ISE09/20-21

• Transportation demand management ("TDM") generally refers to an application of strategies and initiatives to redistribute demand across multiple transportation modes and/or reduce travel demand, with an aim to achieve more efficient use of transportation resources.^{1Legend symbol denoting See MRCagney (NZ) Ltd (2020).} TDM is considered an essential part of a sustainable transport system. Broadly speaking, TDM measures can be categorized into: (a) improved transportation options; (b) financial incentives/disincentives (e.g. road tolls); (c) land use planning and development (e.g. parking management); and (d) behaviour change promotion programmes (e.g. commute trip reduction programmes).^{2Legend symbol denoting Ibid.} If implemented effectively, TDM can help achieve a wide range of society benefits such as reduced congestion, cost savings in transportation and improved environmental quality.
• Given the limited road space in Hong Kong, it is considered important to put in place effective TDM measures to ensure a smooth flow of traffic and facilitate the movement of commuters. Hong Kong's transport policy is underpinned by public transport services with railways as its backbone. Meanwhile, the Government also seeks to improve the traffic by various measures such as setting tolls for tunnels and strengthening enforcements against congestion related offences. Although the recent Coronavirus Disease 2019 ("COVID-19") pandemic has slowed down the economic activities and thereby passenger journeys, heavy traffic on roads, shortage of car parks, and overloading of certain railway lines during peak times have remained of concern in the past decade.
• Featuring itself as a smart city, Seoul of South Korea has been actively improving its transportation system with the application of new technologies in recent years. In 2013, it has published a long-term vision plan, known as Seoul Traffic Vision 2030. The plan aims to improve its transportation system through various demand control measures over a long run. This issue of Essentials begins with an overview on the TDM strategies and traffic situation in Hong Kong. It is followed by a discussion of the experiences and initiatives undertaken by the Seoul Metropolitan Government ("SMG") in managing the transportation demand of the city from which Hong Kong might draw reference.

Hong Kong

• Although the recent COVID-19 pandemic has halted the economic activities and so traffic demand, road traffic congestion in Hong Kong has been a concern over the years. The conditions appear to be deteriorating, as reflected in the slowing vehicle journey speed. For instance, the average car journey speed during morning peak hours on weekdays in New Territories dropped from 42.9 km per hour in 2009 to 38.3 km per hour in 2019.^{3Legend symbol denoting Meanwhile, during the period of 2009 to 2019, the car journey speed in Hong Kong Island slightly increased from 21.3 km per hour to 21.5 km per hour while the car journey speed in Kowloon dropped from 24.9 km per hour to 20.6 km per hour. See Transport Department (2010 and 2020a).} On the other hand, the number of total licensed vehicles by end 2019 has exceeded 790 000, which was about 36% above the 2009 level.^{4Legend symbol denoting See Transport Department (2009 and 2019a).} To address growing traffic demand, the Government has been implementing different supply/demand management measures through: (a) improving transport infrastructure; (b) expanding and improving the public transport system; and (c) managing road use. For instance, the Government has been expanding the railway network, working with the franchised bus companies for bus route rationalisation and imposing restriction zones to prohibit kerbside activities.^{5Legend symbol denoting See Transport and Housing Bureau (2015).}
• Continuous growth of vehicle fleet, in particular private cars, is a major factor contributing to heavy road traffic, given that they account for over 70% of the total number of vehicles, and 40%-70% of the traffic flow on most of the major roads. ^{6Legend symbol denoting See Transport Advisory Committee (2014).} As the study of the electronic road pricing scheme to relieve congestion remains underway,^{7Legend symbol denoting Recently, the Government has proposed a pilot scheme in Central Core District and has formed an International Expert Panel to help take forward the proposal. See Transport Department (2020b).} the Government continues to rely primarily on first registration tax and annual licence fee to control car ownership. According to the Report of Consultancy Study on Smart City Blueprint for Hong Kong commissioned by the Government,^{8Legend symbol denoting See PwC (2017).} rental based car-sharing could be promoted to reduce the overall car ownership rate because it allows drivers having access to vehicles on a demand response basis without owning them.^{9Legend symbol denoting Car sharing refers to those car services that do not provide chauffeur services but charge a rental based on usage of the vehicles rented. Different from ride-hailing service which involves vehicles not possessing a hire car permit but carrying passengers for rewards, car sharing service is permitted under existing laws if it has proper insurance covered. Given its per-usage charging nature, it is considered providing a greater flexibility to drivers than traditional car rental service.} In replying to a Legislative Council Question on personalised and point-to-point transport service, the Government said that car-sharing service was already available in the market and was being used by some members of the public. As such, it had not put this under the Hong Kong Smart City Blueprint.^{10Legend symbol denoting See GovHK (2018).}
• Apart from the excessive number of vehicles running on roads, obstruction of traffic in urban areas is often caused by vehicles circulating on roads looking for available parking spaces.^{11Legend symbol denoting By end 2018, the number of public parking spaces available for use was about 760 000, representing a mild increase of 9% compared to the level in 2008. The increase is however remarkably lower than the 36% growth of vehicles over the same period.} To alleviate parking space shortage especially for commercial vehicles, the Government has been providing public parking spaces in suitable "Government, Institution or Community" facilities, as well as taking forward pilot projects on automated parking systems as part of its smart mobility initiative.^{12Legend symbol denoting According to the Government, it earmarked eight suitable "Government, Institution or Community" facilities and public open space sites for construction of car parks which will primarily be used by commercial vehicles. Besides, it has taken forward six pilot projects on automated parking systems. See Transport and Housing Bureau (2019) and GovHK (2020).} In April 2019, the Audit Commission has released its review report on planning, provision and management of public parking spaces in Hong Kong.^{13Legend symbol denoting See Audit Commission (2019).} The Commission has made several recommendations to the Government, including the provision of more long-term public parking spaces and enhancement of the dissemination of parking information.^{14Legend symbol denoting After considering the report of the Audit Commission, the Public Accounts Committee of the Legislative Council has expressed grave dismay regarding the inadequacies of the Government's efforts. See Legislative Council Secretariat (2019).}
• Like many other cities, encouraging people to use public transport is a common TDM strategy in Hong Kong.^{15Legend symbol denoting See The University of Sydney Business School (2020).} Nevertheless, people already rely heavily on public transport, with 90% of Hong Kong's daily passenger trips being made by public transport. Certain heavy railway lines have even exceeded 100% capacity during peak hours. Hence, the Government has proposed in its strategic plan towards 2030^{16Legend symbol denoting Published in 2016 and entitled "Hong Kong 2030+: Towards a Planning Vision and Strategy Transcending 2030", the strategic plan serves to guide future planning, land and infrastructure development and the shaping of the built environment of Hong Kong beyond 2030. See Development Bureau (2016).} to reshape the travel pattern to reduce vehicle-based commuting needs through spatial planning. Specifically, more employment-related uses would be planned in new development areas and outside of the main urban area to bring jobs closer to homes. Details of the initiative remain to be seen.

