Making the switch by UCLA Luskin School of Public Affairs

April 26

Making the Switch How Metro Can Ensure Carpooler Access to Los Angelesâ&#x20AC;&#x2122; New High Occupancy Toll Lanes David Castle John Gahbauer David Lewry Kristen Perry Henry To Advised by: Aaron Panofsky Assistant Professor UCLA School of Public Affairs Department of Public Policy and Center for Society and Genetics Guillaume Roels Assistant Professor UCLA Anderson School of Management

Prepared for Los Angeles County Metropolitan Transportation Authority

Acknowledgements We would like to thank Professors Panofsky and Roels for their excellent advice and guidance throughout this project. This project would not have been possible without them. We are grateful to the UCLA Lewis Center for Regional Studies for their generous financial support that enabled our research. Finally, we would like to thank Stephanie Wiggins and Joanne Kawai at Metro for the opportunity to work on this project and for their support over the six-month duration of this project. Thank you also to Donna Blanchard for her support of our carpooler survey. Disclaimer This report was prepared in partial fulfillment of the requirements for the Master of Public Policy degree in the Department of Public Policy at the University of California, Los Angeles. It was prepared at the direction of the Department and of Los Angeles County Metropolitan Transportation Authority as a policy client. The views expressed herein are those of the authors and not necessarily those of the Department, the UCLA School of Public Affairs, UCLA as a whole, or the client.

Making the Switch

Executive Summary The Los Angeles Metropolitan Transportation Authority (Metro) will soon embark on a yearlong pilot program, dubbed ExpressLanes, converting current high occupancy vehicle (HOV) lanes on segments of the I-10 and I-110 freeways to high occupancy toll (HOT) lanes. This report provides analyses and recommendations to ensure carpooler support for the ExpressLanes program. The analyses and recommendations include an implementation analysis that compares the project with other HOT lane conversions, a strategy for engagement and communications, and a plan for distribution of transponders to carpoolers. Our implementation analysis considers issues that other agencies faced in implementing their own systems, and highlights potential risk factors for Metro. Key findings include the following: • Even when political opposition has been minimized, one grandstanding politician can disrupt the project by using the media to generate confusion and opposition. • Concerns about low-income access to the lanes are likely to evaporate once the system goes into effect and people see that a wide variety of vehicle types are using the lanes. • Requiring carpoolers to obtain and use transponders represents a risk factor for Metro, which creates the perception that carpoolers are losing easy access to the lanes. In order to mitigate the implementation risks posed above, Metro must: • Mitigate public skepticism by educating carpoolers about the benefits of the program, perhaps by including testimonials from users of the San Diego and Orange County HOT lanes. • Recognize the importance of equity issues around low-income users of the system by touting investments in transit and revenue sharing, • Reconsider requiring transponders for carpoolers, as this requirement is one of the biggest risk factors with respect to winning carpooler support for the program. Assuming that Metro continues with its plan to require carpoolers to use transponders to access the lanes, Metro will need a strong engagement plan, including a carpooler incentive program, and a targeted communications strategy to convince carpoolers that they will benefit from the system. Key findings include: • Carpoolers prefer an ongoing points-based rewards program to an upfront subsidy. • Carpoolers vary widely in their perception of the program’s value. • Many carpoolers are comfortable receiving information about carpooling from Employer Transportation Coordinators (ETCs). For others, the experience of other cities shows that freeway signage is especially critical. • A mass media advertising strategy is most effective when it differentiates between carpoolers and single drivers. • Many carpoolers were unaware that the ExpressLanes system would still be free for them, and did not understand how the lanes would improve efficiency overall. • Adoption of transponders among carpoolers may take up to a year to achieve.

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Our recommendations from the findings above indicate that Metro should: • Implement an improved, points-based rewards system for carpoolers to incentivize continued carpooling, leveraging transponder technology to automate calculation and generate excitement about the program. • Utilize ETCs and freeway signage to target communications to carpoolers. Metro should be cautious of using mass media advertising, since carpoolers should be the focus of the initial program rollout; however, distinguish between mass media advertising and management of earned media to manage expectations about the program among the general public. • Create customized education/promotion messages for each carpooler segment. Distributing transponders to as many carpoolers as possible is vital to ensure a smooth opening for the ExpressLanes. Metro should plan to: • Ensure manufacturing and distribution capacity for approximately 261,000 transponders. • Plan to provide most transponders to carpoolers via web ordering and through the workplace. In addition to providing these recommendations to Metro, we have outlined a proposed plan to guide Metro through the year and a half prior to the opening of the system, summarized in the following table: Time to Open

Recommended Steps

18 Months

Design benefits-based introductory messaging, including videos; distribute through ETCs

12 Months

Start pre-orders with bonus points incentive; provide communications checklist and materials for ETCs

6 Months

Design process-based messaging; begin in-person transponder distribution through workplace and CSCs

3 Months

Install signage on corridors; design and distribute messaging around environmental benefits

At Launch

Transition incentive from bonus points to trial period; phase rollout for carpoolers in some way

After Launch

Expand promotion to SOV drivers

Remembering that many carpoolers and vanpoolers are passionate about their ridesharing “cause,” Metro must, in all its engagement, and distribution efforts, try to treat carpoolers less as customers and more as partners in the effort to promote ridesharing. Vocal carpoolers are ExpressLanes’ biggest potential political threat to the program but, if they can be won over through effective messaging and an appeal to their passion, they are also potentially its best advocates. April 2010

Table of Contents 1

Introduction: Project Background ........................................................................................................ 1 1.1

ExpressLanes Goals and Hierarchy of Users ........................................................................... 1

1.2

Strategic Question: Mitigating Impacts on Carpoolers ........................................................ 2

1.3

Project Deliverables .......................................................................................................................... 3

1.4

Scope of Project .................................................................................................................................. 3

1.5

Plan of Presentation .......................................................................................................................... 4

Research Methodology .............................................................................................................................. 4 2.1

Background Research....................................................................................................................... 4

2.2

City Comparison and Agency Interviews .................................................................................. 5

2.3

Transponder Demand Estimation ............................................................................................... 5

2.4

Employee Transportation Coordinator Research ................................................................. 6

2.5

Carpooler Research ........................................................................................................................... 6

Implementation Analysis, Findings & Recommendations........................................................... 7 3.1

Analysis and Key Findings for Mitigating Implementation Risk ..................................... 7

3.1.1 Tolling History ................................................................................................................................ 7 3.1.2 Public Skepticism toward Congestion Pricing ................................................................... 8 3.1.3 Political Grandstanding .............................................................................................................. 8 3.1.4 Misplaced Equity Concerns ....................................................................................................... 9 3.1.5 Transit Issues and Investments ............................................................................................... 9 3.1.6 General Carpooling Concerns ................................................................................................ 10 3.1.7 Transponder Requirement for Carpoolers ...................................................................... 10 3.2 4

Recommendations on Mitigating Implementation Risk .................................................. 12

Evaluative Criteria ................................................................................................................................... 14 4.1

Proven Feasibility via Demonstrated Success in Other Cities ....................................... 14

4.2

ETC Support ...................................................................................................................................... 14

4.3

Carpooler Support .......................................................................................................................... 14

Engagement Analysis, Findings and Recommendations ........................................................... 14 5.1

Analysis and Key Findings ........................................................................................................... 15

5.1.1 Incentives to Participate .......................................................................................................... 15 5.1.2 Willingness to Pay for Transponder Deposit .................................................................. 18

5.1.3 Three Market Segments: Pragmatic Economizers, Older Traditionalist, Idealistic Benefit-Seekers ......................................................................................................................................... 20 5.1.4 Choosing the Right Channel to Reach Carpoolers ......................................................... 21 5.1.5 Messaging for Carpoolers........................................................................................................ 23 5.1.6 Prediction of Carpooler Adoption Rates ........................................................................... 24 5.2 6

Recommendations for Engagement Strategy....................................................................... 25

Distribution Analysis, Findings and Recommendations ........................................................... 27 6.1

Analysis and Key Findings ........................................................................................................... 28

6.1.1 Transponder Demand Estimation ....................................................................................... 28 6.1.2 Transponder Acquisition Preferences ............................................................................... 29 6.1.3 Payment Method for Transponder Deposit ..................................................................... 31 6.2

Recommendations on Distribution .......................................................................................... 31

Implementation Steps............................................................................................................................. 32

Conclusion ................................................................................................................................................... 33

Appendices .................................................................................................................................................. 35 9.1

Appendix 1: Explanation of Congestion Pricing .................................................................. 35

9.2

Appendix 2: Original Hypotheses Related to Carpoolers ................................................ 36

9.3

Appendix 3: Primary Research Log.......................................................................................... 37

9.4

Appendix 4: Academic Interview Questions ........................................................................ 38

9.5

Appendix 5: Neighborhood Council Survey .......................................................................... 40

9.6

Appendix 6: Business Rules Grid .............................................................................................. 41

9.7

Appendix 7: Agency Interview Questions ............................................................................. 44

9.8

Appendix 8: Agency Interview Summary Report ............................................................... 45

9.9

Appendix 9: Traffic Flow Data Charts ..................................................................................... 54

9.10

Appendix 10: ETC Survey ............................................................................................................ 55

9.11

Appendix 11: ETC Survey Summary Statistics .................................................................... 56

9.12

Appendix 12: Carpooler Focus Group Questions................................................................ 59

9.13

Appendix 13: Carpooler Focus Group Mini-Survey ........................................................... 61

9.14

Appendix 14: Carpooler Focus Group Mini-Survey Summary Statistics ................... 62

9.15

Appendix 15: Carpooler Survey (English) ............................................................................. 63

9.16

Appendix 16: Carpooler Survey (Spanish) ............................................................................ 65

9.17

Appendix 17: Carpooler Survey Summary Statistics ........................................................ 67

9.18

Appendix 18: Summary of Survey Crosstab Analyses ...................................................... 77

9.19

Appendix 19: Transponder Technology Analysis .............................................................. 79

9.20

Appendix 20: K-means Segmentation Analysis................................................................... 82

9.21

Appendix 21: Transponder Demand Estimation Calculations ...................................... 85

9.22

Appendix 22: Implementation Steps Detail .......................................................................... 88

References .............................................................................................................................................. 91

Making the Switch

Introduction: Project Background

In early 2008, as part of an overall effort to reduce traffic congestion in Los Angeles County, the Los Angeles County Metropolitan Transportation Authority (Metro) and Caltrans District 7 entered into a Memorandum of Understanding (MOU) with the U.S. Department of Transportation (DOT) to qualify for approximately $210 million in federal transit funding. These funds will enable a number of congestion-reduction initiatives, with about 70% of the funds dedicated to significantly improving transit services along the I-10 and I110 corridors, and to facilitating ExpressPark, a high-tech dynamically-priced parking system. The balance of the funds will be dedicated to the ExpressLanes Demonstration Project (ExpressLanes), which will convert the high-occupancy vehicle (HOV) lanes to highoccupancy toll (HOT) lanes on selected corridors on I-10 and I-110. While carpoolers can continue to use the lanes free of charge, single drivers will have the option of paying a toll to enter the lanes as well. The toll will be collected electronically by using a transponder, a coaster-sized radio device that mounts on a carâ&#x20AC;&#x2122;s windshield. On I-10, the selected corridor runs along the current El Monte Busway from I-605 to Alameda Street, and on I-110, the corridor runs from the Artesia Transit Center to Adams Boulevard.1 The one-year ExpressLanes pilot program is scheduled to go into effect in August 2012 (the launch date was recently postponed by 19 months), and is expected to generate $21 million in annual revenue (Los Angeles County Metropolitan Transportation Authority). Of Metroâ&#x20AC;&#x2122;s congestion-reduction programs, ExpressLanes attracts the most controversy because it not only changes existing freeway use, but also implements a dynamic congestion pricing model to price available lane space. Both congestion pricing and HOT lanes are relatively new and innovative ways to deal with congestion: only a handful of cities in the US have experimented with them, and this new form of road pricing has raised public opposition. See Appendix 1 for a detailed explanation of HOT lanes and congestion pricing. In addition to getting federal funding to implement these projects, Metro also had to be authorized to operate as a tolling agency from the California legislature, via Senate Bill No. 1422 (SB 1422), which dictated the provisions of the aforementioned MOU. SB 1422 requires Metro to implement a public outreach plan to engage affected communities and evaluate and mitigate impacts of the program on those communities before implementing ExpressLanes. Metro tasked us with determining the optimal strategy for implementing the ExpressLanes program and the specific effects on Los Angeles drivers and the general public. 1.1 ExpressLanes Goals and Hierarchy of Users The stated goals of the ExpressLanes program are to reduce congestion and the pollution it causes, to increase freeway speeds, and to improve overall travel times. Because higher 1

These two corridors were selected for their suitability for HOT conversion as well as a consequence of political considerations.

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vehicle occupancy serves all three goals, Metro promotes ridesharing and gives explicit preference in its resource allocation to modes where vehicle occupancy is greatest. Accordingly, their hierarchy of users is as follows: 1. Transit users 2. Vanpools 3. Carpools (HOVs) 4. Single drivers (SOVs) The significant role that carpoolers and vanpoolers have in this hierarchy is one of the major reasons why they are important constituencies to satisfy in the ExpressLanes implementation. 1.2 Strategic Question: Mitigating Impacts on Carpoolers Perhaps the most important groups affected by the implementation of ExpressLanes are the carpoolers and vanpoolers2 who use the HOV lanes everyday (referred to collectively as carpoolers for ease). This group is a high priority for Metro, because they are already reducing congestion through their ridesharing behavior, and because they will most directly experience the operational changes on the freeway. Carpoolers may feel that they have lost some of their benefits because other vehicles will now be allowed to use the lanes that were previously restricted to HOVs only, and consequently, speeds may slow down somewhat in the lanes.3 Additionally, some carpoolers will perceive the required transponder lease to be a burden for which they receive little benefit compared to their status quo. Carpoolers in Los Angeles are better organized than in other cities, because in Los Angeles, large employers are required to have programs and staff support to encourage carpooling.4 Because carpoolers are so well organized, they represent a critical risk factor for ExpressLanes: should carpoolers mount a sustained campaign of public opposition to the ExpressLanes, the program could lose support in the State Legislature, and as a result fail to be renewed at the end of the one-year demonstration period. One important way to avoid opposition is to ensure that carpoolers will still be able to use the lanes on Day One of the conversion. Achieving a carpooler participation rate of close to 100% on Day One is important because carpoolers who, find themselves unable to access the lanes that they are accustomed to using on Day One, will be unhappy and could instigate negative press and incite a political movement that could derail the project. Therefore, Metro needs to know how to best engage carpoolers so that they will both support ExpressLanes, and enroll in the program prior to its launch. Vanpools are similar to carpools but are more formally organized through a workplace, and generally use a van leased by the employer to transport more employees than would fit in a carpool. In our analysis, we observed negligible differences between carpooler and vanpooler preferences. Because carpoolers outnumber vanpoolers, we refer to both groups as carpoolers in this paper. 3 In the current HOV lanes, speeds routinely exceed 50 or 60 m.p.h. even when congested general purpose lanes are going much slower. With the ExpressLanes, speeds will be regulated at 45 m.p.h. through dynamic pricing, and would only increase beyond this during times when there is no congestion on the general purpose lanes. 4 In California, the Air Resources Board has implemented regulations that require large organizations to take proactive steps to reduce emissions from employee commuting. (This is why large employers are required to have ETCs.) The success in increasing carpooling is due in part to improved organization of carpoolers as a result of ARB regulations. 2

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To fill that need, Metro engaged our APP/AMR team to study the effect of the ExpressLanes project on carpoolers, starting with the following strategic question: What should Metro do to encourage carpooler support for the ExpressLanes program and ensure that carpoolers can continue using the HOT lanes after conversion? 1.3 Project Deliverables This report will provide Metro with a comprehensive set of actions to maximize carpooler adoption on Day One. We identified three major deliverables to fully answer the strategic question: • Implementation Analysis: A comparative analysis of the policy decisions surrounding other HOT lane implementations in the U.S., and recommendations to mitigate the risk of sustained public opposition, with a special focus on carpoolers. • Engagement Strategy: An analysis of the behaviors and preferences of carpoolers, with recommendations on incentive programs, deposit pricing, and messaging strategies for most effectively engaging carpoolers. • Distribution Planning: An analysis of the number of transponders needed for the pilot project and the options for transponder acquisition and payment, with recommendations to ensure adequate distribution capacity and encourage maximum adoption by carpoolers. Our analysis and recommendations in these three areas will help Metro to make decisions that satisfy carpoolers and lead to a successful implementation of ExpressLanes. Before beginning the research, we developed a list of hypotheses regarding carpooler’s preferences with respect to promotion and distribution of transponders, found in Appendix 2. We strove to validate these hypotheses throughout our research on the project. 1.4 Scope of Project The research in this paper will focus on how Metro can fully engage carpoolers in Los Angeles to make the transition to ExpressLanes as smooth as possible. There are a number of other issues surrounding ExpressLanes that are not addressed in this report, either because Metro has either already made a decision or has decided to resolve the issue internally. These issues are noted in Box 1 below.

