Tolls, fares and traveller choices

The one-minute explanation

Travellers and freight choose between routes by generalized cost: travel time plus any charge converted into an equivalent amount of time. A toll on a fast road is, to the traveller, a detour measured in minutes.

The conversion rate is the value of time, and it rises with the wealth of the settlements involved. The same toll that empties a road between poor towns barely registers between rich cities. Pricing decisions therefore cannot be copied from one corridor to another—the market each charge faces is different.

A charge produces one of three outcomes, in order of preference for the traveller: pay it, go around it, or give up the trip. Only the first earns revenue.

How travellers decide

Driving is never free. Even on an untolled road, travellers carry a private vehicle-use cost per kilometre—fuel, tyres, servicing and wear—which rises with the nation’s income and is heavier per kilometre for freight than for passengers. This is why a free road still shows a charge in the demand panel, and why rail can win passengers from a road that costs nothing to use. The private cost steers route and mode choice, but it is not toll revenue, it never reaches the transport fund, and it is excluded when the game measures how much demand a charge suppressed.

All modes compete inside this single calculation—roads, rail operating lines, air services and water routes serving the same pair are weighed together. Two consequences follow:

• Speed is currency. A charged route survives competition by saving time. A toll on a road no faster than its free alternative simply hands traffic away.
• Wealth changes the answer. As GDP per person grows, charges weigh less against time savings. A pricing scheme that failed early in the game may work well later, and vice versa.

Mode preferences and service quality act inside the same choice—they never create a second pool of demand.

Diversion, suppression and the shape of the market

When a charge makes a route less attractive, demand first looks for another way: a cheaper road, another mode, a longer but free path. That is diversion—the trip still happens, somewhere else on your network.

Suppression happens at the level of the whole origin–destination pair: if every useful option is too slow or too expensive for the time it saves, part of the demand stops travelling entirely. Two rules shape it:

• If some usable option is both free and fast enough for the distance, the pair loses nothing to suppression—charging one route beside a good free one only redistributes.
• Each mode contributes its own best option to the pair’s retention. A strong second mode alongside a tolled road keeps more of the market alive even when it is not the cheapest choice. Parallel duplicates within one mode add nothing.

Suppression is applied once per pair and it costs more than revenue: suppressed trips also disappear from accessibility, and through it from grants, development growth and migration—the chain described in Settlements, transport service and metros.

How each mode charges

Roads: a rate per link

Road tolls are set per link. Expressways and regional rapid roads start tolled by default; national routes and provincial roads can be tolled; local tracks cannot.

Tolling a link carries two costs, not one. The obvious one is 10% higher maintenance—collection has overhead. The quieter one is congestion: a tolled link is treated as 10% more saturated than its raw flow implies, so it reaches congested conditions sooner than an equivalent free road.

Instead of managing a fixed number, a toll can be told to track one of two reference points permanently:

• Break-even — the charge follows what covering the link’s operating cost requires. The low-maintenance choice for links that should pay their own way.
• Maximum revenue — the charge follows the peak of the modelled revenue curve, computed from endpoint incomes, the time the link saves against a slow alternative, and the traffic lost at each price.

The toll editor previews the passenger and cargo shares that would be retained at the rate you are considering. Checking that preview before a large change is the difference between pricing a corridor and emptying it.

A link’s payback period divides its capital cost by monthly net cash flow—toll revenue minus maintenance minus renewal. Non-cash depreciation is excluded; overhaul is cash and counts, so the figure lengthens while the link is inside a renewal window. When net cash flow is zero or negative, no payback is shown, which is itself the answer.

Rail: a stance, not a number

Rail fares are automatic. Each operating line is given one of three pricing stances—public service, balanced or commercial—which sets a fare band around the market rate. Utilization moves the fare within the band: busy lines drift toward the top, empty ones toward the bottom. Above 85% utilization a break-even floor phases in, so a crowded balanced line covers its operating costs and a commercial line covers them with a margin. Public-service lines are exempt from the floor, run cheap by design, and receive a public subsidy for the discount they give.

Stance changes take effect at the next quarter. Competition matters too: where strong alternatives exist, rail discounts itself to stay in the market.

Water: your rates, with a suggestion

Water routes are the other place you set prices by hand. Passenger and cargo fares are separate per-distance rates you type in—a cargo route has no passenger fare and a passenger route no cargo fare, while a mixed route carries both. Frequency, from one to thirty sailings a day, is set alongside them, because price and supply only make sense together.

The panel offers a suggested setting derived from endpoint incomes, competition and recent loads, aiming at roughly 80% utilization, and shows your current values as a percentage of it. The suggestion is advice, not an override: your entered rate is what the route charges.

Ports additionally collect cargo-handling fees on the freight they process—those are automatic.

Air: not a public lever

Air fares belong to the private airlines entirely. The public fund receives a flat charge per completed air journey instead, so there is no fare to set. Public money reaches aviation the other way around—through subsidies for services the market will not run on its own.

Ferries

Ferry links are tolled like the roads and railways they extend, at their own per-kilometre rates.

Pricing has feedback loops

Charges interact with the congestion system in opposite directions:

• Roads push back with time. As a road saturates, travel time rises, its generalized cost climbs, and traffic drifts to alternatives—congestion is a self-limiting price paid in minutes. A toll can pre-empt this, converting the corridor’s scarcity into revenue instead of delay.
• Rail pushes back with price. A railway never slows down from crowding; instead its automatic fare rises toward and above break-even. A saturated line defends its finances rather than its speed.

This is why tolling a congested expressway with a parallel railway is often the strongest move: the toll diverts road traffic onto the railway, whose fare income rises with the load, while the road’s remaining users pay for their faster trip.

Reading pricing revenue

1. Judge a charge by the pair, not the link. After a toll change, look at the origin–destination markets it serves: how much diverted, how much disappeared? The demand panel’s funnel separates the two.
2. Expect the revenue curve to bend. Raising a rate increases income only while enough paying traffic remains; past that, higher rates earn less. There is no universal optimal rate—it depends on wealth, alternatives and time saved.
3. Check both directions. Billing counts movement both ways; a commuter corridor can look half-empty by saturation and still bill both directions fully.
4. Remember what is not priced. Fuel tax follows road use automatically, and the air passenger charge follows completed journeys—neither needs a decision, both respond to the same traffic your pricing shapes.

Common misconceptions

“A higher rate always earns more”

Revenue needs paying traffic. Past the point where diversion and suppression outweigh the higher rate, income falls—and the suppressed trips quietly damage accessibility, grants and growth as well.

“I can set the rail fare”

Rail pricing is a stance, not a number. The player chooses the intent—cheap public service, balance, or profit—and the line prices itself within that intent, including the near-saturation cost floor.

“This toll worked there, so it will work here”

The same charge faces a different value of time, different alternatives and a different market on every corridor. Wealthy, well-connected pairs absorb charges that would erase demand on a poor frontier.

Continue the collection

The next part turns to the other side of financing: borrowing, debt service and keeping the fund resilient.