Seoul's TDM strategy

• In the past, Seoul's traffic management measures were mainly charging/restriction based. For instance, it had introduced the congestion impact fee in 1990 to charge facility owners an annual fee to recover partially the costs of development and improvement of the transportation infrastructure.^{17Legend symbol denoting See Seoul Solution (2017c).} To address continued traffic congestion in the city, it had sought to suppress traffic demand in the 1990s by implementing the congestion charge^{18Legend symbol denoting See Seoul Solution (2017a).} in designated areas (Namsan Tunnel No. 1 and No. 3), and launching a parking threshold programme to restrict the creation of parking spaces at some busy areas. With these measures in place, there had been a gradual increase in the average car journey speeds.
• However, thriving economic growth in the 2000s has induced growing traffic demand, resulting in worsening traffic congestion and air pollution in the city. To make it more liveable with less reliance on vehicles, SMG has announced a TDM-based long term master plan, known as Seoul Traffic Vision 2030 ("the vision plan") in 2013 serving as a basis for its transportation policies in the next 20 years. The vision plan focuses on developing human-oriented, shared and environmentally-friendly transportation.^{19Legend symbol denoting See Seoul Metropolitan Government (Undated).} In particular, it has set aggressive targets by 2030 - a 30% reduction in car travel, a 30% reduction in commuting times by public transport, and a 30% rise in the use of green transport. While the targets are yet realized, several alternative demand management initiatives have been launched to complement the expansion of public transport system and promotion of walking and cycling. The initiatives are discussed in the ensuing paragraphs.

Implementation of car-sharing programme to reduce car ownership

• SMG has introduced a car-sharing programme (known as "Nanum Car") to promote shared transportation under the vision plan.^{20Legend symbol denoting See Seoul Solution (2017b).} Under the programme, SMG has contracted out the service by means of open tender to several operators and provided various kinds of assistance to support the sector. For example, operators are given a 50% discount for parking in public parking lots, and they may receive a subsidy for purchase of eco-friendly cars. To make the service more affordable to the wider public, discounts on the car rental cost are offered to disabled persons and low-income households.^{21Legend symbol denoting Apart from the financial support, it has also created a service management system to resolve disputes between users and operators.} According to SMG, establishing the Nanum Car programme virtually required minimal setup cost to the government,^{22Legend symbol denoting See ShareHub (2015).} since the service is provided by the private sector under the city's brand name.
• Reflecting the increasing popularity of the car-sharing programme, the number of users has increased drastically to two million in three years' time since service launch, with those aged 20s and 30s being the majority of users.^{23Legend symbol denoting See Seoul Metropolitan Government (2015).} According to a study conducted by SMG, the car-sharing programme has brought various benefits to the city. These included suppressing the necessity of vehicle ownership by about 8.5 vehicles per car-sharing vehicle, reducing household expenditure by about 28.9 billion won (HK$213.9 million) per year by saving the cost of car ownership, and lowering air pollution by cutting greenhouse gas emissions by vehicles by about 486 tonnes per year.^{24Legend symbol denoting Ibid.} However, its effect on reducing road traffic on weekdays was considered not obvious, as the service was more likely to be used by young users on weekends.
• Having said that, in view of the positive response, SMG has announced in 2019 that it would expand the scale of the car-sharing programme. This included increasing the number of car-sharing vehicles from 4 700 to 10 000 by 2022, and gradually increasing the number of car rental stations to 1 200 by 2030.^{25Legend symbol denoting See Seoul Metropolitan Government (2019c and Undated).} To support the expansion of the programme and give citizens' easier access to the service, it has dedicated at least one parking space for car-sharing vehicles at every larger public car park (with more than 10 parking spaces). It is planned that in the longer run, car-sharing would become a means of "quasi-public transportation".^{26Legend symbol denoting See Seoul Metropolitan Government (2019b).}