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Box 1: Issues Out-of-Scope for our Project • • • • • • •

Definition of a carpool (i.e. 2+ versus 3+ occupants) Maximum and minimum tolls Toll discounts for special users (such as low-income users) Locations of corridors that will be used in the project Facility improvements (such as adding lanes or modifying ramps) Modifications to the entry/exit points of the ExpressLanes Enforcement plan and associated technology (such as automated license plate recognition)

1.5 Plan of Presentation We will present our research methodology and discuss our implementation analysis, the key findings, and general recommendations related specifically to our research on other HOT lane implementations in the U.S. Next, we will discuss the criteria we used to evaluate our engagement and distribution alternatives. Then, we will present the analysis, findings, and recommendations for engagement strategy and for distribution planning. Finally, we will conclude with a discussion of implementation steps. 2 Research Methodology We conducted research in five major areas: • Background research • City comparison and agency interviews • Transponder demand estimation • Employee transportation coordinator research • Carpooler research Appendix 3 contains a comprehensive log of our primary research. 2.1 Background Research We conducted background research to understand the context of HOT lane conversions and congestion pricing, and how pricing of lanes affects sensitive constituencies, such as carpoolers and low-income carpoolers. This research consisted of a thorough review of the academic literature on several topics: • Road pricing and equity • Low-income payment behavior • Carpooler travel behavior • Implementation case studies from other cities We obtained key information directly from primary contacts at Metro. In addition, we interviewed David Sutton, who runs the existing rewards program for carpoolers, to gather information about current carpooler incentives. Finally, we conducted interviews with

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three academic transportation experts: Brian Taylor5 and Mike Manville6 at UCLA, and Lisa Schweitzer7 at USC to corroborate our findings. The questions for the interviews are included in Appendix 4. Lastly, we administered a survey at two neighborhood council meetings, but could not meaningfully analyze the results due to the small sample size; a copy of the survey is included in Appendix 5. 2.2 City Comparison and Agency Interviews To compare and contrast Los Angeles with other cities that have implemented HOV to HOT conversions, we conducted detailed research on the business rules of all other HOT lane facilities in the U.S, as shown in Box 2 below.8 Box 2: Cities and HOT Lane Facilities in the U.S. • • • • • • • •

Denver, CO Katy, TX Miami, FL Minneapolis, MN Orange County, CA San Diego, CA Seattle, WA San Francisco

I-25 HOV/Express Lanes Katy Tollway/Managed Lanes (I-10) 95 Express (I-95) I-35W MnPass Express Lanes 91 Express Lanes (SR-91) I-15 Express Lanes SR-167 HOT Lanes I-680 (forthcoming)

The results of this research are compiled in the business rules grid found in Appendix 6. This grid helped inform the rest of our comparative research, and informed Metro’s decisions on rules and fees, which they made concurrent with the progress of this project. To get a candid perspective on implementing HOT lanes, we interviewed managers at each of the toll operating agencies listed above. A list of the questions we asked these agencies are found in Appendix 7. A report outlining key findings from the interviews is included in Appendix 8. 2.3 Transponder Demand Estimation To make feasible recommendations on the promotion and distribution of transponders, we estimated how many carpoolers currently use the HOV lanes and how many SOV drivers we would expect to use the HOT lanes, in order to estimate the number of transponders needed. Early in the project, we realized that Metro did not know the true size of this market, which would prevent them from effectively mitigating the risk associated with not having enough transponders on Day One and derailing support for ExpressLanes as a Brian Taylor is Professor and Chair of the Department of Urban Planning at the UCLA School of Public Affairs, and Director of the UCLA Institute of Transportation Studies 6 Mike Manville is a post-doctoral Scholar at the UCLA Lewis Center for Regional Policy Studies, and Associate Editor of Access (a transportation digest) 7 Lisa Schweitzer is Assistant Professor, USC School of Policy, Planning, and Development 8 The Bay Area Toll Authority is not included in business rules grid because their facility has not yet opened. 5

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result. In addition to verifying an adequate supply of transponders for carpoolers and SOV drivers, an accurate estimate of transponders will also assist in making sure that the system is prepared to handle the estimated volume of transactions on Day One. To determine the size of the market, we collected data on highway usage for the I-10 and I110 corridors from the Caltrans freeway Performance Measurement System (PeMS) database, and also from the Caltrans HOV Report for 2008. Appendix 9 contains the traffic flow charts used in this analysis. The team also collected information on transponder adoption rates from several cities, to better understand the effect of engagement plans on transponder leases and sales. We used the data from Minnesota to estimate an adoption curve for Los Angeles. 2.4 Employee Transportation Coordinator Research Every large employer in California is required to designate an ETC to coordinate ridesharing programs in their organization, and to manage compliance with air quality regulations. ETCs proved to be an invaluable group of research subjects that helped us to better understand carpoolers. They are also a potentially useful channel for promotion and distribution. We conducted several pieces of research with ETCs. First, we administered a survey to ETCs at a rideshare marketing workshop. The 113 responses from this survey helped us to understand how ETCs feel about the ExpressLanes program and how they might be willing to support it. The survey itself is included in Appendix 10 and the summary statistics from the survey are included in Appendix 11. We also observed two Metro-facilitated ETC focus groups, in which ETCs gave frank feedback about the program. Finally, we conducted follow-up interviews with four ETCs, to further investigate their feelings about the ExpressLanes program. 2.5 Carpooler Research The centerpiece of our research for this project was our direct, primary research on carpoolers, which offered insight into their opinions, needs, and preferences with respect to the ExpressLanes project. To prepare for the large-scale carpooler survey that we conducted, and receive candid feedback on the program from carpoolers, we facilitated focus groups at four organizations: Los Angeles World Airports (LAWA), the Long Beach Veterans Administration, City of Hope, and the Department of Public Health. An outline of questions for the focus groups can be found in Appendix 12. We also administered a mini-survey during the focus groups asking about willingness to pay for the transponder deposit, preferences for incentives, and overall opinion of the program. A copy of that survey can be found in Appendix 13 and the summary statistics can be found in Appendix 14. Our main gauge to determine carpooler engagement and distribution preferences was our survey of carpoolers in LA County, which had 3,037 respondents. A copy of that survey can be found in Appendix 15. We asked Metro to distribute a link to the online survey through April 2010

Making the Switch

their ETC listserv, instructing the ETCs to then pass the survey along to their employees. We also made the survey available in Spanish, and in paper format, to try to reach additional carpoolers. A copy of the Spanish survey appears in Appendix 16. The summary statistics from that survey are included in Appendix 17. Despite our best efforts at expanding the reach of our survey, some types of carpoolers (occasional workers, non-office workers, people without e-mail) are likely underrepresented in our survey. Distributing the survey through ETCs may have introduced additional bias, potentially over-selecting employees who are well informed about ridesharing and/or those who rely upon ETCs as a transportation resource. Despite this potential sample bias, we are confident that our analysis and findings are still informative and meaningful because our data captured a wide variety of perspectives and preferences on the ExpressLanes program. Furthermore, for the majority of questions, we have no reason to expect our sampling bias to be correlated with survey responses, and thus we do not expect our results to be unduly impacted. In a few select circumstances where biased data is more likely (for example, questions that refer specifically to ETCs and questions where we would expected underrepresented groups to have responses different from most) we will discuss the issue and explain how we incorporated this concern into our analysis. 3 Implementation Analysis, Findings & Recommendations Having outlined our research methodology, we now turn to the first major deliverable, our implementation analysis. This comparative evaluation analyzes policy decisions surrounding other HOT lanes implementations, and recommendations to mitigate potential risks in Los Angeles. This analysis is drawn primarily from the business rules grid and interviews with program managers at agencies implementing the HOT lanes. For more detail on the agency interviews, see Appendix 8. We will highlight key findings throughout the analysis, and close with our recommendations. 3.1 Analysis and Key Findings for Mitigating Implementation Risk Our research on other HOT lanes implementations identified several factors that consistently influence the success of the program. These are: tolling history, public skepticism, political grandstanding, equity concerns, transit issues, general carpooling concerns, and transponder requirements for carpoolers. 3.1.1 Tolling History Cities with pre-existing tolled freeways tended to experience less confusion and face fewer concerns from the public when implementing HOT lanes than cities in which tolled facilities did not exist prior to HOT lane implementation. Miami (Santana 2009) and Katy, Texas (Casta単eda and Howse 2010) had extensive toll facilities already, and encountered little or no public opposition to the lanes from any constituent groups. Seattle (Patterson 2009) and Denver (Catlin 2009) both had some toll facilities and experienced only minimal confusion over the differences between pure tolling and HOT lane systems. Minneapolis

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(Buckeye 2009), Orange County (Lee 2010) and San Diego (Burke 2009) did not have any toll facilities prior to implementing HOT lanes, and these cities dealt with the greatest number of questions and concerns from the public. Los Angeles is in a unique position because although the city has no tolled roads or bridges, drivers may be familiar with the nearby toll facilities in Orange County and San Diego. Our ETC and carpooler focus group research found that drivers’ unfamiliarity with tolled freeways corresponded with negative attitudes toward ExpressLanes. Key Finding: LA has a population that may be familiar with tolling from the Bay Area, Orange County and San Diego, but tolling is completely new to LA, so significant confusion and resistance are still to be expected. 3.1.2 Public Skepticism toward Congestion Pricing Almost every city reported initial public skepticism regarding the effectiveness of congestion pricing. Public concerns have however, varied according to each city’s specific circumstances, and as a result, each city agency has employed different strategies for combating public skepticism. In Minneapolis (Buckeye 2009) and Seattle (Patterson 2009), both cities dealt with outright skepticism that congestion pricing would work at all, while Denver (Catlin 2009) faced concerns that HOT lanes would disadvantage transit riders and would cause additional parking problems downtown. To mitigate the public’s concern, Minneapolis partnered with academic institutions to provide credibility, while Orange County (Lee 2010) and San Diego (Burke 2009) sought strong political champions to gain public support. Katy (Castañeda and Howse 2010) eschewed the complicated pricing schemes implemented by other cities, and decided to go with a simple three-tier fee schedule. All cities in our sample experienced a near-total absence of public skepticism after implementing HOT lanes as drivers saw the benefits of congestion pricing without disadvantaging any one group. However, unlike most other cities, Los Angeles is unique in that it will require drivers to register and for carpoolers to have transponders. Key Finding: Metro needs to cultivate strong political champions to protect the pilot during the demonstration project and later during re-authorization. However, just by successfully opening the system, they will gain much of the public acceptance needed. 3.1.3 Political Grandstanding A significant risk in the early stages of HOT lane implementation, when public scrutiny is most intense, is that an elected official grandstands against the program in order to win political favor with his or her constituents. The characterizations used in such attacks are often inaccurate but nevertheless difficult to dispel as Minneapolis discovered (Buckeye 2009). As one agency manager (who did not want to be identified) advised, scheduling the program’s launch date when the legislature is not in session minimizes the risk that political grandstanding will disrupt implementation and incite negative press.

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Key Finding: City agencies avoided implementing congestion pricing systems during legislative sessions to avoid political grandstanding by politicians. 3.1.4 Misplaced Equity Concerns A constant refrain regarding HOT lanes is that they disadvantage low-income drivers by creating an option in which they can’t participate, and the HOT lanes will become “Lexus Lanes.” A thorough review of the literature reveals that despite this perception, HOT lanes are actually among the least regressive transportation policy solutions (Manville 2010).9 In addition, they show that low-income individuals often place a high value on reliable trip time because, for example, they tend to work in jobs that penalize late arrival (U.S. Department of Transportation Federal Highway Administration 2006). Thus, low-income drivers may reap more benefits from using the lanes. Finally, even if low-income individuals choose not to use the HOT lanes, they still benefit from the system, because traffic is less congested on the general-purpose lanes (Blumenberg 2002; Burris and Hannay 2003; Clifton 2004; Svadlenak and Jones 1998; Weinstein and Sciara 2006). For all these reasons, the academic experts we interviewed emphasized that HOT lanes should not automatically raise equity concerns (Manville 2010, Schweitzer 2010 and Taylor 2010). In other city implementations, higher income groups have largely been responsible for raising equity issues, believing that HOT lanes are less accessible and thus less utilized by low-income groups. In reality, HOT lanes have been well used by drivers across all income levels, including low-income drivers. In a survey conducted after Miami opened its HOT lanes, 54% of low-income drivers supported expanding the HOT lanes to other highways, the highest support from of any income group (Santana 2009). Additionally, Denver’s visual survey of cars on their lanes revealed no obvious bias toward newer or fancier cars (Catlin 2009). Despite this established record in other cities, Metro is still likely to face opposition to ExpressLanes based upon unfounded and misdirected claims about equity. Based on other cities’ experience, Metro’s best response to these claims is to simply launch the system after which equity concerns will evaporate. Until then, publicizing Metro’s investment in transit, its revenue sharing arrangements along the ExpressLanes corridors, and its proposed preferential deposit/toll structure for low-income users will help minimize opposition. Key Finding: Concerns about low-income access to the lanes are likely to evaporate once the system goes into effect and people see that a wide variety of vehicle types are using the lanes. 3.1.5 Transit Issues and Investments In congested areas, transit is the most efficient method for transporting people. Because low-income communities generally use transit more heavily than high-income communities, the balance of investment in transit versus other modes of transportation is central in the equity debate (Murakami and Young 1997). 9

The majority of local transportation projects are funded in large part by sales taxes, which are considered highly regressive.

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Most cities we surveyed have invested in improvements to public transit in conjunction with the HOT lanes implementation in order to assuage equity concerns and mitigate opposition along the corridors. Denver’s I-25 HOT facility was originally a busway funded by the Federal Transit Administration, which compelled the toll operator to facilitate continued transit usage on the corridor. To discourage people from switching from transit to driving, the toll operator set the minimum toll for the HOT lanes higher than the highest fare for transit on the route (Catlin 2009). Not all cities adopted that approach, however. Katy reported that using the HOT lanes is cheaper than paying the transit fare, but in Katy, transit was not a widespread public concern, and the transit agency itself did not oppose the differential (Castañeda and Howse 2010). In Los Angeles, as in Denver, transit will be a significant concern: low income commuters make up a high proportion of current transit users on the corridors slated for HOT lane conversion. Consequently, continued support of public transportation will likely be a key factor in the public’s assessment of the ExpressLanes. Key Finding: In conjunction with HOT implementations, transit investments are a popular way to prioritize ridesharing and mitigate equity concerns; however, it is also important to examine how pricing on the HOT lanes will affect ridership on transit along the same corridors. 3.1.6 General Carpooling Concerns The carpoolers in our focus groups voiced a popular concern that HOT lanes might break up carpools and vanpools, because they offer people an alternative way to use the faster lane in an SOV. Given Metro’s hierarchy of users in Los Angeles’ transportation system (seen in Section 1.2), Metro does not want to disadvantage ridesharing. Our research on other cities showed that HOT lanes did not dissuade people from carpooling. San Diego reported that they saw no decline in HOV usage of the lanes (Burke 2009). However, given that this seems to be a major concern of the carpooling community in Los Angeles, it seems prudent to ensure that carpooling is still encouraged after the rollout of HOT lanes. Key Finding: HOT lanes have not been responsible for breaking up carpools in other cities, but this is a legitimate concern that carpoolers in Los Angeles have about ExpressLanes. 3.1.7 Transponder Requirement for Carpoolers Unlike the majority of cities that we surveyed, Los Angeles’ proposed HOT lane implementation will require carpoolers to use transponders. Orange County and Miami also required transponders, though each agency had special circumstances.10 Our research 10

Orange County’s lanes were built by a private consortium on the median of the highway, so they were an addition to the existing facility and no existing lanes were actually converted from HOV to HOT. When their system opened, everyone was required to have a transponder, but because it was a new facility built alongside the existing highway, Orange

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indicates this is a source of significant contention for carpoolers who are not familiar with the HOT lanes or the electronic tolling concept. Many focus group participants objected strongly to a transponder requirement, and felt that this was akin to charging for using the lanes (even though actual use of the lanes is free). In addition, many existing carpoolers indicated that they would refuse to obtain a transponder if a deposit were required. This seems irrational given the high benefits carpooling conveys to carpoolers, but many focus group participants unfamiliar with tolling had emotional reactions to the transponder requirement. Conversely, among several focus group participants who had experienced carpooling on Orange County’s SR 91 ExpressLanes, where a transponder is required, the transponder requirement was simply a non-issue. Collectively, these responses suggest that initial reactions to transponder requirements are likely to be quite negative (and irrational), while experience and understanding can reverse this assessment. Because all existing HOT lane programs offer reduced price or free access to HOVs, a method for differentiating HOVs from other vehicles is necessary for tolling and enforcement. We analyzed four options for identifying HOVs: 1) No transponder/Static bag: Carpoolers may use the lanes without a transponder. If they already have a transponder (for non-carpool travel), they place it in a “static bag” that blocks the radio signal to avoid tolling while carpooling. 2) Lane Segregation: Carpoolers use a special lane separated from other drivers; only vehicles in the regular lanes are tolled. 3) Special Account/Special Transponder: Carpoolers must register for a special account to use the lanes without a transponder, or must acquire a carpooler-only transponder that will identify the vehicle but not charge a toll. 4) Switchable Transponders: All vehicles must acquire a transponder; drivers indicate their occupancy via a selector switch on the transponder. No tolling occurs when the driver indicates a carpool. Appendix 19 offers a detailed analysis of the pros and cons of each technology; our findings are summarized in Figure 1.

County didn’t face the problem of changing the status quo for carpoolers (Lee 2010). In Miami, the HOV lanes were overused, and the city wanted to discourage casual carpoolers from the lanes. Thus, they required carpoolers to register with the agency and get a special sticker. Casual carpoolers did oppose that conversion, but Miami’s goal was to serve the regular carpoolers better. In addition, Miami already had several other toll roads in operation, and so a large percentage of their population already had transponders and was comfortable with tolling facilities (Santana 2009).

