According to new report, NYC area drivers spent 56 extra hours per year stuck in traffic. NYC TLC will likely adhere to mandate to limit new cars as calls to implement congestion pricing increase

https://youtu.be/1-9RXVtQcMU

According to a new urban mobility report by Texas A&M’s Transportation Institute, NYC area drivers spent 56 extra hours stuck in traffic in 2020 (although that’s down significantly from pre-pandemic 2019). The report shows that New York City (defined as the tri-state corridor of NY-NJ-CT around NYC), is now the most congested major metropolitan area in the country, even displacing car centric LA! There are several explanations for the increasing congestion, but it can directly be linked to COVID’s unique impact on city transport dynamics. Working from home (WFH) combined with the fear of riding on public transport led to an unprecedented rise in NYC car ownership. According to the DMV, the number of vehicles registered in Manhattan, Brooklyn, Queens and the Bronx, jumped 37% year over year (i.e., August to October 2020 vs. same period in 2019). In Manhattan alone car registrations increased 76%!

“People were reluctant to ride transit…A lot of people who had to be at work changed modes. If they couldn’t walk or bike, they probably found their way into the [vehicle] tunnels.” – David Schrank, co-author of Texas A&M urban mobility report

Source: Urban Mobility Report – Texas A&M Transportation Institute

Implications for NYC For-Hire Transport Industry & Implementing Delayed Congestion Pricing

Before the pandemic there were already NYC congestion issues. In fact, the August 2018 FHV License Pause (aka TLC Plate Cap) was a direct result of increasing congestion levels in NYC. The Metropolitan Transportation Authority (MTA) even cited the rise of for-hire vehicles when explaining why subway ridership was declining at the time! They likely had a point given Uber / Lyft passenger subsidies drove down the price of shared rides to be cost competitive with bus and subway fares.

“More than 100,000 workers and their families will see an immediate benefit from this legislation…And this action will stop the influx of cars contributing to the congestion grinding our streets to a halt.” – Mayor Bill de Blasio after passing 2018 FHV Cap

The recent decision to remove the EV exemption to the FHV License Pause also related to fears of increasing congestion. Essentially, although adding EVs on its face seems good for the environment, increasing the for-hire fleet with additional cars would increase congestion leading to more pollution (i.e., slower average speeds). While I expect subway and bus ridership to increase, a new class of NYC car commuters has been created because of the pandemic. While those of us who live and/or work in NYC know that TLC cars weren’t the only reason for increasing levels of congestion pre-pandemic (i.e., double parked delivery trucks) – a lot of for-hire cars were added in a short period of time.

Many in the TLC industry may think the only real impact of increasing congestion levels is an FHV Cap (outside of making it harder to get around the City), but they would be mistaken. Another piece of passed legislation that will have a major impact on the TLC industry is NYC Congestion Pricing. In 2019, after decades of attempts, New York State’s legislators passed NYC congestion pricing laws (Note: this is separate from the congestion surcharge all for-hire cars are charged currently), making NYC the first city in the country to have such a fee (although it’s worth noting other major global cities, such as London, have had congestion pricing for years).

So why haven’t we really felt the impact yet?

State of NYC Congestion Pricing

Long story short the federal government (Federal Highway Administration) also had to sign off on the plan via an environmental review, as some of the roads impacted by congestion pricing receive federal funding. Then a pandemic hit and here we are over two years after the congestion pricing bill passed with no signs of implementation. That, I believe, is about to change and change quickly for a host of reasons from raising revenue to fund public transport to congestion. In March, the Biden administration informed the MTA that it only had to submit an environment impact statement vs. a more involved environmental assessment, which indicated that the federal government was supportive of the congestion pricing plan. That being said, a lot of work needs to be done and questions answered as City & State columnist Gabe Ponce de León points out.

However, politically difficult decisions will have to be made before tolls to enter Manhattan south of 60th Street can be installed. The 2019 law stipulated that the board of the Triborough Bridge and Tunnel Authority would determine the charges and exemptions, credits, or discounts for any group of drivers, including taxis and ride-hailing vehicles. A six-member Traffic Mobility Review Board would be tasked with advising on toll structure. But two years have elapsed since the passage of the law, and that board hasn’t been appointed yet. Gov. Andrew Cuomo would ultimately select five of its members through his control of the Triborough Bridge and Tunnel Authority, and Mayor Bill de Blasio would select the other member. 

Past congestion pricing proposals have recommended charging $12 to $14 for cars and $25 for trucks, but the cost will likely fluctuate based on the time of day and other considerations, such as whether to grant credit to motorists who already pay tolls entering the city – via the Henry Hudson Parkway or Triborough Bridge, for instance – and whether to charge on each leg of a commute. 

How it all plays out is anyone’s best guess, but I would expect some sort of exemption for NYC for-hire vehicles. Remember FHVs help reduce congestion vs. private passenger cars (i.e., number of people one car transports and utilization rate). In addition, if you start charging TLC cars $12 to $14 every time they enter south of 60th street that is a guaranteed way to kill the industry (i.e., would make it prohibitively expensive for consumers). Another thought that crosses my mind is the NYC yellow cab industry may even try to argue that they should be exempt (or subject to lower fees), but FHVs should not – that would be a political mistake for all parties involved in my opinion. What is almost certain though is private passenger cars will be subject to the full congestion fee and that will most likely boost the NYC for-hire industry as people opt to take taxis and Ubers/Lyfts into and around the City (in addition to the subway / bus).

For every $1 billion in toll revenue per year, the MTA can raise $5 billion in three year bond financing. Given the MTA is, to put it lightly, facing a financial crisis I can’t see how implementing congestion pricing is not a top priority for the state and city.

What are your thoughts on NYC Congestion Pricing?

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Article by Dawood Main

Dawood Mian is the Founder & CEO of AutoMarketplace. He covers the NYC for-hire transportation industry and related news. Search AutoMarketplace for cars, parts, tires, technicians, body shops, reviews, jobs & more.

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