Kheel Plan: Double the Congestion Charge & Make Transit Free


"If you were to design the ultimate system, you would have mass transit be free and charge an enormous amount for cars."

So said Mayor Michael Bloomberg last April, right about the time he unveiled his plan to charge motorists a fee to drive into Manhattan’s central business district. Eight months later, as the mayor’s original proposal mutates for better or worse, the MTA is hours away from raising transit fares. Neither idea has exactly caught fire with the public, and the fare hikes could actually end up a foil for congestion pricing — a plan originally intended as a sustained financial boost for the transit system.

And then there’s Theodore "Ted" Kheel. The environmentalist, philanthropist, and renowned labor attorney has lobbied for free transit in New York for over 40 years. Last February he commissioned a $100,000 study that, as it turns out, could put the city’s money where the mayor’s mouth is. A summary of findings released late last week shows that if the city were to impose a $16 congestion fee ($32 for trucks) below 60th Street in Manhattan, 24 hours a day, seven days a week, along with higher curbside parking fees and a taxi surcharge, the MTA could remove its turnstiles and fareboxes forever.

Relying on exhaustive analyses of dozens of factors ranging from vehicle miles traveled (VMT) and transit capacities to emissions and employment data, assembled in an interactive spreadsheet created by Charles Komanoff, the study, managed by the Institute for Rational Urban Mobility (IRUM) and researched by Joseph Clift, George Haikalis, Brian Ketcham and Carolyn Konheim, found that the Kheel Plan would:

  • Reduce traffic within the Central Business District by 25% and within the entire city by nearly 10%. Auto trips into the CBD would drop by one-third.
  • Save the public a staggering $4 billion a year in recovered productivity, or more than 100 million "vehicle hours" that would otherwise be spent in traffic. (Some 20% of this value would be realized by bus riders, 32% by truck, taxi and auto users within the CBD, and 48% by vehicle users in the rest of the city.)
  • More than recoup revenues now generated by fares. The one-two punch of the $16 automobile toll ($3 billion annually), taxi fare surcharge ($340 million annually) and higher curbside parking fees ($500 million annually) would generate nearly $4 billion annually – enough to replace the $3.5 billion in current tolls and subway and bus farebox revenues and still leave an annual revenue stream of $500 million for improving and expanding transit.
  • Provide universal no-fare transit with less crowding than today’s service. Making transit free will be an enormous boon for all New Yorkers, particularly low-income residents, and lift, once and for all, the specter of fare hikes. The Kheel Plan also includes a strategy for handling the anticipated increase in ridership that will result in less, not more crowded trains and buses.
  • Shorten travel time: Enable a one-third (34%) increase in vehicle speeds within the CBD and an average one-tenth (10%) increase in the rest of the city. A typical 12-minute taxi trip in the heart of midtown Manhattan would be trimmed to nine minutes, while five minutes would be shaved from the typical 55-minute ride for a non-CBD trip, say from Bayside to Bensonhurst. Bus travelers would also save time: a fare-free system would eliminate the tedious swiping of MetroCards that leads to frustrating boarding delays, thereby shortening a typical 20-minute bus ride to 15-16 minutes.
  • Produce additional, significant benefits: The plan would generate an additional $2 billion in health cost savings and other benefits from reduced pollution, fewer traffic crashes, lower insurance costs, and increased tendencies to walk and bike – all due to diminished traffic levels.

"The PlaNYC proposal, while commendable and courageous, offers little if any relief to endlessly spiraling subway and bus fares," researchers conclude, while "the Kheel Plan banishes fare escalation from the civic horizon by abolishing the fare itself."

While it was developed independent of the Congestion Mitigation Commission process currently underway, its authors say the Kheel Plan "takes Mayor Bloomberg’s visionary congestion pricing proposal to its logical conclusion." As Commission chairman Marc Shaw noted at yesterday’s meeting, however, that logical conclusion is going to have to be something that "works in the real world" — a world filled with term-limited City Council members, parking garage industry-funded lobbyists, a debt-laden MTA and various other challenges. Logical or not, one thing is for certain: With the Commission’s aggressive timeline set to deliver an Implementation Plan to City Council by January 31 and Council scheduled to vote by March 28, a conclusion will be reached shortly.