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Figure 1: Transponder Technology Analysis Summary

The most commonly cited reason for requiring carpoolers to have a transponder is that it makes enforcement easier. However, since all technologies require visual verification, we found no variation along that criteri criterion and no additional benefit for requiring transponders. Moreover, from an experiential perspective, alternatives that do not require a transponder for carpoolers are clearly dominant to those that do. Key Finding: There are very few reasons to require a switchable transponder, as Metro plans to do. In fact, not requiring carpoolers to have a transponder is a dominant option, consistent with our findings in the implementation analysis section. 3.2 Recommendations on M Mitigating Implementation Risk Based on the key findings above, there are a number of steps that Metro can take to mitigate implementation risk and ensure that this pilot program is a success. Mitigate carpooler skepticism through targeted education for ccarpoolers arpoolers Los Angeles is located within close proximity to two of the oldest and most successful HOT lanes systems in the United States: San Diego Diego’s I-15 and Orange County’s ’s SR-91 SR Express Lanes. Metro should call upon on those examples when promoting Express ExpressLanes Lanes and should consider quoting testimonials from SR-91 users in Orange County who commute to Los Angeles County. We also found that public skepticism over the lanes largely evaporates when the system opens successfully, so opening the facility without technical glitches will help mitigate skepticism.

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Line up strong political champions, but time the opening of the system carefully. Timing is critical in order to avoid potential political problems. Political champions are vital to assuring success in the long term, and Metro has achieved that support through the battle for its authorizing legislation; however, one or two self-serving politicians can still disrupt a positive opening. While it may be impossible to keep politicians from voicing skepticism in the media, this scenario is more likely to occur if the system is opened during the legislative session, and so we recommend that Metro plan the opening to coincide with a legislative recess. Maintain the existing strategy for confronting equity issues. Equity issues have been largely absent from other citiesâ&#x20AC;&#x2122; implementation, in part because there was less of a barrier to continuing to use the lanes as a carpool (i.e., no transponder requirement). Even so, we think that Los Angeles will follow the general pattern of other cities and avoid major equity concerns from the general public if the system is opened successfully and is well utilized by all drivers. Metro should continue to tout its investments in transit and its preferential rate structure for low-income users, and not invest significant additional resources to try and counteract these concerns. Provide new incentives to encourage carpooling Transit users and rideshare users are the priority constituents on this system, and Metro needs to make sure they are satisfied and engaged. About 70% of project funds will be distributed toward improved transit, and Metro should continue to tout this investment but also ensure that the tolling structure does not disadvantage transit users. Drivers do not always make decisions based on total cost, so price perception is critical. In addition, to promote ridesharing in van and carpools, Metro needs to use this implementation as an opportunity to provide better incentives to carpoolers. We will address this recommendation more directly in the following section. Revisit the decision to require transponders for carpoolers. We have identified the transponder requirement for carpoolers as one of the biggest risk factors with respect to derailing this HOT lanes implementation. Therefore, we must recommend that Metro revisit its decision to require transponders for carpoolers. By simply removing that requirement, Metro could mitigate almost 100% of the risk that carpoolers would be opposed to the system, based on the experience of other cities. Moreover, our technology analysis has revealed few, if any, significant benefits are derived by requiring transponders for carpoolers. As discussed in Section 1, Metro has already decided to require carpoolers to have transponders. The remainder of our project explicitly recognizes this decision. We will use the section on engagement strategy to examine incentives that might counterbalance this barrier, and we will proceed with our analysis and recommendations assuming that Metro is going to be requiring transponders for carpoolers.

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4 Evaluative Criteria Before discussing engagement and distribution, we will first establish the criteria we will use to evaluate the alternatives that we will consider as we proceed through the remaining analysis sections. The goal of our research is ultimately to make recommendations that would bolster carpooler support for the ExpressLanes program and ensure a high adoption rate on Day One of the system’s opening. Thus, this becomes the central goal that all of our criteria point toward. The criteria themselves derive directly from the data that we collected, and include: proven feasibility of the alternative via success in other cities, ETC capacity to support the alternative, and carpooler support for the alternative. 4.1 Proven Feasibility via Demonstrated Success in Other Cities Derived from our city comparison and agency interviews, the proven feasibility criterion gives preference to those alternatives that have a proven track record of success in other cities. We have already discussed many of the findings of our city interviews in the implementation analysis (Section 3); however, we also asked city agencies a number of specific engagement and distribution questions to uncover which strategies were effective and which were not. Thus, the criterion of “Proven Feasibility” is a qualitative determination of whether or not another city chose the alternative and found it to be successful in their HOV to HOT conversion. 4.2 ETC Support Derived from our surveys, focus groups and interviews with ETCs, the ETC support criterion recognizes that ETCs are an important channel for reaching carpoolers, and have proven willing to support Metro in the ExpressLanes project. We will measure this criterion qualitatively by whether or not ETCs have the willingness and/or ability to support the alternative. 4.3 Carpooler Support Derived from our focus groups and survey of carpoolers, the carpooler support criterion evaluates the expected carpooler perception of the each of the engagement and distribution alternatives we introduce and directly informs our analysis and recommendations. Depending on whether we are drawing from focus groups or surveys, support of carpoolers will be measured qualitatively or quantitatively. Now that we have laid out the criteria for evaluating alternatives, we will turn to the analysis, findings, and recommendations for the remaining two deliverables: a recommended engagement strategy and a suggested distribution plan. 5 Engagement Analysis, Findings and Recommendations In this section, we will present our analysis, findings, and recommendations on engagement strategy for carpoolers. We will address Metro’s existing rewards program for carpoolers, and will evaluate two alternative incentives that would attract more carpoolers. We also look at willingness to pay for the transponder deposit, and the promotion channels

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and messages Metro should use to reach carpoolers. Promotion will be evaluated as it relates to three groups of carpoolers that we identified in a segmentation analysis using the K-means clustering technique. Distribution will be addressed in Section 6. 5.1 Analysis and Key Findings Our analysis uses the data drawn from our carpooler focus groups and carpooler survey to determine what incentives carpoolers most prefer, and how much they would be willing to pay for a transponder deposit. A segmentation analysis identifies three distinct types of carpoolers by their salient characteristics and preferences, and makes it possible to subsequently recommend promotion channels and messages that best fit each group. Finally, we evaluate the transponder adoption rate that can be anticipated following the launch of the engagement plan we recommend. 5.1.1 Incentives to Participate Transponders appear to represent a barrier to carpoolers’ use of the HOT lanes (See Section 3.1.8). Carpooler focus group comments revealed that carpoolers are wary about the impacts on carpooling from HOT lanes. We believe that Metro needs to offer an incentive for carpoolers to encourage continued ridesharing behavior as carpoolers. We identified two possible incentives: (1) Offer transponders to carpoolers with a free or reduced deposit, or (2) offer a point-based rewards program for using the HOT lanes as HOVs. Metro’s existing carpooler rewards program (Metro Rewards) offers a $15 Coffee Bean & Tea Leaf gift card each year to carpoolers who join the program and rideshare a minimum of 8 days per month. Rewards members are also entered into regular raffles to win larger value gift cards. By some measures, the program is successful: over 27,000 participants are enrolled, representing over 1,700 work sites (Sutton 2010). Moreover, awareness of the program seems reasonably high: most 63.4% of respondents to our carpooler survey indicated they knew about Metro Rewards. However, it is not clear that the program provides as a strong incentive to carpool. None of our carpooler focus group participants mentioned the program when asked about their reasons for ridesharing. Additionally, many focus group participants noted logistical difficulties with the program: it took too much effort to complete the necessary paper work and some participants claimed they never received the promised gift cards. Furthermore, many focus group participants were unsatisfied with the gift card itself, preferring more “useful” cards to stores such as Target. ETCs also complained about the additional administrative burden of verifying carpoolers’ gift card eligibility. In our focus group mini-survey and our larger carpooler survey, we asked carpoolers to consider whether they would prefer an upfront benefit in the form of a subsidized transponder, or an ongoing benefit in the form of a frequent carpooler points system. The results are summarized in Figure 2. We did not specify a dollar value for either of the hypothetical benefit programs. Among focus group participants who carpooled, the response was overwhelmingly in favor of the points system; about 81% of participants (n=36) chose this alternative. Among survey respondents, the response was more mixed,

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with 38% favoring ing the point system, 33% % favoring the upfront subsidy, and 29% unsure (n=2,619). Despite some variance in the exact amount of support across the three segments of carpoolers, the points program was still the preferred choice in each group. Figure 2: Ca Carpooler Preferences for Incentives

To better understand preferences for a points points-based based reward system, we estimated using a multivariate variate logistic regression model using data from our carpooler survey, survey summarized in Table 1.. Preference for a points points-based rewards system (rather than a transponder subsidy) is the dependent variable. In our analysis, we considered the continuous variables11 of frequency of ridesharing, frequency of transit usage, income, and willingness to pay for a transponder, and discrete variables capturing preferences for ordering a transponder, ridesharing information source, awareness of the existing rewards program, and whether the respondent currently rideshares on the corridors where ExpressLanes will be implemented. Only a few off these variables had a statistically significant relationship with regard to rewards preference, as shown in the model in Table 1.. Higher frequencies of carpooling are correlated with an increased likelihood for a preference towards a points-based points system.. This result is in line with expectations, as carpooling more often would increase the benefit of the points-based based system relative to an up up-front front deposit subsidy. Income is also positively correlated with preference toward a points points-based based system. The result re also shows that carpoolers who prefer to order a transponder at an in in-person person location have a preference toward a points-based based system. Overall, the highest-frequency frequency carpoolers are most likely to prefer the points-based points system. Metro has identified this particular group as the group whose needs are the most important to serve. This analysis provides further evidence that, even after controlling for 11

The variables for frequency of ridesharing, frequency of transit usage, and in income come were originally categorical variables; we converted them to continuous variables using the midpoint of each category.

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other variables, the high-frequency carpoolers have a strong demand for a points-based rewards program. Table 1: Logistic Regression on Preferring Points-Based Reward Coefficient Marginal Effects Frequency of Ridesharing (times per 0.0204* 0.00486* month) (2.55) (2.55) Income ($1000s)

Order Transponder: In-Person Location (d) Order Transponder: Other (d)

0.00613** (2.65)

0.00146** (2.65)

0.438* (2.27)

0.107* (2.23)

-0.840*** (-3.32) 1948 0.012

-0.176*** (-3.96) 1948 0.012

Observations Pseudo R2 Marginal effects; t statistics in parentheses (d) for discrete change of dummy variable from 0 to 1 + p < 0.10, * p < 0.05, ** p < 0.01, *** p < 0.001

In addition to testing preference for a points-based system, carpooler survey respondents indicated their preference for gas cards (73.6% of respondents) and gift cards12 (44.4% of respondents) in exchange for receiving rewards points, as seen in Figure 3. These alternatives were strongly preferred over other hypothetical benefits, including transit credits, toll credits, and raffle tickets.

Our survey did not distinguish between the different types of retail/restaurant cards.

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Figure 3: Carpooler Benefit Preferences What kind of benefit would you prefer? (n=3,849) Gas card

74%

Gift card (for restaurants or stores)

44%

Toll credits

13%

Raffle tickets for a chance to win a…

Transit credits

Other

3% 0%

50%

100%

Key Finding: Carpoolers prefer an ongoing points-based rewards program to an upfront subsidized transponder deposit, and are in favor of expanding the rewards beyond what Metro has already established in the current Rewards program. 5.1.2 Willingness to Pay for Transponder Deposit Metro has tentatively established the deposit for a transponder, pending their negotiations with outside vendors. According to internal Metro documents which have yet to be approved, and which we saw after completing our research, Metro is considering waiving the transponder deposit if the user’s account is opened with a credit card, though the user must initially deposit $40 into their account for tolls. For customers who prefer to pay in cash, a deposit will still be required. The same internal Metro documents also indicate that low-income users will have a different scale for the deposit and a discount on tolls. When given the opportunity in our survey to state the maximum amount that they would be willing to pay on their transponder deposit, carpoolers gave an extremely wide range of responses. Analyzing their willingness to pay is helpful not only because it provides a sense of what Metro’s carpoolers expect to pay, but also because at this stage, carpoolers’ willingness to pay can be used as a proxy for assessing to what degree carpoolers value the ExpressLanes program and to what extent they perceive its benefits. As Figure 4 shows, responses to the willingness to pay question are tri-modal: the clusters suggest that respondents generally fall into one of three groups, each of which is analyzed more closely in Section 5.1.3. Across all groups, the average willingness to pay is $26.69, while the median is $20.00. Nearly 40% of respondents believed transponder deposits should be priced at $10 or less and 14% believe they should be free or fully subsidized. On the other hand, 25% of carpoolers thought that the transponder deposit should be priced at $40 or higher.

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Figure 4: Willingness to Pay for Transponder Deposit What is the maximum deposit you will pay for a transponder? (n = 2,431) 20%

Median = $20.00

15%

Mean = $26.69

10% 5% 0%

Carpooler willingness to pay was also gauged through a mini-survey administered at each of the carpooler focus groups (for full results, see Appendix 14). The average WTP of the participants in the carpooler focus groups was $35.62, nearly $9 more than the average WTP in our carpooler survey. Because focus group attendees had the benefit of hearing about ExpressLanes during our one-hour sessions, it is likely that their higher WTP is attributable to their increased knowledge about the program. Comparing the focus group and carpooler survey results suggests that, in general, carpoolers who are more knowledgeable about ExpressLanes will see more value in having a transponder and will be willing to pay more for its deposit. To better understand the connection between WTP and selected carpooler characteristics (income, transponder ordering preference, and frequency of ridesharing), we used a multivariate ordinary least squares (OLS) regression model using data from our carpooler survey. The results are summarized in Table 2. In our analysis, we considered the same set of variables as in the previous regression on rewards program preference (Section 5.1.1). Willingness to pay (i.e., maximum transponder deposit) is the dependent variable. Income, ridesharing frequency, and some transponder acquisition preferences had a statistically significant association with WTP. Modeling â&#x20AC;&#x153;frequency of ridesharingâ&#x20AC;? as a continuous variable yielded results that were statistically insignificant. The second model included a discrete variable for people who rideshare on a daily basis, which revealed a weak significant relationship that was negatively correlated with WTP. Increasing household income predicts increased WTP. Income as a series of categorical variables (not shown) reveals that the effect of income is more significant at higher income levels. The model suggests that the most frequent carpoolers are likely to see the least amount of additional benefit by requiring transponders since they are likely to have the fewest opportunities to use the HOT lanes as a single driver. Consequently, Metro will have to offer the most incentives to this group to induce their participation in ExpressLanes.

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Table 2: Multivariate Regression on Willingness To Pay (Max Transponder Deposit) (1) (2) *** Income ($1000s) 0.144 0.143*** (3.45) (3.42) Order Transponder: At Work Location

-4.516* (-2.46)

-4.467* (-2.43)

Order Transponder: Other

-27.79*** (-6.17)

-27.88*** (-6.20)

Frequency of Ridesharing (times per month)

-0.222 (-1.55) -3.122+ (-1.82)

Rideshares 5+ times per week

Constant Observations Adjusted R2 t statistics in parentheses + p < 0.10, * p < 0.05, ** p < 0.01, *** p < 0.001

25.91*** (6.76) 1824 0.029

23.90*** (7.64) 1824 0.030

Key Finding: Carpoolersâ&#x20AC;&#x2122; willingness to pay for transponder deposits varies greatly based upon the level of awareness and understanding of the ExpressLanes Program. Overall, frequent carpoolers have a lower willingness to pay for the transponder deposit, which may be explained by the decreased benefit to such drivers since frequent carpoolers are not as likely to utilize the HOT lanes as single drivers. 5.1.3 Three Market Segments: Pragmatic Economizers, Older Traditionalist, Idealistic Benefit-Seekers We identified three distinct segments of carpoolers using a technique called K-means clustering, which uses an algorithm to group carpoolers with similar traits, as observed in our carpooler survey. Key data on our segments can be found in Appendix 20. The segments are characterized as follows: Segment 1: Pragmatic Economizers Segment 2: Older Traditionalists Segment 3: Idealistic Benefit-Seekers These segments are useful in determining how to target individual carpoolers with messages that will resonate with them. Pragmatic Economizers, the largest group in our survey (n=1,398), are more likely to be middle-aged (30-44 and 45-65) and to be regular five-day-a-week carpoolers or April 2010

Making the Switch

vanpoolers. They are more motivated by employer incentives than others, though they are cautious about choosing which hypothetical incentive they would prefer, with a higher than average number reporting that they do not know. Although they are more likely than members of the other two groups to have used other area toll facilities, their willingness to pay for the transponder is the lowest among the three groups, and is just $9.21. Importantly, Pragmatic Economizers were the group most likely to currently use the ExpressLanes corridors. Older Traditionalists are the second largest group in our analysis (n=1,008). They are the oldest group, most likely to be 45-64 years old or over 65 years old. They have â&#x20AC;&#x153;averageâ&#x20AC;? carpooling patterns, being neither among the most nor the least frequent carpoolers, though they are the least likely to take transit. They have a stronger than average preference for handling transactions in person: this group is more likely to have paid their annual vehicle registration fee in person and is more likely than their counterparts to prefer ordering a transponder at their workplace, in person at Metro, or in-person at a retail outlet. Conversely, they are the least likely to have handled, or to prefer to handle, such transactions online. Although they have the highest share of low-income carpoolers in their midst, and are also the most likely to be middle-income earners ($35,000-44,999), their willingness to pay for a transponder deposit ($25.94) is higher than the Pragmatic Economizersâ&#x20AC;&#x2122;. Idealistic Benefit-Seekers are the smallest (n=631) and youngest group in the survey, and are more likely to be 18-34 years old than other groups. They are the most motivated by environmental concerns, and they are the most likely to take transit, though they are also the least likely to carpool on a daily basis, instead having a proclivity to carpool one to two or two to four times a week. This group is the most active at seeking benefits and incentives, the most aware of the existing Metro Rewards program, and the most likely to have a definite preference about a particular rewards program. They also tend to be the wealthiest of the groups and the most likely to have a household income of $75,000 or more, and they place the highest value on the transponder, with a willingness to pay of $66.62. 5.1.4 Choosing the Right Channel to Reach Carpoolers We observed interactions at the ETC and carpooler focus groups that suggest that many carpoolers and rideshare users do not understand or are not aware about the purpose of the ExpressLanes Program and how it works. To better engage carpoolers and encourage 100% buy-in and adoption on Day One, Metro must communicate and educate carpoolers on the technology and the benefits associated with the ExpressLanes Program. We looked at three primary communications channels as part of this analysis: ETCs, freeway signage and mass media. Through our interactions with ETCs and the results of our carpooler survey, carpoolers confirm that ETCs are vital sources of ridesharing information. In particular, as shown in Figure 5, the carpooler survey shows that 57% of carpoolers obtain their ride sharing information from ETCs. The survey results also indicate the effectiveness of ETCs in relaying information: 70% of respondents who got their information from ETCs were

