Congestion Pricing

[Zmapper]

The basic idea behind congestion pricing is to charge people to enter crowded areas of cities during peak hours as a way to relieve traffic. The charge is normally collected through license plate images like how E-470 in Denver or 407 in Toronto collect their tolls. The cities that have a congestion pricing system set up include:
London
Stockholm
Milan
Singapore

The American cities that are looking at congestion pricing are:
New York
San Francisco

In your opinion, what city or cities should start a congestion pricing system? I might add a poll later.

[iwishiwascanadian]

I'm not a big fan of congestion pricing, it seems to unfairly toll the residents of the city that happen to drive, regardless of how great (or poor) public transit is. 

[Zmapper]

iwiwc: For the travelers that do have to drive, congestion pricing allows the road to be priced so traffic is reduced, saving them time. Think of an old Soviet bread line; you could wait for under-priced bread, or you could skip the line and buy bread priced at market-rate.

[Scott5114]

I oppose congestion pricing. Especially in America, there are some people who cannot switch to public transport. And think of people who live way out in the sticks and need to do something downtown; should they really have to choose between having to pay extra or having to find somewhere to park and take public transport into the congestion pricing zone? That sort of thing doesn't reduce traffic or emissions at all.

[TheStranger]

The Bay Area toll bridges are now using congestion pricing...which has basically caused me to time my entry (on weekdays) into SF after 7 PM, when the toll drops from $6 to $4 on the CalTrans-maintained crossings.

It's actually affected my decision-making as far as when to drive out to visit family.

[J N Winkler]

I oppose congestion pricing. Especially in America, there are some people who cannot switch to public transport. And think of people who live way out in the sticks and need to do something downtown; should they really have to choose between having to pay extra or having to find somewhere to park and take public transport into the congestion pricing zone? That sort of thing doesn't reduce traffic or emissions at all.

I have my own doubts about congestion pricing, but they have less to do with the principle of charging more for a resource at the times when it is scarce, or the regressive impact of congestion charging on the poor, than with its effects on traffic and downstream economic activity.  I think a congestion charge, set high enough to have a measurable effect on traffic levels (which after all is the purpose of most congestion charges), is likely to destroy colocation efficiencies and thereby suppress productive economic activity.  In this respect it is like the idea of having a development charge for land, which can suppress development to the extent that a housing shortage is created because builders have no incentive to build new houses.  Also, it has been argued that a revenue-neutral congestion charge could have the effect of encouraging congestion in off-peak hours because the higher charges during the peak artificially lower the charges at other times of the day, which in turn falsely signal an abundance of roadspace.

In regard to the effect of congestion charging on people living out in the sticks, I actually don't think that is a primary concern.  The cities which have either implemented or are considering a congestion charge tend to be large "world cities" where it is already a far more difficult proposition to get from "the sticks" to the city lights using just a car.  For example, I lived sixty miles outside London for years and would never have considered going into inner London with a car, and the introduction of the congestion charge in 2005 made no difference to my thinking.  Oxford to Paddington by rail was usually just 50 to 55 minutes (the variation being largely due to timetable inflation as an indirect result of rail privatization) whereas Oxford to central London by bus or car could easily take two to three hours and was never a palatable option for reasons of comfort alone.  In large American cities like New York, San Francisco, Los Angeles, etc. it is somewhat easier to get from a rural area to downtown by car but there is still considerable variability in journey time (i.e., journey time reliability is very low) and in terms of traffic it is nowhere near as easy as in, say, Wichita or Oklahoma City.

There tend in any case to be very few types of business that must be transacted in the downtown of a large city rather than in a smaller regional center.  In the case of London, the only examples that come to mind are enrollment for a biometric identity card or research at the National Archives, both of which are adequately served by railborne public transport.  I can see myself going to downtown Los Angeles to visit Map Files at Caltrans District 7 (which used to be on Spring Street though I think it has since moved to a new building--on Main Street?), and possibly to do archival research at the Los Angeles Public Library, but not much else.  The main leisure draws of downtown areas in large cities are cultural facilities like museums, theatres, opera houses, etc. and by their nature they offer their users wide scope to choose off-peak travel times (museums and theatres have midday opening or midday performances, while opera is stereotypically an "evening out" well after the afternoon peak period).

