Tuesday, April 24, 2007

Congestion Pricing in Manhattan

I applaud Mayor Bloomberg for proposing congestion pricing in Manhattan as part of his Earth Day initiatives, patterned after a similar system in London. From The New York Times on Sunday:

The proposal that is sure to attract the most attention, and possibly objections, is one to impose the $8 fee on car drivers, and $21 for truck operators, to drive in Manhattan south of 86th Street.

The mayor said congestion on the city’s streets is the source of many of the city’s health, environmental and economic problems.

“We can’t talk about reducing air pollution without talking about congestion,” he said.

“As our city continues to grow, the cost of congestion to our health, to our economy and to our environment are only going to get worse,” he said. “The question is not whether we want to pay, but how do we want to pay — with an increased asthma rate, with more greenhouse gases, with more wasted time, lost business and higher prices. Or do we charge a modest fee to encourage more people to take mass transit.”

The fee the mayor is proposing would only be imposed during the week, between 6 a.m. and 6 p.m.. And motorists driving the major highways along Manhattan’s east and west sides would not be fined, so it would be possible to go from Brooklyn to Harlem along Franklin D. Roosevelt Drive without entering the zone.

The article contains other information about the implementation that suggest that it has been reasonably well thought out. But this doesn't stop the critics from making a raft of self-serving claims. Let's take a look at a few:
State Assemblyman Richard Brodsky said he opposed the mayor’s proposal for a congestion fee because it is a regressive tax.

“The middle class and the poor will not be able to pay these fees and the rich will,” said Mr. Brodsky, who is chairman of a committee that oversees the Metropolitan Transportation Authority. “There are a lot of courageous things in the mayor’s package, but this one is not very well thought out.”

According to this logic, all prices for services not linked to income are regressive, since the rich can more easily pay them than the poor. It might technically be true, but it isn't particularly helpful. Besides, when I go to Manhattan, I see the middle class and the poor on the subways and buses, not their own cars.

Here's some more, of the more nakedly self-serving variety:
Clayton Boyce, a spokesman for the American Trucking Association, a national industry group, told The Associated Press, “It will be a real problem for operations for trucking companies and shippers, including all the retailers in Manhattan, which is substantial.”

“And all the people who get FedEx and UPS deliveries will have problems and will bear extra expense, so we definitely see problems with it,” he said.

It's time to give Mr. Boyce a refresher course in microeconomics. Start by considering what his answer might have been last week to the question, "What is the biggest problem your industry faces in providing excellent service to lower Manhattan?" Based on what I've seen on those streets, my answer would have been "congestion." So the mayor has proposed to tax the thing that has been encumbering the trucking industry, and its spokesman is complaining because his clients will need to pay the tax in proportion to the congestion they cause.

Think of it by the numbers. How many packages are on the typical FedEx truck in Manhattan? If it were 210, then the extra expense would be a dime per package. That's trivial. How does $21 compare to the total value of each truck's cargo in a given day? It has to be tiny. And look at what the FedEx truck drivers get in return--fewer passenger cars clogging up the city streets where they need to make pickups and deliveries. They waste less time and less gas. It doesn't take much abatement of that wasted time and gas to make back the $21 per truck. The trucking industry should be this proposal's biggest supporters.

12 comments:

Anonymous said...

Great points! I took away more from your blog in about 1 minute than wading through all the excess minutia of other articles addressing this fascinating subject of a congestion charge in Manhattan.

A Red Mind in a Blue State said...

Here's my concern, as someone who goes into Manhattan a few times per month-- when I go for business, during the day, I take the train/subway.

But evenings, for pleasure (unless its Madison Square Garden) there's no way I'm tooling around the City by subway. Not happening. I'll pay whatever they want.

In order to really reduce car traffic they have to: add more parking garages (safe, affordable & clean would be nice)just outside the City as a jumping off point; as safe as the subways now are thanks to Rudy, they'd have to be safer and cleaner before I'd take my wife & kids on them at night. If they insist on making it way to expensive to come in, revenues would have to eventually take a hit, and businesses would have to eventually move out.

Its easy to say people should use mass transit-- its another thing to provide a useable alternative to private transport.

Fritz said...

I don't think FedX is a good example. The congestion dynamics don't exist for FedX in midtown & lower Manhattan. If this program were to be established in the surrounding boroughs, then it would. It would encourage commercial suppliers to the city to change delivery times, but for most, it would be an additional burden on essential services. Livery and private passenger vehicles are the sole source of congestion and should be the main focus to eradicate it.