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aware of Metro Rewards versus the overall average of 63%. In addition, ETCs have a direct relationship with carpoolers and based upon the results of our ETC survey, 52% of ETCs have indicated a willingness to help Metro promote the ExpressLanes program. As ETCs are already acquainted with many of Metro’s programs and personnel, the cost to communicate the ExpressLanes program through ETCs is low from an administrative and monetary standpoint. As a result, ETCs are a key communication channel to regular carpoolers. Figure 5: Carpooler Sources of Ridesharing Information Who/what is your primary source of ride sharing information? (n=2,775) My employee transportation coordinator (ETC) A co-worker A friend outside of work LA Metro Commute Services website Another website (e.g., CommuteSmart.info) 511 or 1-800-Commute News media Other 0%

10%

20%

30%

40%

50%

60%

Our academic and agency interviews suggest that freeway signage is another effective promotional channel. In particular, San Diego mentioned that signage was critical to the success of their implementation (Burke 2009) while Miami utilized signage effectively to raise (Santana 2009). Advertising through mass media may be an important promotion channel, with about half of the cities utilizing mass media channels and half choosing to promote through other channels. Miami (Santana 2009) and San Diego (Burke 2009) decided to market the HOT lanes heavily in the mass media, while some cities, including Minneapolis (Buckeye 2009) and Seattle (Patterson 2009), chose to have a “soft opening” with very little mass media advertising and also engaged in a phased rollout of the system. There are several key issues to consider when deciding to use mass media for promotion. One particular issue is the difficulty of specifically target carpoolers through mass media advertising. Another issue is the cost and administrative burden on Metro in implementing a mass media advertising campaign. These issues could negatively impact the carpooling experience and derail the success of the ExpressLanes program if mass media is not managed carefully. As we discovered from interviews conducted with city agencies, cities that chose a “soft opening” feared the possibility of overwhelming the system with users on the first day, which could lead to exacerbating any early technical April 2010

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glitches and thus aggravating carpoolers from the beginning. Thus, it appears that mass media advertising can be a risky strategy. In addition to the concerns about the effect of too much mass media advertising on carpoolers, it could also be somewhat costly and administratively complex to implement. For example, San Diego had to hire a full-time marketing consultant to manage its mass media campaign for its I-15 FasTrak program in the late 1990s (U.S. Department of Transportation Federal Highway Administration), and this was before the advent of Internet marketing and social networks. However, even if Metro decides not to use mass media as an explicit tool to promote the ExpressLanes to carpoolers, Metro may benefit from managing media (especially earned or “free” media, such as local news coverage or editorials published in local newspapers) throughout a rollout of the system, as was observed in Katy. Katy’s promotional strategy was particularly successful in targeting both carpoolers and the general public. First, they focused their communications about the lanes to carpoolers, and allowed them to use the lanes alone for six months. As carpoolers were acclimating to the new system, they engaged in a mass media strategy to educate the public about the lanes, including inviting reporters on a test drive of the system and proactively demonstrating how the HOT lanes worked (Castaneda and Howse 2010). This phased media strategy was among the most sophisticated we found in our research. Key Finding: Regular carpoolers are comfortable with the ETCs as a source of information. A mass media advertising strategy is most effective when it differentiates between carpoolers and single drivers, both in terms of messaging and timing relative to the launch of the lanes. Actively managing earned media can provide a valuable eduction opporuntity to reduce skepticsm, and other cities shows that freeway signage is critical to prepare drivers for the transition. 5.1.5 Messaging for Carpoolers In addition to knowing the channels to use to reach carpoolers, it’s also important to identify the best ways to develop messages for carpoolers. Our carpooler focus groups revealed the difficulty that carpoolers had in understanding critical aspects of the ExpressLanes program. Many were fixated on the cost of HOT lane access, viewing the refundable transponder deposit as a cost. Other major concerns that arose in focus groups included: 1) a perception that the ExpressLanes would destroy the “ridesharing community,” 2) difficulty understanding the environmental benefits of the ExpressLanes, and 3) a concern that the ExpressLanes’ 45 m.p.h. guarantee was not meaningful to carpoolers who may currently enjoy higher speeds in the HOV lanes. In interviews, ETCs indicated that privacy concerns related to the transponder’s perceived ability to track its users were also an issue. The concerns that carpoolers expressed in our research underscore the need for an effective messaging strategy that will educate existing carpoolers about both the program’s goals and its benefits to them. Our segmentation analysis, described in Section 5.1.3, revealed three segments with varying preferences and feelings about the ExpressLanes. These segments will be helpful to Metro in creating

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targeted messaging for carpoolers. Specific recommendations for messaging are outlined in Section 5.2. Key Finding: Message resonance differs by carpooler segment, with some common messaging needed. Carpoolers were especially unaware that the ExpressLanes system would still be free for them, and they did not understand how HOT lanes would improve overall efficiency. 5.1.6 Prediction of Carpooler Adoption Rates Even the most effective promotion campaign needs time to achieve full saturation. Given Los Angeles’ lack of familiarity with tolling technology, carpooler adoption of transponders will not happen overnight. To predict how long it might take to achieve 100% adoption of transponders among carpoolers on the pilot corridors, we estimated a non-linear regression model with two parameters drawn from transponder adoption data in Minnesota, the only location where such data were available (Thompson 2009).13 Our model is analogous to the “sales force” model, and is given by the following equation:

‫ ݊݋݅ݐ݌݋݀ܣ‬ൌ

ܶ݅݉݁ ஼ ‫ ܦ‬൅ ܶ݅݉݁ ஼

We used this model (as opposed to using the raw data from Minnesota) in order to smooth the adoption curve projections, and to perform a sensitivity analysis for varying adoption rates. We ran the analysis in terms of the percentage of carpooler transponder adoption; thus, our maximum value in the equation above is 100%. We also performed a sensitivity analysis by varying the parameters up to 20% in order to estimate high case and low case adoption curves. All three are shown in Figure 6. Figure 6: Predicted Transponder Adoption Curve 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Expected Scenario High Case Low Case

Time (Weeks)

We estimated the “C” parameter as 1.567 and the “D” parameter as 15.392.

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In the expected case, 100% adoption by carpoolers is not achieved until more than one year from the time that Metro brings promoting the program to them. However, we believe that carpooler adoption of transponders may actually reflect the high case. Unlike the model case, carpoolers are accustomed to using the lanes now, and will need to acquire a transponder to continue their existing commuting behavior. However, even if actual adoption takes only seven to eight months, this model underscores the point that Metro will need to start promoting the program to carpoolers early. Key Finding: Adoption of transponders among carpoolers may take up to a year. 5.2 Recommendations for Engagement Strategy The key findings in Section 5.1 form the basis for an engagement strategy focused on carpoolers to encourage 100% adoption of ExpressLanes. Implement an improved, points-based rewards program for carpoolers. Metro should consider implementing an improved points-based rewards program in which carpoolers earn benefits based on the total number of trips or total number of miles driven on the ExpressLanes as a carpool. Unlike the existing Rewards system, a frequent carpooler program would provide an ongoing incentive to rideshare. To make the program most effective, the benefits should include gas cards, or at least gift cards with retail options (not just coffee shops). Such a program could significantly increase carpooler support for the overall ExpressLanes program, and the points-based concept is popular with all three market segments identified in Section 5.1.3. In addition, this program dovetails well with Metroâ&#x20AC;&#x2122;s hierarchy of users: this benefit would only be available to carpoolers, and would be more valuable the more often they used the lanes as a carpool. We lack the data necessary to make a specific prediction on the costs of implementing our recommended points-based rewards program, but we can approximate the financial impact to Metro. As we noted in Section 5.1.1, there are approximately 27,000 current Rewards participants. Based on the popularity of a revamped program in our carpooler survey and carpooler focus groups, we believe that the total number of Rewards participants could quadruple to well over 100,000, with even more joining if occasional carpoolers opt in. This increase in participation would correspondingly quadruple the direct cost of the program. Metro currently spends approximately $10-12 per participant per year on discounted Coffee Bean gift cards. Of course, by modifying the nature of the points system, the average benefit could be scaled up or scaled down. The additional size and complexity of the program would necessitate hiring additional employees for the Rewards department, which currently has three full-time staff. Finally, the revamped points-based rewards program would likely require an additional IT investment to receive carpooler usage data and track points. We estimate an upper bound on the program cost of approximately $3-5 million per year, which is much higher than the cost of the current program, which we estimate to be about $500,000 annually. However, if revenues from the ExpressLanes could be used to cover the program in order to promote ridesharing, the

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entire cost of the revamped rewards program could be covered with about 10-20% of the expected ExpressLanes revenues. 14 Utilize ETCs and freeway signage to target regular carpoolers. Be cautious of mass media. Metro should use established ETC channels to reach regular carpoolers, since ETCs already have an established, trusting relationship with carpoolers. Our research also shows that the ETC channel has high carpooler support and more than half of all ETCs have indicated a willingness to promote the ExpressLanes program, minimizing costs and the administrative burden to Metro. However, Metro should provide ETCs with extensive advertising materials in both electronic and print formats to reach the broadest number of carpoolers. Section 7 delves more deeply into timing and messaging priority for communications. Meanwhile, freeway signage, another effective promotion channel for carpoolers, should be installed next to the existing HOV lanes to raise awareness of carpoolers who currently commute on the I-10 and I-110 freeways. While Miami and San Diego utilized mass media advertising campaigns to promote their HOT lanes, Metro should be wary of mass media advertising as a promotion channel. Program managers for the HOT lanes implementations in Seattle, Minneapolis and Katy chose soft openings, without mass media advertising, because they did not want to attract too many users to the HOT lanes on the first day, overwhelming the system. In addition, it is worth mentioning that mass media advertising is not the most effective way to target carpoolers, which is the ultimate goal of this strategy. While we recommend that Metro avoid mass media advertising to promote the ExpressLanes, Metro should endeavor to manage earned media throughout this rollout, even if they do not use it as an explicit tool to promote to carpoolers. Managing earned media effectively ensures a smooth opening by managing public expectations of the system. Target messaging to specific carpooler segments. To maximize the engagement strategyâ&#x20AC;&#x2122;s efficacy, we recommend that Metro customize its messaging approach for each of the carpool segments identified in Section 5.1.3. For Pragmatic Economizers, the group with the most vanpoolers and highest carpooler frequency, messaging should focus on the following aspects of the program: â&#x20AC;˘ Expansion of the HOV lanes on I-10, which will create more lane space for carpoolers â&#x20AC;˘ Improved predictability of travel times that carpoolers will enjoy in ExpressLanes, thanks to better incident response rates and improved traffic flow management 14

Assumptions of current costs: 1 manager at $100K, 2 staff people at $50K, 27K participants at $10 each per year: overall total: $470K. Assumptions of new program costs: 1 manager at $100K, 4 staff at $50K, 100K-250K participants at $10-$20 each: overall total of $1M to $5M. Information system cost: unknown, and would be lost in noise of staff plus rewards costs. Program total: estimated at $3M to $5M. ExpressLanes revenues: estimated at $27M.

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Ability to fund ridesharing (and specifically vanpooling) improvements, such as better Park and Ride facilities, and more vehicles for vanpools Because the Pragmatic Economizers group is the most likely to oppose ExpressLanes, messaging to this group needs to start early. •

Older Traditionalists do not seem overly averse to the program, as reflected in their moderate willingness to pay for the transponder deposit. They are, however, harder to reach than other groups as they rely less on online information sources and more on inperson interactions. For this reason, the messaging to Older Traditionalists should focus on the mechanics of the program, specifically: • Offline means to acquire a transponder, noting that the transponder is costless (the deposit is refundable) • Details of the rewards program and how it will work Because Older Traditionalists are harder to reach online, messaging efforts should be channeled through in-person methods, notably ETCs. In addition, messaging Metro provides to ETCs should be provided in both electronic and paper formats, so that Older Traditionalists are not left out of the communications around ExpressLanes. For Idealistic Benefit-Seekers, a group that carpools less regularly but values the concept of ridesharing and the benefits that ExpressLanes offers, messaging should center on the following aspects of the program: • Environmental benefits, derived from less idling and congestion • Funding for ridesharing projects, most notably transit • Choices for occasional carpoolers who can use ExpressLanes regularly: for free when carpooling, and for a toll when driving alone • Improved trip reliability and 45 mph guarantee that ExpressLanes offers Idealistic Benefit-Seekers are relatively easy to reach through online channels and are also the most enthusiastic group of carpoolers. Messaging efforts to this group should therefore be lower in priority and can occur at later stages in Metro’s engagement efforts. We explore the timing of the messaging to each segment in Section 7. Begin promoting ExpressLanes to carpoolers well in advance of the system opening. Metro should being promoting the ExpressLanes to carpoolers, and the transponder requirement, at least one year before the program launch to maximize the possibility of achieving as close to 100% adoption among carpoolers as possible. However, Section 7 will offer more detailed recommendations regarding next steps on implementing this strategy. 6 Distribution Analysis, Findings and Recommendations The remaining piece of our implementation strategy is the distribution of transponders to carpoolers. In this section, we will present our analysis, findings and recommendations in this final area. First, we will estimate how many transponders will be needed for the pilot project so that Metro can ensure adequate manufacturing and distribution capacity with their chosen vendors. Next, we will address the question of how carpoolers prefer to

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obtain their transponders, and finally, how they would like to pay for the transponder deposit. We will conclude this section with our recommendations on distribution strategy. The proposed process flow diagram in Figure 9 illustrates each of the transactional steps involved in the acquisition and distribution of transponders, to illustrate the roles of each party. To summarize the graphic, Metro will provide information about the program directly to carpoolers, as well as through ETCs, who can also reach carpoolers directly. Carpoolers will acquire transponders through one of four channels: phone, Internet, mail, or in person at either their workplace or a Metro Customer Service center. Carpoolers may need to provide a deposit and/or additional funds for the initial account balance. A thirdparty vendor will handle physical distribution of the transponder. Figure 9: Transponder Distribution Process Flow Diagram

6.1 Analysis and Key Findings In this section, we discuss our three key analyses related to distribution: transponder demand estimation, transponder acquisition preferences, and payment preferences. Key findings follow each analysis, with recommendations presented at the end of the section. 6.1.1 Transponder Demand Estimation Over 500,000 unique vehicles travel on the I-10 and I-110 highways on a daily basis, and nearly one-sixth (approximately 80,000 vehicles) travel on the HOV lanes (State of California Department of Transportation 2009). Given the sheer volume of traffic on the corridors, and the requirement for all drivers to have a transponder, Los Angeles is likely to confront much higher demand for transponders than any other cities that have undergone HOT lane conversions. However, having an accurate estimation of transponder demand is vital for two reasons. First, Metro simply needs to ensure an adequate supply of transponders, and ensure that they have the financial and logistical capacity to support the program. Second, Metro needs to ensure that their chosen vendor has the manufacturing and distribution capacity to provide the transponders when they are needed.

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We found the demand for transponders by using traffic data to estimate the number of carpoolers using the HOV lanes currently, adding the number of transponders needed if capacity doubles on I-10, and then estimating how many SOVs might be using the HOT lanes after conversion. The base demand for transponders from carpoolers is likely to be over 80,000 with overall likely demand from all drivers estimated at around 261,000. This figure reflects a â&#x20AC;&#x153;middle caseâ&#x20AC;? scenario, assuming that most single occupancy drivers will use ExpressLanes an average of 3-4 times per week. All calculations are summarized and all assumptions stated in Appendix 21. Key Findings: We estimate total demand for transponders to be about 261,000 transponders. 6.1.2 Transponder Acquisition Preferences Now that we have a better understanding of total transponder demand, we turn to carpooler preferences for transponder acquisition and payment. To gain a better understanding of the ordering and distribution options that are available, we asked other city program managers about the options they chose and about the strengths and weaknesses of the options they implemented. While there is some variation among cities, each city generally provides for ordering online, by phone, by mail-in applications and some in-person locations (customer service locations or retail locations). The results of our carpooler survey showed that 47% of respondents preferred ordering transponders on the Internet, 35% preferred their place of work as their distribution channel, and about 5% preferred one of the in-person distribution options. In carpooler focus groups, participants who had previously used transponders generally agreed that Metro should provide web access for ordering the devices. They had few, if any, concerns about distribution. However, participants who were less informed about transponders suggested that transponders be made available through customer service centers, retail locations and in the workplace. In the ETC survey, when given options of how they would be willing to support ExpressLanes, the second most favored means of support was distribution of transponders, with 30% responding favorably. In follow-up interviews, ETCs also supported Metro coming to their workplaces to distribute transponders. Because providing transponders in in-person locations is much more resource-intensive, we needed to better understand what was driving preferences for in-person ordering. First, we estimated a multivariate logistic regression model using data from our carpool survey. In order to have a more robust model, we combined the two in-person options (Metro customer service center and retail location) into a single category. We considered the same independent variables as in the previous regressions. Two side-by-side models are shown in Table 6. In the first model, we modeled income as a continuous variable, resulting in a weakly significant negative relationship with preference for ordering transponders in person. In the second model, we included a discrete variable for low-income users (income below $35,000), which had a more significant and positive relationship with preference for ordering transponders in person. In both models,

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carpooling on the ExpressLanes corridors is also associated with a higher probability of preferring an in-person option. This regression is one of the few times in our analyses where low-income respondents stand out as having distinct preferences and needs. While the result is not surprising, it does offer evidence to support the academic wisdom that low-income users are more likely to prefer obtaining transponders at a walk-up location than ordering online or over the phone. In addition, unlike in our previous regression models, the variables representing use of the two ExpressLanes corridors were significant. Thus, even after controlling for income, I-10 and I-110 drivers still show a marked preference for in-person acquisition options. For the purpose of targeting communications to carpoolers about in-person options, we noted that the Older Traditionalists segment from our survey segmentation analysis showed a greater than average preference for in-person acquisition. Table 6: Logistic Regression on Ordering In-Person (1) Coefficient Marginal Effects * 0.0249* I-10 Corridor (d) 0.481 (2.26) (2.00) I-110 Corridor (d)

Frequency of Transit Use (times per month) Prefers Points-based Rewards (d) Income ($1000s)

(2) Coefficient 0.448* (2.34)

Marginal Effects 0.0238* (2.09)

0.560* (2.37)

0.0306* (2.01)

0.540** (2.58)

0.0303* (2.20)

0.0643*** (4.63)

0.00291*** (4.65)

0.0673*** (5.43)

0.00315*** (5.45)

0.573** (2.90)

0.0281** (2.73)

0.436* (2.52)

0.0216* (2.41)

-0.00693+ (-1.79)

-0.000314+ (-1.80) 0.702** (2.61) 2634 0.048

0.0437* (2.04) 2634 0.048

Low Income (d) Observations 2119 2119 Pseudo R2 0.049 0.049 Marginal effects; t statistics in parentheses (d) for discrete change of dummy variable from 0 to 1 + p < 0.10, * p < 0.05, ** p < 0.01, *** p < 0.001

In determining which of the in-person distribution options to select for implementation in Los Angeles, it is instructive to look at the experience of other implementing city agencies.

