Alexander Jan: New York should learn from London’s congestion charge experience – and so should London

Alexander Jan: New York should learn from London’s congestion charge experience – and so should London

From midnight on 30 June, congestion charging is set to be introduced in New York City. The first night-time payments of $3.75 (about £3) will kick in for cars entering Lower Manhattan, south of 60th Street just below Central Park.

The tariff will rise to $15 (£11.85) for morning peak hours. Trucks and coaches will pay more. New York State’s  Metropolitan Transport Authority (MTA) estimates the charge will cut the number of vehicles in the charging zone by around 100,000 a day – about 20 per cent.

It sees improved air quality and increased public transport speed as two important benefits. Despite a slew of concessions, the toll is expected to raise at least $1 billion for the MTA’s public transport capital programme.

The move comes 21 years after Ken Livingstone introduced the congestion charge in London. It has been through various changes since, including to tariffs and operating hours, some of them temporary. The zone was extended westwards by Livingstone in 2007, but brought back to its original size by Boris Johnson three years later. Unlike New York’s plan, London’s charge does not vary with the time of day.

Even so, there remain significant similarities between the two cities’ schemes. London’s charge is still levied on vehicles entering an area of around eight square miles – not far off the size of the New York charging zone. Likewise, residents who lived inside it receive discounts (although a difference is that New York’s will be means-tested).

There are many comparisons to be made. What, then, can New York learn from the UK capital’s experience? And what should London itself learn from it?

Firstly, New York is likely to find that that congestion charging is popular and has immediate positive effects. In London, early surveys of public and business opinion revealed favourable responses. The charge brought benefits to those who paid it, with morning peak traffic speeds rising by about 17 per cent, from nine miles per hour to 10.5. Transport for London said at the time that the charge had rapidly reduced traffic entering central London by as much as 18 per cent, cut congestion by 30 per cent and boosted bus ridership by around a third.

Secondly, New York should recognise that annual monitoring of the impact of the charge (ideally with some sort of independent oversight) is important. It allows people to see for themselves the effects the charge is having and how it might be amended over time to make it better. In this respect, London has erred. Detailed reports of the charge’s effects were stopped after six years. They were hefty documents, but not having any sort of review makes it harder to understand the longer-term impacts of the tariff.

A third lesson for New York from London is to ensure that other sources of transport funding are not cut as a result of the increased income congestion charging provides. This is a bigger risk for New York, given the anticipated scale of revenues. There might be a temptation on the part of future New York State governors to reduce MTA resources drawn from elsewhere, or to move them from downtown to upstate projects.

But a fourth lesson is arguably the most important. New York needs to ensure a clear public understanding about how road space capacity freed up as a result of reduced traffic levels is going to be allocated. Who will gain as a result of the new charge?

In London, the benefit to charge-payers has been eroded over time. A remarkable fall in morning peak traffic of about 40 per cent since the charge was introduced is today accompanied by a deterioration in speeds of about one fifth. In 2023, a 10 kilometre (6.2 mile) peak hour journey in central London took 37 minutes and 20 seconds, equivalent to 8.7 mph. TomTom International BV, a traffic data provider, estimates that out of 387 cities surveyed, London is the world’s slowest.

It isn’t only motorists who have suffered. Bus users, many of whom come from low-income households, have seen the speed of their services suffer. In 2002, before congestion charging was introduced, the average morning peak speed for buses in central London was 10.9 mph. By 2023/24 it had fallen to just 7.1 mph, a deterioration of about a third.

That is a counter-intuitive policy outcome to say the least. A number of factors help to explain it. In recent years, road capacity for motor vehicles has been reduced significantly rather than increased, most notably through the creation of cycleways and by traffic restrictions being brought in even for major roads.

Across the capital, traffic queueing has been increased by the installation of many additional traffic lights. There were 4,755 in 2000. There are 6,400 now. Many of these will have been added in central London, along with changes to timings. On top of that, there has been a big increase in roadworks. There are more than 15,000 jobs a year done in Westminster alone.

New York needs to be mindful of these London outcomes. If its private and business road-users pay for a reduction in congestion yet find themselves, along with bus passengers, stuck in more of it, that is a sure-fire way to generate resentment against congestion charging. This in turn risks building opposition to more ambitious future proposals to tame traffic, such as city-wide pay-per-mile.

Unlike London, New York is governed by a single, city-wide authority with just five boroughs. That should make co-ordinating plans for roads and ensuring that transport benefits are shared fairly less of a challenge than it is here. But the lessons from London should nonetheless serve as a warning to New York’s transport chiefs. If you want to retain New Yorkers’ support over the long term, make sure you share the benefits of congestion pricing fairly, equitably and transparently.

Alexander Jan is the London Property Alliance’s chief economic adviser. and chair of the Central District Alliance and Hatton Garden BIDs. Follow him on X/Twitter. Support and its writers for £5 a month or £50 a year and get things for your money too. Details HERE. Photo by Omar Jan.

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