In the wake of the coronavirus pandemic, the US is experiencing an unprecedented challenge to protect citizens and flatten the curve until vaccines are available. Measures enacted to slow its spread, such as shelter-at-home orders and social distancing, are profoundly affecting economic activity. As a result, there have been extraordinary changes to traffic volumes, transit ridership and tolling revenue. SmartBrief caught up with Tracey Trexel, tolling solutions lead for IBM Global Business Services, to learn more.
What kind of impact has the coronavirus pandemic had on traffic trends and the tolling industry?
Limits on person-to-person interaction and gatherings have helped reduce the spread of the coronavirus, and as a result, personal automobile usage has diminished. States reported a record drop in traffic ranging from 38% to 63% in March and April. INRIX reported personal travel declined by an average of 48% nationally from April 4-10. New York City saw highway speeds increase more than 50% compared to the beginning of the year. Los Angeles saw speeds increasing an average of 48% following Gov. Gavin Newsom’s shelter-at-home order. As state and local governments begin reopening, businesses and in-person activities have led to an increase in vehicle miles traveled in cities across the country. Today, “vehicle miles traveled (VMT) nationwide is almost back to where it was in March,” said Laura Schewel, CEO and co-founder of StreetLight Data. For L.A. and Ventura counties, in early April, VMT was down 37% from March 1. At the end of June, it was down just 14%. Traffic on major roadways in Washington fell over 50% from March to April and is now down just 12%. Traffic on New York bridges and tunnels is down only 18%, and the number of vehicles entering Manhattan’s central business district is only 15% below pre-pandemic levels. Current trends show an increasing preference for the personal car. A rise in single-occupancy vehicle commuting could cause a massive influx in road traffic, causing huge congestion and delays going forward.
Tolling provides critical revenue that keeps our nation’s roads, bridges and tunnels open and in good working order for the safety of the drivers who use them. Toll revenue also provides a supplemental revenue source for transportation investment, public transit and other transportation improvements. The reduction of automobile usage and decrease in traffic has resulted in millions of dollars in lost toll revenue. In addition, challenges to collect have increased with a spike in pay-by-plate transactions, higher violations, and leakage from license plates seen but not reconciled. Prior to the expiration of Washington’s stay-at-home order, the state reported an average 53% decrease in tolls. Today, tolling in Washington is averaging a 38% reduction. Georgia’s toll roads have not returned to pre-pandemic levels and currently are at about 50% of normal trip volume and 25-30% of forecasted revenue. The Pennsylvania Turnpike Authority, a not-for-profit toll road, reported its cumulative traffic volume declined by half and that it expects about a $400 million to $500 million drop in revenue this year. According to the New Jersey Turnpike Authority, traffic on the Turnpike was down 30% through June, with revenues down 27%; for the Parkway, toll transactions fell 26%, and revenue was down about 27%. This loss in revenue could impact recovery and states’ ability to finance capital projects.
What are some of the steps the tolling industry has taken to respond to the pandemic?
For the tolling industry, the top priority during this pandemic is protecting the health and safety of the toll collectors and customers. To that end, agencies have responded by suspending cash collection of tolls, closing walk-in centers, making call center personnel remote, opening express lanes and implementing flexible payment policies. In March, the Pennsylvania Turnpike switched from cash collection to toll-by-plate to safeguard employees and motorists. For toll-by-plate vehicles, license plate images are captured, and the registered vehicle owner receives an invoice. Invoices can be paid online, by phone or by mail. Tolling authorities in Illinois and Florida followed suit, switching to all-electronic toll collection. Agencies that previously suspended cash collection, such as the Central Florida Expressway Authority, New York State Thruway and New Jersey Turnpike, resumed again in June. In August, Maryland made cashless tolling permanent statewide.
To further protect customers and employees, the Texas Department of Transportation (TxDOT), Georgia’s State Road and Tollway Authority (SRTA), the Transportation Corridor Agencies (TCA) in Orange County, Calif., and the Washington State Department of Transportation (WSDOT) temporarily closed customer walk-in centers. As the pandemic continues, customers have learned they can manage their accounts online, by phone, or by mail. As a result, some locations have permanently closed, such as two of WSDOT’s Good To Go! locations in Bellevue and Gig Harbor. Reopened service centers have adjusted to the challenges of balancing health and safety by requiring facial coverings, maintaining social distancing, reducing people waiting in lobbies, using plexiglass shields at workstations, and conducting wellness checks for employees at the start of shifts. Call centers for the SRTA and the Los Angeles County Metropolitan Transportation Authority (LA Metro) are closed or operating with reduced or remote staff, and operations and maintenance personnel are being provided protective equipment as needed. Most agency administrative offices have closed to the public, employees are teleworking and committee and board meetings are being held virtually.
