What Didn’t We Know About Congestion Pricing?

Advertisements like this one, meant to win people over to congestion pricing, just sound bitter after the death of New York’s proposed plan last week.

And New Yorkers will likely continue to see Varick Street as I did at 7:00 last Thursday evening:

INSERT DESCRIPTIONVarick Street, 7 p.m.

But even while the debate was still raging, many of the plan’s particulars were unclear — specifically, just how fees would have been collected.

Jeff Zupan is a senior fellow for transportation at the Regional Plan Association — an independent, not-for-profit, regional planning organization which testified to the New York State Assembly in support of congestion pricing. He advised Times readers about congestion pricing in its early stages, and has agreed tell us what, exactly, we are missing (or not missing) out on.

INSERT DESCRIPTIONJeff Zupan

Q: Can you explain how the plan would have worked?

A: This is the woulda, coulda, shoulda answer.

The congestion pricing plan would have charged passenger cars $8 and trucks $21 to cross into the charging zone in Manhattan from 60th Street and southward between the hours of 6 a.m. and 6 p.m.

Vehicles that had crossed the tolled bridges and tunnels at the Hudson and East Rivers who used E-ZPass would have had their congestion charges “offset,” meaning that no vehicle would have paid more than $8 (or $21). Those vehicles without E-ZPass would have had a $1 surcharge.

There were some less-discussed elements of the plan:

There would have been a $1 surcharge on taxi trips entering or leaving or made within the zone during those times, an elimination of the current exemption from the off-street parking sales tax for zone residents, and more widespread parking meters and higher charges for them.

Collectively — after deducting for the cost of installation of the detection system — the congestion pricing plan was estimated to raise $491 million per year — with the funds dedicated to the M.T.A. for transit improvements.

In addition, the federal government would have provided $354 million for immediate improvements upon passage of the plan by the State Legislature which has now been lost to other cities for their congestion relief programs (sigh).

Q: Might the plan be reconsidered and what parts of it would have to change in order for this to happen?

A: While congestion pricing is dead for the time being, the terms of the debate have been changed:

Most people now recognize that congestion is a serious problem and that something can be done about it. There is also a growing movement nationally to charge drivers more directly for the use of the roads and technology. This will make charging easier and more sophisticated in the future by allowing for time-of-day, day-of-week, and level of congestion pricing.

The legitimate and huge funding gap for transit in New York will be difficult to meet solely by other means. Congestion pricing will come to New York, but for now it is an idea whose time has not quite come.

As to the second part of the question — given the likelihood that the charging part of the congestion pricing plan will now go into hibernation, the more relevant question is: what ideas for addressing traffic congestion other than pricing are likely to be considered?

The list is long, but the crackdown on illegal and unnecessary parking placards for city employees heads everyone’s list. The city is doing that but needs to be more aggressive about it.

There should also be more parking meters charging more, more taxi stands, and more traffic enforcement using more traffic enforcement agents.

Many of the short-term actions on the transit side are now problematic with the loss of the federal funds for congestion pricing and the pace of longer term actions like the Second Avenue subway and L.I.R.R. access to Grand Central are jeopardized by the loss of the congestion pricing funds (second sigh).

Q: Had the plan been implemented, what improvements do you think the city would have seen the fastest?

A: The federal funds, when combined with other M.T.A. funds, would have been used for new transit services even before the pricing system was in place.

It would have included 367 new buses for 12 new routes and increased service on 33 existing routes.

An improved exclusive bus lane at the East River would have been established and subway service would have been expanded on the 1, C, E, and F lines. Ferry services, two new park-and-rides, two new bus depots, and five bus rapid transit lines would have been established.


Q:
How would the technology used to collect tolls have worked? Would the city have had to invest in additional technology? If so, where would this money have come from?

A: The technology would have been a combination of the E-ZPass detectors used today and photographs of license plates for those without E-ZPass.

Today, three-fourths of all drivers using toll facilities have E-ZPass, so only one-fourth would have required a photo and, with the financial incentives to use E-ZPass, that percent would have dropped further.

Those who did not want to enter the E-ZPass system could buy transponders for cash at outlets around the city. Detection would occur at the two dozen entryways into the zone.

The capital expenditure to set up the system was estimated at $120 million, which would have been paid for with the initial revenues collected.

Q: What would have happened to street parking on the border zones?

A: In Manhattan probably not much. Few would have driven all the way to the edge of the zone only to look for unavailable street parking. And the high price of parking in the 60’s — at the same levels as south of 60th Street — would have further deterred them.