Addressing cark park shortage through shared parking

• Apart from promoting car-sharing, SMG has also put "shared parking" (i.e. making the privately-owned parking space open to the public) as another key measure of encouraging shared transportation under the vision plan. While there has already been a wide application of automated parking system in the city,^{27Legend symbol denoting According to the trade, there are currently more than 400 automated parking systems. See Smart Parking Australia (2020).} the initiative seeks to alleviate the parking space shortage problem by enhancing the efficiency of existing ones. According to SMG, the cost of creating such a shared parking space was just one-tenth of the setup cost of a new parking space.^{28Legend symbol denoting See Seoul Metropolitan Government (2019d).} As such, it has been encouraging owners of commercial facilities, as well as those of schools and religious facilities to rent out their parking spaces to the public.
• To address the concerns of security issues, SMG has offered a subsidy of up to 25 million won (HK$167,500) for the installation costs of complementary facilities (e.g. gates and CCTV) for each participant. SMG has also provided compensation insurance protection for possible vehicle damage. The respective district offices are responsible for managing the operation. As at end-2018, there was a total of 19 091 parking spaces joined under the programme. More recently, SMG has further expanded the scope to cover certain residential areas by inviting house owners to rent out their daytime unused on-street parking spaces to the public on an hourly basis. The project notably will deploy Internet-of-Things technology to monitor the space availability in real time.^{29Legend symbol denoting These parking spaces were managed by attaching Internet-of-Things sensors to the floors of the spaces which could detect the presence of vehicles in real time. Connecting with the smartphone application, they were open for reservations by the public. See Seoul Metropolitan Government (2019a).}

Creating "low mobility society" by re-distributing/adjusting travel demand

• Another key objective under the vision plan was to create "low mobility society" and reduce unnecessary commuter journeys. In this connection, SMG has been actively promoting flexible working hours or flexibility in work. Both are indeed also part of the measures under the "smart work" initiative. In the private sector, SMG offers incentives, in terms of lower congestion impact fee, to facility owners which have implemented the traffic reduction measures, such as a staggered working-hour programme.^{30Legend symbol denoting Where a staggered working hours programme is implemented, it is required that at least 30% of the employees participate in the programme, with the reporting time of participating staff no earlier than 10:00 am. See Seoul Solution (2017a) and Seoul Metropolitan Government (2010).} Besides, since 2017, small and medium enterprises putting the flexible work arrangements in place have been entitled to incentives of up to 5.2 million won (HK$35,880) per participating employee per year, subject to a limit.^{31Legend symbol denoting The amount of subsidies is limited to 30% of the number of insured employees in a company, capped at 70 employees. See Ministry of employment and Labor (2017).} In addition, employers have also been provided with a maximum subsidy of 20 million won (HK$138,000) for the costs related to introducing work-from-home or remote work arrangements.
• As in the government sector, it has established some 10 smart work centres throughout the city to allow its government employees to choose working at dedicated locations (e.g. next to its main subway station) near their homes instead of working in their routine offices. Each centre is equipped with individual workstations, computer facilities, teleconference systems and meeting rooms to support their normal operations. The centres are open for online booking, and there is a best practice guide issued by the government to ensure smooth operation under this mode of working.^{32Legend symbol denoting See Smart Work Center (2020).} The initiative reportedly has enabled one-third of the staff working closer to their homes, reducing the need for transportation.^{33Legend symbol denoting See Dhaka Tribune (2017).}

Concluding remarks

• TDM is an essential part of a sustainable transport system. Effective TDM strategies could improve the environment, sustainability, quality of life and competitiveness of the city. In Hong Kong, the Government has been implementing different supply/demand management measures through improving transport infrastructure, expanding the public transport system and managing road use. However, traffic conditions have remained of concern in the past decade due to continued growing vehicle fleet, shortage of parking spaces and over-capacity of railway lines. Facing similar issues, Seoul has rolled out a TDM master plan mapping out the strategic directions towards 2030 to alleviate the congestion problem. In addition to continuing the construction of an efficient traffic network, it has introduced the car-sharing programme and the shared parking initiative to enhance the efficiency of the existing transportation infrastructure. Besides, it has been extensively promoting flexible work arrangement in both public and private sectors to reduce commuter trips in peak hours. Although these alternative strategies are specific to the characteristics of Seoul, they may provide some reference for Hong Kong in devising a longer term transportation management plan.

Prepared by Kent CHUNG
Research Office
Information Services Division
Legislative Council Secretariat
3 December 2020