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A Real-Life Problem in Real-Life?

People who commute are facing a new dilemma, called "congestion pricing." For example, it occurred in New Jersey, Chicago, San Francisco, and recently in Seattle.

Consider the problem faced by Leslie Hayden, a CPA living in Kirkland (WA), who has to commute to downtown Seattle. Her normal route used to involve taking Highway 520 across Lake Washington.

But now, a toll has been implemented by . The rate is between $3.59 and $5.13 each way, depending on the time of day and your method of payment. Plus, a price increase for the summer months was to be $4.35, one way.

Hayden faced multiple options for her commute, both directions five-times weekly:

  • She could pay the regular toll of $3.59 (and the increase to $4.35 for the summer)
  • She could avoid the toll by taking Interstate 90, rather than Highway 520
But, she had to make a decision knowing these additional facts:
  • The commute via Interstate 90 added seven miles to her daily commute, one way.
  • Hayden's car gets 22 miles to the gallon
  • Gas prices generally are at or above he $3.50
Hayden's conclusion: She is saving money by taking the toll-avoiding trip.

Your Task: Is Hayden correct? In forming an answer, consider these additional questions and facts....which may or may not be helpful:

  • Since the toll started, commute traffic on the Highway 520 toll bridge has dropped about 40%, while traffic on the "free" Interstate 90 bridge has risen 10%
  • On an average weekday, the bridge caries 30,000 cars per lane
  • The tool has reduced traffic so much that drivers on the toll bridge now travel at 65 mph, maybe three times faster than before the toll at that same time of day
  • The highest fares are between 7 a.m. to 9 a.m. and 3 to 6 p.m.
  • Hayden figures that her time is worth $30/hour
  • Nine percent of cars and trucks that formerly used the Highway 520 bridge are now avoiding it and the more conjested Interstate 520...opting instead to drive north around Lake Washington on SR 522
  • About five percent of drivers who previously commuted via the Highway 520 bridge seem to have vanished...not using either bridge or circumventing road...perhaps riding transit buses, carpooling, or perhaps not even commuting across the lake at all
  • Commutes across the toll bridge between 11 p.m. and 5 a.m. are free
  • Tolling on SR 520 is expected to raise $1 billion overall toward the $4.65 billion SR 520 bridge replacement
  • D.M. (OR) adds this concern: "...it seems to me that you need to add in the cost of extra wear/maintenance on the vehicle."
Additional Question: Via tolls on the Highway 520 bridge, the state expects to raise $1 billion overall toward the $4.65 billion necessary to replace the bridge. How long will this take?


Source: Adapted from Ervin/Rosenthal's "$3.50 ride takes a toll on 520 bridge traffic," Seattle Times, 1/4/2012

Hint: Hey...this is real-life...and in real-life, no one will be standing next to you offering hints! Thus, you are on your own...


Solution Commentary: Solutions will vary....are you able to justify yours? What other assumptions did you make?