The congestion charging debate

By Felix Salmon
June 4, 2010

Here’s the full video, in two parts. I fully intend to go into more detail about a few of the points raised, but for the time being, enjoy, and do post any questions in the comments.


Comments
4 comments so far

Congestion is actully a good thing. It tells us that many people see great value in being somepalce at the same time.We really don’t want it to go away,since it also reflects the higher values in the economy of places where there is congestion. We know that when there is no congestion at the beaches it is probably not a good beach day for most.That lesson applies very broadly.

What we really want is there to be congestion, but not enough to upset our private benefit. But we all know that the roads we take will have congestion at some points and some days. We factor it into our lives. The proof is in the changes in average commuting times over the last four decades,which have changed significantly only in those places where everyone wants to be because they can make more money than elsewhere.

The plan put forth by Charles Komonoff to price some taxi trips and other trips off the road through price increases gets to the heart of the equity debate over congestion pricing: who gets pushed out and who gets the benefit. If the net effect of the Komonoff plan is to push poorer people off the roads so that those who are left can go faster,it represents a gift to the wealthier,who will get most of the benefit,and a transfer of burden to those now unable to afford a taxi trip that they previously took.Using the money to subsidize further mass transit may be the hook that gets the government to impose the system,but there can be little question that the faster trips will be to the benefit of those who can pay and those who can’t will be asked to shift their trips to other modes or other times.

This is the same problem that is presented with time-of-day pricing. Private trips that can’t bear the cost have to shift in some fashion,so that poorer people will be asked to change their lives to accommodate others.

We might all get benefit if the cost of trucking and shipping goods could be lowered through less traffic on the roads,since there are real surcharges placed on trips taken by truck into New York City,Manhattan, and,particularly,the Manhattan core. But there is very little in any of the plans that will provide those truck-only corridors that would allow those benefits to be generated and captured.

We need first to understand the purposes of the trips that are taken and then understand how the economy of New York City is affected if some of those trips are shifted. For example, we now confront the question of the subsidy for school children in the subways and buses.Many of those trips are now taken in the peak. What would happen to school schedules if we said that the transit pass cost would be lower if schools opened at 10 AM? We would reduce peak congestion in the morning if that happened and use more of the off peak transit capacity. Why isn’t that being discussed?

It is clear that not all peak hour trips are the same. I would argue that most of the peak trips taken into the core by drivers today are already judged to be necessary; few people pay the high parking charges easily.We do need to know how many of those trips would shift or could shift to mass transit if pricing could force change. We already know that the vast majority of the vans in the city core are service vans. Raise their costs and they just pass it on. As it is,UPS pays New York City $ 14 millions in parking ticket charges every year and just passes those costs on.

Ted Kheel’s plan was to find someone else to pay the bill. It’s a wonderful plan,and it’s why New York pays more into the federal coffers than it gets back. But in the long run taxes do matter,both physically and actually. As Maryland has learned to its cost, raising taxes on millionaires doesn’t necessarily keep them in the jurisdiction.

Road pricing that treats everyone equally is where one wants to go in the long run. The ‘gas tax’,which is really a weight-and-distance fee, has worked well to this point, but it no longer has the comprehensive coverage of users that it once had. So we need to look elsewhere. But I doubt that rationing the use by poorer people is likely to fly politically. The opposition to such plans has kept the tolls off the free bridges into Manhattan.

Posted by FrankMcArdle | Report as abusive

Tax, tax, tax. What do you expect from academics, politicians and bureaucrats? A cornerstone of our societal efficiency is the ability to move people and transportation exactly from point A to B quickly and economically. If the marginal rate of utility decreases by congestion to the point of a route being inefficient, then people and goods will find and use an alternate route. They do not need to be taxed to figure it out. The tax proposed here is neither practical or efficient, and definitely discriminatory against the poorer members of society.

Posted by wazzuptoo | Report as abusive

At a lecture almost thirty years ago at the Columbia School of Architecture and Planning, an idea was raised that would be interesting to hear if it actually happened.

New York has an extensive public transit system that can be run 24 hours a day and the subways, as I recall, almost did that back then. It was suggested that deliveries of some kinds of freight could be made at night to relieve some of the congestion caused by trucks on the streets.

It would require more stations with elevator service and some modification or additions to the rolling stock. But it didn’t seem like a terrible idea at the time.

It seems amazing to me that anyone even tries to take a car into Manhattan. The cost of parking is more than the cost of gas for several hundred miles of driving.

Posted by paintcan | Report as abusive

Frank – there is an equity debate at the heart of every free market system. We sell food in supermarkets and don’t give it away free. That makes food less accessible to the poor.

The only alternative to selling is taxing with rationing. That is how they distribute food in Cuba today. In the USSR food rationing was partly done by lining up. In the US, we do the same for roads: we tax to pay for roads, and we ration them out by time, to the people willing and able to wait in traffic the longest.

Tax and ration systems seem conceptually fairer than free market systems (free food “for the poor” instead of supermarkets). We then get led into centrally planned solutions to deal with the messy realities, such as your proposed “truck only corridors”. In practice, free market systems tend to work better.

P.S. The most efficient way to subsidize the poor is to give them money through the tax system, and let them choose how to spend it. Free cash helps all poor people. Free roads help car owners, most of whom are not poor.

Posted by khskymeter | Report as abusive
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