May 1, 2003
In mid-February, London began charging private vehicles £5 to enter its central core. The outrage that the press and other pundits predicted didn’t occur: The toll has soothed rather than seethed Londoners. The losers from this radical experiment are almost nowhere in sight. The winners can be found all round.
To recap: The toll – called a congestion charge – was designed to reduce traffic in an eight-square-mile area of downtown London by 10% to 15% during workdays, between 7:00 am and 6:30 pm. With that reduction, gridlock was promised to end. Ten weeks into the experiment, traffic planners peg the reduction at about 17% and gridlock has ended.
The toll system was also expected to raise between £130-million and £150-million a year in tolls. Because the £5 congestion charge has convinced more Londoners than expected to avoid London’s most congested area during peak times, Londoners as a group are paying less than expected to be rid of congestion: Current projections have the system raising £100-million, all of it dedicated to public transit and road-related infrastructure.
At the aggregate level, the results are grand and impressive. But their meaning especially comes through at the ground level, where their effect on the daily lives of Londoners plays out.
– Cab Rides: Before the introduction of the toll, a typical London Black taxi fare from the once-congested City to West London cost between £18 and £20. With taxis now fairly flying down decongested roads – typical cab speeds have doubled – it often costs between £11 and £12. The benefits extend well beyond the 30% to 40% saving to the passenger in cab fare. Businesses now schedule more meetings per day, knowing they won’t be consigning their high-priced personnel to downtime in the back of a cab. The cabbie is much happier, too. The faster trip times translate into many more fares — more than twice as many, according to some estimates.
– Bus Rides: Without gridlock, passengers don’t face long waits before their bus arrives – excess waiting times are down 23% – and the buses themselves travel 15% faster. Smoother, too: With traffic-related delays more than halved, the lurches so characteristic of buses have abated. Bus ridership on this more attractive service is up 14%. The economics of public transit is also more attractive. The same bus and driver can now cover more ground in a day, leading to additional routes and expanded service for passengers.
– Businesses: London First, a business group whose members account for 17% of all London employees and 22% of the city’s GDP, asked its members: “Do you think that congestion charging has worked?” Only 3% said “no.” When asked about the charge’s impact on their particular business, 95% felt it had been neutral or beneficial, 5% deemed it negative. By a ratio of almost five to one, the members reported that their personal journey to work had improved.
Although some surveys, including a recent London Chamber of Commerce survey, shows retailers blame congestion charges for a drop in business, most industries back the congestion charge because it’s quickly recouped. Cert Logistics, a distribution company that delivers wine to many of London’s top restaurants and hotels, reports its delivery times have been cut by as much as 50%. And some businesses, despite lost business, nevertheless back the congestion charge – they save more money in their deliveries than they lose in profit to lost customers.
The congestion charge also provides savings to those who don’t manage costly delivery vehicles, drivers, and inventory. Based on London’s average earnings of £34,000 per year, the £5 charge pays for itself in just 17 minutes of saved time. Some Londoners don’t value their time that highly. They are among those who have decided to walk, to cycle, to take a cheaper, more convenient cab or bus, to change their travel schedules to avoid central London in peak hours, or to take any number of other options that were always there in theory, but materialized in practice only after the city of London made the choice meaningful by putting a price on road use. London road users now make more intelligent travelling decisions for themselves, and improve the economy and the quality of life for all.
Lawrence Solomon is executive director of Urban Renaissance Institute, a division of Energy Probe Research Foundation. He is also a director of PEMA, a non-profit with a patent pending on toll road technology. urban.probeinternational.org
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