Charging for Congestion in New York

Charging for Congestion in New York

April 13, 2018  | Robert Puentes

April 13, 2018

In the early 2000s, the United Kingdom faced a big problem. Congestion in its cities was rapidly growing, causing long delays on the roads and leading to severe overcrowding on the commuter rail networks. The links to the UK’s international gateways for both freight and passengers, were under increasing pressure. Rail freight lines and strategic road links to ports and airports were heavily congested and often beyond capacity in peak times.

Something had to be done, not just to relieve the traffic headaches people there were experiencing, but also because the transportation problems were starting to choke the national economy, particularly in and around metropolitan London.

If that sounds familiar to the United States today, it should. In major metropolitan areas like New York, transportation challenges dominate headlines and for good reason. The data firm Inrix recently named New York the third worst-congested city in the world, ahead of Sao Paulo, Bangkok, and Jakarta. At the same time, New York Governor Andrew Cuomo declared a “state of emergency” for the city’s transit system. As it was in London, now is the time for bold action.

What’s different is that while the UK acted with deliberateness and purpose to address these problems, here in the United States we dither.

In response to their transportation threats, in 2003 London introduced an area-based congestion charging initiative in the central part of that city. All cars entering the zone during the workweek are charged a fee with the intent to reduce demand to the level of maximum efficient use of road capacity. Under some schemes pricing can vary based on time of day or amount of congestion but London’s is a flat fee.

The justification is that vehicles entering the cordoned area impose costs (congestion, carbon emissions, road damage) on the residents of the area that is unfair and cannot be supported by the local tax base. Sir Rod Eddington, who chaired a national study on transportation’s impact on the UK’s productivity, stability and growth, called it “an economic no-brainer” because dense city centers work most efficiently when public road space is allocated in a manner that best sustains overall quality of life.

Keeping those cities moving are dense public transit networks that receive direct revenue from the congestion pricing programs. These lessons are evident internationally in cities like Singapore, Stockholm, and Milan each of which adopted their own cordon pricing policies. While there are no area-wide models in the United States, some places like Virginia implemented congestion pricing on discrete corridors and earmarked revenue for public transit.

A comprehensive congestion pricing plan was nearly implemented in New York a decade ago but died in the state legislature. And despite declaring last year that the time for congestion pricing has now come, Governor Cuomo recently ignored plans for a sensible strategy and instead endorsed a narrow scheme to cap and tax ride sharing vehicles like Uber and Lyft in order to reduce traffic.

This is a mistake. Without a doubt, raising money for the transit network is absolutely critical for New York. But, alone, it is a poor proxy for broader economic, social, or environmental goals that should be the ultimate outcome of a bold congestion-relief plan. It will only serve to reinforce the atomized debate between public transit and cars, outer neighborhoods and inner neighborhoods, or traditional taxis and other vehicles for hire. It also does nothing to address the particular problems traffic congestion and a crumbling transit system have on lower income households. The current system of transportation funding and finance is not at all neutral with respect to income, and the cap and tax plan makes it worse, especially for neighborhoods with poor transit access.

New York should abandon the staccato approach of a tax on ride-sharing cars with the vague promise of additional reforms later. The governor and mayor should put their weight behind a comprehensive plan to charges all vehicles that travel in central Manhattan during peak periods. The phased approach recommended by the gubernatorially-appointed Fix NYC Advisory Panel is optimal but there must be a formal commitment to all elements of the strategy.

The London congestion zone succeeded precisely because it was part of a far-reaching policy less concerned about transportation as it was about the economy. In other words, leaders there did not set out to address problems like congestion in and of itself: but worried about the effect of congestion on users.

With cities like New York facing crushing fiscal challenges today, examining the economy through a transportation lens—with recognition of environmental and social factors—is something policymakers in this country should emulate.

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