Why congestion pricing can save cities from their worst possible future

By Andrew J. Hawkins

The era of consequence-free driving in cities is nearing an end. New York is poised to put in place the country’s first congestion pricing plan, which would charge drivers a fee to enter the busiest parts of Manhattan. And the Big Apple isn’t alone: cities around the world are weighing radical ideas to curtail driving, ease gridlock, and reduce pollution. Advocates argue that now is the time to tackle the scourge of car traffic before the expected wave of robot taxis descend on city streets en masse.

The logic behind congestion pricing is pretty simple: charge motorists a fee to enter the busiest parts of a city, and use that money to bolster public transportation, which is more efficient at moving people through cities and better for the environment. Faced with paying for something that was once free, many drivers will opt to use some other form of transit instead. The road becomes less congested, the air becomes clearer, and cities become more livable.

In New York, drivers would be charged a fee — probably as much as $10 — to enter Manhattan below 60th Street in Midtown. The new fees will be charged through an electronic tolling system, most likely expanding upon existing E-ZPass technology used for cashless tolling at the city’s bridges and tunnels. If they do not have an E-ZPass tag, a camera would snap a picture of the license plate to bill the driver later. The fees are expected to raise billions of dollars to fix the city’s troubled subway system and thin out streets that have become strangled by traffic. The plan is expected to be approved by early April when the state budget is due, but won’t go into effect until 2021.

New York would be the first US city to adopt congestion pricing, but others could soon follow. Elected officials in Portland, Seattle, and Los Angeles are mulling their own plans to ease gridlock while also raising money to improve aging transit systems. Vancouver is weighing a fee of between $3 and $8 for motorists driving into the busiest parts of the city. And European cities, already known for their strict rules on urban driving and congestion charges, are cracking down even more on gas- and diesel-burning vehicles in an effort to fight climate change.

The timing is critical: Despite early promises that ride-sharing would lead to fewer cars on the road, Uber and Lyft have been found to cause an increase in congestion in many cities. Federal funding to improve and expand public transportation has dried up, leaving cities scrambling to find other revenue streams. And autonomous vehicles, held up as a remedy for the chilling increase in traffic deaths, could actually make things worse. Experts worry that robot taxis could ultimately choke roads with “zero occupancy vehicles,” circling for the next fare or simply running errands. Even if we end up sharing these robot taxi trips with each other, the trips will be so cheap they could poach riders from public transportation, causing ridership to plummet and fare revenue to dry up.

Congestion pricing could halt that future before it begins.

“Congestion charging is vital because the risks of gridlock are so great with [autonomous vehicles],” writes Sam Schwartz, a leading transportation expert who coined the word “gridlock,” in his recent book, No One at the Wheel: Driverless Cars and the Road of the Future.

Congestion pricing has been bouncing around academic circles for decades. Former New York City Mayor Michael Bloomberg tried to pass it in 2007, but was defeated mostly by suburban lawmakers who didn’t like the idea of forcing their constituents to pay for the luxury of commuting into the city. Bruce Schaller, a transportation consultant who helped craft Bloomberg’s plan, said that in the decades since, “the economy is booming, and traffic is worse than ever because more people want to live downtown.”

Add to that a tidal wave of delivery vehicles bearing Amazon packages, and Uber and Lyft cars bearing jockeying for space, and you have a perfect storm of gridlock and pollution in many major cities.

New York’s congestion pricing plan didn’t come easy, or quick. This plan is the fourth attempt to pass congestion pricing in over 10 years. It required near-constant lobbying by advocates, as well as a bit of political finesse to get New York Governor Andrew Cuomo and New York City Mayor Bill de Blasio, who are bitter rivals, to eventually come together and endorse the plan.

Other cities like LA, Seattle, Vancouver, and Portland are “just sniffing at it with studies that will take a while,” Schaller says. But passage in New York could bolster those efforts. New York has led the nation before: the city was one of the first to ban smoking indoors, and more recently, it established a minimum wage for Uber and Lyft drivers.