  • I like this idea. But I’m curious, what exactly is the Kheel plan’s “strategy for handling the anticipated increase in ridership that will result in less, not more crowded trains and buses?”

  • Josh

    Konrad, I had the same question. After skimming the abstract of the report that was recently released, it seems like there are four main points:

    1. Much discretionary travel (which the report thinks many car trips are) occurs during off-peak hours, when the transit system already has spare capacity.
    2. Run more trains. (Not a tremendously novel idea but an important one.)
    3. Operate the LIRR and Metro-North in a way so as to attract (the abstract is not clear on how this will be done) transit riders who live along their corridors to take those systems rather than the subway.
    4. More people will commute by bike because the streets will be more pleasant.

  • Even if they just made bus service free and allowed people to get on or off in the front and back, that would be great.

    This would be a real game changer politically.

    Could Weiner (or anyone) really be elected mayor on the platform of denying New Yorkers free subway service?

  • Jonathan

    Wouldn’t the increased cost of travel chip away at the toll revenues collected by MTA and Port Authority? As the report says on page 7,

    Time constraints kept us from itemizing and totaling the respective toll revenue streams; we constructed our analysis instead as a comparison of the two systems.

    I don’t know how much of an impact that might have, but I suspect there’s an effect.

  • mf

    This would be nice, and I’m all for it, but how about we start by making transit free for anyone under 18. This wouldn’t cost the city much, as most kids get student metrocards anyway, and would remove one of the key financial incentives to get a car.

    When my family of 5 takes the subway or bus together, it’s $20 round trip, even for a short trip. A few weekend trips, and the savings from not having a car disappear.

  • Angus Grieve-Smith

    Okay, taking into account the MTA debt, how many years would it be before the debt was paid down enough to be serviced by tolls, and the subways could actually be free?

  • Jonathan

    mf, I don’t know your family, but I imagine that you could save at least $3.33 by buying a $16.67 metrocard that with the additional 20% bonus would give you 10 rides worth. It may also be that one (or both) of the adults has an unlimited-ride card used for commuting, which costs nothing to use on the weekends. So I figure you only need to pay between $10 and $16.67 to get the family around town, depending on how many adults have unlimited cards. Bonne route!

  • drose

    Impressive spreadsheet to go through, but one of the major variables that goes into the model is the elasticity of work and non-work trips. For work trips, this is assumed to be 50% of the increase in out-of-pocket trip costs. For non-work trips, this is assumed to be 90%. With 66% increases in the costs each for each type of trip, most of the reduction in total VMT comes just from the cordon charge.

    The problem is that these elasticities come from a 1977 study done by the Tri-State Regional Planning Commission (I’m guessing this is the NYMTC’s predecessor). I’m not sure if this is the most recent study of driver behavior or the most comprehensive, but I think it is a rather large leap of faith to attribute 1977 driving patterns to 2008 drivers. Although the authors do account for gasoline, parking and other costs in 2008 dollars, I think it is somewhat arbitrary to assume that these elasticities will not have changed over the past 30 years given the social and economic changes that have taken place in the NYC metro area since that time.

    Another cost of this plan I was looking for was fall-off in consumer spending that undoubtedly would occur as a result of less auto traffic into the CBD. Although working drivers would have to switch over to public transportation in order to maintain their jobs, it is not necessarily the case that non-working drivers would even come into the city with such a high cordon charge, irrespective of free transit use. I would have liked to see the delineation of the fall-off in NYC economic activity from the drop in consumer traffic from these non-workers added to the costs of this plan, but I couldn’t find it in the Cost-Benefit analysis in this workbook.
    While I am a supporter of congestion pricing and hope that some way can be found to institute many of the good suggestions that have been made over the past eight months by, to name a few advocates, the Mayor’s office and members of the Congestion Pricing Commission, I think this Kheel Plan may be pushing traffic reduction too far. I could say that it probably hasn’t been quite modernized enough, given that these ideas have been around for some time, but I feel that would be unfair to those who have worked to make it a modern alternative to congestion pricing. I just wish there was more recent data to support some of the assumptions made to generate these interesting results.

