Friday 17 May 2024

New York is coming: but it is hardly a model for other US cities: UPDATE NEW YORK CANCELLED BY NEW YORK GOVERNOR

UPDATE: On Wednesday. New York State Governor Kathy Hochul issued a video statement in definitely suspending the New York congestion charge scheme. This is despite the entire system having been installed and tested with literally weeks to go before implementation. I'll write more about this soon, but it is a devastating set back for congestion pricing/time of use charging in the United States.  The reason being to "address the rising cost of living in New York" even though it would affect a tiny proportion of New York drivers or even commuters into lower Manhattan. It's completely bizarre that she claims one of the reasons for suspending the charge is because commuting on Mondays and Fridays is at a lower level than before the pandemic.  More details on the announcement are here.


On the 30th of June 2024 New York will be the first city in the Americas to introduce time-of-day based road pricing on existing roads.  It may have been designed to generate revenue for the subway, commuter rail and bus systems in New York, but it is also expected to relieve congestion, let's hope it does.

New York Congestion  Charge Zone

What it is officially called is the "New York City Central Business District Tolling Program", which is a fair description.  It is arguably NOT congestion pricing because the rate structure being applied is blunt, and applies 24/7.  It is urban road pricing, but it is applying pricing at all times so may also reasonably be called a toll on existing roads.  It is being called the "Congestion Relief Zone" and I am sure officials in New York City will be relieved to see if it has a significant and sustained impact on congestion, I expect it probably will have some immediate impact as it is modelled to reduce the daily vehicle count by 100,000, which is around a 14% reduction in traffic overall. 

The time-of-day charging component is essentially a higher price during daylight hours, which are 0500-2100 weekdays and 0900-2100 weekends. 

Nevertheless, it is significant. Although the US is peppered with what are variably called HOT, express or toll lanes, which have peak (and in some cases dynamic) pricing of lanes, these are mostly conversions of HOV lanes to enable better utilisation of their capacity, by offering a premium level of service.  This is the first implementation of charging, varying by time-of-day, on previously untolled roads.

It is important to note that it is a cordon as in Stockholm, not an area charge, as in London. Trips wholly within the zone are not charged (setting aside special fees for taxis and for-hire vehicles), but relatively few vehicles are likely to never leave the zone and not enter again.

Note that one can drive all of the way around the periphery of lower Manhattan and not be subject to the charge, providing essentially a through route from the Hugh L. Carey Tunnel to the north of Manhattan. It's not clear this is necessary, but it has meant a lot of charging points have had to be installed on the roads connecting with FDR Drive and the West Side Highway (which at the southern end is an at-grade arterial route).

Price structure

During the peak period (0500-2100 weekdays and 0900-2100 weekends) cars and light commercial vehicles will be charged US$15, and during the off-peak period US$3.50.  This seems highly likely to encourage a rush of traffic before and after the peak period, although before 0500 is likely to be insignificant, after 2100 may be moreso.  

Motorcycles are to be charged US$7.50 during the peak and US$3.75 off-peak.

Smaller (rigid) trucks and some buses will be charged US$24 during the peak and $6 off-peak, whilst larger (articulated) trucks and tour buses will be charged US$36 during the peak and $9 off-peak. 

There are credits for vehicles that have entered lower Manhattan through tolled crossings, specifically the Holland, Lincoln, Queens-Midtown and Hugh. L. Carey Tunnel (Brooklyn-Battery Tunnel), but only during the peak period, not the overnight period.

The full price schedule is here and pictured at the bottom of this article.

Taxis and licensed per hire vehicles are subject to a different charge. Each trip from, to, within or through the zone will be subject to a fee of US$2.50 for for-hire vehicles, and for taxis, green cabs and black cars it will be US$1.25 per trip, with the fee not varying by time-of-day.

Cars and motorcycles are subject to a single charge per day, other vehicles are not. 

There is the power to impose a 25% surcharge on Gridlock Alert Days, which is when the UN General Assembly meets and "throughout the holiday season". 

Discounts and exemptions

Two discounts and five exemptions are listed.

These are:

  • A 50% discount for low income vehicle owners enrolled in the Low Income Discount Plan. This applies after 10 trips per calendar month, to all peak period trips after that point.  This discount requires an application. It is eligible for those enrolled in a qualifying government assistance program or with an income no greater than US$50,000 in the previous calendar year as reported to the IRS. It requires an EZ-Pass toll account.
  • A tax credit for residents within the zone with an income of no greater than US$60,000 in the previous calendar year.  Details on this tax credit are due in Fall 2024.
  • Individual Disability Exemption Plan.  Applies to individuals who have disabilities or health conditions that prevent them using public transport. It either applies to a vehicle registered by the individual or identified by the individual as owned by a person the individual designates (such as a caregiver). 
  • Organisational Disability Exemption Plan. Applies to organisations that transport people with disabilities. To qualify, vehicles must be used in the zone solely to transport people with disabilities.
  • Emergency Vehicle Exemption. This includes vehicles for fire, ambulance, police, civil defence, corrections, blood and organ delivery, environmental and hazardous substances emergency response and sanitation patrol.
  • Commuter and school bus exemption. Applies to buses providing scheduled commuter services, school buses contracted with the Department of Education and licensed commuter vans. Note this does apply to scheduled fixed route commuter and intercity buses, but not tour and charter buses.
  • Specialized Government Owned Vehicle Exemption. Applies to vehicles providing public works, owned by federal, state, regional or local government. This includes garbage trucks, street-cleaning trucks, snow plows, pavers, bucket trucks, etc.

