There is a slight bias towards richer drivers here, but I don’t anticipate the price to be particularly high. However, I don’t see much particular justification for first-come first-served, and price is one of the best metrics we have for need in society.

First-come, first-served means a lot of people get them “just in case.” I certainly would selfishly want one, even though I don’t commute to work, it just would be handy when I drive at commute hours.

Dutch auction would result in rich people also bidding on them who don’t really need them. What this really changes is which set of people get them that don’t really need them. In one case it’s the first applicants, in the other case it’s the rich applicants.

However, the bigger difference is in who doesn’t get one that really needs one. With FCFS, it’s anybody who enters the game late. With dutch auction, it’s nobody as long as the number released is sufficient to keep the price in the range any hybrid commuter can readily afford.

And to top it off, it raises some extra money to maintain the lanes.

To be ideal, you would need to be more complex. The hybrid sticker is, as you say, more a reward for being fuel efficient, since it actually increases rather than reduces congestion on the road. As such I agree that the highway-mileage issue may be not so relevant. Ideally hybrids would only be allowed in the lanes when they have excess capacity. When they get full they should get left for people who are actually taking cars off the road. (Kidpoolers and, in theory even co-domiciled couples should also leave the lane at this time though it’s pretty hard to enforce the latter.)

Of course, if you are going to reward the hybrid driver for buying a lower fuel vehicle, it actually would make more sense to reward me (the non-commuter) even more, as I am doing a great deal more to cut fuel consumption by working at home. In the past, I would either bike commute on nice days and drive on rainy ones, again making me much more effective than the regular hybrid commuter. Ditto the commuter who takes the train mostly, but sometimes drives.

In the end, the right way to reward the hybrid buyer is by making gasoline much more expensive. The dedicated lane should be reserved for the people taking cars off the road.