Are Congestion Charges Working? And Are They Fair?

For people who live in the proximity of many of the world’s major cities, various iterations of congestion charges continue to be maintained, updated or newly introduced. But are they fair for private and business motorists, and can it be said that congestion charges are proving effective in line with their environmental, financial and societal aims? We take a look.

The intentions behind London’s Congestion Charge

In the UK, the London Congestion Charge (LCC) was introduced in 2003, its primary goal being to reduce the number of vehicles in the capital. The then Mayor, Ken Livingston, said congestion was ‘crippling’ London and there was ‘no practical alternative.’

The scheme was intended to generate additional revenue for the government, reduce journey times, make parking easier, tackle air pollution and boost public transport usage. Certain vehicles were charged for entering specified parts of the capital, with cameras used to identify drivers not paying the relevant fee.

Updated to reflect growing concerns over emissions

July 2013 saw the Ultra Low Emission Discount (ULED) brought in to incentivise the adoption of plug-in hybrid electric vehicles (PHEV) that emit 75g/km of CO2 or less and meet Euro 5 air quality standards or better. With diesel coming under far-reaching criticism, vehicles powered by this once heralded fuel have had to pay the full LCC since June 2016, and the T-Charge was introduced in 2017 by current Mayor, Sadiq Khan, which means that older and less environmentally friendly vehicles not meeting Euro 4 standards are charged an additional £10 per day.

What about today and the imminent future?

Fifteen years on from its launch, the London congestion charge is still one of the world’s largest controlled zones, in operation between 7am and 6pm weekdays with the exception of public holidays. The standard daily charge is £11.50, while fines range from £65 to £195. April 2019 will see the T-Charge replaced by the Ultra Low Emissions Zone (ULEZ). Euro 5 vehicles will pay £12.50 per day to enter the capital; the changes aiming to see London’s road traffic emissions reduced by at least 20% overall.

Do any other UK cities have congestion charges?

As of June 2018, there has been a lot of discussion in the media over the introduction of schemes similar to London’s in cities such as Bristol, Cardiff, Leeds, Manchester and Oxford, but none of them have materialised yet. Bath looks set to be the first UK city away from London to introduce a congestion charge after being identified - along with 30 or so others - as having areas which will exceed legal NO2 levels by 2020. With the latest annual report from INRIX finding that the UK is the third most congested country in Europe costing the economy £37.7bn in 2017, it’s clear that other cities will need to follow London’s lead if change is going to come.

What about around the world?

Singapore implemented its ‘Area Licencing Scheme’ all the way back in 1975, based on certain vehicles displaying numbered stickers, but this has since been replaced by a congestion pricing system utilising technology and tolls.

Scandinavia has long been associated with societal development through environmental, transportation and other initiatives so it’s perhaps no surprise that the cities of Bergen and Oslo in Norway introduced tolls on their ring-roads in the eighties, while initial congestion charging trials from 2006 in the Swedish capital, Stockholm, cut traffic by as much as 30%.

Elsewhere in Europe, the Italian city of Milan introduced a congestion charge system called ‘Area C’ in 2012 that relies on automatic number plate recognition (ANPR) to identify applicable vehicles. The ‘CASCADE’ European networking and leadership project cites a 31.1% average reduction in Milan traffic at the end of its first operational year, with high-polluting vehicles reduced by 49%, NOx levels falling 18%, CO2 by 35% and exhaust gas particulate matter by 10%, alongside 26% fewer accidents and buses running 3% faster. The French capital, Paris, along with certain other cities such as Grenoble and Lyon, have a system in place called Crit’Air which essentially prevents older, dirtier vehicles from entering its streets on weekdays by requiring cars to display a sticker or ‘vignette’ in their windscreen, the colour indicating its Euro emissions standards.

The United States hasn’t adopted congestion charging in any of its urban metropolises yet but New York looks likely to be the first American city to introduce such a scheme, perhaps as early as 2019.

Are congestion charges working?

Looking at London first of all, traffic in the heart of the capital reportedly fell immediately by 15%. approximately half of these former-drivers opted for public transport, while the rest caught lifts, cycled or travelled into the city some other way. 

The LCC is managed by Transport for London (TfL), who identified a 21% reduction in cars on London’s roads by 2006, but although the number of bicycles increased by 49%, the taxi fleet rose 13% while bus and coach figures went up 25%, so it wasn’t all good news, as the latter typically run on diesel and are hence more polluting.

