What made New York City pause its congestion toll program indefinitely?

New York City’s congesting pricing program was going to be the first of its kind in the U.S., and it was going take effect on June 30. On June 5, however, New York Governor Kathy Hochul postponed the program indefinitely.

"People started realizing that the costs are not just going to be borne by the trucking companies. They operate on pennies on the dollar right now, and if you put a $36 fee onto them, that is significant for their operating margins,” Rishi Mehra, sector VP of Trimble Maps, told FleetOwner. “It could have been a deciding factor ... for some small trucking fleets to not even do business in New York City altogether.”

NYC thought it had a solid plan to simultaneously reduce traffic and fund its public transit system. Instead, it only found a way to frustrate residents and transportation companies.

How would the fee work?

The Metropolitan Transportation Authority calls its congestion fee program the Central Business District Tolling Program and calls the fee itself a Congestion Relief Zone Toll.

If enacted, the tolls would occur within NYC’s Congestion Relief Zone, which includes local streets and avenues in Manhattan at or below 60 Street.

In its current state, the toll size would be highest during peak hours (5 a.m. to 9 p.m.) and would cost 50% more if the vehicle does not have E-ZPass. For trucks and buses, the general fee options are as follows:

Off-peak hours with E-ZPass: $6
Off-peak without E-ZPass: $9
Peak hours with E-ZPass: $24
Peak without E-ZPass: $36

The city would charge its tolls through a vehicle's E-ZPass accounts or through mailed toll bills. Trucks would be charged separately for each entry into the zone.

In addition, the city could offer a toll-reduction credit of up to $20 for trucks with E-ZPass that enter Lincoln Tunnel, Holland Tunnel, Queens-Midtown Tunnel, or Hugh L. Carey Tunnel.

The purpose of a congestion fee

New York City faces a significant traffic problem. A toll program could theoretically bring two simultaneous benefits: reduce traffic and bring revenue for much-needed public transit upgrades.

Reduce traffic

Traffic data company Inrix found that the average New York City driver loses 117 hours to congestion each year, making it the third most congested city in the U.S. and fifth most congested city in the world. The average American driver loses only about 36 hours per year.

A significant part of this congestion occurs within Manhattan, New York City’s most densely populated borough. NYC wanted a mechanism to reduce the traffic in this high-congestion area.

Introducing a toll for high-congestion areas would incentivize many regional drivers to instead use the city’s public transit systems, theoretically reducing congestion. By reducing congestion, other drivers would save time, vehicle emissions would be reduced, and regional air quality would be improved.

Funding for transit upgrades

The toll would also fund the Metropolitan Transportation Authority, helping to develop the city’s critically underserved public transit infrastructure.

NYC also expected the toll program to bring in $1 billion a year for capital projects, which could cause the Metropolitan Transportation Authority to lose billions of dollars in potential federal funding and reduce MTA’s staffing. For its 2025-2029 capital program, MTA faces a $25 billion deficit while it works to upgrade aging transit infrastructure.

The authority has already stopped work on subway improvements after the congestion pricing program’s indefinite delay.

Overwhelming opposition

Transportation groups and small businesses opposed the planned toll program.

“There was an overwhelming opposition to this congestion pricing that was being introduced,” Mehra told FleetOwner. “They were very much against it because from a transportation economy perspective, it is at its worst point from the recessionary stage. Even though we might say overall the stock market is at its peak, the freight market is in a very deep trough in a recession environment.”

In May, the Trucking Association of New York filed a federal lawsuit against the MTA for its tolling plan.

“On a given day, many of the trucks delivering this essential freight travel into and throughout the Zone, and will be forced to subsequently re-enter the Zone multiple times per day, to abide by their customers’ strict delivery instructions,” the association argued in its lawsuit. “TANY members have no alternative means of operating their businesses and making deliveries in Manhattan other than to subject their fleets to charges imposed by the Tolling Program.”

With a toll program meant to disincentivize passenger vehicles in favor of public transit, commercial vehicles have no recourse but to eat the added costs of business. MTA’s toll system would also charge trucks for every entry into the Congestion Relief Zone, without exemption.

This added cost to trucking operations would impact local business prices, ultimately hurting the city residents who already face a cost of living crisis.

Congestion pricing: postponed indefinitely

Governor Hochul directed the MTA to indefinitely pause its congestion pricing program on June 5.

Hochul was a past champion of the plan itself, Mehra said.

“But she realized the impact that this would have with already an existing high inflation in New York City,” Mehra said. “It was the right move for the governor to indefinitely postpone this thing … This is not the time to come and impose an extra charge on top of the inflationary pressures that are being faced by New York City residents.”

What’s next?

“The pricing is still on the table,” Mehra said.

According to Mehra, MTA is still considering different versions of the program. The authority is thinking of scrapping the $15 daytime auto charges and the $24 to $36 for trucks.

“I think the bigger challenge would also be trying to find out how you fund the MTA with the billion dollars that it was anticipating from this,” Mehra said. “The infrastructure the MTA maintains is in significant need of an upgrade. Getting the funding for upgrading the transit infrastructure has to be of utmost priority, whether it is in the governor’s plan or tapping into some federal funds.”