The problem might have been greater in the parts of Brooklyn or Queens where drivers might be able to hop on the subway to save the $8. But the residential parking permit program could be put in place to prevent that.

Q: Were cities that already have congestion pricing used as models when the New York plan was devised?

A: Yes, London, where the congestion charge has been in place since 2003 and has reduced traffic delays by 30 percent and sped up buses that now have less competition for street space.

London relies solely on costly license plate photography and is thus inefficient, leaving only a small amount for transit. We would have been much better off because of E-ZPass (third sigh).

We asked Todd Litman (founder of the Victoria Transport Policy Institute), who wrote a paper on London’s congestion pricing program, how London’s plan is faring and what he thinks New York is missing:

INSERT DESCRIPTIONTodd Litman

LITMAN: Pricing can result in a more economically efficient use of the limited road space, and — unlike congestion or other forms of rationing (such as H.O.V. lanes or vehicle restrictions based on license-plate numbers), it provides a revenue stream.

We can say that congestion pricing is the “smart” way to respond to traffic congestion problems, and that people who oppose congestion pricing are voting in favor of traffic congestion.

Experience in the cities of London and Stockholm indicates that after congestion pricing is implemented, public support tends to increase because people experience the benefits it provides.

However, despite these justifications, there are many obstacles to implementing a new congestion pricing plan.

First, it seems counter-intuitive to consumers that they would actually benefit by being forced to pay for a good that they currently get for free (that is, road spaces). In addition, citizens must believe that the revenues will be used efficiently, in ways that will ultimately benefit them.

The methods currently used to collect congestion fees tend to be costly (including financial and inconvenience costs to motorists as well as tolling authorities), and often raise privacy concerns. Most systems only price a small downtown area, and so only affect a minor portion of total regional travel.

Also, there are usually some groups that expect to bear more costs than benefits, and they tend to be very vocal.

For these reasons, most politicians are reluctant to support congestion pricing, and so implementation requires an unusual set of circumstances: severe traffic congestion problems, a political system that can effectively resolve conflicts, and politicians willing to take risks.

Q: What is N.Y.C. missing out on by rejecting the plan?

A: By rejecting congestion pricing, New York is choosing to suffer more years of severe downtown traffic congestion.

However, there were significant problems with the recent proposal: it was a flat fee (that is, it was not higher during peak periods and lower during off-peak periods) and relied on a relatively expensive pricing method. Also, it would only apply to a relatively small portion of total regional roadways.

If New Yorkers are smart — and sufficiently frustrated with traffic congestion — they will begin now to develop a new and better plan to be introduced next year.

Although I support congestion pricing, I think that there are other effective and efficient ways to improve urban transportation, including more efficient parking management (such as parking pricing and cash-out policies), distance-based vehicle insurance and registration fees, bus priority systems, transit service improvements (such as upgrading transit stations, and offering refreshments and WiFi services on commuter buses), walking and cycling improvements, and policies to increase the amount of affordable housing near transit stations.

Interest in congestion pricing should not distract from efforts to implement these other, complementary policy reforms.

Q: What concessions were made to London’s equivalent of N.Y.C.’s objectors — i.e., residents from outer boroughs, low-income drivers, etc.?

A: London’s program offers a very large discount to residents living within the priced area, and exemptions for certain groups, such as people with disabilities and motorcycles.

Q: What improvements happened fastest when London’s congestion pricing plan was implemented and what were the most immediate benefits?

A: London’s congestion pricing program substantially reduced congestion delays for automobiles and buses in the downtown core, and provided comparable reductions in air pollution and accidents.

It was implemented in conjunction with improvements in walking and cycling conditions and public transit services — particularly bus service. It is therefore difficult to know exactly which factors contributed most to improving transport system performance.

Q: How have attitudes toward the plan changed in London?

A: Mayor Ken Livingstone was re elected after the road pricing program was implemented, suggesting that residents supported the program overall.


Michael

If public transportation is convenient enough, and people still choose to drive. That's a problem with the people, then congestion pricing will work.

On the other hand, if public transportation is bad, and people were forced to drive. Then congestion pricing will not only fail, it will affect many other parts of the economy.

It all boils down to, how much money people are willing to pay for the time they saved from driving. For people who driving into Manhattan these days, I'm sure the extra $8 doesn't mean much.

Matt

What I love is that, near as I can tell, of the 14 vehicles in the picture 9 of them are SUVs and one is a school bus. Now, I don't have anything against SUVs per se, but nothing adds insult to injury like being stuck behind an SUV and not being able to see what is going on up ahead.