  • Jonathan

    drose, they did another study to support the elasticity data in 2007. Read the analysis document for more details.

  • paulb

    I’m usually very skeptical–more like scornful–of proposals to cut out subway and bus fares, because I think that New Yorkers who use public transit should pay for it, too. But maybe this just shifts the way we pay for it, so that the cost is subsumed in the general cost of doing business in NYC. We pay for the subway in the things we buy that are delivered by truck, or in the services we use that have to go via automobile, or at those times when we absolutely positively have to drive.

    I guess Kheel is assured that truck and car traffic in Manhattan would never dive below a certain amount. I mean, if it did, there’d be an ever decreasing amount of revenue from the traffic charges.

    So, maybe, OK. But if this is just a disguise for something like what John Liu advocates–let someone else pay for the subways, let’s get more money from Washington DC, or the state, or anyone else–then I think it’s a load of welfare state crap, which we need less of in NYC, not more.

  • drose

    Jonathan,

    My bad, thanks for pointing me to Charles’ new regression.

    After looking at it, I would say that it is difficult to extrapolate from the elasticity he generated using trip costs across the East River of $13.66 to $15.74 (all in 2000 dollars), when this plan would then add another $16 onto the trip cost. This total cost would be so far out of the sample set used to calculate the 70% elasticity, that any forecast that then uses it would be subject to an enormous amount of forecasting error. I would have to go back to my textbooks to figure out the amount of error, but using even 50% and 90% as point estimates for the elasticities for work and non-work drivers (as in the ’77 study) would compound this forecast error exponentially. It would have been nice to see a range of estimates for the results they’ve obtained instead of hard and fast numbers.

    I understand the authors are advocates, and a single number is effective for supporting their position, but a confidence interval of some sort would probably generate a more supportable and believable conclusion to their work.

  • Kirk

    Kheel’s NY would be a nice place to live, work, & visit. It would the next coolest thing to beaming up the Enterprise.

    However, it might be easier to get a transporter working than this plan.

  • I like the idea of free transit, but I’ve seen a couple of problems.

    1. On free transit days in the San Francisco area, crime goes up substantially in the transit system, with calls to the transit police doubling on those days. Many regular commuters avoid the trains on “Spare the Air” days specifically to avoid the anti social behavior types that ride for free.

    2. This is less of an impact, but the trains become a de facto homeless shelter on free fare days.

    Any kind of fare-free transit must address these larger issues of crime and homelessness.

  • Nickel

    Today’s Daily News: “A $4 toll on the Queensboro, Williamsburg, Manhattan and Brooklyn bridges would raise $531 million for mass transit and cut traffic 5.6%, city analysts found.”

    Does that mean the city’s Plan B is to reduce congestion charges from $8 to $4?

  • Gary

    I agree with Fritz at 13. Better to set a nominal toll at $1-2 and maintain a semblance of order in the system. Unlimited ride cards could be discounted sharply from wherever the fare is set for the benefit of regular commuters.

    With respect to commuter rail, hours would need to be expanded on NJ Transit, LIRR, and Metro-North. Currently all of those suburban visitors have a choice between an early curfew, driving in, or cooling their heels in Penn Station and Grand Central until daybreak.

    I used to live in NJ and I’ll tell you, for many people a de facto 1:40am curfew is a major disincentive to taking the train. This would also inevitably serve to reduce the incidence of drunken driving.

  • Komanoff

    Jonathan — thanks for pointing drose to my 2007 elasticity analysis he overlooked.

    drose — instead of just bemoaning the problem of extrapolating from outside the original datasets, you might try substituting different elasticities in the spreadsheet and seeing the results; you’ll find that the Kheel Plan still generates enormous benefits even with elasticities much lower (or higher) than the amounts assumed.

    drose and everyone else — there’s a lot to absorb in the spreadsheet; think of it as a sprawling mansion with 30 rooms (worksheets); how about exploring the premises and *then* launching your volleys?

    paulb — there will be more than enough revenue from the cordon fee to pay for free transit, under almost any conceivable set of elasticities; that’s the beauty of the Kheel Plan — there will always be enough drivers willing to pay to motor into the CBD; they do it now, for next to nothing; let’s charge them — for the common good (even their own, measured in saved time)!