In general, I don't think playing with price signals using congestion charging will either eliminate the need for capacity expansion or supply a revenue stream that can be used to finance significant amounts of it.  You don't see congestion charging being used on a large scale in countries which are really serious about expanding or upgrading their infrastructure--think Germany or Spain.

[Chris]

I also oppose congestion pricing. The long-term effects are much smaller than the initial effects, thus after a few years, traffic is back to normal, while paying extra tax. Most effect is outside rush hour.

Another problem is the decision-making regarding the congestion charge. For example in Stockholm, a referendum was used in the central city and 12 adjacent municipalities. But they based their decision only on the outcome of the central city (53% in favor), while all 12 surrounding municipalities voted against it. It's like wanting the opinion of the people, but not the opinion of those most affected by the charge. I called that a democratic farce.

[xcellntbuy]

Congestion pricing also exists on the HOT lanes of Interstate 95 that currently exist from downtown Miami to the Golden Glades interchange (Florida's Turnpike, FL 826, FL 9 and US 441).

[Brandon]

Congestion pricing for trucks (but not cars) exists on the Illinois Tollway system.  The objective is to get trucks to use the tollways during off-peak times.

[Duke87]

The idea to have congestion pricing in New York died in the state legislature a year or two ago.

[mightyace]

I personally don't see a big problem with it.

We accept downtown parking lots that charge less on nights and weekends.

Hotels and motels often charge more during peak seasons and around special events.

Back when everyone paid for long distance, per minute rates were lower on nights and weekends.  Even now, many cell phone plans count minutes during the day but not on nights and weekends.

These are all very similar to congestion pricing in that you pay more when it's in more demand.

[iwishiwascanadian]

I wouldn't mind if if public transit was better or up to European standards, but it isn't so in many cases, people have no other logical and time-efficient choice other than to drive. 

[vdeane]

Then they can drive at different times.  It's like I-66 near DC, except with congestion pricing instead of HOV restrictions.

[jjakucyk]

I wouldn't mind if if public transit was better or up to European standards, but it isn't so in many cases, people have no other logical and time-efficient choice other than to drive.  

It's a chicken and egg problem though.  Why would people push for more or better public transit when the roads are essentially free to begin with?  Since roads are basically a free resource (in that users do not directly pay directly for their use in most instances), they are in much higher demand than they would otherwise be.  Congestion pricing is an attempt to level out the playing field somewhat, to bring a more proper economic relationship to the situation.  As it is now, the only two factors in most roads and their use is supply and demand.  However, in most markets supply and demand are regulated by price.  If supply can't be increased to meet more demand, then the cost should go up.  That doesn't happen with roads, so people make irrational decisions on how to use them because they're free.  

Congestion pricing is simply a method to better allocate a scarce resource.  As mightyace mentioned, we accept this in most other markets, so why not roads?  Without it, we end up with huge highways choked with traffic during rush hour, and nearly empty at other times of the day.  That's a huge waste of capital and resources.  By properly pricing the infrastructure, it will encourage people to use it more rationally, such as at off peak hours, or by carpooling, or taking transit, or even moving closer to work, and it will reduce wear and tear and the need for future highway expansion.  Where alternatives are not generally available, the congestion pricing will bring in revenue to fund alternatives, and citizens will want more of those choices in how they get around since roads aren't artificially free anymore.  

[Chris]

I wouldn't mind if if public transit was better or up to European standards, but it isn't so in many cases, people have no other logical and time-efficient choice other than to drive. 

Europe is much more than central London or Paris. Automobile usage is not that much lower in Europe outside the largest cities...