But no other US city is as far along as New York. Los Angeles has some of the world’s worst traffic, but thanks to its car-centric population, congestion pricing has long been seen as politically unfeasible. That’s changing, but in fits and starts. Recently, the CEO of Los Angeles County Metropolitan Transportation Authority announced that he would recommend “some form” of congestion pricing to ease gridlock and raise enough money to fast-track major transit projects in time for the 2028 Olympics. He advised forming an advisory council to further investigate how a congestion pricing policy would work in LA.

Other cities are inching toward plans of their own. Portland wants to rein in drivers with tolls on two interstate highways — a form of congestion pricing that would require federal approval. That means the Trump administration would have to sign off before the Oregon Department of Transportation could create surge pricing during rush hour on Interstates 205 and 5 near the city’s downtown.

“New York adopting congestion pricing will make a big impression on the West Coast cities,” Schaller said. “Everyone is watching raptly. But they still have to fight their own battles locally.”

Those battles can be fierce, given the polarizing nature of congestion pricing. Critics say it’s a regressive tax, putting an unfair burden on working class drivers who don’t have access to public transit. But supporters point out that most low-income commuters can’t afford to drive anyway, and that extra money for transit improvements will help improve access.

Schaller explained that congestion pricing forces people to consider the full cost of driving. Today, most drivers only pay a fraction of the costs associated with car traffic, such as parking fees or gas taxes. Congestion pricing accounts for how a person’s decision to drive affects other people. These include crashes with pedestrians, bicyclists, and other vehicles, time lost stuck in traffic, and environmental and health problems. Economists call these factors “externalities.”

“Externalities is the economic concept that when you drive, everyone behind you takes a bit longer to get to their destination, in a congested environment,” Schaller said. “So your action creates an external-to-you cost. Price it, and in economic theory an optimal outcome is reached. Or at least you get a step closer.”

Advocates of congestion pricing cite the success of similar systems in cities like London, Stockholm, and Singapore, where traffic speeds and public transit funding have increased while health issues relating to motor vehicle emissions have declined. A study of Stockholm’s air quality after the implementation of congestion pricing found there to be a 5 to 15 percent decrease in pollution. Another study looked at the introduction of the E-ZPass electronic tolling system in New York City and found it “greatly reduced” traffic congestion around tolling plazas, resulting in reduced incidents of premature births and low birth weights for mothers who lived within 2 kilometers of the plaza.

London pioneered congestion pricing, but the system is showing its age. When the charge was introduced 16 years ago, no one foresaw the impact Uber and other ride-hailing apps would have on congestion. From 2013 to 2017, private ride-hail vehicle registrations soared by over 75 percent: these cars are exempt from paying the congestion charge.

The city is now taking corrective action. Under new rules set to go in place in April, some London drivers could pay an additional £12.50 ($16.35) — on top of the £11.50 ($15.04) a day congestion charge — to enter what’s being called the “ultra low emission zone.” It is part of a “polluter pays” ethos — the broad theory that older, more polluting vehicles will have to pay to enter the congestion charging zone.

Paris is taking a somewhat different approach. The “yellow vest” movement last November, in which tens of thousands of grassroots protesters took to the streets of Paris to oppose rising gas and diesel taxes, hasn’t deterred city officials from looking at an outright ban of the most polluting cars. The city’s regional administrative council recently voted to ban older diesel cars from Paris and its surrounding municipalities, a region with over 5 million inhabitants. The council plans to gradually tighten regulations in order to allow only electric or hydrogen-fueled cars on Paris roads by 2030. In central Paris, pre-2000 diesel vehicles have been banned since July 2017.

But whether it’s electric or autonomous or both, a car is still a car, occupying the same space on the road and causing the same headaches for everyone around it. As electric, self-driving cars proliferate, cities might be just swapping one form of congestion with another. Scott Goldstein, policy director of Transportation for America, calls this “clean congestion,” in which people riding in driverless, electric cars find themselves in the same bumper-to-bumper scenarios they do today.

“Congestion pricing can be an incentive to ensure that those [clean congestion] scenarios don’t happen,” Goldstein said. “Pricing isn’t a silver bullet. And you know, it may not be appropriate for every community, but it’s something that absolutely needs to be part of the conversation.”