Congestion Pricing and a Sustainable NYC

In an extraordinary act of political courage during an election year, Governor Andrew Cuomo allowed his transit task force “Fix NYC” to release a report proposing congestion pricing for Manhattan south of 60^th Street. The proposal is the starting point for a serious discussion of funding the city’s mass transit system and reducing gridlock in New York City. I suspect the proposal will be altered before it is enacted, and it is possible that once again, New York’s dysfunctional legislature will be unable to act on this critical issue. It is also possible that Cuomo will back down if the pressure gets too intense. New York City Mayor Bill de Blasio did not reflexively oppose the proposal, as he has in the past, so congestion pricing may have a chance. According to New York Times reporters Winnie Hu and Vivian Wang:

“In a shift, Mayor Bill de Blasio, who has opposed congestion pricing, also seemed cautiously open to the plan. “This plan certainly shows improvement over previous plans we’ve seen,” Mr. de Blasio said during a radio appearance on WNYC, calling it “definitely a step in the right direction.”

I hope that this policy idea will become a real-world program, since it helps address both the city’s traffic and mass transit crisis. This past November I wrote that:

“Congestion pricing is the fundamental answer to the need for new revenues. Manhattan’s streets are choking in traffic and double-parked delivery trucks. We need to make it much more expensive to bring delivery trucks into the city during the day and should provide an economic inventive to move those activities into the late evening. We need to make sure that all vehicles—Ubers, cabs and private vehicles—pay extra to enter congested parts of the city. We need to make the subways and buses attractive alternatives to private vehicles. The money generated from the congestion fee should be sent directly to the MTA for the exclusive use of mass transit in New York City. The fee should be set high enough to bring in the additional resources needed and to reduce congestion on the streets.”

The politics of congestion pricing is contentious, if largely symbolic. Very few people from New York City’s outer boroughs commute by car into the central business district. The cabs and Ubers that will be charged can pass along the fee to their riders and, after initial sticker shock, drivers may see their tips go up since most people base their tips on a percentage of the total fare. The trucking companies will either pass the fee along to their customers or work with those customers to deliver their goods during the late evening when the fee is lower. Still, no one likes increased costs and opponents will make plenty of noise.

The fundamental argument for a fee on surface traffic in lower Manhattan is difficult to refute. There are more and more vehicles and the amount of road space is not being increased. In fact, the amount of space for motor vehicles has been reduced over the past decade due to new bike lanes and pedestrian malls. We are confronted with what Garrett Hardin referred to as the “tragedy of the commons” in his landmark 1968 Science Magazine essay. According to Hardin:

“The tragedy of the commons develops in this way. Picture a pasture open to all. It is to be expected that each herdsman will try to keep as many cattle as possible on the commons…As a rational being, each herdsman seeks to maximize his gain. Explicitly or implicitly, more or less consciously, he asks, “What is the utility to me of adding one more animal to my herd?”… The rational herdsman concludes that the only sensible course for him to pursue is to add another animal to his herd. And another; and another… But this is the conclusion reached by each and every rational herdsman sharing a commons. Therein is the tragedy. Each man is locked into a system that compels him to increase his herd without limit—in a world that is limited. Ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons. Freedom in a commons brings ruin to all.”

The common pasture is devoured by the cattle; the common roadway is overwhelmed by vehicles. More and more vehicles, slower and slower traffic. I should note that the roads of lower Manhattan are not entirely free. Parking is limited and often costs money, and most bridges and tunnels are tolled. Traffic is quite slow and therefore the cost of travelling on the surface is paid in wasted time. The average travel speed in the proposed congestion zone in 6.8 miles per hour. The only way to fix the congestion problem in lower Manhattan is to either regulate vehicles with some form of command and control rule, or to charge a fee during the most congested parts of the week to discourage traffic. Some cities have experimented with systems where odd numbered license plates are required to travel on “odd days” and even numbered plates are required for even days. Wealthy people solve the problem by owning two cars, others solve it by having two sets of plates. Congestion pricing is more certain and equitable and has the virtue of raising revenue for alternative modes of transport.

People need to be able to move around the city quickly, inexpensively and comfortably.

Cities require effective and efficient transportation systems because their fundamental purpose is to bring people together for economic, social and cultural purposes. Even though modern communication would allow many of us to work from home all of the time, humans crave social interaction and our work and creative processes require live contact. If city neighborhoods become isolated due to congestion—something we see in places like Los Angeles—that interaction becomes costlier. People need to be able to move around the city quickly, inexpensively and comfortably. New York City’s subway system enables that to happen and without it the city’s economy and attractiveness would collapse. Our path toward long-term sustainability would abruptly end. In order to keep the price of mass transit reasonable, it must be subsidized, and in recent decades that subsidy has not kept pace with needs. Congestion pricing is an elegant answer to that difficult question.

The Fix NYC report accomplishes what it was designed to do: begin a realistic policy and political process designed to reduce congestion and fix mass transit. Both the governor of New York and the mayor of New York City have expressed a willingness to engage in that process. The roll out will be gradual, probably starting with a tax on for-hire vehicles and cabs along with trucks, and then eventually extending to passenger vehicles once mass transit shows signs of real improvement. The report and its proposals are steeped in political realism. One of its most profound political insights is its insistence that fees follow mass transit improvements. According to the report:

“The Panel believes the MTA must first invest in public transportation alternatives and make improvements in the subway system before implementing a zone pricing plan to reduce congestion. Before asking commuters to abandon their cars, we must first improve mass transit capacity and reliability.”

This is an inflection point in New York’s life as a great world city. Solving the transit problem is key to the city’s health and well-being. With the water system restored, and energy, waste management, education, housing and public safety slowly improving, we have reason to be optimistic about the city’s long-term prospects. But if congestion pricing again goes down to defeat, and the city’s subways continue to deteriorate, the progress we have made to becoming a sustainable city will come to a halt.