James Barlow

One of the problems with congestion charging in the UK is that it is not treated as an alternative to other forms of taxation but a supplement. People are not confused by "being forced to pay for a good that they currently get for free", but rather painfully aware that they are paying twice.

For example, in London the congestion charge does not replace road tax (now to be calculated for each model of vehicle based on "carbon output"), or duty on fuel (now 50% of the pump price, currently circa $8 per gallon)

MS

I just think Annika Mengisen is the cutest Freakonomics blog author.

Zach

What I'm most upset about is that there was no public vote. I want to know if my representative was in favor of congestion pricing, and I want them to be responsible to me for this mistake.

Ken Wheaton

"It would have included 367 new buses for 12 new routes and increased service on 33 existing routes." ... So even before congestion pricing is put into effect, we're going to put over 300 new buses on the road! Brilliant!

But as a subway rider, it's the subway "plans" that made me pretty anti-congestion: "Subway service would have been expanded on the 1, C, E, and F lines."

How does one EXPAND subway service ... especially on those lines? You can't add any tracks, so what are you going to do? Flood another million people into the subway system and then ... add more trains? Maybe stack them end to end so we can just walk from one stop to the other. Or perhaps they could build some system that travels in another dimension? That, after all, is just as realistic as expecting any results from the MTA.

And we all must be forgiven if we don't trust the MTA to do anything right, on time or on budget. Time and time again, they've been given stacks of money -- from price hikes, from federal grants -- to finish projects such as the Second Avenue Subway and the Fulton Street renovation. And what have they to show for it? Thirty years of case studies in incompetence.

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Kevin L

If drivers are willing to deal with the traffic in the picture displayed, then they're already paying the cost. Me personally would not drive into Manhattan on a regular basis. But I guess the spillover costs such as air pollution and crowding out drivers like me from wanting to drive into Manhattan. Supporters of congestion pricing were probably mostly people who felt strongly against the spillover costs. But has anyone ever try to demonstrate to the drivers that driving into Manhattan isn't efficient? Or is it actually most efficient for these drivers and the alternatives pale in comparison. These drivers don't mind the cost of the car, insurance, gas, and their time. To them, it must be more costly or impossible to do the alternative.

Robert L. www.neolibertarian.com

As Litman pointed out: the New York scheme was not congestion pricing: Manhattan traffic is not the same from 6 AM to 6 PM; this was just a revenue grab. The taxi fee is another example: you don't want anyone to drive but then you put a fee on taxis, thus forcing people to drive if they want any flexibility? The taxi fee makes no sense if congestion is the problem but makes huge sense if the goal is just to bleed more taxes out of New Yorkers.

Also, once the tax is in place there is no reason to expect that it will not be expanded, used for other purposes (like London's carbon tax), and used for any purpose the politicians want to. The idea that a pile of tax money will only be used for the projects that are promised is not borne out by any observation of government.

mike

Congestion pricing works very well in London, fact 1. Fact 2, the idea that these SUVs or any vehicles, are paying the price is nonsense. That is the reason mass transportation is not supported enough in this country because the externalities are not included in calculations. The delays caused to people that live in the city are not included in a cost calculation. The impact of pollution is not calculated. And for certain, given that Federal gas tax never seems to rise anymore, you are not paying for the true wear and tear on the infrastructure.

Annoyed

"The problem might have been greater in the parts of Brooklyn or Queens where drivers might be able to hop on the subway to save the $8. But the residential parking permit program could be put in place to prevent that."

So you are going to charge people for driving into Manhattan to encourage them to take transit, then discourage them from taking transit by preventing them from parking near the trains. That makes no sense.

I would actually favor a congestion pricing system that is well thought out, but I agree with the previous posts that there were too many problems with this one.

The picture with this article is also misleading. Why is there traffic on Varick St? Two words: Holland Tunnel. Even with the congestion charge the tunnels to NJ will always be a bottleneck at the evening rush hour. There could be some improvement farther away from the tunnel entrance, but not on Varick St.

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ACE

I know it seems like a bunch of people are for the pricing plan. I am against it, but I can understand where those for it come from.

Those of you from NYC, should probably ask their councilman about it. Then you should look up councilmen specifically against it. I thought councilman fidler had some good things to say.

NAAT (Britain)

Claims such as the "Congestion Charge" reducing traffic delays in London by 30 per cent are a complete fantasy.

