Five Cities with Congestion Pricing (And Four That Need It)


Congestion pricing is gathering some inertia in cities worldwide for a few reasons; safety, money, and public desire are among the main ones. Unlike traditional mechanisms to deal with more cars such as, well, building new roads, congestion pricing has had a profound effect on the cities it has come to. Pricing schemes operate on the same general platform – charge a car if it passes into a certain zone of a city – but each country has generated an architecture that is influenced as much by culture as it is by need. Below is a list of cities (and in one case, a city-state) that have designed and deployed congestion pricing systems:

Singapore – The godfather of congestion pricing systems started with some numbered stickers placed on the windshield of cars. The Area Licensing Scheme (ALS) as it was called was introduced in 1975 and was as simple as you could get. Originally, cars with one or two people in them were charged US$1 every time they crossed a line entering Singapore’s central business district during the peak morning period with carpools of more than three people and trucks exempt from the fee. Violations were costly and vehicle impounding was not uncommon – and in a country with some of the highest auto import duties in the world, financially catastrophic.

The sticker system has thankfully been replaced with a simple transponder-and-toll enforcement and other countries have again followed the tiny city-state’s lead. Singapore has moved in favor of efficiency as it usually does and setup a model for urban congestion pricing—though there was something completely charming about paying your fee with a paper license and trying to avoid the cameras at all costs.

London – Probably the best-known congestion pricing system in the western world. While more technically complex than Singapore’s system the London pricing system has had a similar level of success in reducing traffic for the central business district through an intricate series of cameras throughout the city. The “Ring of Steel” as it is so bellicosely named also plays a double role; the cameras are in place to catch traffic scofflaws as well as more sinister criminals since they are part of London’s expansive closed circuit television system.

The program has become an archetype for other potential systems, especially in the United States, though London’s girded structure differs significantly from the typical grid structure in major American cities. A sort-of Great Wall of Pricing is the concept du mode for today’s transportation economists however, and we have London to thank for that.

San Diego – Southern California isn’t the first place you would think about when discussing progressive transportation policy. Often the only solution for California traffic planners is to pour concrete to deal with the insatiable appetite for new roadways among the perpetually sun-kissed drivers. San Diego has taken that concept, along with its conjoined twin implied demand, and tossed it out the window in favor of a highway-specific congestion-pricing scheme.

The scheme has been tweaked slightly to fit the geographic idiosyncrasies of South California: lots of cars, lots of highways, not a lot of density. It’s not a congestion cordon system like we see in London or Singapore but rather a dichotomous highway tolling system where, if you’re willing to pay, you can zoom by drivers wallowing in the infinite gridlock by using a an express lane that runs parallel to the original highway. These toll-lanes have been called “Lexus Lanes” by activists who see them as just another way that efficiencies favor the rich and the poor will have to deal with high traffic volume until Armageddon (or Carmageddon?), but these toll-lanes were, for better or worse, designed around opportunity costs rather than nominal equality in transportation. People who need to get somewhere fast will pay fast to get there, US$8 be damned, and people who can wait, will wait.

Stockholm – Stockholm, if those slick IBM commercials are indicative of anything, is at the center of the “Smart Cities” movement and they have the congestion pricing scheme to prove. It’s a cordon system similar to London and Singapore where drivers are charged a fee based on their entry into the Stockholm Central Business Distrct. In true Scandinavian fashion they’ve used a light hand for their system and include exemptions for vehicles like motorcycles and foreign-registered vehicles, a smart move that promotes ease of travel for tourists. The congestion charge also disappears during the evenings and very early mornings so revelers and night owls need not worry.

Milan – Improving air quality is an implied goal for all of these congestion pricing systems, by discouraging driving you are encouraging cleaner methods of getting where you are going. Milan has cut out the middle man and made improving air quality the state mission of its system the Ecopass. The scheme, like nearly all the others on this list, is designed to squeeze access to the central business district in Milan and, in an eminently obvious but never before applied way, drivers are charged based on how dirty their cars are. Hummers and Piaggios aren’t going to be charged the same rate to enter downtown Milan because they’re not doing the same damage to the environment—in fact the Piaggio Porter Electric wouldn’t be charged anything to enter the CBD.