Additionally, motorist have seen relief in a number of ways. For example, TCA has waived fees for suspended accounts and has lowered minimum payments for violations. In Orange County, monthly account maintenance fees were waived for commuters not currently accumulating the minimum in tolls. The Illinois Tollway has given customers more time to pay unpaid tolls online with no additional fines or fees. It has also reduced fines to $3 for violations and deferred the issuance of violation notices by several months. In some places, like the San Francisco Bay Area, Express Lane tolls were suspended for the spring due to a dramatic decline in traffic. The Harris County Toll Road Authority in Houston waived tolls from March through April.
Are there any new trends of note that have cropped up during the pandemic?
In addition to the aforementioned shift to all-electronic tolling, there has been an increase in remote work, single occupancy vehicle use and bicycling. People are seeking new ways to get around while maintaining social distancing. According to Dr. Lydia Campbell, chief medical officer for IBM, almost all of IBM’s 352,000 global employees have been working remotely since March. Employers like Facebook, Microsoft, Google, Amazon, Salesforce and other major companies recently told employees they could work from home for the rest of the year, and companies like JPMorgan, Morgan Stanley, Zillow, Twitter and Square are planning to offer employees options to work from home indefinitely. Companies are paying greater attention to mental health and wellbeing, and surveys show that over 50% of Americans want to continue working remotely after the pandemic. Research shows that employers benefit from decreased overhead and savings on reduced business travel. One company reported a 25% increase in productivity and that its call center has experienced its lowest attrition rate in three years. The new normal offers a heightened understanding for unpredictable remote working conditions. These trends may continue once the health crisis is over.
As COVID-19 sent the United States and much of the world into lockdown, travel plummeted affecting all modes of transportation. Airlines saw a 96% reduction in air travelers in the early stages of the pandemic and a 73% reduction by mid-summer. It could take several years for the industry to recover due to the onset of virtual meetings and waning interest in air travel for leisure. Similarly, public transit systems saw steep declines in ridership during lockdowns and reopenings. Trends are showing a switch from public transit, carpooling, and ride share, to single-occupancy vehicle use. A study by IBM confirms that the road ahead may be difficult as people flock to personal vehicles rather than return to public transportation. More than 17% of people surveyed said they intend to use their personal vehicle more as a result of COVID-19, with approximately 1 in 4 saying they will use it as their exclusive mode of transportation going forward. A shift to single-occupancy vehicles means cities like New York, Los Angeles, Boston, Chicago, Seattle and San Francisco are susceptible to extreme traffic and increased congestion. As an alternative, some people are turning to bicycles to fill the gap. In Philadelphia, cycling has increased by more than 150%, and the San Francisco Bay Area has registered a 77% increase in bike trips with bike shops reporting record business. According to PeopleForBikes data, the U.S. measured a 21% increase in urban-area bicycle ridership from March to mid-June, and bike sales are up 65% from last year.
How have express lanes and congestion-pricing initiatives faired during the pandemic?
Congestion-priced express lanes have seen the greatest impact among tolled facilities during the pandemic. Express lanes charge based on a dynamic pricing system. This means that the amount drivers pay for using the express lanes is based on time of day, how far they travel and how many other cars are on the road. Due to the pandemic, there weren’t many cars on the road during the second quarter of the year. For example, in March, the San Francisco Bay Area Express Lane operators implemented an “open to all” policy, jointly ceasing all express lane tolling until congestion warranted a return to tolling. Weekday tolling on the express lanes resumed in June, reinstating the variable-rate tolling policy but not before a significant, unrecoverable loss of revenue. Similarly, Virginia’s Express Lane tolls hit lows of less than $2 on average on the Interstate 495 lanes in early April when traffic was down by 80%. Before the pandemic, Transurban was collecting an average of $9.32 for drivers using the I-95 Express Lanes and $5.67 on I-495. During the first two weeks of June, average daily traffic on I-95 and I-495 was between 50% to 60% lower than it was during the same time last year. In the first week of June, the average cost to use the Interstate 95 Express Lanes was $6 and just under $2.40 on the I-495 Express Lanes, roughly half what it cost during the first week of March. California’s Orange and Riverside counties reported reduced toll revenue on the 91 Express Lanes with traffic down 67% in April. Reduced traffic and congestion due to remote work and slow reopening may continue to cause issues for express lanes.
