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December 12, 2006

What’s one trip per day worth?

For service and repair drivers who work south of 60th St. in Manhattan, wicked traffic congestion means they lose one trip per day. May not sound like much, but according to this study I mentioned a while back, it costs each one $7,000 in annual income.

A cabbie loses 5.3 trips a day and $8,000 in annual income.

Many people assume that less driving means less congestion, but those familiar with Manhattan know better. In fact rush “hour” in Manhattan now spans 12-14 hours.

Posted by tedb at December 12, 2006 04:41 PM




Comments

What do you think the clearing price would be for a daily driving pass in Manhatten? How about a hypothetical white collar worker who commutes in... What difference in pay do they get for working in the city? I bet it adds up to more than the delivery truck or the cabbie. If you wanted deliveries and cabbies, and you wanted some kind of daily usage fee to reduce the traffic, would you actually have to set aside traffic allocations at lower prices for them?

Comment by: Brad Hutchings at December 13, 2006 04:41 PM

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Not necessarily. Take tolled truck lanes for instance. Although the trucking industry was opposed to them at first, truckers are now pretty supportive. They're willing to pay a little, bc they figure they'll get more in return (e.g. more reliable operations, lower warehousing costs, etc.) The same trade offs would likely come into play if pricing were used more extensively in NYC.

Comment by: tedb at December 13, 2006 06:44 PM

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As always, the important consideration in this scenario is how the policy change impacts agents at the margin. My intuition says that most of the people who live (or perhaps work) in Manhattan have relatively high incomes. This is almost certainly true in the case of those who own vehicles. Hence, they would likely have high values of time and be willing to pay a substantial charge to reduce congestion. This is important, since charges to alleviate Manhattan-like congestion levels would be quite high, indeed. It is not clear that a cab driver would behave the same way. I'm not convinced of the $7,000-8,000 figures, but even if they were true, this amounts to a rather small amount per day/hour. Would the marginal improvement (extra revenue minus charge) be enough to motivate an otherwise unconcerned individual to engage in the policy/political process? What are his/her chances of success? Moreover, consider that most people who have chosen to live/work in Manhattan have done so with the full understanding and expectation of poor travel conditions. They have implicitly factored this cost into their longer-term decision making (location choice, taxi market entry/exit). In the long term, they may (and often do) exercise exit over voice. This said, New York City would be an interesting place for a congestion charging demonstration.

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