Friday, April 27, 2012

A tale of two bridges

It has become the best of times on Highway 520, one of two floating bridges across Lake Washington that connects Seattle to its eastern suburbs. You can "sail" across the bridge, with no traffic, even during rush hour. The secret, of course, is the $10 price:
Technologically, the system is a marvel. There are no toll booths. Indeed, there is no sign at all that this is a toll road except for actual signs that say so. The toll is collected in myriad ways. You can sign up for an account and get a little coded sticker for your windshield. Or you can wait until they bill you, using your license plate to track you down. Apparently, it works. Unless your commute is between 11 p.m. and 5 a.m., in which case it’s free, you can’t escape.
Meanwhile, it has become the worse of times on Highway 90, which is more jammed up than ever. Although the bridge is nominally "free," commuters end up "paying" in increased commuting time. Overall, the effect is exactly what any economist would have predicted:
In Seattle, since the toll was imposed, traffic on the toll bridge has dropped about 40 percent, while traffic on the free bridge has risen 10 percent. Overall traffic from the east side to and from the city has dropped about 6 percent.
The moral of the story is simple: the economy is more efficient than it was before the toll because consumers are facing the cost of their choices.
The money raised will be used to rebuild the bridge. Thus this cost will be paid by those who actually use the bridge, in direct proportion to how much they use it, rather than sticking it to the general taxpayer. The market will sort out those who value their time at more than $10 per commute from those who do not and give both drivers what they prefer. And of course, it’s good for the environment: Some people will reject both the toll and the increased congestion on the free bridge, and use public transit or work from home.
HT: Chris

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