[timr]

> Congestion was already priced into all goods and services in NYC

I agree!

> instead of a tax that at least ostensibly will fund better transit.

Telling me that the money will be set on fire by a public organization with good intent doesn't convince me.

What has happened here -- and mathematically, this has to be true, or it wouldn't work -- is that the city has taken what used to be the market cost of congestion, and set an artificial floor higher than that market. They then captured the difference as revenue.

That's the fundamental argument against the assertion that traffic speed increases will offset the costs. It cannot be true, or people would choose to drive.

[paulgb]

> That's the fundamental argument against the assertion that traffic speed increases will offset the costs. It cannot be true, or people would choose to drive.

I think the mistake you're making here is assuming that the value of driving and the cost of congestion are the same to every driver.

For some people, driving is an elastic decision. They mode shift, or time shift to off-peak, or carpool, or combine errands in the city into one trip instead of multiple.

For other people, driving is necessary. They'll benefit from fewer of the first type of person being on the roads during peak hours.

[josephcsible]

> time shift to off-peak

One of the worst things about this congestion charge is that it applies even at off-peak times.

[paulgb]

It’s 75% lower off-peak though, so there’s still an incentive.

[timr]

No, I don't need to make assumptions about any of that. It's a complex interplay of factors (like any economic system), and everyone has their own reward function.

I'm just saying that if the marginal driver were still choosing to drive, then the system wouldn't work at all. That seems tautological?

The MTA has to set the price high enough above market that the reduction in demand is X%. Whether someone is driving because of speed, or comfort, or some other factor, the cost has to exceed their personally calculated benefit.

[paulgb]

> Whether someone is driving because of speed, or comfort, or some other factor, the cost has to exceed their personally calculated benefit.

It's a dynamic system though; as some drivers opt not to drive, the utility of driving for those other drivers increases. Yes, the market will find an equilibrium somewhere where some people will still drive, but that's kind of the point.

[timr]

I think the better argument for your side is that a large number of people have a utility function that isn't rational -- or at least, not based on commute time saved.

Yes, the market will find a new equilibrium, but if I'm right that the marginal driver is choosing to drive or not based mostly on a function of time saved, then eventually we'll see the market reaching an equilibrium where people are willing to pay up to the amount of money they save by getting somewhere faster via car (ignoring other costs for the sake of argument).

If that is true -- if the market is efficient for time -- then this plan can only ever work by making driving more expensive than the time lost to congestion.

(As an aside, thanks for having a serious, nuanced discussion about this. It's depressing how many people just want to fling insults and downvote/flag/censor stuff that they disagree with. I knew I was going to get ravaged for having a non-canonical opinion, but it's so hard to get people to just engage with the argument in good faith.)

[8note]

> higher than that market

i dont think thats true. the cost can also be much cheaper, but people price differentiate better when they can actually see the number than when they cant.

you can look at 19.99 as an example, vs 20 as example of making people feel a certain way to get them to shop differently, or credit cards - which get people to pay much more for an item than they otherwise would with the interest payments, or with the klarna styled buy now pay later.

its not a tautology that a higher price drives down cost.

i think the government price is likely much less than the cost of congestion, especially once you price in the externalities of pollution, but drivers werent aware of how much cost they were incurring from the congestion, and now that there's a number, they can make decisions based off of it