Congestion is defined by TfL as ‘excess delays’ and despite the LCC’s initial success, congestion actually increased again between 2005 and 2006, which was attributed to widespread roadworks at the time.

Financially, the LCC generated a net income of £89.1m during 2007. This figure was well short of the anticipated £130m or more that TfL sought to raise annually.

The downsides

Five years on from the introduction of the London Congestion Charge, it was generally deemed an overall success in reducing congestion and encouraging people to use alternative and often greener forms of transport while generating reasonable revenues to reinvest into the city. Many organisations and businesses, though, such as John Lewis and the London Chamber of Commerce, either blamed the LCC for a fall in footfall and revenue or for motivating firms to relocate outside of London.

The frustrating correlation between falling numbers of private cars in London yet rising levels of delivery vans and taxis - as ‘gig economy’ brands like Uber and Deliveroo continue to flourish - was largely behind the London Assembly transport committee report’s urging Sadiq Khan in 2017 to overhaul the LCC.

With delays caused by congestion having steadily worsened in recent years partly due to the influx of app-requested deliveries and rides clogging up the capital’s roads, along with widespread roadworks, the committee called for variable pay-per-mile fees to be introduced according to the times and vehicles involved, and for taxis to be included in the C-Charge. 

Something clearly needs to be done. London still has a reputation for gridlock, TfL’s income from the LCC has flatlined and even dropped back in 2010, while a report found London’s NOx levels have still risen by a fifth since it was introduced.

Are congestion charges fair?

Depending on when a vehicle enters a certain road affects its proportionate contribution to the build-up of congestion, motorists who get stuck in queues for longer time periods than others naturally feeling that charges are less fair. Although the poorest in society are less likely to own cars and more likely to use public transport or taxis, plenty of people in the low-income bracket do drive into cities.

While it may not seem fair to have to spend a percentage of someone’s salary on being able to access London by car, many would argue that the revenue generated from more affluent road-users ultimately benefits lower-income citizens in a more direct way.

Removing congestion charges, tolls and other forms of pricing from cities would almost certainly result in congestion spiralling out of control, which would benefit nobody financially, socially, environmentally or in terms of health.

Responding to a freedom of information (FOI) request in March 2017, TfL revealed that all revenue generated by the LCC is reinvested back into the capital’s transport and that £1.7bn net revenue has been generated by it since inception, £1.3bn having been spent so far on the bus network, £80m on improving road safety, £64m on environmental efforts and £196m on maintaining London’s roads. It could be argued that without the LCC’s help, such funds wouldn’t be available to spend across the city.

With its £11.50 base rate and additional £10 T-Charge for some vehicles, London’s congestion charge is considerably more expensive than other cities’ schemes, though. Many understandably feel that the LCC would be fairer if its fees differed depending on the time a vehicle enters the capital, like Sweden’s model in Gothenburg where around £0.77p is charged between 06:00 and 06:39, rising to a maximum of £1.87 during the city’s rush hour windows of 07:00-07:59 and 15:30-16:59.

What about for businesses?

The business community has frequently hit out at the LCC over the years; the recent T-Charge in particular. Sue Terpilowski from the Federation of Small Businesses commented: “The introduction of the T-Charge comes at a time when small and micro-businesses in London are already facing astonishingly high property, employment and logistics costs. There is a fear that this will be the final straw that closes businesses and takes jobs." Sixty-six percent of the organisation’s members voted against a rise in LCC pricing.

Opinions differ from business to business. A firm called Ambient Computer Services told the BBC in 2013 that congestion was just as bad yet the LCC cost their business £5,000 a year, but office supplies firm UOE said that the scheme has resulted in a “consistency of traffic flow and a reliability…that’s worth £10 every day.”

It could be argued that the dominance of ‘out of town’ retail parks is damaging retailers on a wider scale than a scheme like the LCC, and that any price-rises in goods and services can be attributed to so many factors, from political and global to meteorological.

Summing up

On balance, congestion charge schemes in cities are largely fair overall. Their intentions are typically noble with much of the revenue getting reinvested to the benefit of citizens and motorists, and they do generally result in reduced levels of congestion and private car traffic.

The more recent rise in delivery and ride-hailing traffic is concerning and shows no signs of abating, though, so it seems sensible that all charging zones should apply to taxis and other such vehicles. It’s also fair to say that today’s world expects pricing to be intelligent, dynamic and convenient, so while London’s scheme is quite rightly regarded as positive overall, it’s important for governments to regularly review their systems to ensure that charges remain fair and reflect technological developments and societal trends.