Somehow Americans (not necessarily on this forum) think Europe is some kind of public transport heaven where nobody ever needs to drive a car, or cannot afford to drive a car due to $ 7 fuel prices... 84% of the EU passenger travel is by car... This is only 8% lower than the United States.

[jjakucyk]

That 84% stat can be very misleading.  Does it include walking or biking, or is that not tracked?  Is that 84% when factoring in distance (i.e. one 84 mile drive and 16 mile-long walks)?  How long are their trips compared to the USA?  84% of 4,000 miles per year is much different than 84% of 16,000 miles per year. 

Europe is a public transport heaven when compared to the USA.  People can choose to not have a car and still get around to most places just fine.  That expensive gas makes their use of cars much more rational, but of course it doesn't eliminate it.  Also, while there are plenty of suburban areas in Europe, they're also much better scaled and easier to get around with or without a car.  Yes they're low density, but they're arranged a bit more like traditional towns with Main Street type shopping areas that aren't relentlessly separated from residents, usually with commuter rail or other transit connections to the broader metro area nearby. 

[myosh_tino]

The Bay Area toll bridges are now using congestion pricing...which has basically caused me to time my entry (on weekdays) into SF after 7 PM, when the toll drops from $6 to $4 on the CalTrans-maintained crossings.

It's actually affected my decision-making as far as when to drive out to visit family.

Actually, the congestion pricing is only on the Bay Bridge (I-80).  Tolls on all other Caltrans-maintained bridges is $5.  On the Bay Bridge, the toll is $6 Monday thru Friday from 5-10am and from 3-7pm, $4 during non-commute hours (7pm-5am and 10am-3pm, Monday thru Friday) and $5 on the weekends.

[Chris]

That 84% stat can be very misleading.  Does it include walking or biking, or is that not tracked?  Is that 84% when factoring in distance (i.e. one 84 mile drive and 16 mile-long walks)?  How long are their trips compared to the USA?  84% of 4,000 miles per year is much different than 84% of 16,000 miles per year. 

84% of passenger travel miles, compared to train, buses and urban rail transport. It does not take into account walking and cycling, but outside the Netherlands, the cycling share is too marginal to be statistically significant.

Europe is a public transport heaven when compared to the USA.  People can choose to not have a car and still get around to most places just fine.  That expensive gas makes their use of cars much more rational, but of course it doesn't eliminate it. 

It is possible to reach every downtown, suburb, back house and back water by public transport. But, a major issue is travel time. The Netherlands has about the worst congestion and most extensive public transport system of Europe, yet 90% of the rush hour travels requires twice as much time with public transport, a branch of the Dutch ministry of finance has surveyed.

So yes, it is available, but no, it is not a serious alternative in most cases. Considering there are more passenger cars than households, people still prefer to own a car, although granted, car ownership in the Netherlands is slightly lower than say France or Germany. It's too expensive to keep a little-used car.

What politicians often forget about public transport is the additional transport to reach your destination. Often, this could be as much as the train travel time for example. I used to have a girlfriend who lived 80 miles away. It took only 57 minutes to travel the 60 miles, but an additional 50 minutes to get from my home to the station, and from the station to her home, either by bus or cycling. With the car, the whole route took only 70 minutes, which saved me around 40 minutes one way. It's not much of a choice then.

[J N Winkler]

It's a chicken and egg problem though.  Why would people push for more or better public transit when the roads are essentially free to begin with?  Since roads are basically a free resource (in that users do not directly pay directly for their use in most instances), they are in much higher demand than they would otherwise be.

By the same reasoning, you could argue that providing public schools encourages women to get pregnant because they don't have to pay for their kids' education.

Congestion pricing is an attempt to level out the playing field somewhat, to bring a more proper economic relationship to the situation.  As it is now, the only two factors in most roads and their use is supply and demand.  However, in most markets supply and demand are regulated by price.  If supply can't be increased to meet more demand, then the cost should go up.  That doesn't happen with roads, so people make irrational decisions on how to use them because they're free.