The novelty here is in the simplicity of the aims. Milan wants cleaner air, city managers know that cars contribute to it downtown, and traffic engineers can restrict their access by pulling a couple economic levers. It’s quick and dirty –well maybe not dirty—but most importantly it gets the job done and is explicitly geared towards making life better for urban denizens in Milan.

Honorable Mentions: Riga, Latvia; Durham, England; Znojmo, Czech Republic; Valletta, Malta; Miami, Florida (highway pricing); San Francisco, California (not exactly a congestion pricing system, but variable parking fees have discouraged driving and, as advocates point out, finally equalized the nominal and real costs of parking).

Delhi – People often come to Los Angeles and shake their head solemnly at the effect that urban sprawl has had on the environment and low-income residents. They have obviously never been to Delhi. It’s a city “on its back” as Paul Theroux once said about Guatemala City, sprawled spread eagle over nearly 600 square miles. Traffic also chokes many parts of the city 24 hours a day and a pricing system that allows for commercial and military exemptions –I include auto-rickshaws under the “military” umbrella, there seems to be an army of them—would go a long way towards organizing one of the more organic cities in the world.

New York – This a little unfair since New York has already designed a congestion pricing system that would restrict access below a given street by adding a more linear version of London’s cordon system. But it got rejected by upstate lawmakers who saw it as a tax on their commuter-based constituency. Not to worry though, NYCDOT Commissioner Janette Sadik-Khan has a way of convincing policy-makers and the public that a progressive transportation edict is one of the best ways to improve health and safety citywide. And if she can’t, she has the blessing of Mayor Bloomberg to use more aggressive tactics in a Robert Moses kind of way.

Bangkok and Säo Paulo– I’m pairing these two cities because I have experience in the former and have never been to the latter but tend to hear that the traffic issues are similar in scope and severity. The sheer road capacity problem in these cities also make them a decent conceptual match; they are not Los Angeles or Shanghai where excess demand can be met, temporarily, with increasing supply on an apparently never ending scale.

This is where congestion pricing gets tricky. If congestion is endemic to a city’s transportation outlook then the potential traffic alleviation can be negated by the volume of cars, unless you take the severe step of charging a toll that only the very affluent can afford which would also make traffic that much worse on incoming arterials where traffic is already choking off access. It’s an issue that no one wants to touch –the very rich bypass the traffic in Säo Paulo by taking a helicopter to the city center—but there’s no doubt that the problem will begin to cripple city economies without a gutsy traffic planning move.

Images courtesy of buzrael, Paul Barter, photosfing, RaymondYu, EURIST e.V.Ambrosiana Pictures, satellite360carthesian and Paul Trafford on flickr

  • http://twitter.com/haveyouethan Ethan Tan


    To point out an error, the ALS ‘sicker system’ in Singapore is no longer in use. It has been replaced by the Electronic Road Pricing System in 1998.
    Every vehicle is required to have a transponder (“In-vehicle Units” aka IUs) on the dashboard where a prepaid cashcard is inserted. The gantries shown in the photograph are not just cameras, they house detectors that linkup to the IUs and deduct a predetermined sum whenever your vehicle passes through the gantry. A photograph is taken only when the sum is not deducted (insufficient balance in the cashcard or no cashcard inserted in the IU).

    This way, no license is required, and you just pay as you go. The system also allows the toll deducted to vary across time of day and vehicle type as a means managing road use.

    Moving forward, I understand that they are currently testing a GPS based system to reduce the need for hefty investment in physical gantries.

  • Theodore Brown

    Thanks, Ethan! Just submitted my correction. I had thought that was still in the works but should have known a place like Singapore would be ahead of the curve on that concept. 

  • http://www.thisbigcity.net Joe Peach

    Hi Ethan and Ted. Guess what – I too was under the impression that Singapore was still sticker based. Hopefully this isn’t an examples of western world ignorance… Regardless, edit made.

