Cuomo’s Congestion Pricing Plan Actually Isn’t Half-Bad

It’s been three months since Governor Andrew Cuomo appointed a panel to come up with a congestion pricing plan to, as the panel was named, Fix NYC. That report came out today and it’s…good? I know, I’m just as surprised as you!

Meet the new proposed congestion charge, pretty much the same as the old proposed congestion charge

It would cost $11.52 a day for cars to drive into Manhattan south of 60th Street, otherwise known as the Central Business District (CBD), Monday through Friday, 6 a.m. to 8 p.m. That was the same proposal Mayor Michael Bloomberg made a decade ago — although the daily charge was then to be split up between $5.76 outbound and inbound charges — as part of the Move NY Plan, and it’s the core of Cuomo’s proposal now. Taxis, for-hire vehicles (more on them momentarily), and buses would be exempted. So, too, would trips along the FDR Drive that exit north of 60th Street — such as, for example, an SUV that drives from Gracie Mansion to Park Slope via FDR Drive and the Brooklyn Bridge every day.

In total, the fees, which would be charged via a combination of E-ZPass and license plate readers, would generate between $810 million and $1.1 billion annually while reducing congestion by 8 to 13 percent. That may not sound like much, but taking one out of every ten cars off the road makes a very big difference in getting traffic moving.

There are some minor differences in Cuomo’s plan, though. For one, the new proposal suggests charging trucks $25.34, or 2.2 times as much as cars, as trucks account for an outsize share of congestion and currently pay, wait for it, 2.2 times higher tolls on city bridges. The plan hopes this will encourage truck drivers to make deliveries during off-peak hours; it also calls for the congestion pricing for trucks to begin in 2020 as a kind of trial phase, before charges for cars follow a few months later.

A focus on for-hire vehicles

One of the biggest differences between the Fix NYC proposal and Mayor Bloomberg’s failed plan a decade ago is the emphasis on for-hire vehicles, since Uber and Lyft didn’t exist in 2008. As the report notes, for-hire vehicles now represent more than half of all vehicles in the CBD on weekday afternoons. To address that, rather than subjecting them to the congestion price, which would do little to disincentivize them since it would be a flat daily rate, it proposes a larger zone — up to 96th Street — for an FHV surcharge of between $2 and $5 per ride, with additional fees for time they’re in the zone without a passenger. In all, the surcharge could raise between $155 million and $605 million annually, depending on which pricing scheme is adopted.

The clever bit is where that money goes. The panel suggests this revenue be used to plug one of the big open questions facing the subway: Who’ll fund the MTA’s $836 million Subway Action Plan to repair and modernize the system? Currently, the state has committed to fund half, but de Blasio has refused to fund the city’s proposed share. The MTA’s only other funding options are to raise fares or borrow, and the MTA has already borrowed enough.

Another clever aspect of the FHV charge is a “significantly reduced” surcharge for pooled trips, such as UberPool and Lyft Line. Not only will this likely help reduce congestion by increasing occupancy rates, it will help get Uber and Lyft on board since pooled rides, if they have multiple people in them, are far more profitable.

A phased approach

Rather than implement everything at once, the report calls for a phased approach, which seems “essential” to making the plan work.

The first phase, beginning this year, would be fairly modest, requiring a full review of the city’s parking placard system — which in effect bestows upon more than 100,000 people, mostly city employees and politicians, a waiver to park wherever they want for free — increased (or any) enforcement of traffic laws such as blocking the box or parking in bus lanes, and changes to various MTA funding structures to more directly provide a guaranteed source of revenue. You know, things that should have been done a long time ago.

The second phase, starting in 2019, would implement the above FHV surcharges. And the third phase, targeted for 2020, would see the congestion pricing introduced, first to trucks as a kind of trial phase, then to cars as well, as soon as the L train comes back into service.

While this timeline sounds fine, it would require the MTA to get cracking on the congestion charge technology before the legislature is likely to approve it. Two years of lead time seems awfully tight. For example, it took London two years to implement its congestion charge even though the mayor had unilateral authority to order it.

This is about much more than congestion pricing

As the name of the panel suggests, this report is a wide-ranging review of how to make transportation in New York City better and how to fund it. For example, the panel calls for the existing Payroll Mobility Tax, introduced in 2009, to be dedicated to the MTA without needing annual state legislative approval. It also supports Cuomo’s proposal to allow the MTA to collect real estate taxes from development that benefits from mass transit expansion, such as the Second Avenue Subway. Then there are the placard, bus, and traffic enforcement proposals mentioned above. This is, fundamentally, a plan to make getting around New York City bearable.

Is the range of options a feature or a bug?

As Cuomo promised, the proposal is a slate of recommendations rather than one take-it-or-leave-it plan. The report outlines several possible charging schemes for pretty much every one of its ideas. And nothing says the whole plan has to be adopted; it’s easy to envision, for example, the placard review somehow getting lost in the shuffle. Maybe we just end up with an FHV surcharge and a bitter fight with Uber and Lyft.

Or, perhaps the flexibility allows for political horse-trading in Albany in order for the plan to pass. It’s still too early to say, but at the very least, it’s a plan every New Yorker — even the ones who drive and will therefore enjoy less traffic — should get excited about.