Congestion pricing is part of the solution to gridlock

The problem of traffic congestion is reminiscent of Mark Twain’s comment about the weather, “Everybody talks about it, but nobody does anything about it.” It is no easy matter to deal with the congestion problem in major urban centers.

New York is getting ready to address the issue with a congestion pricing plan. After many years, it may be an idea whose time has finally come, but there is even more governments can do to combat traffic bottlenecks.

Congestion pricing advocates point to an array of health, safety, and environmental benefits, including air pollution, pedestrian injuries, and unclogging city streets. They cite the success of congestion pricing plans in places like London, Stockholm and Singapore.

These cities use different methods to toll drivers in their respective congestion zones. London uses a video surveillance system to record car license plates. Singapore uses larger gantries with sensors to read license plates, or directly charges E-ZPass-like units in cars. Stockholm has installed gantries and cameras at all entry points to the tolled zone.

Some New Yorkers claim congestion pricing is an unfair tax that disproportionately hurts poor people who do not have access to public transit. While affluent motorists can pay for a quicker ride, the working class will struggle to pay the toll. Suburban commuters, of course, see the plan as benefiting the city at their expense.

After years of hesitation, New York is on the verge of becoming the first U.S. city to charge motorists for driving into a central business district. The program is expected to be implemented in 2021, once the necessary infrastructure is in place.

The congestion pricing plan will help pay for badly needed repairs to the city’s transit system and reduce gridlock. The goal is to generate $1 billion annually to secure the issuance of $15 billion in municipal bonds.

Drivers could pay $12 for cars and $25 for trucks to enter the heart of Manhattan. Prices may vary based on time of day and traffic volume, and potentially offer exemptions and credits to certain travelers, such as discounts for buses, taxis and motorcycles. For example, residents in the congestion zone who earn less than $60,000 annually will be eligible for credits.

Not surprisingly, politicians avoided making many of these difficult decisions. Instead, they will be made by a six-member Traffic Mobility Review Board.

The idea of road pricing was developed by Professor William S. Vickrey, the 1996 Noble Prize winner in economics who passed away four days after winning the prize. He argued that the consequences of not charging motorists for their rush-hour usage could be “disastrously expensive”.

Society pays a high price for congestion. When traffic flow nears maximum road capacity, each additional motorist imposes a delay on others (as density increases, speed drops and travel time lengthens). The delays increase geometrically. Vickrey argued that only peak-load pricing could solve the congestion problem in urban transportation.

Major U.S. cities including Los Angeles, San Francisco, Seattle and Boston are exploring various forms of congestion pricing to unclog city streets and raise money for transportation. And the time may be right to consider tying price to performance. Money-back travel time guarantees could be offered to help customers accept higher prices for transportation services.

For instance, a turnpike a charge of 10 cents per mile during a particular time of day would be linked to a minimum average speed. If the average falls below the minimum, customers are charged progressively less. Advances in technology make it possible to put customers first and introduce a new level of accountability for public transportation providers by offering these guarantees.

This would promote customer trust and acceptance of pricing changes and provide a turnpike operator with an incentive to insure that the road is providing superior service. Former House Speaker Tip O’Neil famously said, “All politics is local”. The same can be said for trust in government transportation agencies.

Originally Published: April 12, 2019


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