Transit research has shown that higher fuel prices can cause people to shift from car travel to public transit.[i]Because of this, public policy decision makers have sometimes used a tax on fuel to encourage this shift. A fuel tax can also generate additional funds to invest in the transit system to ensure service can meet demand. This strategy works well at the beginning of a transformative shift, although it may cease to be effective after a certain point, as raising gas prices through taxation can reduce gas consumption, thereby reducing the funding for public transit. (Such was the case with TransLink in Vancouver.) Long-term strategic thinking will help to ensure such strategies are sustainable, as no one funding instrument is guaranteed to work over the long-term and adaptation is needed.
Other pricing policies, such as increasing parking charges or implementing congestion pricing, can also encourage a shift from cars to public transit. In February 2003, the city of London, England introduced a fee for driving cars into the city in an attempt to reduce traffic congestion. The funds raised by the congestion charge were to be used to improve other modes of transportation. The result has been improved bus and taxi service and reduced traffic congestion; the city has also raised funds for transportation improvements.[ii]
The reduced congestion enabled more efficient bus service by raising the speed of bus travel. Not only does this make bus travel more attractive, since passengers get where they’re going faster and more reliably, it also allows the same number of buses to make more trips each day because they are moving along their routes more quickly. Increasing bus speeds by reducing congestion and increasing signal and traffic priority is one way to get more buses for ‘free’.
[i] Litman, Todd, 2012, ‘Transit Price Elasticities and Cross-Elasticities’, Victoria Transport Policy Institute.
[ii] Litman, Todd, 2011, ‘London Congestion Pricing: Implications for Other Cities’, Victoria Transport Policy Institute, p. 1.