How Basic Economics Could Solve Manhattan’s Traffic Problems

It's simple: Charge people to bring cars onto city streets during rush hour.

Cars driving at night in front of the Queensboro Bridge
Frank Franklin II / AP

The worsening traffic in New York City is a personal inconvenience, an environmental blight, and an economic drag—possibly to the tune of $20 billion. That’s the latest projection by the Partnership for New York City, a group that represents businesses, of the annual loss for the metro area over the next five years if nothing is done to unjam cars.

Congestion pricing—essentially, tolling cars to enter crowded streets during rush hours—is widely viewed by transportation advocates and researchers as an essential intervention into the city’s growing transportation crisis. It’s an idea that’s succeeded elsewhere—since London cordoned off a fee zone in 2003, the number of cars entering its city center has declined 44 percent. Congestion pricing was last seriously attempted under Mayor Michael Bloomberg in New York City in 2008, but there’s still no precedent in the U.S. for such a system.

That could soon change, if a report by Fix NYC, a traffic advisory panel appointed by New York Governor Andrew Cuomo in October 2017, turns into law. Released last week for review by the New York state legislature, the report recommends a plan, with three phases, for smoother streets and more transit revenues. It suggests a charge for driving into Manhattan’s core. One possible number: $11.52 for personal vehicles. Here are the three phases.

Phase One: Fix What’s Broken

Between cheaper gas prices, population growth, unreliable transit, and the rise of ride-hailing apps, average speeds in the central business district of Manhattan slowed by more than 17 percent in 2016, to 6.8 mph.

Phase one, which the report recommends starting immediately, involves identifying improvements for transit connections between New York’s central business district and the outer boroughs. That means restoring the subway to a state of good repair, for which no one should hold their breath. (That Herculean task could take billions of dollars and decades of work.) But there are faster and more affordable fixes, too, such as improving bus service and introducing new express bus routes to poorly connected neighborhoods. The Bloomberg administration called for this when it pushed for congestion pricing. Local advocacy groups have continued to demand the same. (And—why not?—the city could throw in some streetcars, too.)

Phase one also suggests reforming the city’s much-criticized parking-placard program, reviewing parking laws for Manhattan tour buses, and stepping up enforcement by the NYPD of moving traffic violations—a potentially rich source of revenue for the city and state.

New York City’s Parking-Ticket and Moving-Violation Revenues
Chart: Fix NYC | Data: New York City Comptroller

Phase Two: Tax Uber and Lyft

On-demand vehicles are having an undeniable impact on urban mobility: Uber and Lyft are drawing riders off trains and buses, and packing more vehicle-miles traveled on city streets. Especially troubling is how many of these cars are roving free of passengers: Research by the transportation consultant Bruce Schaller, cited in the report, found that the number of hours for-hire vehicles spent without riders “rose from virtually zero in 2013 to 36,500 by 2017,” resulting in a proliferation of waiting drivers and empty seats.

To discourage idle driving and unnecessary trips, Fix NYC calls for a surcharge on all for-hire vehicles in Manhattan’s central business district, starting in 2018. (Chicago has already implemented a similar charge.) After a 10-month period allowing companies to install the appropriate GPS technology, all taxis, Ubers, Lyfts, and other on-demand vehicles could be subject to a fee ranging from $2 to $5, depending on location, time, and day of the week.

The report’s emphasis of this phase of the plan is noteworthy. Taxing ride-hailing firms could be a big moneymaker for the needy buses and trains of the MTA. With the number of these vehicles on the road, the annual surcharge revenues could range from $155 million to $605 million. “This is the growth industry which we can get revenue from,” said Mitchell Moss, a professor of urban policy and planning at NYU who served on the Fix NYC panel.

That’s a big difference from 2008, the last time the city pushed a fee-based traffic-taming plan. A decade ago, the iPhone had only been out for a year and Uber was merely a pitch deck. It would be three more years before Uber launched in San Francisco and revolutionized urban mobility, for good and ill. Indeed, in 2008, the number of cars crossing into Manhattan from outer boroughs was peaking; it has since declined. Now, the intense growth is found in the number of vehicles within the core of Manhattan.

Taxing those for-hire vehicles may not reduce congestion by much, according to Schaller. Wealthier riders who are opting for the ease and comfort of Uber and Lyft over the hassle and uncertainty of New York City transit might not be sensitive enough to price. Rather, the surcharge “should be aimed at raising as much revenue as possible,” said Schaller.

Phase Three: Price the Roads

At peak travel times, the number of cars on urban roads and highways will always rise to meet maximum capacity—that’s the law of congestion. Building public transit can only mitigate, not reduce, the crushing demand for road space. Half a century of transportation research, as well as case studies in Stockholm, London, Singapore, and beyond show that there’s only one way to reduce congestion: charging people to drive.

Per the recommendations of the Fix NYC panel, driving into the heart of Manhattan at the busiest times of day should cost something. One idea that the report throws out is a daily charge that’s roughly double a one-way Port Authority bridge toll, which would be $11.52 for cars and $25.34 for trucks. The revenue, which would go to the MTA, would be considerable, as would the traffic benefits. The report estimates that such charges would raise something on the order of $800 million each year, reduce the number of cars entering the city center between 6 a.m. and 8 p.m. by 13 percent, and increase average traffic speeds by 9 percent.

The panel recommends that this final phase of “zone pricing” start in 2020. The question is, can it pass political muster? Previous attempts by Mayor Bloomberg to charge drivers for entering the busiest parts of the city failed in the state legislature—members from the outer boroughs and suburbs were not onboard with taxing car commuters. The Fix NYC plan is sure to face similar concerns from state representatives in some of the same areas. “It’s an uphill climb every time,” said Schaller.

Congestion-pricing advocates also have a big problem that Bloomberg-era boosters didn’t: The current mayor isn’t on their side. Bill de Blasio opposes the idea, on the grounds that it would be burdensome to lower-income drivers. The response from the pro-charge crowd is that the current costs of congestion are disproportionately borne by poorer New Yorkers, who also depend on the mass transit that a congestion fee would help fix.

With the MTA desperate for revenue and the effects of Uber and Lyft vehicles being felt on the road, a surcharge on for-hire vehicles would likely be an easier sell in the statehouse than zone pricing. But as the city’s traffic crisis came to a head this past year, congestion pricing’s status has risen from wonkish footnote to actual public discourse. (Below, a graffitied cri de coeur sighted by a friend in a New York City bathroom.)

The Fix NYC plan is only the start of a political process; the state legislature must debate and approve the details before any of its contents become law. There is no precedent for a true congestion-pricing scheme in the U.S., and the idea has failed in New York City before. But this time, the political calculus is different, and the pressure is overwhelming.

This post appears courtesy of CityLab.