New York's congestion toll plan could learn from the London experience

The officials crafting New York City’s new traffic fee should take a leaf from President Joe Biden. His multi-billion dollar cleantech giveaway was branded the Inflation Reduction Act for a reason.

As for Manhattan’s forthcoming Central Business District Tolling Program … what even is the Central Business District? In a city where real estate agents invent neighborhoods with shameless, and manic, creativity — SoBro? RAMBO? — we can do better. More substantively, a new toll should, even in the name, be directed at something people don’t want. People generally want “business.” What they don’t want is to be in a gridlocked taxi with the air-con set at something approximating an angel’s whisper.

Two decades ago, another great city, London, put a price on driving and called it the “congestion charge.” New York, where drivers could start paying a fee as soon as next Spring, could learn from that simple branding, and more besides.

A congestion charge, like a carbon tax, puts a price on an externality previously absorbed by the commons. It does this by raising the cost of something — in this case, driving your vehicle in a certain area — and thereby reducing demand for it. But when it comes to mobility, the circulation that keeps a city alive, you can’t choke off one means of transport without providing an alternative.

In the run-up to instituting London’s congestion charge in 2003, the mayor’s office made two things clear: That the charge was aimed at alleviating gridlock in the city center and that the proceeds would be used to help revamp a public transit system that had suffered long decades of underinvestment, viscerally symbolised by the King’s Cross tube-station fire of 1987 that claimed 31 lives.

Still living in London back in 2003, catching a bus to my job was usually a crapshoot as to whether I would get to work on time. Much of central London, particularly the financial center of the City, is a warren of narrow streets that emerged long before motor vehicles were invented; the slightest disruption could cause traffic to seize up. Average vehicle speed for the morning rush hour in central London fell from 12.2 miles per hour in the 1977-82 period to less than 10 miles per hour by the time the congestion charge came in. Moreover, south of the River Thames, where I lived, the underground rail system was relatively sparse compared to north London. Waiting for a night-bus or negotiating with a taxi driver to take you to south London late in the evening required the patience of a saint or the skills of a seasoned diplomat, respectively.

The day the congestion charge debuted — February 17, 2003, timed for the school vacation — 300 new buses hit London’s streets. In the five-year period between 2001 and 2006, bus capacity overall, measured in distance operated, jumped by 26% or almost 100 million kilometers (62 million miles). Traffic circulating in the congestion zone, measured in distance driven, fell by about 15% virtually overnight, most of that being private cars. Bus speeds and waiting times improved. Gradually, the underground system was extended, too, including the innovative reorganisation of the East London line as a longer surface rail service and, of course, the eventual construction of the mammoth Elizabeth line across London. Regarding the latter, New Yorkers should imagine being able to get on a subway train at JFK and having it whisk them all the way to the northern reaches of the Bronx.

In some ways, New York has advantages over London in making a congestion charge work, according to Jonathan English, a fellow at New York University’s Marron Institute of Urban Management. Unlike London’s tangle of hundreds of roads converging on its central congestion zone, the area designated for Manhattan — the area below 60th Street apart from the highways running around the edge of the island — has relatively few entry points to monitor. Moreover, some of those already have backhanded congestion tolling in place: The bridges and tunnels operated by either the Metropolitan Transportation Authority or the Port Authority. Plus, Manhattan’s avenues are built for vehicles in a way central London’s are not.

The existing tolls themselves, however, illustrate a hurdle to be overcome: They vary widely, in part because of overlapping jurisdictions. English tells me of how, when he lived in Williamsburg in Brooklyn, unusually heavy truck traffic would roll down Metropolitan Avenue in order to use the free Williamsburg Bridge and avoid the relatively close Queens Midtown Tunnel. An important foundation for London’s congestion charge was the then-recent reorganisation of city government under its first mayor, including the formation of a single entity overseeing most roads and transit, Transport for London. For New York, tight coordination on how a new congestion toll interacts with (perhaps more uniform?) existing tolls would probably help.

The critical thing, though, is better public transit. Ridership on MTA services increased by half in the two decades leading up to the pandemic, while spending on improvements fell by 8%, a fact visible in the very fabric of much of the subway network. Four-fifths of net revenue from the congestion charge is pledged to be spent on buses and subways, with the rest going on Metro North and the Long Island Rail Road commuter networks (condolences to those using New Jersey Transit, even before a possible influx of new passengers priced out of driving).

New York is different from London in that the subway carries more passengers than buses do. On this front, the recent pandemic offers a silver lining of sorts: Subway ridership is still running about a third below pre-pandemic levels, leaving capacity available to absorb displaced drivers (or at least those who can reasonably get to a stop). On the other hand, it takes more than just seats to attract riders and, as my colleague Justin Fox wrote here, violent crime on the subway has jumped since 2020, adjusted for passenger numbers. Giving people a choice between a toll and a daily dose of angst is not the stuff of lasting political compacts.

In addition, the first phase of the Second Avenue Line — a whole three new stations for $2.5 billion per mile of track — doesn’t bode well for brand new routes. Like London, though, New York could also reimagine its bus services, which at least offer more flexibility to meet shifting transit patterns. Beefed up express routes, such as the 14th Street Busway, show promise and ought to get an extra edge in terms of speed as fewer private vehicles enter lower Manhattan.

Just as important as London’s wins from the congestion charge, New York should analyse its shortcomings. Enamored by the congestion charge’s early success, City Hall extended the zone, forgetting that it took the best part of 40 years for the idea of pricing driving to become politically feasible. The extension was rolled back within four years.

Moreover, the initial improvements in congestion did not make much headway from there and on some measures reversed a bit as other factors slowed vehicle speeds: Roadworks, proliferating bus and bike lanes and the rise of ride-sharing and online delivery vans. That isn’t a failing of the congestion charge per se; congestion would be far worse without it simply by dint of the inefficiency of single-occupied vehicles versus mass transit. But it shows how quickly changes in lifestyle and technology can render years of planning obsolete. London’s experience, with the initial charge of five pounds having tripled and new charges targeting higher-emission vehicles layered on top, also suggests whatever level a New York charge begins at, it will need to rise further over time to maintain impact.

Which makes it all the more important to offer a clear set of benefits in return, and quickly. “In all the research I’ve done, the carrot is more important than the stick,” says English. A White House that largely ditched carbon penalties for a smorgasbord of cleantech subsidies could relate.

Liam Denning is a Bloomberg Opinion columnist covering energy and commodities. Views are personal and do not represent the stand of this publication.