Congestion Pricing Fee Won't Address a Major Source of NYC Congestion

(Bloomberg) -- New York’s congestion pricing plan, which will charge drivers a fee for entering Manhattan’s business core, will do little to relieve a major source of traffic in midtown: app-based ride services such as Uber Technologies Inc., Lyft Inc. and Via Transportation Inc. , according to a 2018 study.

Between 2013 and 2017 the number of taxis and app-based for-hire vehicles in New York City’s central business district increased by 59 percent and doubled in the afternoon rush hour, according to a March 2018 report by Schaller Consulting. In 2017, the taxi and ride-for-hire sector added 365 million miles of driving to city roads. Car ownership is also growing.

To raise money for the Metropolitan Transportation Authority, the state legislature last year approved a passenger surcharge of $2.50 per cab ride and $2.75 per electronic-hail ride for for-hire-vehicles crossing below 96th Street in an effort to raise about $400 million a year. The surcharge will only modestly reduce traffic congestion, because taxi and for-hire passengers are "relatively" insensitive to price, the report said.

A $3 surcharge would reduce Uber and Lyft trip volumes by three to four percent, which would be offset by growth in trip volume as more people use the services.

To provide real relief to clogged Manhattan streets, Schaller recommended an hourly charge for taxis, for-hire vehicles and trucks, combined with a cordon pricing fee for all other vehicles. The hourly fee would apply whether vehicles had a passenger or not. Uber and Lyft drivers spend 40 percent of their time in the central business district without passengers, according to the report.

A fee of $50 per hour in Midtown and $20 per hour in the rest of the central business district and the Upper East and West Side would reduce app-based vehicles and taxi trips by 8 percent and mileage by as much as 30 percent, depending on how much they reduce vacant time between trips, the report said. The hourly charge would create a strong incentive for Uber, Lyft and Via to reduce the amount of time their drivers spend empty between trips, Schaller said.

The high charge would also provide strong incentives for shared rides. Currently, very few Uber and Lyft trips in Manhattan during the day involve pooled services.

This would provide substantial immediate traffic relief to Manhattan streets and generate $670 million annually for improved subway and bus service and other transportation needs, the report said.

--With assistance from Henry Goldman.

To contact the reporter on this story: Martin Z. Braun in New York at mbraun6@bloomberg.net

To contact the editors responsible for this story: James Crombie at jcrombie8@bloomberg.net, Michael B. Marois, William Selway

©2019 Bloomberg L.P.