Integrated modeling framework for leasing urban roads: A case study of Fresno, California

Increasing private sector involvement in transportation services has significant implications for the management of road networks. This paper examines a concession model’s effects on a road network in the mid‐sized city of Fresno, California. Using the existing transportation planning models of Fresno, we examine the effects of privatization on a number of typical system performance measures including total travel time and vehicle miles traveled (VMT), the possibility of including arterials, and the differences between social cost prices and profit maximizing prices. Some interesting insights emerge from our analysis: (1) roads cannot be considered as isolated elements in a concession model for a road network; (2) roads can function as complements at some levels of demand and become substitutes at other levels; (3) policy makers/officials should consider privatizing/pricing arterials along with privatizing highways; (4) temporally flexible but limited price schedule regulations should be part of leasing agreements; and (5) non‐restricted pricing may actually worsen system performance, while limited pricing can raise enormous profits as well as improve system performance.