New York City will implement its first congestion charge program by the end of 2023… perhaps. The charge was passed in 2019 but has faced delays until present. Unsurprisingly, New Yorkers don’t love it… but it will grow on them (if you’ll forgive my out of sample prediction). The figure below reports percent of residents supporting congestion charges across five different cities:
In history, even business owners don’t oppose the tax. In theory, demand falls for businesses within the congestion zone as it becomes more expensive to access these places. However, demand can also rebound for these places as customers realize reductions in the time costs of travel to get into the city. Leape (2006, Journal of Economic Perspectives) discusses survey results suggesting congestion pricing is OK by many commercial places:
“A survey of 500 firms carried out in early 2004 found that 72 percent of
businesses felt that the road charging experiment was working (with 14 percent
saying it was a failure) and 58 percent felt it improved London’s image (with 15
percent saying it gave London a bad image to outsiders). Overall, a plurality of
firms felt the impact on London’s economy was neutral (32 percent) with equal
numbers identifying positive and negative effects (26 percent) (Clark, 2004).”
All the while, vehicle entry to London fell by 27% and time spent sitting at idle or traveling less that 6mph fell by 33%.
