By Felix Field and Brandon Kahn

Congestion pricing is a relatively uncommon policy worldwide, but a few major cities—such as Stockholm, London, Milan, and New York—have implemented it in recent years. This policy charges drivers a toll for entering specific high-traffic areas. The primary goal is to reduce traffic congestion by discouraging personal vehicle use and encouraging public transportation. In addition to easing urban gridlock, congestion pricing can also improve air quality by lowering carbon emissions from cars and motorcycles. Although only a few cities have adopted it, congestion pricing has the potential to significantly enhance urban life if implemented effectively.

On January 5, 2025, New York City implemented congestion pricing. In the case of New York City, the tax is paid when you enter the “Congestion Relief Zone,” which covers all of Manhattan below 60th Street. The toll paid upon entering the zone is also based on the time of day, with higher prices during rush hour and lower prices during the late hours of the day. Additionally, the revenue generated by the tax will then go towards MTA improvements that will improve public transportation in the future. Overall, if the tax effectively reduces traffic and increases the use of public transportation, it would be extremely beneficial to New York City, and many other cities may also benefit from implementing such a policy. 

Among other cities that have already implemented congestion pricing, London has continued to see positive results after around 20 years of implementation. According to the U.S. Department of Transportation, “Congestion charging in London improves efficiency, reduces pollution, and raises revenue for transit improvements,” with automobile traffic having declined by about 20% compared to before congestion pricing. (Congestion pricing in London). Just like London, New York is a populous city with an effective public transportation system. By implementing congestion pricing, NYC could also see a reduction in pollution and traffic along with an increase in public revenue.

Data Analysis

Our research focuses on examining whether congestion pricing is an effective means of reducing in-city traffic and promoting the use of public transportation. We examined congestion pricing using public transportation ridership data to determine if it has actually led people to switch from driving to using public transportation. Examining MTA ridership data, we analyzed New York City’s congestion pricing and its specific impact on Long Island Rail Road (LIRR) ridership. LIRR ridership is an effective indicator because the primary use of the train is to commute from outside New York City and the congestion zone to the city center, where congestion pricing takes effect. However, other methods of public transportation, like MTA buses, share very similar results. If congestion pricing is effective in reducing traffic and promoting public transportation, LIRR, and MTA bus ridership is expected to increase after the implementation of congestion pricing on January 5, 2025. 

 To analyze LIRR ridership, we examined two specific comparisons of ridership. First, we looked at the seven-day ridership averages from the week before congestion pricing was added (Dec 28, 2024 – Jan 4, 2025) compared with the seven-day ridership average of the LIRR a year prior (Dec 28, 2023 – Jan 4, 2024) and calculated the annual growth rate to find a baseline annual growth rate. Next, we examined the seven-day ridership averages for the week of April 18, 2025, to April 24, 2025, and compared them to the exact dates a year prior, April 18, 2024, to April 24, 2024. We also calculated the growth rate for these dates, finding a post-congestion pricing growth rate. By comparing these growth rates, we see how congestion pricing affects LIRR ridership. As seen in Figure 1, the baseline growth rate for LIRR ridership is at around 3%. When examining post-congestion pricing, the growth rate is significantly higher, at approximately 15%. The results are similar when looking at another method of transportation, MTA buses. As seen in Figure 2, using the same process as with the LIRR, we find that the bus ridership growth rate increased by more than 9% after congestion pricing, with the pre-congestion pricing growth rate at around 3% and the post-congestion growth rate a little under 13%.

Figure 1

Source: Metropolitan Transportation Authority. “MTA Daily Ridership and Traffic: Beginning 2020: State of New York.” MTA Daily Ridership and Traffic: Beginning 2020 | State of New York, 25 Apr. 2025,

Figure 2

Source: Metropolitan Transportation Authority. “MTA Daily Ridership and Traffic: Beginning 2020: State of New York.” MTA Daily Ridership and Traffic: Beginning 2020 | State of New York, 25 Apr. 2025

 The data indicate that congestion pricing likely impacted public transportation usage. While other factors, such as seasonal changes or broader transportation trends, may have had a minor effect, the significant increase suggests that congestion pricing played a major role. Consistent with theory, we found that congestion pricing is associated with an increase in the demand for public transportation. Overall, New York’s Congestion pricing has effectively influenced people to use public transportation instead of driving their vehicles.

Conclusion

Using MTA ridership data, we analyzed the effect congestion pricing has on public transportation usage. After examining the data, we found that congestion pricing increased LIRR and MTA bus usage overall, indicating that it achieved its goal of promoting public transportation and likely also reduced traffic. This also means lower pollution in the city. Since congestion pricing is effective in New York, we believe it could also be effectively implemented in other cities nationwide. However, congestion pricing works best for cities with high traffic volumes and an effective public transportation system. Without an effective public transportation system, the effect of congestion pricing would be minimal, as the demand for driving would be less elastic without suitable alternatives. In cities with public transportation, though, congestion pricing offers a promising policy tool to reduce traffic, lower carbon emissions from cars, and promote public transit. Congestion pricing in New York City shows optimistic results, and with the proper infrastructure, it could transform urban transportation nationwide.

References 

1. Metropolitan Transportation Authority. “MTA Daily Ridership and Traffic: Beginning 2020: State of New York.” MTA Daily Ridership and Traffic: Beginning 2020 | State of New York, 25 Apr. 2025, data.ny.gov/Transportation/MTA-Daily-Ridership-and-Traffic-Beginning-2020/sayj-mze2/about_data
2. Todd Litman (Victoria Transport Policy Institute). “Congestion Pricing in London Decreases Inner City Traffic by About 20 Percent and Generates More than £97 Million Each Year for Transit Improvements.” Congestion Pricing in London Decreases Inner City Traffic by about 20 Percent and Generates More than £97 Million Each Year for Transit Improvements. | ITS Deployment Evaluation, www.itskrs.its.dot.gov/2007-b00333#:~:text=Summary%20Information,AM%20and%206%3A30%20PM. Accessed 27 Apr. 2025.