  • nyer

    (Sorry for my rough math…)

    According to wikipedia the MTA provides 2.4 billion rides a year. On a daily basis that is approximately 6.5million rides (including weekends). If you assume that each person takes 2 trips a day, that is about 3.25million unique riders.

    The NYC public school system has about 1 million students.

    Almost every single NYer takes transit at least occaisionally and almost 50% take it every day (according to my fuzzy math above).

    Only 12.5% of the population uses the school system.

    General taxes are used to support the schools but not used to fully fund the transit system?

    This is not to suggest that we should cut funding to schools, but just to show that on a daily basis far more people gain from taxes spent on the MTA than on the school system.

    Schools are free, why shouldn’t the trains be free too?

  • paulb

    I also think it’s only fair, if a charge like this actually comes into use, to throw people who have to drive into the CBD for business a bone, apart from just promising less congestion. Some of the proceeds of a charge like this should go toward making drivers’ lives easier, too. That’s just basic consideration that the city is pluralistic.

  • NJT

    #15: Overnight commuter rail service would be great, but at least for NJ Transit, it’s impossible until/unless a second set of tubes gets built under the Hudson. As I understand things, the existing tunnels need frequent maintenance, which they get in the ungodly hours when they’re unused except for the occasional late-night Amtrak train. You can’t even count on one track to be open at all times, so 24-hour scheduled service is out of the question.

  • No one focused on the mutually reinforcing companion measures to reduce VMT and congestion and raise revenue that actually make life easier for drivers, i.e.,
    – metering all parking w/i the CBD at rates sufficient to maintain one space free per block front so drivers dont have to search for parking (approximately half comercial garage rates) and
    – a`20% surcharge on taxi trips which alone cause most of the congestion w/i the CBD.

    Not only are these steps essential to making tolls fully effective but toll levels sufficient to reduce traffic are essential to making these companion strategies BENEFIT drivers by shortening their travel times, assuring convenient parking and, for taxis, increasing turnover, enabling them to serve more trips per shift and saving their passengers the time and cost of getting stuck in traffic. To be sure they don’t benefit drivers so much that we reduce road capacity and turn over more to peds, bikes and buses. Everybody wins!

    Carolyn Konheim

  • There is a huge problem when you want to offer free transit. It has been said earlier in other comments that crime goes up when transit is free. It is actually not only about crime.

    The global quality of service is decreasing when transit is free, first in users’ mind and then, in reality. Few people do “respect” what they get for free… That is why it is important to be sure that users are aware that the service they use and pay for is to be respected.

    Also, if something is free, it means it’s bad quality: you wouldn’t give a buck for something bad, would you? Why would you get in a low quality bus/train/metro when you do have a car or can get a car or any other transportation mode?

    Lot of cities thought about implementing free transit services and they failed because of this, among other reasons. Traffic is first increasing with new users and then, quality of service fall, traffic is decreasing, and costs are going up. The TA cannot afford the extra cost and the system as a whole is loosing its relevance.

    User share covers around 20% of capital+operating cost. Transit is a public service so it really has to remain “cheap” but not free. When you pay for a car, for gas, for tolls, you participate in the public financial effort to build, operate and maintain the infrastructure. It is the same for transit, even though transit investments need funds from public entities (local, State and federal governments).

    NYC doesn’t want free transit, because it would mean no more transit!

    Matthieu Desiderio
    Transport Information Group
    http://www.matthieudesiderio.com

  • Larry Littlefield

    Why not just borrow money and make everything free?

    What a something for nothing generation in this country. When they are done, there will be nothing left for those who come after.

  • rex

    Matt #21, “Also, if something is free, it means it’s bad quality…?”

    You mean like public education? Toll free highways? On street parking? Sidewalks? Fire fighting? Law enforcement? Air? Central Park? Smiles?