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Based on our agency manager interviews, cities that provided in-person locations to handle distribution favored using their existing customer service locations. The Bay Area (Wolfe 2009) and Miami (Santana 2010) decided to use retail locations to create convenient options for customers, but many cities, like San Diego (Burke 2009), have avoided retail locations due to concern over complicated logistics and a desire to avoid the impression that the transponder is being “purchased” rather than “leased.” For management of demand planning, inventory management and physical distribution Internet, phone and mail orders, all city agencies relied on partnerships with outside vendors. Some city agencies, such as Denver, opted to outsource distribution to another city tolling authority rather than a private vendor (Catlin 2009). Key Findings: Other city agencies have provided a full suite of options to distribute transponders, including web access, phone, mail-in applications and in-person locations. Carpoolers in Los Angeles appear to prefer to obtain transponders though the Internet and the workplace, and ETCs are a willing and trusted distribution source. Low-income carpoolers and carpoolers on the pilot corridors show a greater than average preference for in-person distribution options. 6.1.3 Payment Method for Transponder Deposit Since carpoolers may be required to put down a deposit for a transponder, we also tested their preferences for method of payment. Interviews revealed that all other city agencies provided credit and debit card payment options, with most also allowing payment via personal checks and cash, albeit with higher deposit or balance requirements. Unsurprisingly, the carpooler survey clearly indicated a preference for credit cards (42%) and debit cards (22%) for payment of the transponder deposit. However, Metro may also want to factor equity into its decision of which payment methods to accept. Research has shown that low-income individuals are much less likely to have access to a credit card (Parkany 2005). Consequently, offering a cash option may improve overall access to the program. Key Findings: Other city agencies have provided a full suite of options for payment of deposits and tolls, including credit/debit cards, personal checks and cash. Carpoolers prefer credit/debit and electronic payment options, but lowincome drivers may have distinct payment preferences or needs. 6.2 Recommendations on Distribution Given our key findings for distribution in the three areas above, we present our recommendations for capacity planning, transponder acquisition and payment options below. Ensure manufacturing and distribution capacity for approximately 261,000 transponders. While the actual adoption of transponders will likely follow the adoption curve outlined in Section 5.1.6, any shortages of transponders or system failures on the initial launch date for

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the ExpressLanes could prove to be catastrophic since it will directly affect the normal commuting behavior of carpoolers. One way to alleviate this risk would be to phase in the transponder requirement for carpoolers, and not to require carpooler transponders on Day One. Ideas for phasing the rollout appear in Section 7. Expect most transponders for carpoolers to be ordered online, but also provide workplace distribution and an in-person option. While most carpoolers will likely use Metroâ&#x20AC;&#x2122;s online system to order their transponders, we also suggest that Metro proceed with their proposed mobile distribution kiosk to distribute transponders locally at major employers in Los Angeles. While this distribution method is more resource intensive and will require Metro to send representatives to employer workplaces, it also provides an opportunity for Metro to connect directly with carpoolers and explain the benefits of the system to them in person. Metro can also further gauge the willingness of ETCs to distribute transponders in the workplace, if it is allowed by Metroâ&#x20AC;&#x2122;s vendor agreements. Given the equity concerns around low-income users, and the preferences of carpoolers on the pilot corridors, Metro should also allow carpoolers to order transponders in person at customer service locations. We hesitate to recommend retail locations as an in-person distribution option for Metro, due to logistical concerns. Expect most carpoolers to use credit and debit cards for payment, but provide personal check and cash options to improve low-income access. While aggregate results from the carpooler survey have expressed a clear preference for making payments via credit and debit cards, we recognize that Metro must serve a broader constituency and so it would be prudent to provide all feasible payment options. Lowincome access is vital to mitigating any equity concerns in this implementation. 7 Implementation Steps The recommendations up to this point in this report address the political and operational risks that may arise as carpoolers deal with the HOT lane conversion. By creating incentives for carpoolers to continue carpooling, and targeting carpoolers with early, focused messaging about the ExpressLanes Program and its goals, Metro will minimize the risk that carpoolers remain unaware and unengaged. By educating carpoolers about the need to get transponders, and by providing distribution channels preferred by carpoolers, Metro will minimize the risk that a large number of carpoolers do not participate in the system on Day One. With risk mitigation in mind, we recommend the following implementation timeline for Metro. For a more detailed explanation of the steps to implementation, see Appendix 22. Time to Open

Recommended Steps

18 Months

Focus engagement efforts on their ETCs; direct communications to frequent carpoolers; use videos to

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articulate Metro’s hierarchy of riders and explain how the ExpressLanes are good for ridesharing 12 Months

Start accepting transponder pre-orders with financial incentives to encourage early ordering; provide a “communications checklist” to ETCs to help coordinate messaging; begin announcing a revamped rewards program

6 Months

Messaging through ETCs should emphasize transponder requirement, but that transponders are free; begin ramping up in-person distribution network and distributing transponders through the workplace

3 Months

Messaging through ETCs should stress that time is running out to benefit from the financial incentive; use clear signage at in-person distribution centers indicating the “deadline” for the “switch;” install freeway signage; target infrequent carpoolers with messaging

At Launch

Eliminate pre-order incentive; offer free, 3-month transponder trials; alternatively, phase rollout of system to either allow carpoolers to use it alone with transponders for one month, or allow carpoolers to go without a transponder for one month while SOVs can start using the ExpressLanes with a transponder

After Launch

Promote to SOVs, highlighting the program’s “freedom of choice” and “guaranteed speed” aspects. Do not offer financial rewards; consider using SOV transponder revenues to cross-subsidize vanpool transponders

8 Conclusion The ExpressLanes program offers commuters an attractive value proposition, which can ultimately promote ridesharing; however, this message can be hard to discern amidst the “noise” of irrelevant information and misinformed objections. As this report has argued, the project’s political and operational success depends upon an educated carpooler population that supports the program’s objectives and obtains transponders in advance of the facility’s opening. Metro can best engage carpoolers and therefore ensure the program’s success by recognizing that different groups of carpoolers will need different messages and incentives at different times, and by offering transponder distribution options that are easy and convenient. Metro can accelerate adoption by offering pre-order incentives and by rolling out a robust, points-based rewards program, that rewards carpoolers for ridesharing.

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Remembering that many carpoolers and vanpoolers are passionate about the ridesharing â&#x20AC;&#x153;cause,â&#x20AC;? Metro must treat carpoolers as partners, rather than customers, in all its engagement and distribution efforts around the ExpressLanes. Organized and vocal carpoolers are ExpressLanesâ&#x20AC;&#x2122; biggest potential political threat to the program but if Metro can win them over through effective messaging and an appeal to their passion for the cause, they could also be its best advocates.

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Appendices

9.1 Appendix 1: Explanation of Congestion Pricing High occupancy toll (HOT) lanes are similar to carpool or high occupancy vehicle (HOV) lanes in that they are physically separated from the unrestricted, general purpose lanes and they offer lower travel times. HOT lanes differ from HOV lanes in that they are also open to non-carpoolers who pay a toll to enter the lanes. HOT lanes do not have tollbooths and cars do not slow down to pay the tolls: instead, specialized electronic devices at the side of the roadway deduct the correct toll amount as the car passes by transmitting a signal to the device (called a transponder) that HOT lane users keep in their car. This transponder is linked to the user’s declining-balance toll account. Many experts consider HOT lanes an improvement over HOV lanes because they allow the carpool lanes to be used as efficiently as possible while still giving carpoolers an incentive to rideshare, since they are able to use the lanes for free. HOT lanes also generate revenue that can be used to support facility maintenance, expand rideshare programs and vanpools, and provide better transit service. Some HOT lanes charge a flat toll; others use a toll that varies based on time of day or demand. This latter system is called “congestion pricing.” Congestion pricing, which many HOT lanes use in their operations, applies the simple and ubiquitous laws of economics to freeway use. By pricing access to the lanes according to the demand for “lane space,” users pay more when less space is available and less when space is abundant. The freeway thus becomes more efficient: price regulates the demand for the lanes and is calibrated to correspond with optimal traffic flow. On many congestion-priced HOT lanes, the toll varies depending on the time of day and is higher during the times when traffic is heavier. Some newer HOT lane facilities use what is called dynamic congestion pricing, which means that the toll responds to the level of demand in the lanes, with price adjustments taking place as often as every minute. Congestion in these lanes is avoided because when traffic is heavy, the price is increased to a point that discourages people from making unnecessary trips. With no congestion on these lanes, drivers who need to be somewhere quickly have a new option available to them. Even drivers who never choose to use the HOT lanes benefit from others using them, because they are no longer competing for lane space in the free lanes, and congestion improves across the entire freeway.

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9.2 Appendix 2: Original Hypotheses Related to Carpoolers Carpoolers… …Prefer to handle registration online or over the phone, so the process of signing up can be largely automated. …Have regular access to the internet and are accustomed to shopping online, so promotion and distribution can take place through online channels. …Do not drive more than a few times a month as a single driver, so will not be interested in public transit credits as an incentive. …Have credit cards, so could link their transponder account to the card and refill their balance automatically. …Will receive most of their transportation information from employer transportation coordinators or friends at work, so marketing should be focused on these channels. …Will want to know how much time they’re saving by using the lanes so this information should be displayed. …Will have difficulty remembering to switch their transponders to a carpool setting, so signage or signals will be needed to remind them.

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Data Source

Validated?

Focus group; Survey data

Yes

Survey data

Yes

Focus group; Survey data

Yes

Survey

Yes

Focus group; Survey data

Yes

Focus group

Yes

Focus group

Yes

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9.3 Appendix 3: Primary Research Log Interviews Conducted

Focus Groups Conducted (all moderated by the team)

Surveys Conducted

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9.4 Appendix 4: Academic Interview Questions Brian Taylor, UCLA • At what kinds of work environments is carpooling most predominant? • What are the pros and cons of requiring transponders for all users? • How do you think carpoolers will react to the one-time cost of a transponder (about $30), which they would need in order to continue using the carpool lanes for free? What could Metro do to make this cost more manageable? • How might the transponder requirement change the way in which carpools form? The way they persist? • What are some of the most common misconceptions about low-income households in Los Angeles County? • In what ways are low-income households in LA different from those elsewhere in the country? • What do low-income carpools look like? How are they organized? How formal/regular are they? How long do carpools “last”? • How are travel costs shared among low-income carpools? • What does SOV driving look like in the low-income community? How regularly do low-income individuals drive alone to work, and under what circumstances? • How do you think low-income carpoolers will respond to the ExpressLanes program? • What advice would you give to Metro as they prepare to inform the public about the program and the need for carpoolers to get transponders? Where should Metro go to reach low-income carpoolers? What do you think low-income carpoolers will expect from Metro, and how should Metro be prepared to deliver? What pitfalls should Metro avoid as it “markets” the program? And what should Metro be sure to do? Mike Manville, UCLA • How does the ExpressLanes program fare in terms of distributional equity? With 70-75% of funding going towards transit---is this the right measure? • What do you think is most important for ExpressLanes to do right, if congestion pricing is to be expanded in LA? • What about the LA context makes it difficult to institute something like ExpressLanes? • What do you think about the program’s requirement that all users have transponders in their vehicles? What are the pros and cons? • How do you think carpoolers will react to the one-time cost of a transponder (about $30), which they would need in order to continue using the carpool lanes for free? What could Metro do to make this cost more manageable? • How might the transponder requirement change the way in which carpools form? The way they persist? • How do you think low-income carpoolers will respond to the ExpressLanes program?

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• • • • • •

What are some of the most common misconceptions about low-income households in Los Angeles County? In what ways are low-income households in LA different from those elsewhere in the country? What do low-income carpools look like? How are they organized? How formal/regular are they? How long do carpools “last”? How are travel costs shared among low-income carpools? What does SOV driving look like in the low-income community? How regularly do low-income individuals drive alone to work, and under what circumstances? What advice would you give to Metro as they prepare to inform the public about the program and the need for carpoolers to get transponders? Where should Metro go to reach low-income carpoolers? What do you think low-income carpoolers will expect from Metro, and how should Metro be prepared to deliver? What pitfalls should Metro avoid as it “markets” the program? And what should Metro be sure to do?

Low-Income Focus: Lisa Schweitzer, USC • What are some of the most common misconceptions about low-income households in Los Angeles County? • In what ways are low-income households in LA different from those elsewhere in the country? • What do low-income carpools look like? How are they organized? How formal/regular are they? How long do carpools “last”? • At what kinds of work environments is low-income carpooling most predominant? Do employers at these organizations support carpooling? Or are employees mostly on their own? • How are travel costs shared among low-income carpools? • What does SOV driving look like in the low-income community? How regularly do low-income individuals drive alone to work, and under what circumstances? • If carpoolers needed to have a transponder in their cars in order to use HOV lanes (for free), at what locations would low-income carpoolers be likely to want to pick them up? (At a gas station, supermarket, Metro customer service center, other?) • How do you think low-income carpoolers will respond to the ExpressLanes program, which seeks to improve traffic across all lanes of the freeway by allowing toll-paying single drivers to use the HOV lanes? • How do you think carpoolers would react to the one-time cost of a transponder (about $30), which they would need in order to continue using the carpool lanes for free? What could Metro do to make this cost more manageable? • What advice would you give to Metro as they prepare to inform the public about the program and the need for carpoolers to get transponders? Where should Metro go to reach low-income carpoolers? What do you think low-income carpoolers will expect from Metro, and how should Metro be prepared to deliver? What pitfalls should Metro avoid as it “markets” the program? And what should Metro be sure to do?

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Making the Switch 9.6 Appendix 6: Business Rules Grid

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9.7 Appendix 7: Agency Interview Questions •

What was the initial motivation for congestion pricing project?

•

What were the funding sources for the project (federal, state or local)?

•

Implementation challenges and decisions about the following… o Did you have to integrate with any existing toll facilities? o What were some of the distribution issues (for transponders) you struggled with? Locations How decided? How did you negotiate with vendors? Inventory management/consignment issues? Payment and account management Demand forecasting process How did that compare to actual demand? Pre-distribution of transponders? o Process for choosing transponder technology?

•

How did you decide how to enforce the new system?

•

What were the biggest concerns you heard from the public prior to implementation?

•

Marketing o How did you do marketing, outreach and engagement pre-launch? o Did marketing change post-launch?

•

Carpool conversions o What was the reaction from carpoolers? o How did you try to mitigate the effects on carpoolers/gain their support?

•

Low income equity issues o Was there political opposition? o Was this group (low-income drivers) vocal? o Did you have contact with advocacy groups? o What steps did you take to mitigate effects on low-income drivers? How did you decide on those steps?

•

What other groups did you have to deal with (FHA, transportation watchdogs, etc)? o What were their concerns and how did you address them?

•

What are the biggest lessons learned? If you had to do it again, what would you have done differently?

