News has reached London that New York City has finally got a go-live date for congestion pricing. In 2003, London introduced a not dissimilar system. The congestion charge (or C-charge) with a daily fee of $13 (£8) was payable by vehicles entering an area of around eight square miles — roughly the size of the New York scheme.
Today, drivers pay about $19 during the weekday and weekend afternoons. The C-charge has been supplemented by the Ultra Low Emission Zone levy of $16 for older, more polluting cars. Trucks and buses pay more. The ULEZ is payable across the whole of Greater London — some 600 or so square miles — and is additional to the C-charge for dirtier vehicles entering the C-charge zone. Unlike in the New York scheme, residents inside the congestion charge zone receive a discount of 90%, irrespective of their assessed income. There is no comparable discount for the ULEZ.
Back in 2003, Transport for London, the agency broadly equivalent to the MTA (but which comes under our mayor) found the C-charge reduced traffic by 18%. It cut congestion by 30% and boosted bus ridership by around a third. Morning peak traffic speeds rose by about 17% from 9 miles per hour to 10.5 mph. In 2019 just before Covid struck, the C-Charge raised $314 million in net terms. Overall, the scheme is largely seen as a success. Along with other measures, it has contributed to a long-term dramatic decline in central London traffic volumes. and it has helped to improve air quality. However, congestion benefits (as opposed to traffic levels) have stalled.
What might New York learn from London’s experience? Firstly, despite initial opposition, the C-charge has gained public support. It is worth persevering!
Secondly, and perhaps most importantly, it is crucial to ensure the benefits of the charge continue to be felt by those paying it. In London, the benefits have been at least partially eroded. Traffic light timings and road space have been reallocated, especially to cyclists. There has too, been a big increase in roadworks. Together these have substantially reduced road capacity for everyone else. As a result, congestion is still a significant problem. This has become a cause of resentment amongst some C-charge payers.
Thirdly, monitoring is important to allow the charging regime to be improved. In London, detailed reports were stopped after six years. This has made it harder to understand the longer-term impacts of the scheme such as during Covid pandemic.
Finally, ensuring that other sources of transport funding are not cut is important. Given the anticipated revenues from the Manhattan scheme, there might be a temptation on the part of future state governors to cut MTA resources or move them up state.
London and New York have a long-standing tradition of friendly rivalry. In June, we will be watching closely from this side of the pond as our most famous rival city takes a courageous step to tame its traffic, twenty-one years after we did.
Alexander Jan is chairman of two central London BIDS (Central District Alliance and Hatton Garden) and chief economic advisor to the London Property Alliance. He is former chief economist at Arup, the built environment consultancy.
Alexander Jan , 2024-06-03 18:03:04
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