Anonymous said...

The view from London:

Don't get your hopes up. The much-vaunted "success" of the scheme in London looks wildly overrated locally. Yes, it raised some money - but taxes do. It reduced congestion somewhat, allegedly although the statistics are gross distorted by the decision of the Mayor of London to give the scheme a following wind by deliberately resequencing traffic lights around the zone in order to cause congestion prior to the scheme's introduction (that's not a wild conspiracy theory by the way - a little light googling will confirm it). Roughly three-quarters of the initial 30% drop in traffic in the charging zone has now been reversed - obviously things might be even worse without the zone, but still clearly shows that the elasticity of demand for driving in London is insufficient to allow charging to to reduce congestion. Also an inevitably, congestion around the zone has picked up, suggesting a large chunk of traffic is displaced, not avoided.

You wouldn't take statements from George Bush at face value, because he's a political zealot with a track record of mendacity. Ditto Ken Livingstone.

Anonymous said...

Allow me to set Red's Mind at rest. Re:

"But evenings, for pleasure (unless its Madison Square Garden) there's no way I'm tooling around the City by subway. Not happening. I'll pay whatever they want."

You will not have a problem, because the fee is only proposed for 6:00 AM to 6:00 PM.

ishmaelabroad said...

Pollution and traffic is an externality. This tax helps price some of that externality into the cost of driving.

If it doesn't reduce congestion and pollution, then luckily money is fungible and this tax should be used to make incremental improvements in the current mass transit (more buses?) or reduce fares (especially on monthly passes) if there is already excess capacity...

Giant Step said...

"The trucking industry should be this proposal's biggest supporters."

But they aren't, and that should cause you to reevaluate your argument. Chances are the special interests have better information about the effects of the legislation upon them than you do--even as an intelligent, well-trained economist.

So, what are we missing?

Mark said...
This comment has been removed by the author.
R said...

Congestion pricing is a tax. Why do I call it a tax because when the gov request monies from you its a tax.

Now I noticed that we seem to have a one track mind on reducing congestion and all in the city.

Solution no. 1 in my view.

Public transportation should be free including LIRR, Mero North and NJ Transit.

If it were free what would be the reason for driving? It free!

How come that is not a part of the plan to reduce congestion? And charge ad fees in the system that will cover the cost, rent retail space, add a slight sales tax state wide and more ....

Just make it free for all to use and safe by enforcing the laws

Little Blue PD said...

We all have to wonder what Bloomberg is really thinking of with this congestion pricing tax scheme. Maybe he mostly just wants a new tax. Just wrap it up in 'concern for the environment', and people can just demonize those who oppose it.

If he cares so much about traffic jams, congestion and air pollution, why does he let Park Avenue be blocked off? Why doesn't he do anything about that?

Pershing Square Restaurant blocks Park Avenue going South at 42nd St. for about 12 hours a day/6 months of the year! This Causes Massive Congestion & Air Pollution!

But apparently it does not bother NYC's Nanny-in-Chief Mike "Congestion Pricing Tax" Bloomberg? Check out the map!

http://whataplanet.blogspot.com
http://preview.tinyurl.com/38obfd

Check it out!

Thanks,

Little Blue PD

:)

Anonymous said...

I find it very hard to understand at a time we are struggling with a rescission that New Yorkers would be subjected to such a punitive repressive tax.IF the Mayor is really interested and cutting down on traffic emissions and the number of vehicles causing congestion also at the same time saving energy by the publics need to commute to work by car. I believe it can be done without costing the public a dime .Simply by moving the city to a four day work week a ten our day rotating week ends in the private and public sector.Also with a aggressive car pooling ,its a win, win situation for all .

Anonymous said...

Congestion pricnig is an invasion of privacy for everyone, with or without a car. It would be great to have less congestion on the streets in Manhattan, however one aspect which I have not seen discussed is the fact that the program will install several thousand TV cameras which are designed as both face recognition cameras as well as license plate recognition capabilities. The result will be that every aspect of every New Yorkers life will be observable and trackable. All elements of privacy will be eliminated. Though the program is supposed to work from 6AM to 6PM, there is little doubt that the location of people and cars will be tracked 24 hours per day, 7 days a week.

Before Congestion Pricing is passed, privacy issues MUST be discussed and strong protections must be put in place. Perhaps a special provision to the law should include a law stating that all files are to be destroyed and the data expunged after a set period of time, such as 24 hours.

Let’s make a better City, but without the total loss of privacy.