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9.8 Appendix 8: Agency Interview Summary Report Summary Comparison of Implementation of HOT Lanes in 8 US Cities InMotion Consulting collected the following data from interviews and follow up communications with representatives from local transportation agencies who were familiar with the HOV to HOT conversions in their cities. The list of questions reviewed in the interviews is appended to this report; however, given the unique characteristics of each implementation, not every question was addressed in every interview if it wasn’t relevant to their implementation. Where a topic wasn’t relevant for a particular city, we’ve noted the reason in the summary below. Background of Projects • • • •

• • •

•

Miami – already had extensive tolling and wanted to reduce casual carpools; required carpool registration Minneapolis – no toll roads in area, basically a pure conversion from scratch; no transponders for carpoolers Denver – had some pure toll roads (specialized) but no HOT lanes; no transponders for carpoolers Katy – had over 1M transactions a day from the Houston beltway, which was tolled already and may commuters from Katy were using that road too; no transponders for carpoolers (use separate lanes) Seattle – had some bridge tolling but no HOT lanes or pure toll lanes; no transponders for carpoolers Bay Area – currently converting some HOV to HOT and already have bridge tolling; will be requiring carpoolers to have transponder eventually and will toll them Orange County – lanes built and developed privately with reduced/free carpool rates extended when OC bought back the system from the private operator; carpoolers do need a transponder San Diego – originally a pure conversion from scratch; carpoolers not required to have transponder

Takeaways for Los Angeles • •

Implementation seems to have gone smoother in cities that already had some kind of toll facility so people were familiar with concept and might have transponder Only cities to require carpoolers to have transponders had specific reasons to do so. This requirement represents a huge risk factor for Los Angeles implementation. o Miami – wanted to limit carpools to long distance, regular drivers; also already had extensive toll lanes and population familiarity with them o Orange County – the lanes were additions to the existing freeway and were privately built and operated first; carpoolers actually got better deal once they opened, so it was an added benefit versus a restriction

April 2010

Making the Switch

Public Concerns • •

•

• •

• • •

Miami – none; they were used to tolling already so it wasn’t a new idea Minneapolis – partnered with educational institutions and politicians so idea was accepted; ended up being a political backlash from legislature when the system opened during the legislative session Denver – public very concerned about lane pricing compared to transit; additional concerns came from local officials worried about parking supply; the public had a preference for transit, which improved at the same time (and rates were always cheaper than lane price) Katy – public was not concerned because it expanded HOV options (going in both directions all the time), and provided an additional value for their transponders Seattle – mostly positive response since funds were going to fund infrastructure improvements that were needed; some concern over equity at first; some confusion about static bags since people who already had transponders for the bridges didn’t realize what they needed to do – they needed more information out there Bay Area – unsure; currently transitioning to HOT and switchable transponders Orange County – too long ago to know but these lanes were in addition to regular freeway San Diego – no real concerns since it had public and political support

Takeaways for Los Angeles •

•

There was very little general public concern once the initiative got through the initial political process (most initial concern was stirred up by politicians); they may be a danger of political grandstanding if the system opens while the legislature is in session All cities reported that once the facility was opened (all successfully) that public nervousness turned to acceptance and support

Carpooler Concerns •

•

Miami – some backlash from carpoolers who were actually excluded from using the lanes (some couldn’t register at all – weren’t allowed); also the physical dividers caused a backlash because there wasn’t enough communication about them in advance Minneapolis – no concerns since carpoolers were only concerned about lanes slowing down and the agency mitigated the concern by committing to operating for free flow; carpoolers didn’t need transponders or to pay for access Denver – no substantial concerns since transponders were not required for carpoolers (the agency actually wanted to require them but there was too much opposition internally to the cost and inconvenience for carpoolers) Katy – no concerns since they weren’t required to get transponders and they got additional lane space

April 2010

Making the Switch

•

Seattle – no concern about transponders since carpoolers didn’t need them, but the agency did make some requested improvements to the HOT lanes in the process (striping and better access) Bay Area – about to start tolling carpoolers and requiring transponders (in stages); unsure of what risk will be so far; some carpoolers seem to think it will help enforcement Orange County – since lanes were a pure addition to the existing freeway, there wasn’t an issue with carpoolers originally; carpoolers got a discount then and now (sometimes free); no opposition to policies now San Diego – carpoolers didn’t have to have transponders so they weren’t active; usage is still 80% HOV and the agency made improvements for carpoolers like park and ride to encourage transit

Takeaways for Los Angeles •

With the exception of Miami, no other city dealt with carpooler resistance since the status quo did not change for the carpoolers, and in some cases, additional improvements were made to the lanes that carpoolers wanted o Carpooler resistance represents a huge and unprecedented political risk for LA; the Bay Area isn’t going to require carpoolers to get a transponder when they first open the system, though they will phase that in later on

Low-Income Concerns •

•

• •

•

Miami – none since everyone was used to tolling already and low-income drivers reported that its been beneficial for them too (majority of low-income drivers actually wanted to expand the system) Minneapolis – some opposition from politicians, which was addressed through pricing and revenue sharing on corridors (though the corridors are not low-income areas); opposition died down after the system opened successfully Denver – some high income groups advocated on behalf of low-income drivers but there was no action from actual low-income groups; the agency did perform outreach and focus groups; survey shows car type use is well distributed Katy – none reported; it just wasn’t an issue for them; they promoted it as “there if you need it” and noted that in some cases, it could save someone’s job Seattle – no organized opposition, and they found that time is more valuable for low-income drivers in some cases; low-income drivers also benefit from all around speed increase Bay Area – tags are free so there is less pricing concern; seems to be more of an issue for higher income advocates (paternalism) Orange County – since lanes were a pure addition to existing freeway it wasn’t an issue; originally the non-compete clause caused some concern about freeway improvements, but its not an issue now San Diego – none that they could remember

April 2010

Making the Switch

Takeaways for Los Angeles •

•

Opposition generally came from politicians and high income individuals advocating on behalf of low-income drivers as a constituency; in no case was there organized opposition from low-income groups If used, mitigation took the form of transit and corridor improvements; might be necessary to do enough outreach and consideration of group needs in order to assuage public concern After opening, low-income arguments virtually disappeared because traffic improved so much across the board and studies consistently show that lanes are well used across the income spectrum

Distribution •

•

• • • •

•

Miami – they use a couple different transponder/sticker systems so it’s somewhat confusing, but they are available via retail and stickers are effectively free with toll credits; very high penetration since many roads are tolled in Florida (80% of drivers) Minneapolis – quite expensive ($40 plus monthly fee); available through online and through customer service centers (no retail); original demand predictions were far off from actual (by a factor of 2) Denver – contracted out distribution to another agency which already had a network in place due to another dedicated toll road; not so much an issue now since there is also license plate reading and drivers don’t need a transponder at all Katy – already had 1M transponders out there, so they piggybacked on the same technology and distribution network Seattle – they use online and customer service centers for distribution; initial estimates were wrong but they had no problems getting more transponders Bay Area – do distribute via retail outlets and essentially tag is free Orange County – originally had some retail but it was a logistical challenge and account set up logistics were too complicated; transponders are free with credit card enrollment but there are monthly charges; cash customers pay a deposit for the transponder San Diego – followed their existing customer service channels, started small with customers; have been contacted by Walgreens but wanted to avoid “purchase” appearance and logistics challenges with back office; vendor manages inventory/demand

Takeaways for Los Angeles • •

Generally other cities have distributed through their own existing channels: online, phone, mail and customer service centers A few cities have used retail distribution, but arguments against pursuing this path include the perception that drivers are “buying” versus “renting” transponders, as well as the logistical complexity

April 2010

Making the Switch

•

Many cities have opted to make their tags free or effectively free o Potential issue is that tags are free in the Bay Area, and Orange County (with a credit card enrollment), so these markets might represent a black market for LA Vendors seem to manage most aspects of demand planning, inventory and distribution; with no obvious problems with shortages; however, numbers in other cities haven’t been as high as what we are possibly looking at in LA

Marketing •

• • •

•

• • •

Miami - flooded the mass market with advertising; used lane delineators and signage to raise awareness on the actual highway (delineators were too unexpected and caused accidents) Minneapolis – made a conscious choice not to market heavily in the beginning to avoid flooding the system right away (though they had some earned media) Denver – engaged in lots of marketing and earned media beforehand Katy – were initially concerned about too much marketing, but took a phased approach to opening the system; allowed HOVs only for 6 months (since they had changed the lane structure), then promoted it in the media, and then opened it to everyone; this approach very successfully avoided problems Seattle – didn’t want to flood the system on the first day, so the system opened on Sat and the agency did very little marketing beforehand (also had some bridge transponders already out there); they felt that too much demand (causing lanes to slow down) could be perceived as system failure; in person outreach and video on web were keys to their marketing program Bay Area – not doing much yet since they are still planning Orange County – the operator engaged in some private marketing originally; ongoing low level now through web San Diego – didn’t do much pre-registration or marketing; just dealt with existing customer base; emphasized multi-modal concept (however, our outside research suggested that marketing was much broader and designed by a specific marketing consultant)

Takeaways for Los Angeles •

•

Cities have opted to manage marketing differently – some flooding the market and others choosing to have a soft opening o There is a real concern about flooding the system on the first day and causing an outcry over “failure” from opponents if the lanes are seen as crowded and slow No cities have had to worry about marketing heavily to carpoolers because they didn’t need to worry about carpoolers using transponders (except Miami, which wanted to reduce numbers of carpoolers)

April 2010

Making the Switch

• •

All agreed that there was a strong need for signage and advance warning on the lanes of upcoming changes Katy took a phased approach to opening, which was very successful; they opened to carpoolers 6 months early so they could get used to the lanes, then promoted to the media by driving them on the lanes, and then opened to the public o It’s important to control the media story, even if there is no mass media advertising

Technology Choice/Enforcement • • •

•

• •

•

Miami – currently using a mix of stickers, transponders and license plate but moving toward license plate technology more and more Minneapolis – uses regular transponders but none needed for carpoolers; enforced through visual enforcement, beacons and mobile reader units Denver – easiest system to enforce with the license plate recognition system (people can just be billed, even if they don’t have an account); however, license plate recognition is more expensive than using transponders Katy – already had 1M standard transponders in use from other tolling systems, so they integrated into that system; enforcement was extremely important but they had a dedicated force for the toll lanes so there were no conflicting interests and they could work with them closely to make adjustments to the system/signage as needed Seattle – used standard transponders compatible with their bridge system Bay Area – transitioning to switchable transponders but currently are using regular transponders with no problems; CHP thinks enforcement will be better with switchable and would ideally like a fully automated system (don’t like to do that kind of enforcement – would rather focus on moving violations); are keeping their eye on occupancy detection Orange County – carpoolers need a transponder, but they also have declaration lane to avoid toll (need both since carpools are sometimes free and sometimes tolled); visual enforcement used with no license plate backup; also maintain hotlist of repeat offenders San Diego – considered switchable transponder but people opposed it (wanted it to be automated); still need visual enforcement no matter what but would rather CHP be doing other things (CHP prefers to educate, no ticket for toll violations on the lanes); evaluating automatic occupancy verification now

Takeaways for Los Angeles •

•

No one is yet using switchable transponders but they are the buzz in the industry and people are excited about the technology o It’s still unclear whether or not it really helps with visual enforcement, but highway patrols (especially CHP) seem convinced that it helps CHP and other highway patrols dislike the idea of toll enforcement and would prefer any technologies that automate that process

April 2010

Making the Switch

• •

Declaration lanes in OC don’t seem to slow down traffic (but does necessitate some space) Several cities recommended taking it easy on violators in the beginning to allow people to adjust to the new system – officers might engage in education rather than citing

April 2010

Making the Switch

Appendix 8B: Best Advice for Los Angeles from Other Agency Interviews •

•

Miami o Make sure the public knows everything that is happening in advance to avoid unwelcome surprises (such as delineators) o They tried to get as many transponders out as possible, but not necessarily for use on HOT lanes, just for general toll accessibility o System was quite different in that there was a lot of tolling already and carpool lanes were overloaded; they needed to segment users (but not publicly) Minneapolis o Didn’t market appropriately to all groups (when they were hard to reach) o Avoid opening during legislative session o Mobile enforcement units worked out really well and increased flexibility (however, not compatible with Title 21 which disallows write capability) Denver o Collect data on lane use early – before rollout to have good comparisons o Do outreach and education early; however, they did hold back somewhat to avoid too much of a flood the first day o Go easy on people at first since it’s a new system o Carpool transponder idea was abandoned due to price hardship and putting a hurdle in the system for them o Toll was never lower than transit fare to encourage transit o Learned from Minnesota not to open during the legislative session to avoid political grandstanding and successfully opened a month later than originally planned o License plate tolling is more expensive because its harder to do o Used prize for landmark transponder sale as publicity (was a low-income woman) Katy o Learn from other cities and what works for them; you can’t tell by reading about cities or just talking to them how their back office works, what resources they have in place, etc o No two cities or implementations are the same: what works in one place may not work at all in another place o Phased rollout worked extremely well in getting carpoolers used to the idea of the lanes, and it allowed them to control the media story better and phase in the system on their terms Seattle o Need to educate carpoolers the most of all groups o Vendors who do all maintenance see the problems with the technology better o Public outcry was minimized due to public will to use money for infrastructure o Found that low-income time argument was true and accepted in area

April 2010

Making the Switch

•

o Soft opening helped manage demand early on since they didn’t want to overload in the beginning Bay Area o Switchable transponders won’t be introduced until lanes are rolled out with existing system, to decouple new facility rollout and changing status quo on technology Orange County o Various account types appeal to different types of users o Hotlist of repeat offenders is kept to watch for violators o Verification lane hasn’t caused traffic problems at the gantry o Allow for toll policy changes without board approval if possible San Diego o Can’t foresee all the problems so need to be flexible o Signage is a big deal and education is critical and it helps to have politician shepherding the process o Hesitation to go with retail because of the perception of “buying” versus “renting” a transponder o Once it was rolled out, people liked it, even low-income argument lost power o CHP is sensitive to technology choice and wants to avoid being in business of enforcement

April 2010

Making the Switch

9.9 Appendix 9: Traffic Flow Data Charts

April 2010

Making the Switch

9.10 Appendix 10: ETC Survey

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Making the Switch

9.11 Appendix 11: ETC Survey Summary Statistics The following are the summary statistics for the 113 surveys collected from ETC coordinators who attended Metroâ&#x20AC;&#x2122;s ETC ExpressLanes Marketing Event on October 27, 2009. Thesee statistics are an excerpt from a longer analysis provided to Metro in December 2009. Size of Respondentsâ&#x20AC;&#x2122; Organizations 0-100 employees 3%

1001+ employees 42% 101-1000 employees 55%

Distribution of Office Population Captured in ETC Surveys (n = 106 ) 40% 35% 30% 25% 20% 15% 10% 5% 0% 0-25

26-100

101-250

251-500

501-1,000

Number of office employees

April 2010

1,001-1600 1600 1,601-3200

Making the Switch

3 2.5 2 Average number of 1.5 carpool trips takenper week 1 0.5 0

Number of office employees

Average Frequency of Carpooler Trips (trips/week) by Size of Organization Reasons Why Employees Choose to Carpool (according to ETCs)

To save money

78%

To save time

42%

Because parking is constrained

28%

Because of carpool incentives

23%

No access to car, transit

23%

Other

April 2010

Making the Switch

Ways in Which Organizations Would be Likely to Support ExpressLanes by Percentage of Carpooling Employees Promote ExpressLanes

40% 55%

I don't know

35% 26%

Distribute transponders

35% 29%

Pre-register transponders

20% 22%

Pay the cost of transponders

20% 17%

None of the above

15% 11%

Pay carpoolers' tolls

10% 11%

Other

5% 6%

Manage toll payments

5% 8%

10%

20%

30%

40%

50%

60%

Organizations at which more than 20% of employees carpool (n = 20) Organizations at which 20% or fewer of employees carpool (n = 81)

Distribution of Value of Carpooler Incentives ($/Month) at Organizations that Provide Incentives (n = 57) 40% 35% 30% 25% 20% 15% 10% 5% 0% 1-5

5-10

10-25

25-50

50-100 100-200 200-400 400

Dollars per month

April 2010

>400

Making the Switch

9.12 Appendix 12: Carpooler Focus Group Questions General & Background Questions •

How do you get to work? Are you on I-10 or I-110? How often?

•

What are the basic logistics of your carpool? o How did you initially contact the members of your carpool? Was this selfinitiated or did your employer provide opportunities to network with other carpoolers? o How do you share costs among carpool members? o Where do you get your information about carpooling and/or carpool programs? (Work, online, etc?)

•

Why did you decide to join a carpool?

•

From day-to-day, how do you decide whether to carpool vs. drive alone to work? o Would you consider taking a different mode of transportation during your commute to work? If so, what form? Bus? Subway? Vanpool? Bicycle/walking?

•

What type of incentives (would) encourage you to carpool? o Do you or any members of your carpool currently receive any incentives for carpooling from your employer(s)? Did you in the past?

•

Do you think cheating on the HOV lanes is a problem? o Do you have any thoughts about enforcement?

ExpressLanes Program •

Are you aware of the “ExpressLanes Program”? What is your impression of this program? How did you get your information about it? Show Metro video on the ExpressLanes Program. (10min) Provide brief explanation/video of entire process. (5min) Explain the implications of ExpressLanes to carpoolers.

•

Any questions? What do you think of the ExpressLanes Program and the process?

List of Topics to Address •

Would the transponder cost dissuade you from carpooling?

April 2010

Making the Switch

•

What benefits and/or challenges (concerns) do you believe will be associated with the ExpressLanes Program?

•

How would you prefer to access your ExpressLanes account? On the phone? Over email? Online? In person?

•

What, if any, additional information would you like to receive regarding the ExpressLanes Program? How would you like to receive this information? (Internet website, e-mail, through your employer, letters?)

•

It is likely that vehicles traveling in the converted HOT lanes will require a transponder device. If you are the owner of the vehicle, how would you prefer to: a) Register for the transponder? By Internet, by phone, mailed application, in-person at a retail location b) Receive the transponder device? By Internet, by phone, mailed application, inperson at a retail location

•

How do you think LA Metro could improve the ExpressLanes Program for carpoolers?

•

What incentives do you think would be valuable?

•

As a carpooler, what would convince you to use the ExpressLanes Program?

