Reducing road congestion through incentives: a case study

Traffic congestion is a burden on modern society: hundreds of billions of dollars are wasted each year due to extra fuel consumed, wasted time of commuters, traffic accidents, etc. Congestion occurs when the demand for transport capacity exceeds supply either in a sustained manner each day or just during peak hours. In the former case it is necessary to add transport capacity, whereas adding capacity to combat peak-hour congestion can be very expensive and create a vicious cycle which attracts “latent demand” to fill in the added capacity. Peak-hour demand must therefore be actively managed. Currently, several cities and agencies employ congestion charging which, while effective, often lacks popular support. In this paper the authors describe an approach that uses incentives to nudge commuter behavior towards congestion-reducing times and modes of travel. Specifically, they describe an incentive program, CAPRI (Congestion And Parking Relief Incentives), which aims to reduce peak-hour traffic in Stanford University. CAPRI rewards commuters who drive during off-peak hours and those who walk or bike to work. Commuter behavior is monitored using RFID sensors for automobiles and a smartphone app–My Beats–for walkers and bikers. A commuter who signs up for CAPRI earns points for the “good trips” she makes, and these points can be redeemed for rewards (both monetary and in-kind) in a fun, online game. CAPRI also nudges commuters through features like personalized offers, social influence and status. The paper describes the program, highlighting the effect of each of these features in nudging commuter behavior.