Congestion Fees

Sarah Harvey reports:

Traffic waiting times could be slashed, productivity would soar and frustration levels fall if congestion fees were introduced to New Zealand, the Business Council for Sustainable Development says.

Congestion fees, where drivers pay a premium to drive on some roads during peak hours, have cut traffic issues in London and Stockholm, and fast lanes introduced in the United States, where people pay to use the lanes, have reduced congestion.

I am a big fan of congestion fees or congestion charging. It is a very good market response to congestion problems.

The best use of congestion pricing I have read about is in one US state. They have two routes to the airport. One route is free, but is often congested and takes a significant period of time.

The otehr route has a variable charge. They guarantee you that you will be able to get to the airport in 20 minutes. Most of the time the charge is just $2 or so, but if the number of cars on the road gets too high, meaning the trip may take more than 20 minutes, then the charge increases. Sometimes the charge has even gone up as high as $25 – so that people will only use the road if they are really desperate to do so.

This provides an excellent choice – those who value time and those who value money can both be satisfied.