Schaller Consulting

MAKING CONGESTION PRICING WORK

Among a range of policies are often suggested, the focus often turns toward congestion pricing. Wouldn't charging companies and customers for their use of oversubscribed streets be the best solution?

This question is in the spotlight in New York City as the recommendations of Gov. Andrew Cuomo's FixNYC task force are discussed in Albany. How, when and where should a surcharge on Uber, Lyft and other for-hire services including yellow cabs be applied? How effective would a surcharge be in reducing traffic? Can a policy avoid being seen as "too expensive" and at the same time make a difference in providing traffic relief?

"Making Congestion Pricing Work for Traffic and Transit in New York City" takes these questions head-on. The report is the first in-depth analysis of how to apply pricing to new mobility services, often called "Transportation Network Companies" (TNCs).

The report recommends that a surcharge on taxi/for-hire trips in central Manhattan be applied as an hourly charge. An hourly fee would have several advantages over a per-trip fee as currently being discussed. It would provide strong incentives:

• For customers to use shared ride services such as UberPool, Lyft Line and Via, which can reduce traffic impacts with minimal incursion on passenger convenience or reliability;

• For customers to use more efficient and sustainable modes such as the bus, subway, bikes and walking; and

• For TNCs to reduce the amount of time they spend between trips without a passenger, currently 40 percent of their time in the Manhattan CBD, most of which provides no mobility benefit while clogging traffic.

The report recommends that the hourly fee be higher in Midtown Manhattan which chronically has the most severe congestion in the CBD and also has a wealth of transit, walking and biking options. A fee of $50/hour in Midtown and $20/hour elsewhere in Manhattan (up to East 96 and West 110 St.) would reduce TNC and taxi trips by 8 percent and mileage by as much as 30 percent, depending on how much TNCs and taxis reduce vacant time between trips. This would provide substantial immediate traffic relief to Manhattan streets. It would also provide an immediate infusion of $670 million annually for improved subway and bus service and other transportation needs.

While $50/hour seems quite high at first glance, a fee of this magnitude is essential to providing effective traffic relief. The main reason that relatively few people drive into Midtown Manhattan is the high cost of garage parking, roughly $25 to $35 or more per day. A $50/hour surcharge translates to an additional $14 per trip on taxi and TNC fares, making round-trip use of taxis/TNCs equivalent to the cost of parking. This fee would be targeted on Midtown trips, which comprise a tiny 0.6 percent of all taxi/TNC trips citywide.

For other trips in Manhattan, the average taxi/TNC fare would increase from $13 to $21. Passengers could offset this surcharge by electing UberPool, Lyft Line or Via instead of taking a solo TNC trip. These trips comprise 29 percent of all taxi/TNC trips citywide.

The report also recommends that an hourly charge be applied to trucks operating in the CBD. An hourly fee for trucks would be more directly gauged to their contribution to CBD congestion and would incentivize more efficient operations, such as increasing staff on each truck to make deliveries more quickly. It could also be structured to reduce double-parking and "blocking the box," two common and unnecessary sources of traffic congestion.

Other key findings from the report are:

• TNC growth has added 976 million miles of driving to city streets, citywide, since 2013, including 365 million additional miles from 2016 to 2017.

• Personal auto use is growing as well as TNC ridership, as evidenced by a 9 percent increase in vehicle registrations in New York City since 2012, and zero net growth in all other types of trips (transit, taxi/for-hire, bike and ferry) from 2016 to 2017, despite continued economic growth.

• With a second year of declines in subway and bus ridership in New York City, overall trends toward more driving and less transit use accelerated in 2017. The current trend toward more driving represents a reversal of 25 years of less driving and more transit ridership in the city. The current shift from transit to auto is not a sustainable way for the city to grow, economically, environmentally or for traffic safety or quality of life goals. The shift highlights the risks to the city from current modal growth patterns and the urgent need to improve transit service and manage street use through pricing and other means.

• "Pooled" services such as UberPool and Lyft Line have not so far provided promised efficiencies in the use of TNC services. Only 6 percent of Uber and Lyft customers take pooled rides during the business day in the CBD, dropping to a low of 1.8 percent of Uber trips in midday hours.

• New York Times: If Your Uber Ride Cost an Extra $50, Would You Take It?
  

• Streetsblog: An Hourly Fee on Cabs and Ubers is Less Radical Than It Appears
  

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