There are lessons learned for Congestion Pricing. It may seem like the wrong time for cities and regions to continue to pursue congestion pricing strategies, but we now have data from the pandemic that makes this more compelling. Prior to the current public health crisis, serious proposals and studies were underway in places like San Francisco, Seattle, Los Angeles, and Washington, D.C. New York was set to roll out the first congestion pricing program in the U.S. next year. Decongesting Manhattan is the primary goal with the revenue being allocated toward the Metropolitan Transportation Authority (MTA) in the anticipation that better service will attract more riders. This health crisis is showing how fixing traffic congestion could have a profound influence on critical national priorities like increased safety, reduced greenhouse gas emissions, better local air quality and reduced roadway crashes and fatalities. The effects of the pandemic that cities are witnessing with respect to urban mobility are the same trends that manifest in places with congestion pricing. There are also valuable lessons to be learned for dealing with congestion. According to INRIX, American commutes only account for 15% of all trips, so removing just 5% or 10% of the trips to the most constrained areas can have a major effect. The pandemic has shown us these changes and the benefits they bring.
What does the future of the transit system look like after the pandemic and how will tolling evolve?
During the pandemic, transit ridership plummeted. US. transit agencies could face an annual shortfall of $26 billion-$40 billion, according to TransitCenter. Ridership has declined between 87% and 92% in New York City, New Jersey, and in the San Francisco Bay Area. Bus systems in Los Angeles, Washington D.C., Seattle, St. Louis, Hartford, Conn., Baltimore and Tampa, Fla., saw ridership cut by more than half. Cities such as Chicago, San Francisco Bay Area, Philadelphia and Los Angeles have seen greater than 90% dips in ridership for subway and rail systems. Transit fare revenue could decline more than ridership because many systems ended fare collection to decrease social contact. LA Metro estimates a loss of $50 million in farebox revenue. Bay Area Rapid Transit (BART) is budgeting for a more than $350 million drop in fare revenue over the next year. The Chicago Transit Authority (CTA) is estimating that it and Metra will have more than $850 million in combined revenue losses this year. Axios predicts “mass transit won’t bounce back from the pandemic nearly as fast as other modes of transportation.” Possible shifts towards driving amid fears of shared transportation modes could slow public transit recovery.
The impacts of these changes are staggering and raise questions about the road to recovery. There are no good precedents on which to estimate how toll road traffic may recover from COVID-19. The expectation is that traffic will return to pre-COVID levels for most regions in about 12 months. This will depend on a number of factors including lockdown phases, speed of reopening based on state criteria and guidelines, and a possible resurgence of the coronavirus. California, Texas, Florida, Georgia and Arizona show a dramatic resurgence in cases over the last few weeks with governors and mayors having to reverse course, putting limits back in place as people started gathering and cases begin to rise.
As the nation recovers from the pandemic, transportation is more critical than ever. In a conversation with International Bridge, Tunnel and Turnpike Association’s (IBTTA) Executive Director Pat Jones and Bill Cramer, Bill shared IBTTA’s letter to the U.S. Congress explaining the reality facing the country’s 128 toll operators and urging them to support critical infrastructure. The letter requests that Congress provide both flexible funding and modifications to financing options. Now is the time to prepare for the recovery after the pandemic. As Samuel Johnson said, Chief Operations Officer for the Transportation Corridor Agencies in Orange County, CA and 2020 IBTTA President, “we need to start showing the public that we are planning for infrastructure even though we don’t have the money right now.” IBM is working with our clients to keep projects on track so that the agencies are ready and prepared to serve their customers as recovery begins. Additionally, IBM is providing essential services and resource support to clients, government agencies and partners for their mission-critical operations to confront the coronavirus during the COVID-19 pandemic. IBM initiatives include partnering with the White House and Department of Energy to create the COVID-19 High Performance Computing (HPC) Consortium to provide access to supercomputers in the fight against COVID-19, IBM’s Weather Channel detailed virus tracking, and Watson Assistant for chat and speech to deliver answers to customers, employees and citizens. As Samuel said, “Communication is key. …we are all in this together, and together, we and our customers and employees will get through it. Moving through this long process, we must be practical, hopeful, smart and caring.”
Tracey Trexel is the Tolling Solutions Lead for IBM Global Business Services with expertise in revenue collection for Tolling, Transit, Parking, and emerging transportation technologies such as Road Usage Charging and Connected and Autonomous Vehicles. With more than 19 years of experience in the transportation industry in software and systems engineering, product management and business development, Tracey strives to deliver innovative solutions that provide top-quality customer experiences and operational excellence to meet the demands of the customer. Before joining IBM, Tracey held senior positions at Emovis, focused on business development and overseeing product development of the RUC solution and as Deputy Project Manager for the UDOT RUC Project; at HNTB she was an agency consultant for procurements, project implementation oversight and call center operations support; she got her start at Cubic, as a Software Engineer for transit fare collection devices and back office systems, and ultimately became Product Manager responsible for defining the requirements to expand the BOS for tolling. Tracey holds an M.B.A. and B.S. Computer Science from San Diego State University. She is PMP certified and a graduate of the IBTTA Leadership Academy executive development program. Tracey is a current member of IBTTA’s Social Equity Task Force as well as the Council of Platinum Sponsors.