Congestion is a major problem facing American cities. Each year the average American spends 38 extra hours in their vehicle because of congestion, and the total cost of the lost fuel and time is $121 billion. Without major changes, that figure is expected to grow to nearly $200 billion in 2020. The good news is that there is a tried and tested policy to help alleviate congestion: congestion pricing. However, congestion pricing is not a one-size-fits-all solution. Congestion pricing programs must be tailored to the specific land use patterns, transportation networks, and geographies of individual cities. To reverse the trend of increasing congestion, it is up to local governments, both big and small, to enact congestion pricing programs that are tailored to each city.
Congestion pricing can take many forms. The two most common types of congestion pricing are cordon charges and variably priced lanes. Cordon charges set a price to enter a particularly congested area of the city at certain times of the day. The most famous example of cordon charges is in London. In 2003, London instituted a £5 charge to enter the heavily congested downtown area on weekdays between 7:00 a.m. and 6:30 p.m. Almost immediately after the program began, car traffic in the cordon area had decreased by 33% and transit use had increased.
Cordon charges are most effective in monocentric cities with heavily congested downtowns. This makes them ideal for some of our larger cities like New York City and Chicago. There is even reason to believe cordon charges will have more of an impact in U.S. cities than the London program. Prior to London’s congestion pricing program, 85% of trips into the central city were already taken by transit. Since transit use is lower in the United States, cordon charges will likely cause a higher proportion of the population to switch to transit. Kenneth Small developed a model indicating that in a typical U.S. city, cordon charges would facilitate a 31% rise in transit use.
Variably priced lanes, another method of congestion pricing, are already in use in a handful of U.S. cities. This method of congestion pricing imposes tolls that vary dynamically with demand for the road. In the U.S., they usually take the form of high occupancy toll (HOT) lanes or express toll lanes. To increase the effectiveness of variably priced lanes, the entire roadway can be variably priced. Studies have demonstrated that variably priced lanes are effective at getting many drivers to alter their commute schedule or switch to alternative modes of transportation. The effects of the variable priced lanes can also be amplified through increased provision of transit.
The main criticism of congestion pricing is that is inequitable, as only higher-income individuals can afford the surcharge. While this is certainly an issue, it can be mitigated by investing the profits from the program into increased transit and accessibility in lower income neighborhoods. Others argue that congestion pricing is politically unfeasible due to anti-tax sentiments among large segments of the population. This ignores the fact that congestion is essentially already a tax on driving. Congestion costs the average American over $1,000 a year. Many of the costs of congestion pricing are offset by lowering the congestion costs to everyone in society. Additionally, driving on congested roads imposes external costs on all the other users of the road. Congestion pricing forces drivers to pay for at least a portion of these costs, and brings the personal cost of driving closer to the cost driving imposes on society.
We will never solve our congestion problems by building new roads and widening others. Instead, we need to change the way we use our roads by bringing demand in line with capacity. Congestion pricing can both lower demand and shift it away from peak hours, resulting in more efficient use of our roads. The evidence on the effectiveness of congestion pricing programs continues to pour in from Europe and at home. The technology is available to cost effectively implement and enforce these programs. Municipal governments are well situated to develop tailored congestion pricing programs, and garner the necessary political support for their approval. The time is now for our cities to implement congestion pricing.
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Value Pricing Pilot Program: Lessons Learned. Federal Highway Administration. Project #052908. 2008.
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