  • http://www.OSlOlSO.tumblr.com OSlOlSO

    Interesting post! :)

  • Limogerry

    Has anyone had the experience crossing the transponder regulated Golden Ears Bridge in Maple Ridge, BC, Canada that iPhone recent calls get wiped when passing over the bridge?

  • Ckmurray

    The only problem for congestion pricing is that in many cities the traffic is heavy simply in part due to the lack of alternatives.  Congestion itself is a cost to transport, and as it increases other forms of transport should become relatively more attractive. 

    (my analysis here http://ckmurray.blogspot.com/2009/11/is-road-congestion-best-allocation.html)

    So when the other options are few, the equilbrium level of congestion will be higher.

    The alternative to congestion pricing is making alternative forms of tranport (bus/rail/metro/cycle etc) more attractive – faster, cheaper, more frequent.

    The commuters might be inclined to use these options instead of sitting in traffic for hours each day.

    The optimum solution might be a small congestion charge used to subsidise other urban transport.  It is a bit crazy to use congestion pricing to simply generate government revenue – it should definitely be used to improve transport options.

    • Theodore Brown

      Ckmurray, all very good points and I actually address the potential for the creation of a synthetic equilibrium in another post on New York’s aborted congestion pricing plan. Look out for the post tomorrow on This Big City. 

  • http://twitter.com/roadpricing S Wilson

    Good article generally, but some big sweeping statements of error that you wouldn’t have made had you done research directly with the schemes concerned.

    Singapore’s system is not just about charging access to the central city, but targets specific routes at specific times and directions, with pricing varying regularly to maintain minimum service standards.  That is what makes it the standard for the world. Under Stockholm you claim it is “similar” to Singapore, but you have misconstrued Singapore.

    You said of London: “the London pricing system has had a similar level of success in reducing
    traffic for the central business district through an intricate series
    of cameras and transponders”.  Hardly.  Singapore maintains minimum standards of service on charged roads, by increasing and decreasing charges on individual roads at different times and the results are relatively free flowing traffic.  London has none of that and congestion in central London remains chronic, just slightly better.  Secondly, there are NO transponders in London.

    You then said “the cameras are in place to catch traffic scofflaws as well as more
    sinister criminals since they are part of London’s expansive closed
    circuit television system”. No they are not.  The ANPR cameras are not CCTV and aren’t there to catch criminals, and can’t. Quite separate systems.  The language suggests it is a cordon, when it is an area charge.  All traffic movements within the zone would be charged, not just those entering it.

    You said of Stockholm “In true Scandinavian fashion they’ve used a light hand for their system
    and include exemptions for vehicles like motorcycles and
    foreign-registered vehicles”.  London exempts motorcycles too, but the reason foreign vehicles are not included in Stockholm is not about tourists (so few drive that far north it is meaningless), but because of enforceability. It is too difficult and costly at the moment to chase up a tiny handful of foreign registered vehicles, when there is no authority to pursue them in their home country.

    You said of Stockholm “The congestion charge also disappears during the evenings and very early mornings so revelers and night owls need not worry”, just like London and Singapore, so why mention it here?

    I applaud you promoting the success of charging for the scarce use of road space, but please be careful about your sources of information.  Far too many urban legends get passed around as fact.

  • Enrico

    Milan’s pricing scheme is going to switch to congestion charge on january 1st, 2012. 
    Ecopass scheme showed too many downturns: first of all the exemptions for less polluting vehicles that in the last months did dramatically increase, strenghtening congestion once again and lessening the revenues to fund public transit and other space-saving transport modes. The reform is a result of a referendum held last spring in which 80% of the voters agreed to change the road pricing scheme into something meant to tackle congestion rather than pollution: so, now the share of the charged vehicles will be approx. 90% while Ecopass charged just 14% or something. Furthermore the toll will be much higher than before (5 euros no matter what kind of vehicle you are driving while with Ecopass we had 3 different fares starting from 2 euros – the most common one – up to 10 euros.