It is true that over the day there are a smaller number of vehicles in the London tolled zone, but the vehicles whether inside or outside the zone are now moving slower than before (and at speeds which are a lot slower than New York currently experiences). If people in New York don't believe this then they should look at some of the reports in the London Evening Standard.

All "congestion pricing" does is line the pockets of the companies that run the schemes while forcing some of the poorer drivers off the road to be replaced by richer people.

D

As a current train commuter into NYC, I would not have a problem paying $8 to drive into the city if it means less congestion and faster commuting times, rather than take the hellish and expensive commute on the trains.

To be honest with you, I feel like the ones promoting the congestion pricing plan (who I assume are public commuting lovers) stand the most to lose from the congestion pricing plan. You are already packed like sardines with slow travel times, and now you're asking for more??

David

Mike, 'NAAT',

could you explain WHY you think traffic is moving more slowly and is more congested now than ever?

don't you think the situation would be even worse if there was no congestion charge?

carbon-consumption taxes are the way of the future so you'd best get used to it...

Mike

You wackos that keep on insisting that the congestion plan in London is working, the DAILY NEWS ran an article the Sunday before the plan died with the truth of the matter in London saying that the first year the traffic did decrease but a few years now later the traffice is congested and mayeb even worse then before, BUT WE LOVE THE MONEY WE ARE RAKING IN!

So as we have been saying this was never about congestion it was about MONEY!

If you really want to stop congestionm get rid of 10,000 taxis in the city. If Bloomie has such a great transit system everyone especially the millionaires should hope on a bus or subway for the three or four blocks they need to go to for their meetings and power lunches!

To say that my passenger car is causing all the kiddies in the city to get asthma but the 10,000 cabbies driving beat up and dirty smoke spewing clunkers do bot contribute to asthma shows why the plan failed. As always it was based on politicians "hey we will make all this money" which really never pans out.

So you want to stop congestion, easy get rid of taxis in NYC, stop double parked cars, ticket them all to bring money into the city. Stop building on every single street at the same time, finish one project before tearing up another, ticket every car that goes thru a red light and then blocks cross street traffic, make pedestrians walk a bit faster instead of walking like Stepin Fetchit as cars try to make right turns. Then aftr doing all this charge the 8 dollar toll on every bridge and crossing! To be fair to all and to raise money. The MTA on the other hand needs to stop paying execs millions and hundreds of thousands each year, if us poor schlubs are making 45,000 or less a year so should they, they should also be willing to take the buses and subways then you will see how quick they are cleaned up!

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addicted

Despite claims that with congestion pricing, people are paying twice, the fact is that this is not true. Well, at least not in the sense intended. Actually, all that is happening is that the users of the road are paying more, but are fortunate since they are being subsidized by people who are not using the road (who pay through taxes outside of congestion pricing).

I agree that NYC's plan was not true congestion pricing, in that it insisted on a flat fee, however, it is better than the alternative that is currently prevalent, where people are paying for the overuse of roads by a) enriching Saudis, and b) wasting time. Under even the flawed NYC plan, this money would have gone instead to their companies (increased productivity) and the rest of NYC (better public transport, combined with less money leaving the country for gas).

Paul C

As a person who commutes into London every day, I'm convinced traffic has eased considerably and air pollution reduced since the congestion charge was implemented.

It's been so successful, the zone is about to be expanded and differential pricing is going to be introduced - large gas-guzzlers will have to pay ?25 per day to enter the zone - a serious deterrent I think.

Don't believe anything the Evening Standard says on the issue or anything else to do with Ken Livingstone. It is a very right-wing newspaper (owned by Daily Mail newspapers, which if you know UK news, says it all) and they have pursued a vendetta against the very left-wing Ken Livingstone for the past few years.

New York, you missed a trick. Hope you get another go at it in years to come.

Hydra

" the congestion charge has been in place since 2003 and has reduced traffic delays by 30 percent "

It is important to undertand what this means. The way it is done is to take a particular trip under uncongested conditions, at two AM or something. Then repeat the trip during rush hour. A trip that takes thirty minutes under free flowing conditions might take 40 minutes during rush hour - A thirty percent increase and a congestion delay of ten minutes. If you reduce the congestion delay by one third, your $8 congestion fee bought you a savings of three and one third minutes.

RH

D

When the NYC taxis went on strike a few months back... oh man, that was heaven.

I look around the streets here and all I see are taxis, town cars and delivery trucks - all commercial vehicles. There are hardly any personal cars on the roads in NYC.

Max

I am in favour of expanding the congestion charge zone for London to include anything inside the M1.