Jean-Manuel Izaret (JMI)’s Post

What do you think of congestion pricing to keep motor vehicles out of city centers? Would you want it in your city? The city of Boston, Massachusetts, opened discussions about such a program last week, as New York City nears implementation of its own plan. Advocates of congestion pricing programs cite reductions in traffic and emissions as well as the increase in revenue that cities can earmark for public transportation improvements. Detractors argue that the measures discriminate against low-income families as well as people who don’t have easy access to public transportation. Either way, congestion pricing exemplifies how pricing decisions can reshape society by changing how people make tradeoffs. The cities that have already implemented congestion pricing - London, Stockholm, and Singapore - show fascinating differences in their pricing structures. 𝗟𝗼𝗻𝗱𝗼𝗻: Flat rate of £15 on weekdays and weekends, with reimbursement options for medical patients and staff as well as possibilities for exemptions 𝗦𝘁𝗼𝗰𝗸𝗵𝗼𝗹𝗺: Variable pricing, with different peak and off-peak prices varying at half-hour intervals 𝗦𝗶𝗻𝗴𝗮𝗽𝗼𝗿𝗲: Dynamic pricing, with prices varying by over a factor of 10 (37 cents to $4.49, according to the New York Times) depending on the time of day and traffic conditions New York’s proposed plan, which is still under review, would call for a flat daily fee of $15 for cars, between $24 and $36 for trucks, and a per-ride surcharge of $1.25 for taxis and $2.50 for ride shares. Each of these price structures begs the question: What is the value of a trip into a city center, and how do we define it? Singapore’s shift to the Dynamic Game may have the closest match to value of any city so far, and reportedly the city has the capabilities to incorporate distance into the price structure as well. But it still falls short of addressing the complexity of the “what is the value” question and how to measure it in absolute terms and relative to the income of citizens. Raising the price dynamically and for everybody might be a good way to drive behavior. But what happens if it excludes parts of the population who live in the outskirts from job opportunities inside the city? Cities with highly efficient public transit systems could mitigate this effect, but it still raises major equity issues. The complexity makes me wonder whether a fee system for congestion pricing is the best way to accomplish the societal goals of fewer emissions and less traffic while generating money ostensibly for transportation improvements and ensuring equal access to advancement opportunities and self actualization.