, "Mobility 2030: Meeting the Challenges to Sustainability," The
      Sustainable Mobility Project, World Business Council for Sustainable
      Mobility (http://www.wbcsd.org), 2004. This major international report
      describes various ways to create more sustainable transportation systems.
      It cites VTPI as a leading source of information on demand management
      issues and strategies.

      "Evaluating Public Transit Benefits in St. Louis: Critique of 'Light Rail
      Boon or Boondoggle'", Citizens for Modern Transit
      (http://www.cmt-stl.org/images/litman.pdf), 2004.
      This paper, written by Todd Litman for Citizens for Modern Transit,
      evaluates an article critical of rail transit investments.


      2005 TRB Annual Meeting
      The 2005 Transportation Research Board 84th Annual Meeting takes place
      January 9-13, 2005 in Washington DC. VTPI Director Todd Litman will chair
      the TRB Sustainable Transportation Evaluation and Indicators Subcommittee.
      This subcommittee explores practical ways of evaluating progress toward
      sustainable transportation. Please contact him if you have questions or
      suggestions concerning this subcommittee.

      Transit and Economic Development: Current Thinking (P05-0706)
      SESSION #220: Public Transportation and Economic Development
      Monday, January 10, 2005, 8:00am- 9:45am, Hilton, International East

      Comprehensive Evaluation of Transportation Costs (05-1130)
      SESSION #304: Cost Estimation for Planning and Policy: What is a Cost?
      Monday, January 10, 2005, 1:30pm- 3:15pm, Hilton, International West.

      Practical Indicators for Sustainable Transportation Planning (05-1700)
      SESSION #462: Sustainable Transportation Planning Indicators
      Tuesday, January 11, 2005, 10:15am-12:00pm, Hilton, International West
      TITLE: SPONSORED BY: Task Force on Transportation and Sustainability
      PRESIDING OFFICER: Todd Alexander Litman, Victoria Transport Policy Institute.

      Rail Transit Impacts on Transportation System Performance (05-0810)
      SESSION #524: Rail Transit Systems Performance
      Tuesday, January 11, 2005, 2:30pm- 5:00pm, Hilton, International Center.

      Racial Justice in Transportation: A Metropolitan Policy Agenda, a special
      workshop sponsored by the Harvard University Civil Rights Project
      (www.civilrightsproject.harvard.edu) and the Brookings Institute
      Metropolitan Policy Program (http://www.brookings.edu/metro/metro.htm).
      Thursday, January 13, Washington DC.

      "Community Challenges," Transportation Planning Workshop
      Friday, January 28, Orlando, Florida.

      IMPACT: Implementation Paths for ACTion towards sustainable mobility.
      Workshop, February 10-11, at Lund University, Sweden. Please contact Todd
      Litman (litman@...) if there are other speaking or consulting
      opportunities for him in Northern Europe around that time.


      TFN Employment Connections
      The Transportation Futures Network (TFN) "Employment Connections" is a
      periodic compilation of job positions working on innovative transportation
      programs across North America, distributed by email.Employment Connections
      is a free service of the Transportation Futures Network (TFN). TFN believes
      that sensible transportation decisions are an essential ingredient of
      viable communities and therefore should support environmental quality,
      social equity, community development and economic efficiency. To that end,
      TFN works to cultivate progressive leadership in the transportation field
      by matching the right people with the right jobs in areas broadly related
      to the transportation field. If you would like to receive TFN Employment
      Connections, or if you would like to submit an employment posting, please
      send an email to mernst@...

      "Smart Bylaws Guide," by the West Coast Environmental Law Foundation
      (http://www.wcel.org/issues/urban/sbg), 2004.
      This comprehensive guide is designed to help local governments implement
      smart growth strategies through policy and bylaw changes. It describes
      smart growth concepts and implementation practices, and backs up the theory
      with case studies, technical standards and bylaws that can be tailored to
      specific municipal circumstances. The Guide brings together the best
      practices throughout North America. It complements the "Smart Growth Policy
      Reforms" chapter of our Online TDM Encyclopedia

      "The New Transit Town: Best Practices In Transit-Oriented Development," by
      Hank Dittmar and Gloria Ohland, Island Press" (www.islandpress.org), 2004.
      This new book defines and describes transit oriented development, and
      discusses in detail how it can be implemented, including sections on
      planning and design, financing, regulations and zoning codes, parking and
      traffic management, and several detailed case studies.

      "Reconnecting America, Hidden In Plain Sight: Capturing The Demand For
      Housing Near Transit,"
      (http://www.reconnectingamerica.org/html/TOD/newReport.htm), by
      Reconnecting America, for the Federal Transit Administration, 2004. This
      market study indicates that a growing portion of households value living in
      walkable communities near quality transit service, due to current
      demographic and real estate trends.

      "Smarter Choices - Changing the Way We Travel"
      UK Department for Transport
      July 2004.
      This remarkable report draws on research on the effectiveness of mobility
      management programs and their potential for improving transportation system
      performance. It analyzes various strategies, including commute trip
      reduction programs, school transport management, mobility management
      marketing, carsharing and improved transit service information. It assesses
      their combined potential impacts and costs. It evaluates two different
      policy scenarios: a 'high intensity' scenario is projected to reduce peak
      period urban traffic by about 21% (off-peak 13%), and provide a nationwide
      reduction in all traffic of about 11%. The 'low intensity' scenario, which
      essentially reflects current levels of effort, is projected to reduce
      national vehicle traffic by just 2-3%.

      "Licenses Take A Back Seat: As High Schools Cut Driver's Education, Fewer
      Teens Are Getting Behind The Wheel," Los Angeles Times, By Shawn Hubler,
      December 2, 2004, front page; available at
      This fascinating article indicates that a declining portion of U.S.
      teenagers are licensed to drive (from 52% of teens in 1992 to 43% in 2002),
      and that automobiles are becoming less important to young people.

      Please let us know if you have comments or questions about any information
      in this newsletter, or if you would like to be removed from our mailing
      list. And please pass this newsletter on to others who may find it useful.

      Todd Litman, Director
      Victoria Transport Policy Institute
      "Efficiency - Equity - Clarity"
      1250 Rudlin Street
      Victoria, BC, V8V 3R7, Canada
      Phone & Fax: 250-360-1560
      Email: litman@...
      Website: http://www.vtpi.org
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