April 2010

Making the Switch

9.13 Appendix 13: Carpooler Focus Group Mini Mini-Survey

Focus Group Mini-Survey 1. What is the maximum amount that you be willing to put down as a deposit for an ExpressLanes transponder? $______________ 2. Which of the following hypothetical incentive programs for carpoolers/vanpoolers would you pick if it were offered? Option A: A subsidized (reduced (reduced-cost) transponder deposit Option B: A â&#x20AC;&#x153;frequent carpoolerâ&#x20AC;? program in which you earn points that you can trade in for gas cards or gift cards 3. What is your overall opinion of the ExpressLanes program? Very positive Positive Neutral Negative Very negative 4. Please list one or more suggestions for what you want to see in the ExpressLanes program. _______________________________________________ ___________________________________________________________________________ ____________________________________________________ ___________________________________________________________________________ _____________________________________________________________________ ___________________________________________________________________________

April 2010

Making the Switch

9.14 Appendix 14: Carpooler Focus Group Mini-Survey Summary Statistics Please refer to Appendix 13 for the questions. Overall Responses Q1 Responses

Total

Group A Group B Group C Group D 38 10 10 12 6

Average

$ 35.62

$ 25.50

$ 31.67

Median

$ 25.00

$ 20.00

$ 25.00

12 $ 60.83 $ 50.00

6 $

8.00

4.00

Q2 Responses Option A Option B

36 19% 81%

10 10% 90%

10 20% 80%

12 0% 100%

4 100% 0%

Q3 Responses Very Positive Positive Neutral Negative Very Negative

38 11% 61% 11% 13% 5%

10 10% 50% 0% 40% 0%

10 20% 70% 10% 0% 0%

12 8% 83% 8% 0% 0%

6 0% 17% 33% 17% 33%

April 2010

Making the Switch

9.15 Appendix 15: Carpooler Survey (English)

April 2010

Making the Switch

April 2010

Making the Switch

9.16 Appendix 16: Carpooler Survey (Spanish)

April 2010

Making the Switch

April 2010

Making the Switch

9.17 Appendix 17: Carpooler Survey Summary Statistics The following are the summary statistics for the 3,037 surveys collected from carpoolers in January 2010. These statistics are an excerpt from a longer analysis provided to Metro in February 2010.

How often do you carpool or vanpool? (n=3,003) 5+ times per week

54%

3-4 times per week

30%

1-2 times per week

A few times a month

Never or very rarely

1% 0%

10%

20%

30%

40%

50%

If you rideshare, do you mostly carpool or vanpool? (n=2,996) carpool

21%

vanpool

79%

April 2010

60%

Making the Switch

How often do you commute via carpool on these freeways? (n=2,528) Never

Less than Once a Month

Once a Month

2-3 Times a Month

Once a Week

2-3 Times a Week

Daily or Almost Daily

100% 80% 60% 40% 20% 0% I-10

I-110

SR-91

Do you carpool on the I-110 between downtown LA and Long Beach? (n=1,198) 2% Yes 34%

No I don't know

64%

April 2010

I-15

Making the Switch

Do you carpool on the I-10 between the I-605 and downtown LA? (n=1,276) 1% Yes No I don't know

44% 55%

Who do you carpool with? (n=2,820) Co-workers

61%

Other people in your household

28%

Other non-family adults (not co-workers)

Other

5% 0% 10% 20% 30% 40% 50% 60% 70%

April 2010

Making the Switch

How often does the group you carpool with change? (n=2,711) Every 1-2 years or less often

79%

1-2 times a year

About every year

More than 5 times a year

3-4 times a year

4-5 times a year

1% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Who/what is your primary source of ride sharing information? (n=2,775) My employee transportation coordinator (ETC) A co-worker A friend outside of work LA Metro Commute Services website Another website (e.g., CommuteSmart.info) 511 or 1-800-Commute News media Other 0%

10%

20%

30%

April 2010

40%

50%

60%

Making the Switch

From what source would you prefer to get information about ride sharing, if not your current source? (n=2,768) I am already well informed by my current source

55%

My employer transportation coordinator (ETC)

28%

A co-worker

A friend outside of work

LA Metro Commute Services website

Another commuting website

511 or 1-800-Commute

News media

Other

2% 0%

20%

40%

60%

Are you aware of the Metro Rewards program for ride sharing? (n=2,806)

Yes 37%

63%

April 2010

Making the Switch

What are your top two reasons for carpooling? (n=2,799) It saves money

61%

It saves time

30% 27% 22% 20%

It's good for the environment It's convenient My employer gives me incentives to rideshare Driving is stressful

12% 8% 5% 3% 1%

Parking at work is difficult or expensive Other I don't have access to a car I don't have access to transit

20%

40%

60%

80%

How often do you ride transit (LA Metro specifically)? (n=2,818) Never

65%

Less than Once a Month

18%

Daily or Almost Daily

2-3 Times a Month

Once a Month

2-3 Times a Week

Once a Week

1% 0%

20%

40%

April 2010

60%

80%

Making the Switch

Do you have a Metro "TAP" card? (n=2,829) Yes 6% No 29% I do not know what a "TAP" card is

65%

If express bus service on the I-10 and I-110 corridors were substantially improved (buses every few minutes), would you use it? (n=2,759) No, definitely not

37%

Probably not

21%

Maybe; it depends

17%

Possibly

12%

Yes, most likely

13% 0%

10%

20%

April 2010

30%

40%

Making the Switch

How would you prefer to order a transponder? (n=2,595) Online

47%

At my workplace

35%

Other

In person at a retail location

By phone

In person at Metro customer service center

With a mail-in application

2% 0%

10%

20%

30%

40%

50%

How you would prefer to pay the deposit for the transponder? (n=2,571) Credit card

42%

Debit card / Electronic bank transfer

22%

Check

13%

Cash

13%

Other

Money order

1% 0%

10%

20%

April 2010

30%

40%

50%

Making the Switch

What type of incentive program would you prefer? (n=2,619) Frequent Carpooler Point System 29% Subsidized Transponder

38%

I don't know 33%

What kind of benefit would you prefer? (n=3,849) Gas card

74%

Gift card (for restaurants or stores)

44%

Toll credits

13%

Raffle tickets for a chance to win a large prize

Transit credits

Other

3% 0%

20%

40%

April 2010

60%

80%

Making the Switch

What age group do you belong to? (n=2,743) 18-29

30-44

37%

45-64

49%

65+

I prefer not to answer

2% 0%

10%

20%

30%

40%

50%

60%

Which gender group do you belong to? (n=2,731) 2% Female

35%

Male

63%

April 2010

I prefer not to answer

Making the Switch

9.18 Appendix 18: Summary of Survey Crosstab Analyses Communication • ETCs are effective: people who get their information from ETCs have the highest awareness of the Metro Rewards program • The propensity to get information from ETCs goes up both with frequency of carpool and income. • The propensity to get information from co-workers generally goes down both with frequency of carpool and income. • Vanpoolers are more reliant on ETCs than carpoolers, but ETCs are still the carpoolers’ most important information source. • Carpoolers are more reliant on co-workers than are vanpoolers. • ETCs are an important source of information for carpooling even for people who do not carpool with co-workers. Communication and Metro Rewards • A majority of people who get their information from the LA Metro Commute Services website are aware of Metro Rewards, but there is room for improvement (only 69% aware). • Respondents who are familiar with the existing Rewards program are slightly more likely to favor subsidize responders than is statistically expected, perhaps due to dissatisfaction with the current incentives. • Respondents who are not familiar with the Rewards program are slightly more likely to state “I don’t know” to these answer options than is statistically expected. Preferences for new Benefit • In general, respondents prefer a frequent carpooler points program over a subsidized deposit. • People who carpool more frequently prefer the points program. • People who carpool less frequently prefer the subsidized transponder • No significant difference in benefit preference is observed between carpoolers and vanpoolers. • People whose carpools or vanpools change member several times a year are more likely to prefer a subsidized transponder; people whose carpool rarely changes prefer the points program, but the results are not statistically significant. • The carpoolers’ primary source of carpooling information does not appear to markedly affect respondents’ choice of incentive program. Maximum Willingness to Pay (WTP) for a Transponder Deposit • Less frequent carpoolers have a higher WTP. • The WTP increases with income, in almost perfect linear fashion. • The higher income groups (highlighted) have a wider range of WTP responses, as indicated by significantly larger standard deviations. • The propensity for preferring online ordering goes up with income.

April 2010

Making the Switch

•

There is no significant difference in maximum WTP between carpoolers and vanpoolers.

Distribution Preferences • Low-income respondents preferred in person at retail much more strongly than other groups. • Online ordering is most popular among people who get their information from external sources. • Respondents across all income groups have a preference for workplace ordering; the highest income group is the least inclined to prefer this option. • Workplace ordering is most popular among people who get their information from ETCs. • Occasional carpoolers are more likely to prefer ordering online. • Occasional carpoolers also have the strongest preference for ordering in person at retail. • Preference for workplace ordering increases with rideshare frequency. • There is no significant differences between carpoolers and vanpoolers on distribution preference. • Older respondents prefer workplace ordering; younger respondents prefer online ordering Payment preferences • Among those who prefer to order online, credit cards are preferred. • People who want to order their transponders in person at a Metro service center strongly prefer paying cash. • For people wishing to order at the workplace, cash, check, credit and debit are roughly equal in preference. • Low income carpoolers prefer cash to other forms of payment. Higher income carpoolers prefer paying by credit card. Within all income groups, however, there is a wide range of payment preference. Carpooler Behavior • Only a slight difference in frequency of carpool can be observed across income groups (the lowest-income group is too small a sample to be observed independently): o More low-income respondents carpool 5+ times a week than the highest income group o The highest income group is more likely to carpool 3-4 days a week than the lowest income groups, but these differences are not statistically significant.

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9.19 Appendix 19: Transponder Technology Analysis This appendix discusses a variety of existing and forthcoming technologies employed by various HOT lanes programs in the U.S. Alternatives Not Requiring Transponders So far, the majority of HOT lanes implementations have not required carpoolers to have transponders, as noted in the implementation analysis above. Now that those systems are already in place, most cities are loath to change the status quo. Option #1: Transponder Not Required: No transponder/Static Bag The simplest solution from the carpooler perspective is to simply allow carpoolers to use the HOT lanes without a transponder. As the vehicle does not have a transponder, no toll will be collected. Drivers that also use the lanes as an SOV and thus do have a transponder can place their transponder in a static bag. The bag blocks the radio signal and thus makes the transponder â&#x20AC;&#x153;invisibleâ&#x20AC;? to the tolling system. Enforcement is accomplished by indicating the non-transponder status of a vehicle to a nearby patrol officer, who can then visually verify occupancy or issue a citation if necessary. For example, in Washington, a light goes off above the lane when a car goes through with a transponder; no light indicates lack of a transponder and thus carpool declaration. As mentioned above, for many carpoolers this is the ideal alternative, as it requires no special adoption or behavior changes. However, for drivers who sometimes use the lanes as an SOV and sometimes as an HOV, the need to use to use a static bag could be a hassle, particularly if the driver forgets to put the transponder into the bag before getting to the lanes. This is a potential safety concern. Beyond this issue, there are no particular system impacts. Examples of cities that have a no transponder / static bag system include San Diego, Minnesota, and Miami.15 Option #2: Transponder Not Required: Lane Segregation A second alternative that does not require carpoolers to use transponders is lane segregation: HOVs and SOVs are required to use different lanes at the point of tolling. Both SOVs and HOVs are free to use either lane for the majority of the journey through the HOT lanes, but before each tolling point, they separate. SOVs go into one lane and are tolled, and HOVs go into another lane and are not tolled. Enforcement again relies on visual verification of occupancy, this time of all vehicles passing through the HOV lane.

Miami, however, also requires HOV vehicles to register with the transportation agency, and imposes certain use limitations.

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From the carpooler perspective, lane segregation is also a preferred solution. Indeed, for users who use the lanes both as an SOV and as an HOV, this may be the ideal system, because a driver does not need to worry about the state of the transponder, they just move into the correct lane. However, the need to drive in a particular lane could potentially create congestion at the tolling points, either due to an inefficient allocation of cars between the two lanes, or due to a rush of lane changes occurring just before the tolling point. This is an important system impact that should be considered before implementing a lane segregation system. Examples of locations that use a lane segregation system include Katy, TX and Orange County.16 Analysis: Alternatives Requiring Transponders While all HOT lane programs offer discounted or free access to the HOT lanes for carpoolers, some programs still require carpoolers use a transponder. Our research indicates this is a source of significant contention for carpoolers who are not familiar with the HOT lanes or the electronic tolling concept. Many focus group participants objected strongly to a transponder requirement, and felt that this was akin to charging for using the lanes (even though actual use of the lanes is free). In addition, many existing carpoolers indicated that they would refuse to obtain a transponder if a deposit were required. This seems irrational given the high benefits carpooling conveys to carpoolers, but many focus group participants unfamiliar with tolling had emotional reactions to the transponder requirement. Conversely, among several focus group participants who had experienced carpooling on Orange Countyâ&#x20AC;&#x2122;s SR 91 ExpressLanes, where a transponder is required, the transponder requirement was simply a non-issue. Collectively, these responses suggest that initial reactions to transponder requirements are likely to be quite negative (and irrational), while experience and understanding can reverse this assessment. Requiring carpoolers to have transponders does offer two concrete benefits compared to no-transponder options. First, if carpoolers still have a transponder, the tolling agency has an option to charge them no toll, or charge them a special carpool rate. In systems that do not require a transponder for carpoolers, carpoolers will be allowed to use the lanes for free. Currently, only Orange County charges carpoolers at a special carpool rate, and only at certain times. Second, the transponder requirement for carpoolers means that overall, many more drivers and vehicles will obtain transponders. This means that if there are future expansions of the tolling system (e.g., creating additional HOT lanes), more drivers will be ready to use the new facilities. Given the difficulty of initially educating drivers about how HOT lanes and transponders work, this may be a considerable benefit. Option #3: Transponder Required: Switchable Transponder

Orange County, however, also requires a transponder registered under a â&#x20AC;&#x153;special access account". Neither city reported any unusual congestion at toll points resulting from their lane segregation systems.

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Switchable transponders are a new innovation and have not yet been deployed on any system. However, Utah recently signed a contract with a vendor for switchable transponders and Los Angeles has stated a preference to use switchable transponders (TollroadNews 2009). As with the options not requiring transponders, enforcement is still accomplished through visual inspection of vehicle occupancy by an officer who receives some visual indication of declared occupancy from the tolling system. This alternative will create additional burdens not present in the previous options. Any required deposits or minimum balances may seem unfair given that this represents a new obligation for a carpooling option that did not previously require any action or expense. Furthermore, the required minimum balance for carpoolers may seem particularly unfair given that people who use the ExpressLanes exclusively for carpooling would not ever have to pay any tolls. In addition, the deposit and balance requirements may create access issues for low-income carpoolers, particularly those that do not have a credit card or bank account. These problems may be larger for people who carpool occasionally (and never use the ExpressLanes as an SOV) as the fixed costs associated with acquiring the transponder and maintaining are spread out over fewer ExpressLanes trips. Furthermore, if a minimum usage fee is applied to accounts, then people who would only use the ExpressLanes for occasional carpooling may opt out entirely, as their less frequent usage may not justify the minimum fee. On the positive side, for drivers who use the lanes frequently as both an SOV and HOV, a switchable transponder represents a good solution: these drivers would have signed up for a transponder and account regardless of the carpooling rules, and the ability to indicate carpooler status by flipping a switch is easier than dealing with a static bag. Indeed, for this category of users, a switchable transponder may be as convenient as the lane segregation option. Option #4: Transponder Required: Special Account or Special Transponder Some systems require carpoolers to sign up for a special carpooling account, distinct from a regular account. Sometimes a special carpool transponder is also required. Drivers who use the lanes as both an SOV and HOV need two separate accounts (and potentially two transponders). Under these systems, enforcement is still accomplished through visual verification of a vehicle. Requiring a carpool-specific account or transponder presents many of the same access problems of switchable transponders, but with the added hassle of having to deal with multiple transponders or multiple accounts for users that use the lanes as both an SOV and HOV. Existing implementations of this alternative include Orange County (which requires a transponder registered under a special account for carpoolers) and Miami (which requires a special account for carpoolers).

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9.20 Appendix 20: K-means Segmentation Analysis

Question How many people are typically in carpool?

Stated reasons for carpooling

People in household? WTP

Preferred source of information

How often do you carpool?

How often do you ride transit?

Preferred incentive program

Variable

(PEs)

3-class (OTs)

Number of people in carpool Saves money Saves times Is convenient Parking is difficult/expensive Employer offers incentives Environmental reasons No access to a car No access to transit Driving is stressful Other

3.629 0.629 0.312 0.200 0.071 0.214 0.253 0.027 0.009 0.114 0.051

3.522 0.602 0.274 0.239 0.075 0.196 0.266 0.030 0.008 0.103 0.059

3.726 0.612 0.304 0.223 0.091 0.162 0.295 0.019 0.010 0.131 0.043

Number of people in household Willingness to pay Well-informed by current source ETC Coworker Friend LA Metro website Another website 511 / 1-800-COMMUTE News media Other A few times a month 1-2times a week 3-4 times a week 4-5 more times a week Never Less than once a month Once a month 2-3 times a month Once a week 2-3 times a week Daily/almost daily Subsidized transponder Points program Don't know

3.412 9.213 0.752 0.133 0.015 0.006 0.051 0.013 0.007 0.011 0.012 0.061 0.075 0.289 0.574 0.660 0.177 0.030 0.047 0.011 0.029 0.045 0.303 0.357 0.341

3.371 25.938 0.758 0.120 0.015 0.005 0.051 0.014 0.008 0.012 0.017 0.082 0.079 0.302 0.537 0.668 0.158 0.036 0.047 0.009 0.025 0.057 0.320 0.392 0.288

3.314 66.621 0.764 0.118 0.008 0.000 0.068 0.015 0.008 0.011 0.008 0.090 0.082 0.325 0.502 0.592 0.219 0.041 0.046 0.008 0.030 0.064 0.382 0.427 0.192

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(IBSs)

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Age

Method of paying last annual vehicle registration fee Gender Aware of Rewards? Stated preference for ordering transponder

Uses freeways at least occasionally

Household income

Rideshare type Use ExpressLanes corridors?

