Traffic congestion is a major problem in Los Angeles. Carpool lanes and investment in mass transit have failed to significantly reduce traffic during rush hour. An alternative policy is needed. Los Angeles should follow New York City’s new policy and place a toll on vehicles entering the central business district in the downtown area. The evidence shows this is an effective way to reduce traffic congestion.
Los Angeles is famous for many things, congested highways being one of them. Los Angeles has the most congested roads in the country. L.A. drivers waste 122 hours annually, worth $3,214 in time and fuel sitting in traffic.
New York City faced a similar congestion problem. Politicians decided to tackle the issue by introducing a tolling system this past January. Between 5 A.M. and 9 P.M. on weekdays, passenger vehicles pay $9 to enter the central business district in Manhattan. They pay $2.25 during off-peak hours. Vans, trucks, and buses pay higher tolls during peak hours. Taxis pay $0.75 per trip. Low-income drivers get a 50 percent discount on the first ten trips into the toll zone each month.
What impact does this new system have on traffic in the toll zone and surrounding areas? A study recently published by the National Bureau of Economic Research finds the policy has improved traffic flows in the Greater New York Area.
Average traffic speeds in the toll zone have increased 15 percent compared to similar areas in other cities. Travel times within and driving to and from the toll zone declined 8 percent. Carbon Dioxide emissions declined between 2 and 3 percent. However, particulate emissions did not change. Speeds increased the most in neighborhoods closer to the toll zone. Finally, they found no difference in the speed increase across neighborhoods with different income levels.
A second study by the Regional Plan Association found traffic delays in the toll zone declined 25 percent compared to 2024. Traffic delays outside the toll area fell 9 percent. The normal post-holiday decline in congestion was 19 percent higher with tolls.
These results should come as no surprise. Tolls create incentives that will alter the travel patterns of people. They will be more inclined to carpool or use transit. They will shift less essential trips to off-peak hours when tolls are lower. These are the same adjustments observed in Singapore, London, Milan, and Stockholm when this type of a toll system was implemented in those cities.
In the past, this kind of toll system could not be implemented if Interstate Highways were part of the plan. The federal government restricted the use of tolls on these highways. Tolls on Interstate Highways could only be used to build new lanes, reconstruction, or high-occupancy toll lanes.
The 2021 Infrastructure Investment and Jobs Act established a Congestion Relief Program. This program provides grants to finance the establishment of a zone-tolling system in large cities with populations over 1,000,000 people for the purpose of reducing congestion. This means federal regulations no longer block Los Angeles from establishing this type of tolling system.
New York is the first city in the U.S. to use tolls to modify travel behavior in the central business district. The evidence so far suggests it is reducing congestion. It is time for Los Angeles to adopt a similar policy to reduce the high level of congestion that plagues the city.
Robert Krol is an emeritus Professor of Economics at California State University, Northridge and author of “Tolling the Freeway: Congestion Pricing and the Economics of Managing Traffic,” Annals of Computational Economics.