Israeli Experiment Shows That Offering Drivers Sweeteners Can Cut Traffic Jams

Car owners are willing to change their rush-hour habits if the incentive is enticing enough - so why is the state not shouting from the car rooftops about the success of its trial?

A traffic jam on the Ayalon Highway (Route 20) in Tel Aviv, September 2016.
Moti Milrod

It’s been four years since the government decided to launch an innovative experiment to see if motorists could be coaxed into giving up the rush-hour commute by car in exchange for a series of inducements (and levies) that would include cash payments for not driving in the country’s major cities.

In March, the transportation and finance ministries received preliminary results from the pilot. Even though they were only partial findings, they contained good news: 46% of the drivers whose data were capable of analysis showed that they had substantially changed their driving habits and refrained from using their cars when and where traffic was heaviest. They had done so in return for up to hundreds of shekels in incentives.

A total of 26% of participants had stopped commuting during peak morning and evening rush hours, while 20% had given up their prior car use – in exchange for cash – and instead either took public transportation, carpooled or started working from home.

Despite public and professional interest in the experiment, the results have not received the PR exposure that most government transportation projects get – and all this at a time when roads and highways in Israel have simply not kept pace with the growth in passenger car traffic, despite the heavy taxes that motorists pay to purchase cars and fuel.

And that raises another question. What if motorists were taxed not on the purchase of a car, but on how much they used it – in an effort to discourage rising automobile use and increase the rather meager rate at which Israelis use public transportation?

So why weren’t the initial results of the experiment shouted from the car rooftops? The answer lies in political fears when it comes to the negative connotation that additional taxation has among the general public.

At the same time, a look at the results – however rough and preliminary they may be – shows how arbitrary and exaggerated the concerns of public decision makers are, and the extent to which Israel’s jam-packed roads have made people receptive to change.

Travel costs
Driving fees during the trial, selected roads

Ironically, all of this is coming at a time when the government is still providing an incentive for government civil servants to drive to work – for example, through the billions of shekels it pays to cover their transportation costs. Yet it then rakes in 60% to 80% in taxes for the purchase of their cars and for gasoline.

The experiment, which is being called “Naim leyarok” in Hebrew (which roughly translates as “Going Green”), was launched in 2012 under the leadership of the heads of the government-owned Cross Israel Highway company and the head of Ayalon Highway’s toll-supported fast lane facilities.

A total of 1,135 volunteers were recruited for the experiment, in two stages. A monitoring device, fitted with a GPS and clock, was installed in each volunteer’s car. The project has also had the involvement of four high-tech companies, which have made use of their own monitoring technology: Ituran, Motorola, Traffilog and ISR.

Every volunteer received an initial 1,000 shekels (about $260) for committing to participate in the program for about two years. The first round of participants recruited received additional compensation based on their driving habits. Participants in the second group each got a standard 5,200 shekels a year, from which deductions were made based on the extent of the demands they placed on the country’s highways. Deductions were made based on a points system, whereby a sum was subtracted if they used their car during rush hour or on a crowded road. By refraining from accumulating negative points, the volunteers could earn up to 250 shekels more a month.

Small margins

The country was divided into regions for this purpose, with the most congested being the Tel Aviv, Jerusalem and Haifa areas.

The drivers’ demands on the road network was gauged not only based on location and time of day; rush hour was defined as 6:30-9:30 A.M. and 3:30-6:30 P.M. Driving in the center of the big cities during rush hour subjected the volunteers to a “fine” of 1.50 shekels per kilometer, with a small fine also applying during off-peak daytime hours. Conversely, travel in rural areas earned participants 10 agorot (2.6 cents) per kilometer. Adjustments were also made for the level of pollution that the volunteers’ specific car emitted.

The people who organized the experiment hoped that motorists would choose to alter their driving habits in order to earn cash bonuses and avoid penalties. Most importantly, the expectation was that participants would shift the time when they chose to commute, to avoid rush hour.

In 2013, transportation experts explained to TheMarker that even small increases in traffic volume create traffic jams – the corollary being that small reductions can eliminate them. If a highway can accommodate 10,000 cars an hour, a traffic jam will develop with the addition of just 100 extra vehicles. This means that just a 15% reduction in volume can result in a substantial reduction in traffic delays.

As of March, 370 of the volunteers had successfully concluded the experiment, in addition to another 159 who had quit or been disqualified because they had sold their car, left their place of work, moved to live in another location or gone abroad for an extended period. Another 606 people are still part of the experiment, with the last of them due to finish in the middle of next year.

The initial findings reveal that, of the 291 volunteers whose results have been analyzed, 46% had substantially changed their driving habits. Another 54% did not alter their driving substantially. But, as the experts noted, even the 46% who did make a change (if the results could be replicated on a wide scale) could have a substantial impact on traffic jams.

A total of 26% of all participants shifted the time of their commutes, according to the March data. The model used in the experiment is not perfect, it should be noted, but it doesn’t pretend to be, at least at this stage.

Unique approach

The approach involving rewards rather than punishments is a novel one that currently is not being used around the world.

The experiment has also been subject to mishaps, and further refinement still has to be made to factor in not only the route the motorist takes, but also providing a specific incentive for carpooling.

But the overall message is clear: It is important to address the demand side of traffic holdups, and not just continue to build additional road capacity. It is also possible to structure taxes in such a way that doesn’t limit car ownership, but instead imposes taxes based on the extent to which a car is actually driven.

The original plan for the experiment envisaged 5,000 participants in the first year and 10,000 the following one. That figure was supposed to jump to 35,000 by the third year and eventually peak at 100,000 volunteers. But the reality was a tad different.

On the order last year of Transportation and Road Safety Minister Yisrael Katz, additional progress on the experiment has been halted until further notice. Katz made clear in no uncertain terms that he would not tax car use – either now or in the future. He also stated he has no intention of imposing additional tolls on motorists who use the country’s highways.

There is an interministerial committee comprised of representatives of the finance and transportation ministries, and from the treasury’s Tax Authority. It was established back in 2010 to consider changing the system of taxation imposed on car ownership or use, but has yet to come up with practical results.

Decision makers have continued to rely on the explanation that passenger car use cannot be limited in the absence of a real alternative in the form of efficient public transportation. In the meantime, though, the government has the consolation of 6.35 billion shekels in annual revenue from the transport sector.

But government officials continue to warn that the economy will suffer 25 billion shekels in direct and indirect damage in 2030 as a result of the traffic deluge on the country’s roads. That’s also twice what it would cost to pay every motorist in the country the maximum bonus provided for in the experiment.