    Lots of things don’t charge a user fee. Some of them suck, some of them don’t. No thinking person deludes themselves that any of the above are free.

    Charging a fee just to keep the riff-raff out public services is elitist. Where is the line for riff-raff and who draws it?

  • Thank you, Ted Kheel.

    You rock.

    .

  • anonymous

    Do we really want to shift trips from walking (the ultimate free transportation) to the subway? That doesn’t sound very environmentally friendly to me.

  • JL Picard

    Kirk #14. Word is Ted Kheel is in a generous mood. A Star Trek style transporter system would do wonders for the New York City area. Hone your pitch.

  • glennQ

    Comment by anonymous: “Do we really want to shift trips from walking (the ultimate free transportation) to the subway? That doesn’t sound very environmentally friendly to me.”

    The environmental (and congestion) aspects are only a diversion IMO. The goal is to raise money, and they haven’t come up with a way to charge you for walking or biking yet…

    glennQ

  • From reading this blog, walking and biking are dangerous ways to travel. The auto should be abolished first. Transit is the only way to do that. Free transit is the best way.

  • Re: Comment #2 by Josh:
    Operate the LIRR and Metro-North in a way so as to attract (the abstract is not clear on how this will be done) transit riders who live along their corridors to take those systems rather than the subway.
    The plan is to level the playing field with respect to fares (or no fares), and to increase the number of stops on commuter rail, so that city residents can better afford to ride these lines, and will find them more convenient — thereby reducing the potential increased overcrowding of the subways.

  • Chris H

    Hmm… How about we take the $16 charge, cut fares in half and throw the rest into some nice capital investments 🙂

  • Chris H (#30) — We could do that. Though we Kheel Planners are committed to eliminating bus fares, which reaps enormous benefits in terms of faster bus travel (and increased ridership) without costing quite as much as one might think.

    But whatever, go and test your combo. Input it to the spreadsheet model (the Balanced Transportation Analyzer) and report back the resulting revenue surplus.

    Actually, I’m amazed and a bit disappointed that no one seems to have done so yet. Is the spreadsheet (or locating it) not user-friendly enough?

  • Chris H

    As I’m heading out, I don’t have the time to input it, but I’ll try to do so later.

    I do agree about eliminating bus fares, at least for local transit buses (not so much suburban commuter buses). It works amazingly with the Rutgers-New Brunswick bus system (combined with restrictive parking policies). This gives the New Brunswick area a much higher transit usage than most cities its size. The bus system, which operates in New Brunswick, Piscataway and a little bit of Highland Park, has a daily ridership of 65,000.

    Intelligent system predicts bus arrival times and reduces transportation complaints

  • Chris H

    Never mind, I found the time.

    $1.68 billion per year with 50% subway fare and eliminated bus fares. I think this is preferable because of the amount of capital investment that needs to be made for the transit system.

  • I think free public transport is a bad idea, because it means fewer people walking and cycling. This is bad for the environment and for people’s health, but also makes for a noisier city.

    40% of U.S. urban travel is 2 miles or less. 90% of those trips are by car. Two miles (3,2km) takes about 10-13 minutes door-to-door by bike, which is a lot faster than using public transportation (or driving for that matter).

    Crank my chain – two mile challenge

    What’s within your two miles

  • Doug

    Rex, et al.

    First, those aren’t free. You pay a meter for a spot, or for non metered spots, you pay taxes.

    For fire, police etc, you pay taxes.

    For public schools, who pays the teachers and janitors and for chalk? Yeah, that’s right, the tax payers.

    Oh, and Central Park? Yup, we tax payers pay to keep it up.

    So really, in a way, very little is “Free”. You DO pay for it, just not so blatantly up close like you do when you pay for a cup of coffee.

    And there already are many homeless and criminals on the trains and buses. Making it free will just make it worse.

    Who, by the way, will pay the salaries of the people at the MTA, or pay for track work or broken down buses? The commuters in the cars?

    Ok, well, I live in Whitestone, and the closest train is far far away, or I take the LIRR. Well the LIRR doesn’t run 24/7 and neither do all the buses in Queens. Will this change?

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