I have to disagree with certain key elements of your analysis.  Yes, it is true that most markets are regulated by price signals.  However, most other markets--with the exception of the market in land--have reasonable elasticity of demand with regard to price combined with some ability to increase supply in response to sustained high demand, which helps keep long-term elasticities at a reasonable level.  Taking Mightyace's example of long-distance telephone service, it is much easier for the telephone companies to add new infrastructure for handling long-distance calls at times of peak demand than it is for highway agencies to widen roads.

Regulation by price breaks down when demand is inelastic with regard to price.  When that is the situation, as is arguably the case with roadspace in many congested areas, it becomes very difficult to calculate a fair price and thus almost impossible to apply congestion pricing without imposing deadweight loss on the economy.  The preferred public policy then becomes one of building elasticity into the system, either through coordinated land-use changes or through eliminating the information asymmetries which allow congestion to develop in the first place.

[jjakucyk]

I would argue that there is in fact a lot of elasticity in the demand for road space.  However, it's certainly not instant.  It can take years for proper adjustments to take place.  That doesn't mean it's not worth pursuing.   

[Landshark]

In your opinion, what city or cities should start a congestion pricing system?

None of them.  They should add capacity instead or build separate tollways.  The roads financed with our tax dollars should be toll free.

[jjakucyk]

In your opinion, what city or cities should start a congestion pricing system?

None of them.  They should add capacity instead or build separate tollways.  The roads financed with our tax dollars should be toll free.

I'm of the opinion that we have too many roads as it is, and need to start focusing on alternatives rather than endless road expansion programs.  It's been proven over and over that adding road capacity does not fix congestion in the long term, it only induces more driving, and within a decade or two the wider road is just as congested as before.  Also, taxes don't come anywhere close to paying the full cost of roads and driving in general.  Thus it makes sense that users should directly pick up some of those extra costs, especially when they're using the roads excessively. 

[mightyace]

Also, taxes don't come anywhere close to paying the full cost of roads and driving in general.  Thus it makes sense that users should directly pick up some of those extra costs, especially when they're using the roads excessively.  

Where is your evidence for this claim?

Now, recently, it has started falling short, but gas taxes, registration and tolls have generally covered the cost of the roads.  Even so, the shortfall is often made up with "General Fund" taxes.

The cost of driving the vehicle has always been on the driver.

And, could you please define "driving excessively?"  That seems to be a very subjective item.

[Scott5114]

Then they can drive at different times.

Sometimes they can't. When your employer wants you to show up to work is often not negotiable.

[jjakucyk]

Even before the Trust Fund went into the red, that money is only used for Interstate and some state/US routes.  Most other surface streets (which make up the enormous majority of the road network) are paid for out of local property taxes and in some cases state income taxes.  So those "General Fund" taxes are coming from everyone, regardless of how much or how little they use the roads.  Now, there's lots of things that are like that in the world, like the taxes that go to pay for schools which come from everyone in the community whether they have children or not.  However, things like schools or hospitals or fire and police departments and libraries all things that benefit society as a whole.  Having good transportation is good for society as well, but roads impose other burdens beyond merely their cost to build and maintain.  

The cost of driving goes way beyond just making payments on your car or filling up the gas tank.  It also creates noise, air, and water pollution.  It requires places to park which have to be subsidized by businesses and home builders, thus making goods and housing more expensive, thus reducing the maximum available utility of a lot of property. The political and military meddling in other countries that have oil, and the military escorts for vulnerable oil shipments is another big factor.  None of these are costs which are borne by drivers, they're externalized to all citizens of the country and even the world as a whole.  It's only fairly recently that these costs have finally come back around to bite us in the ass.

As for driving excessively, anywhere that's congested enough to be considering peak pricing is somewhere that has too much driving going on.  What may be excessive in one place might be normal in another, but the point is that any highways or bridges that are routinely congested are ones that are (by definition) being used excessively.