18-29 30-44 45-64 65+ Prefer not to answer Online By mail By phone In person N/A â&#x20AC;&#x201C; no car Don't know / donâ&#x20AC;&#x2122;t remember Male Female

0.085 0.382 0.488 0.017 0.028 0.421 0.313 0.003 0.217 0.017 0.029 0.369 0.607

0.073 0.331 0.541 0.030 0.025 0.371 0.330 0.013 0.234 0.025 0.028 0.311 0.669

0.132 0.415 0.427 0.013 0.013 0.477 0.304 0.005 0.173 0.014 0.027 0.396 0.589

Aware of Metro Rewards program Online By phone Mail-in application In-person at Metro In-person at retail At workplace Other SR-91 I-15 I-10 I-110 $0-24,999 $25,000-34,999 $35,000-44,999 $45,000-54,999 $55,000-64,999 $65,000-74,999 $75,000 or more Prefer not to answer Carpool Vanpool

0.363 0.442 0.043 0.027 0.017 0.032 0.362 0.077 0.154 0.092 0.366 0.250 0.010 0.052 0.061 0.075 0.066 0.073 0.375 0.287 0.775 0.225

0.356 0.437 0.045 0.019 0.030 0.035 0.375 0.060 0.117 0.077 0.313 0.185 0.009 0.065 0.087 0.068 0.085 0.070 0.360 0.256 0.808 0.192

0.400 0.581 0.038 0.021 0.037 0.043 0.276 0.004 0.130 0.089 0.347 0.244 0.008 0.045 0.053 0.075 0.072 0.074 0.494 0.179 0.800 0.200

Uses ExpressLanes corridors Sum of weights Within-class variance

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0.312 0.234 0.274 1398.000 1008.000 631.000 76.869 15.947 2094.974

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Distances between the class centroids: 1 2 3

2 3 0 16.727 57.410 16.727 0 40.686 57.410 40.686 0

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9.21 Appendix 21: Transponder Demand Estimation Calculations In order to estimate demand for transponders, we made three key assumptions: 1. Current users of the HOV lanes will each need (1) one transponder. This will meet our goal of 100% carpooler adoption. 2. SOV drivers will utilize the converted HOT lane(s) if capacity is available. Capacity in the HOV/HOT lanes will be available as long as the average speed in the lanes is 45 mph or higher (Los Angeles County Metropolitan Transportation Authority 2009b). 3. Vehicles travel the same routes (in reverse) in both the morning and the evening. Vehicles traveling from an origin in one direction in the morning follow the same route (in the opposite direction) when returning later in the day and are only counted once. We calculated demand for transponders on the I-10 and I-110 corridors using the average daily HOV vehicle flow, estimated HOV lane capacity (vehicle flow per hour) at peak traffic hours, and current HOV lane utilization on each highway during peak traffic hours. Average Daily HOV Vehicle Flow We first estimated the number of current carpoolers in the HOV lanes, using the Performance Measurement System (PeMS) online traffic database.17 Total daily vehicles on the HOV lanes of the ExpressLanes corridors averaged 23,600 and 58,500 respectively (Performance Measurement System Database).18 This data is summarized in Table 3. Thus, the combined HOV traffic of 82,100 vehicles is the base demand for transponders, since all carpoolers will be required to have a transponder and we assume that all carpoolers will adopt on Day One. Table 3: Daily Unique Vehicles on I-10 and I-110 Averaged Over 3 Years

I-10 at Del Mar Blvd

I-110 at Slauson

HOV Eastbound 10,879

HOV Westbound 12,745

Total 23,624

HOV Northbound

HOV Southbound 28,015

Total

30,474

58,489

PeMS is a Caltrans-provided traffic data captured by electromagnetic induction loops that are embedded in the roadway surface at approximately 0.5-1 mile increments. 18 Data was collected for both directions and over a three year period between 2006 and 2009. 17

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The data for the different directions on each freeway differs due to a number of factors. This data is only for peak times, so it’s likely that the distribution of drivers at peak times differs, or that some drivers take different routes to and from work. Estimated HOV Lane Capacity During Peak Hours Based on the traffic flow data charts in Appendix 9, we estimated peak traffic periods for both I-10 and I-110 by identifying the highest vehicle flow volume on each highway (in both directions) throughout the day. For the I-10 eastbound and westbound freeways, peak traffic occurs at 7 a.m. and 4 p.m. respectively. For the I-110 northbound and southbound freeways, peak traffic occurs at 7 a.m. and 5 p.m. respectively. Metro is guaranteeing average speeds of 45 m.p.h. or higher in the ExpressLanes once the system goes into effect. At speeds of 45 m.p.h., the lanes can accommodate an average flow rate of 1,800 vehicles per hour. Given this information, we can see that I-10’s average traffic density at peak periods is higher than it should be, indicated by the lower vehicle flow rate in Table 4. Conversely, I-110’s average traffic density at peak periods reveals some extra capacity, indicated by the higher vehicle flow rate in Table 4 (State of California Department of Transportation). Table 4: Maximum Peak Traffic HOV Vehicle Capacity at 45 m.p.h.

I-10 at Del Mar

I-110 at Slauson

HOV Eastbound @ 16:00 1,100 vehicles/hr

HOV Westbound @ 7:00

HOV Northbound @ 7:00 2,000 vehicles/hr

HOV Southbound @ 17:00 1,500 vehicles/hr

1,200 vehicles/hr

Source: PeMS Traffic Data (flow vs. speed)

Estimating the Number of SOV Drivers Able to Enter the Converted HOT Lanes By subtracting the average vehicle flows for each hour in the day from the estimated maximum capacity, we are able to estimate the additional vehicle capacity that could theoretically enter each HOV lane and still maintain the 45 m.p.h. constraint. Adding up the additional vehicle capacity figures on an hourly basis provides an estimate of the extra capacity that could be filled by SOV drivers moving into the HOT lanes. Construction of an additional lane will also add to the capacity for SOVs on I-10, since density is higher than it should be at the moment (Los Angeles County Metropolitan Transportation Authority 2009a).

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Estimating Total Demand for Transponders We estimated a lower bound for total demand for transponders, which is shown in Table 5, by combining the current HOV vehicle flow with the total additional capacity available for use by SOV drivers. This figure assumes that SOV users of the lanes are the same each day. However, in reality, the SOV users are likely to be different each day, which would imply that a greater number of drivers are likely to acquire transponders. Therefore, we considered two additional scenarios, one in which SOV drivers would use the lanes three to four times per week and one in which they would use the lanes one to two times per week. Transponder demand is equal to the inverse of the utilization of the lanes. If we assume on average that SOVs use the lanes half the days of the week, that would imply that twice as many SOV transponders would need to be distributed than if the same SOVs use the lanes every day. If we assume on average that SOVs use the lanes one third of the days of the week, that would imply that three times as many transponders would need to be distributed. The results of all three scenarios are shown in Table 5. Table 5: Demand Scenarios Combined I-10 & I-110 HOV+ Everyday SOV HOV + 3-4x/week HOV + 1-2x/week

Total 175,225 260,847 467,662

We consider the middle scenario to be the most likely outcome, based on the experience of Orange Countyâ&#x20AC;&#x2122;s SR-91 Express Lanes, where SOV drivers use the lanes an average of 2.5 times per week.

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9.22 Appendix 22: Implementation Steps Detail Eighteen Months Prior to Launch: Benefits-Based Messaging to Frequent Carpoolers Metro should focus on engaging carpoolers through ETCs, who are the best channel for reaching frequent carpoolers: the highest-priority group. Engaging ETCs entails minimal expense to Metro, with advertising materials and their distribution constituting the only significant cost drivers. At this point, ETCs need to start alerting their employees to the system’s arrival. At this early stage, Metro should focus communications to frequent carpoolers (the Pragmatic Economizers) and should highlight the goals of the ExpressLanes program. It is more important at this stage to outline the reasons why Metro is implementing the program rather than to explain exactly how it will work. Videos should be made available online and also directly to ETCs for employees with no Internet access, and should be used to explain how the ExpressLanes can build upon long-standing efforts to promote ridesharing, plus underscore that carpoolers can continue using the lanes for free. The benefits that should be highlighted at this stage are improved consistency in travel time, and the opportunity to participate in a new points-based reward program for carpoolers and vanpoolers, without giving many details of the program yet. Twelve Months Prior to Launch: Financial Incentives and Communications Checklists If possible, Metro should begin to start accepting transponder pre-orders, and provide an incentive, such as bonus points, to encourage early ordering, giving Metro a preview of demand. Though the incentive may involve some delayed cost, it can be mitigated somewhat by earning interest on the pre-payment. ETCs should communicate that the transponders are available, but only after they have explained the goals of the program. A “communications checklist” that Metro could send to ETCs would help coordinate the messaging and ensure that carpoolers receive the appropriate information from Metro. To minimize carpooler backlash caused by poor comprehension, it is important that carpoolers have the opportunity to hear why the ExpressLanes are being implemented before they receive messaging that relates to transponder acquisition. To keep carpoolers and ETCs focused on the goal, Metro may want to consider using a “number of focus” technique, whereby the goal is expressed as a number and is itself the message.19 In Metro’s case, appropriate numbers would include optimal traffic flow per lane (1,200) or hours saved per day or per year, so that Metro can connect a definitive number to the benefits that accrue from the ExpressLanes’ operation. Metro should also begin announcing its plans for a revamped points-based rewards program. This points program can be scaled at this point, depending on available resources and the level of pre-order demand. Six Months Prior to Launch: Wider Promotion and In-Person Distribution 19

This strategy was similar to one undertaken by www.350.org where the goal of reducing pollutants was described as a number (pollutant parts per million).

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Metro should continue offering bonus points for pre-orders. The messaging through ETCs should start emphasizing that a) transponders will be required of all carpoolers and b) that there is no deposit for the transponder with a credit card linked account (assuming Metro’s proposed plan is approved). Messaging on Metro’s website and transponder order forms (both off and online) can continue to outline the goals of the program and what it will achieve. Metro should also begin ramping up its in-person distribution network, keeping in mind that the market segment most interested in ordering their transponders in person, Older Traditionalists, is more likely to be older and less well off than other carpoolers. Unlike the first group, Pragmatic Economizers, this group is more likely to understand the value of the transponder and to be willing to pay a moderate amount for the transponder deposit. Messaging at this stage can therefore balance information about why the program is being implemented with information about how the program works. During this stage, Metro should also roll out workplace distribution of transponders, by utilizing its vendorprovided mobile kiosk or simply sending a staff member to major employers with transponders for distribution. Three Months Prior to Launch: Messaging to Infrequent Carpoolers Messaging through ETCs should stress that time is running out and that the bonus points promotion for pre-ordering will expire soon. In-person distribution centers should also have very clear signage that indicates the deadline for the conversion is coming soon20. Metro and Caltrans should now install signage on the freeway facility itself with a very clear date and perhaps a changeable message sign displaying a day countdown. Costs for signage are higher at this stage, but necessary for reaching carpoolers who do not have connections to formal carpooling programs in their workplaces. Begin targeted advertising to the third carpooler segment, Idealistic Benefit-Seekers. These carpoolers are more likely to order online and to carpool infrequently, which is why Metro should address them last among carpoolers. This group cares more than others about the environmental benefits of ridesharing and is more interested in earning rewards from ridesharing than other segments. Messaging at this stage should emphasize ExpressLanes’ contribution to greenhouse gas reduction, and the carpooler points program, which Idealistic Benefit-Seekers will find attractive. At Launch: Phased the Rollout to Prioritize Carpoolers Eliminate the pre-order bonus points incentive and instead begin offering free, threemonth transponder trials, similar to a strategy which was employed by both Seattle and Minneapolis. Accept payment information that Metro will only utilize if the transponder is not returned within three months of ordering. In essence, this would not differ from the

Signage and messaging strategy can be taken from the U.S. Census Bureau’s “It’s coming” ad campaign.

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ordinary deposit program except that accounts receivable would be deferred for promotional purposes. The experience of several other cities (especially Seattle and Katy, TX) suggests that a phased roll out is also advisable to allow carpoolers to adjust to the new system and mitigate the risk that they will perceive a loss of benefits. There are two potential options for phasing the rollout: 1) Allow carpoolers to use the system without a transponder for the first 1-3 months, while still requiring SOVs to use transponders. This plan ensures that carpoolers who have delayed enrolling for whatever reason will not immediately be barred from the lanes when the conversion takes place. 2) Require carpoolers to obtain a transponder before using the new system, but allow them to use the system alone for 1-3 months before allowing SOV drivers to use the lanes. By initially allowing only carpoolers to use the new lanes, the facility operators ensure a smooth opening, with minimized confusion and opposition. In the six months that Katy was open only to HOV traffic, facility managers also gained useful data on HOV demand and usage patterns. Either of these options will prioritize carpooling, in accordance with Metro’s hierarchy of users. Both programs will help carpoolers to transition more easily to the new program, and will reduce the risk of technical and administrative failures upon the system’s opening. The first approach emphasizes carpoolers’ needs at the beginning of the program, while the second emphasizes Metro’s needs at the beginning of the program (while still considering the needs of carpoolers). After Launch: Expand Advertising to SOVs Begin advertising the lanes to SOVs, highlighting the benefits of “freedom of choice” and “guaranteed speed.” Do not offer financial rewards or trial periods for SOVs. Metro should also consider using SOV transponder revenues to cross-subsidize vanpool transponders.

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10 References Blumenberg, Evelyn. 2002. “On the Way to Work: Participants and Barriers to Employment.” Economic Development Quarterly 16: 314-325. Buckeye, Ken. 2009. Phone interview by authors. Minneapolis, MN. Nov 30. Burke, Chris. 2009. Phone interview by authors. San Diego, CA. Dec 3. Burris, Mark and Robert L. Hannay. 2003. “Equity Analysis of the Houston Quickride Project.” Paper Submitted for Publication and Presentation at the Transportation Research Board Annual Meeting, 2003. Caltrans, PATH, and University of California, at Berkeley: Performance Measurement System (PeMS), https://pems.eecs.berkeley.edu/ Castañeda, Lisa, and LaWanda Howse. 2010. Phone interview by authors. Katy, TX. Feb 19. Catlin, Peggy. 2009. Phone interview by authors. Denver, CO. Dec 10. Clifton, Kelly J. 2004. “Mobility Strategies and Food Shopping for Low-Income Families: A Case Study.” Journal of Planning Education and Research 23: 402-413. Internal Revenue Service. “Understanding Taxes – Theme 3: Fairness in Taxes – Lesson 2: Regressive Taxes.” http://www.irs.gov/app/understandingTaxes/teacher/whys_thm03_les02.jsp Lee, Ellen. 2010. Phone interview by authors. Corona, CA. Jan 7. Los Angeles County Metropolitan Transportation Authority. “ExpressLanes: Metro’s Congestion Reduction Demonstration Project.” http://www.metro.net/projects/expresslanes/ Los Angeles County Metropolitan Transportation Authority. “ExpressLanes: The Plan.” June 2009. http://www.metro.net/projects_studies/expresslanes/images/fl_plan.pdf Los Angeles County Metropolitan Transportation Authority. “ExpressLanes Program Executive Management and Audit Committee Report.” July 2009. Manville, Mike. 2010. Interview by authors. Los Angeles, CA. Jan 21. Murakami, Elaine and Jennifer Young. 1997. Daily Travel by Persons with Low Income. Paper Presented at the NPTS Symposium, Betheda, MD. Oct 29-31.

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Parkani, Emily. 2005. Environmental Justice Issues Related to Transponder Ownership and Road Pricing. Journal of the Transportation Research Board 1932: 97-108. Patterson, Tyler. 2009. Phone interview by authors. Seattle, WA. Dec 2. Santana, Rory. 2009. Phone interview by authors. Miami, FL. Dec 2. Schweitzer, Lisa. 2010. Interview by authors. Los Angeles, CA. Jan 25. State of California Department of Transportation. “2008 HOV Annual Report.” Jan 2009. Sutton, David. 2010. Phone interview by authors. Los Angeles, CA. Jan 19. Svadlenak, Jack and Barnie Jones. 1998. “Congestion Pricing and Ability to Pay: Income Levels and Poverty Rates of Peak-Hour, Single Occupant Vehicle Commuters in Portland Oregon.” Northwest Journal of Business and Economics: 1-14. TollRoadsNews. 2009 “Utah I-15 HOT Lanes to use E-ZGo Anywhere transponders” TollRoads News. 9-18-2009. http://www.tollroadsnews.com/node/4360. Accessed 2/24/2009. Taylor, Brain. 2010. Interview by authors. Los Angeles, CA. Jan 21. Thompson, Nick. “Minnesota’s Managed Lanes Systems.” Powerpoint presentation, Dec. 2, 2009. Minnesota Department of Transportation, MN. U.S. Department of Transportation Federal Highway Administration. “Good Practice in Value Pricing – Good Practice in Project Evaluation and Marketing: The San Diego Example.” http://ops.fhwa.dot.gov/tolling_pricing/value_pricing/sandiego.htm U.S. Department of Transportation Federal Highway Administration. “Congestion Pricing: A Primer.” Dec., 2006. http://ops.fhwa.dot.gov/publications/.../congestionpricing.pdf State of California Department of Transportation. “2008 HOV Annual Report.” Jan 2009. Weinstein, Asha and Gian-Claudia Sciara. 2006. “Unraveling Equity in HOT Lane Planning: A View from Practice.” Journal of Planning Education and Research 26: 174-184. Wolfe, Stephen. 2009. Phone interview by authors. San Francisco, CA. Dec 8.

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