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The cost of congestion pricing

New York’s governor pulled the plug on the congestion pricing plan for NYC. But congestion can cost more than the $15-per-driver planned charge.

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In London, Stockholm and Singapore, congestion pricing led to eased gridlock and a drop in climate-warming emissions.
In London, Stockholm and Singapore, congestion pricing led to eased gridlock and a drop in climate-warming emissions.
Spencer Platt/Getty Images

Getting to work — and anywhere else for that matter — in New York City often means gridlock, but there’s a new wrinkle: Gov. Kathy Hochul on Wednesday hit pause on a plan to charge congestion tolls there.

The plan was set to take effect at the end of this month and would have charged most drivers $15 to enter the central Manhattan business district at peak hours.

Revenues would have helped upgrade the region’s public transit. Hochul cited an expensive pandemic recovery and inflation as reasons not to burden drivers with an extra cost right now.

But the cost of traffic itself can be quite high — and not only for the people sitting in it.

Kathryn Wylde isn’t afraid of traffic. “A little bit is a good thing. It shows you have a healthy local economy,” she said.

Wylde is president of the business group Partnership for New York City. But she said when roads get really backed up, that “ends up costing a lot.”

A study her group commissioned in 2018 found that New York’s notorious gridlock was a $20 billion drag on the region’s economy through wasted time and fuel.

“And this is thousands of dollars per individual commuter who’s sitting in traffic, far more expensive than the congestion pricing toll,” she said.

London, Stockholm and Singapore all adopted congestion pricing years ago. In each case, gridlock eased and climate-warming emissions fell.

Jon Gruber, chair of economics at the Massachusetts Institute of Technology, said the benefits extended into the health care sector too.

“Studies have shown that when you put in congestion pricing, it actually saves lives by reducing pollution and reducing deaths from asthma,” he said.

Congestion pricing can have costs, including the risk of lost business. Some drivers might stay home instead of spending on a meal or show in the city.

Bruce Schaller, former deputy commissioner at the New York City Department of Transportation, said as for that $15 toll for drivers, “The fact is that the vast majority of people who go in and out and who move around Manhattan are doing so by bus and the subway, walking and biking.”

He said under congestion pricing, they wouldn’t pay a dime.

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