Getting Comfortable with Congestion Pricing

Congestion charging is an increasingly popular topic in cities wrestling with traffic congestion. Congestion pricing means charging fees for road use in order to reduce demand. Some cities have defined a cordon around the city center, which when crossed generates a fee high enough to influence people’s trip choices and reduce the number of vehicles entering the city.

If this concept seems unfair to people with limited resources, consider:

• Our current way of funding roads is equally unfair. Registration fees, insurance, and gas taxes are the same for everyone but burden the poor more than the wealthy.
• Demand-based pricing can support progressive initiatives through rebates and discounts.
• Congestion pricing revenues could be used to improve transport availability and accessibility for the disadvantaged.

Implemented correctly, congestion charging could therefore create more equitability while simultaneously reducing traffic congestion. 

However:

• Just because the theory holds doesn’t mean the real-world system will live up to the potential. Countless details are needed to design a system that is achievable, equitable, and effective. Revenue from the program must be used responsibly. How does a city figure all that out?
• The public must accept it. My journey from opposition to support required months of reading case studies, economic analyses, and traffic data studies. Most people won’t do that. How do we win their support?

I recently attended a virtual public meeting with the San Francisco County Transportation Authority (SFCTA) about their ongoing downtown congestion pricing study. SFCTA is exploring how to fight congestion by charging drivers a fee to enter (and possibly exit) downtown San Francisco. The money would be used to fund transit and mobility improvements.

Public support for congestion charging follows a pattern, with moderate support in early planning stages that drops steadily until the system is implemented. Support rebounds when residents begin to see real benefits. Daniel Firth refers to this dip as the Valley of Political Death. I was curious to learn where San Francisco residents were at this point. What I heard were thoughtful, well-considered opinions and questions from multiple perspectives; some that I hadn’t anticipated.

What’s the rush?

Some people were not categorically opposed to congestion charging but didn’t think the city’s congestion was bad enough yet. This surprised me. I can easily quote spine-tingling statistics about the scourge of congestion, but such numbers are based on abstractions that don’t necessarily resonate with the public. We should not expect public support simply because our models show incremental improvements in congestion’s economic impact.

Other residents focused on quality of life and safety. The rush is not to stave off some abstract problem in the future, but to make cities more livable right now.

Demographic and net economic goals

This came up immediately while discussing the location of the proposed cordon. Residents were concerned that a charge line through their neighborhoods would severely disrupt the economic and social flow. This point resonated with me. I’ve seen the damage transportation projects can do to neighborhoods such as Claiborne Avenue in New Orleans and the Eisenhower Expressway in Chicago.

Other participants wondered if SFCTA had accurately accounted for the net economic impact of congestion pricing including effects on commerce and the tax base. Studies in Stockholm suggest that congestion pricing has little impact on most retail businesses, but it’s understandable how people might assume otherwise.  Planners should address questions about net effects and not rely simply on revenue projections to make their case. Additionally, cities must think beyond economic calculations and traffic analysis, and consider drawing cordon lines based on social concerns even if engineering analysis suggests otherwise.

What are the goals?

Congestion charging systems can address multiple goals such as: congestion itself, safety, environment, equity, economic development, etc. These goals are all related but not equivalent. Different approaches will have different impacts on individual goals. Residents kept asking which goal was primary, leading to some confusion and frustration.

It is tempting to just list all the goals and say that congestion charging solves a bunch of problems. But we should instead prioritize them so that when there are tradeoffs, the public is not left confused.

Follow the money

Participants also questioned whether the congestion charge was a tax or a fee. It’s important to understand that taxes and fees are different things and resonate with people differently. New fees are generally more acceptable than new taxes.

Politicians often blur the lines between taxes and fees. A fee is generally defined as a charge for the cost of a service, while a tax is a charge that generates general purpose revenue. Cities contending that congestion charges are fees must ensure that all revenue goes to mobility services in order to claim that drivers are paying for the service of improved mobility.

SFCTA clearly stated how money raised will be spent, which met with widespread skepticism. Such thinking is understandable given that some states already divert gas taxes to projects other than roads. Agencies considering congestion pricing must establish ironclad rules for where the money goes if they hope to win public confidence.

Equity

The meeting addressed discounts for low-income households. Many people felt the discount thresholds were too low (i.e. higher earners should still qualify for discounts). Some dissatisfaction here is probably unavoidable. If the charges are too low to change behavior, or do not affect enough people to influence the system, then there will be no decongestion benefits.

Low-income households will still pay a higher percentage of their income than high-income households. Adjusting the dials to achieve social equity while still achieving system goals will be challenging and may require iterative refinement over time.

Fix transit first

Many participants called for transit improvements before implementing cordon charging: the classic chicken-and-egg problem. Money for transit improvements won’t be available until after charging begins, nor will traffic volumes decrease (which help bus speeds). Residents will pay fees without seeing improvements for some time. One wonders about selling bonds against the congestion charge revenues to raise money upfront and reduce the time to deliver benefits.

What is fair?

A frequent theme in congestion pricing is that charging schemes should be as simple as possible, with few exceptions. Hearing some special cases, though, makes it difficult to ignore the hardship that may inadvertently (and unfairly) fall on some individuals.

One poignant case concerned shift workers. A resident explained that she works from 12AM - 8AM (for modest wages). With poor or non-existent transit service at midnight (along with the safety concerns of a woman traveling alone), she must drive to work and has one leg of her trip during the peak period, meaning she would be charged under most pricing scenarios.

There will never be a structure that is fair to everyone, but I have a greater appreciation of the complexity of the task.

Conclusion

As interest in congestion pricing grows, the importance of education and dialogue is paramount. The technical design and implementation of these systems is easy. It’s much harder to actually enhance mobility for all citizens by reducing congestion and increasing transport accessibility and availability.

SFCTA is educating and listening, and city residents are participating productively. I am optimistic that the process will converge on an equitable design and build public support along the way.