How to pay

The system is set up to prefer vehicle owners to use the EZ-Pass DSRC based toll system used on NY and NJ tolled roads already. All of the exemptions and discounts require EZ-Pass accounts. Those without an EZ-Pass will get "toll by mail" with invoices sent to the registered vehicle owner, identified by Automatic Number Plate Recognition, and will be subject to additional fees to recover the cost of number plate reading and posting the invoice (although the website indicates that these will be waived for the first 60 days).

How much money will it raise?

By law it is required to net US$1b per annum. One estimate, reported by New Jersey Member of the House of Representatives Josh Gottheimer is that it will be much much more, at around US$3.4b per annum, with most of the revenue (understandably) raised during weekdays. The report also noted around US$83m p.a. in revenue could decrease due to reductions in traffic reducing use of tolled crossings to lower Manhattan.  The net revenue in any case are to raise up to US$15b in debt to finance upgrades to the subway system.  It's not clear what motorists think of their money being used to pay for NYC transit systems, especially those driving from New Jersey (which is not served by the NYC Subway, but rather the Port Authority's PATH subway). 

New York Congestion Charge tariff schedule Part 1

New York Congestion Charge tariff schedule Part 2

What next?

It will be interesting to see the impact of the zone on traffic in NYC, both within and outside the zone and hopefully it will not worsen traffic on routes seeking to bypass it, or result in any major distortions of behaviour (or negatively impact businesses or residents near the edge of the zone at the north). It ought to reduce congestion during the day, improve the flow of commercial and private vehicle traffic and buses.

However, it is not likely to be followed by other US cities in the short-term. Lower Manhattan is a lot more like central London than other US cities, most of which have much more dispersed trip patterns using their highways.  For example, downtown Los Angeles has around 1% of all of the employment of the LA metro region, so a cordon for that location would have little impact on congestion except perhaps on some offramp or routes approaching it. That isn't to mean that downtown cordons are not worth considering, but in themselves they will have little impact on congestion.

My hope is that New York will be a success, and may spur interest elsewhere in the US, and for New York to expand in some form, whether it be additional zones or some corridor charging on major highways from the New York State side (which don't have tolling).  New York succeeding should help to encourage more debate and discussion about using congestion pricing to reduce congestion even though the primary driver of this scheme is to generate revenue for the subway.

Thursday 16 May 2024

Japan planning introduce time and location based pricing on expressways nationwide

 Japan's nationwide expressway network is run by a series of private businesses. In 1956, the Japan Highway Public Corporation was formed to build and operate a national highway network, using tolls and accessing private financing. At the time, only 23% of Japan's national highway network was sealed including only two-thirds of the Tokyo-Osaka highway.  Tolling was extensively used, and for sections of highway that did not gain private finance, the government guaranteed the loans. Tolling revenue was pooled to cross-subsidise parts of the network that did not generate enough toll revenue to pay for construction (details on the history of highway in Japan is available here (PDF). 

In 2005, the Japan Highway Public Corporation was split and privatised into multiple companies, including the Japan Expressway Debt Repayment Agency (to use toll revenue to repay the considerable debt that remained for the development of the network) and six regional expressway companies. They are:

  • East Nippon Expressway Company Limited;
  • Central Nippon Expressway Company Limited;
  • West Nippon Expressway Company Limited;
  • Metropolitan Expressway Public Corporation (Tokyo);
  • Hashin Expressway Public Corporation (Osaka-Kobe-Kyoto); and
  • Honshu-Shikoku Bridge Authority.
Tolls were authorised to be collected until 2050, recently extended to 2065.  The privatisation was driven by several concerns, in particular:
  • As Japan's network had essentially been completed, there was concern about public ownership enabling politicians to authorise new construction that favoured the construction industry, even if projects were not viable. 
  • The pooling of toll revenue nationwide was seen to enable this cross-subsidisation where there was no need for new infrastructure. Residents objected to paying higher tolls in their area for projects that were far away from them and of dubious economic value.
  • Interest in improving the efficiency of administration and encourage innovation in operations of the network.
  • Interest in enabling comparisons between the performance of companies so encourage more productivity and lift standards across the sector.
  • Concern about the levels of debt government was taking on for the expressway company, and privatisation was seen as a way to put discipline on costs, debt and the scale of capital spending.

Map of Japan's expressways and major highways

The national expressway network is 9050km long. Tolls in Japan are generally set to reflect distance travelled between interchanges, and vary by vehicle type. Most toll roads still have a mix of electronic and manual toll lanes.

So the announcement in the Japan Times in the past week that the Ministry of Land, Infrastructure, Transport and Tourism will be introducing the ability for expressway companies to introduce time-of-day varying tolls, based on location, to manage congestion, is a significant step for the history of expressways in Japan.  It was trialled during the 2021 Tokyo Olympics with a higher daytime charge, and discounts after midnight, but the idea is that time periods and variations in toll fees will depend upon the specific route and the conditions on it. This is NOT dynamic tolls, but rather targeted congestion pricing to enable more free flowing traffic and reduce pollution.

Also announced was the enabling of commuter passes for high frequency users of toll roads in particular areas, to encourage greater use of expressways to remove traffic from untolled parallel local roads.

What will be of interest is how congestion pricing (which is what it is) will be applied to urban tolled expressways as there is an obvious risk that it could divert some traffic onto parallel routes, and it would not take much of a diversion to severely impact such routes. Although most urban expressways offer significant improvements in travel time, there may be localised points of networks to avoid tolls that could cause worse congestion on the local network (which is not the responsibility of the expressway companies).