Congestion Pricing in New York City

Why It Failed. How It Can Succeed.

By Charles KomanoffNurture Nature Foundation

New York City

South China University of TechnologyGuangzhou

9 March 2010

Why Congestion Pricing failed in New York City

in 2007-2008:

“Politics.”So?

Politics and the difficulty of change

• "There is nothing more difficult to take in hand than to take the lead in the introduction of a new order of things ... the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new." – Machiavelli, The Prince (1513)

• “Losers cry louder than winners sing.”

Mayor Bloomberg’s Proposal

• London model

• $8 to enter CBD

• Rivers + 60th St

• 5 days, 12 hours

• Taxis exempt

• “Black cars” $1

• No intra-CBD toll

• Net existing tolls

• Surplus to MTA

Why the Bloomberg Proposal Failed

• Too Manhattan-centric– Benefits for center, tolls for outside

• Mistrust of transit provisions– “MTA rat-hole”

• Benefits not dramatic enough– Too little traffic-speed gain (< 7%)– Air quality improvements unclear

• Phony populism

A New NYC Pricing Plan Must:

1. Massively reduce congestion

2. Generate big revenue for transit

3. Expand travel choice

4. Match burden to benefits

5. Be marketed truthfully

6. Come from the people, not mayor

Time Cost of Traffic Congestion

An average

yellow-cab trip

within the CBD

(3 kilometers)

imposes $21

worth of delay

costs on other

road users (in autos, taxis,

trucks, buses)

An $8 taxi ride imposes

$21 of “social delay costs”

Kheel-Komanoff Plan• Toll all trips into CBD (except taxicabs)

• Variable toll: $2-$9 (trucks = 2x)– Weekdays: $3/$6/$9– Weekends-Holidays: $2/$3/$4

• Taxis: 33% surcharge on each fare

• New tolls add to current tolls (no net)

• Revenues → MTA → service + fares

• Transit improvements up-front + after

K-K Plan Results: Traffic Flow

Average Weekday Speed Gain: 21%

K-K Plan Results: Time

K-K Plan Results: Revenue

Manhattan paysManhattan pays

Taxi Surcharge is Essential1/3 of CBD Traffic is Yellow Cabs.3/4 of Cab Use is by Manhattan Residents.

K-K Plan Results: Cost-Benefit

K-K Plan Next Steps

• Enlist support from “stakeholders”

• Enhance traffic model (“BTA 1.1”)

• Subject to modifications– Toll levels and design?– Subsidies?– Maintain fare vs. invest in transit – Transit vs. tax relief

• Politics = “Art of the Possible”