Are traffic-clogged US cities ready for congestion pricing?
New York is the latest city to contemplate congestion pricing as a way to deal with traffic problems. This strategy, which requires motorists to pay fees for driving into city centers during busy periods, is a rarity in urban public policy: a measure that works and is cost-effective.
From article, (Should road use [in city centers] be free?
The idea of charging for use of public roads is not new. Economist Arthur Pigou discussed the issue as early as 1920 as part of his attempt to remedy the suboptimal workings of the market system. In 1963 Canadian-born economist William Vickrey argued that roads were scarce resources that should be valued by imposing costs on users.
Consumers intuitively understand differential pricing. We expect to pay more for airline tickets at peak travel times and for hotel rooms at popular times of the year. Congestion pricing operates in the same way. By increasing prices, it forces users to think about the cost of making a trip. A congestion tax is what behavioral economists call a “nudge” that makes people evaluate their travel patterns.
And it can be effective. A 2008 study gave drivers in Seattle a hypothetical cash sum to spend on trips, charged them tolls linked to traffic congestion levels, and let them keep money they did not spend. Their cars were fitted with equipment to monitor driving patterns.
The results showed that pricing affected behavior: Travelers altered their schedules, took different routes or collapsed multiple trips into single journeys. Collectively, these changes reduced congestion at peak time, lessened wait times and increased average travel speeds in the study’s regional traffic model.
Congestion pricing in practice
Singapore was one of the first major cities to introduce congestion pricing in 1975, charging US$1.30 for a vehicle to enter the central business district between 7:30 and 9:30 a.m. The policy had political support because most residents used public transport, with only the wealthiest driving private cars. The tax was viewed as a more equitable distribution of costs.
The net result was that congestion was reduced and travel times improved. Between 1975 and 1988, the project generated revenues 11 times larger than its costs. Pollution decreased and pedestrian safety improved. In 1998 Singapore shifted to variable charges that target congested road stretches and vary by time of day and travel direction.
London introduced congestion pricing in 2003, charging motorists, entering central London between 7 a.m. and 6 p.m. on weekdays, 5 British pounds (about $7) per day. The scheme generated 2.6 billion pounds (about $3.63 billion) in its first decade, almost half of which was invested in public transport and infrastructure improvements.
The Congestion Charge, as it is known, reduced the number of automobiles entering the city by 44 percent from the pre-charge level and slightly reduced traffic accidents. Air quality in central London also improved.
The charge did produce some unintended consequences. House prices within the Congestion Charge zone increased – bid upward by consumers who appear willing to pay to avoid traffic and enjoy improved environmental conditions. Over the long term, the congestion tax lubricated the gentrification of central London.
But this process is common to many other big cities, with or without congestion pricing: The rich preempt central city locations and displace the less wealthy to the suburbs.
Stockholm introduced a congestion tax in 2007, after a seven-month trial and bitter political fights. Vehicles entering the central city were charged different rates over the course of the day, reaching 35 Swedish kronor (about $4.40) during morning and evening rush hours.
The tax gradually gained public support and decreased congestion as commuters shifted to public transport. Other Swedish municipalities have since copied the scheme.
Currently, the proposed plan for New York City would charge cars $11.52 cars to enter Manhattan below 60th Street on weekdays during business hours. Trucks would be charged $25.34, and taxis and app-based rides such as Uber and Lyft would be charged $2 to $5. The tax would generate $1.5 billion yearly.)
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