Posted on January 13, 2020
Several major cities have floated the idea of congestion pricing as a means to ease the number of vehicles choking already busy streets. The idea is simple—much like tolls on highly traveled highways, cities would begin charging fees to drive in the city center during peak travel hours. For trucking companies, this may have several significant implications.
Pros and Cons of Congestion Pricing
Some industry experts think these fees may make it even more difficult to for smaller firms to compete with major fleets that can absorb those added expenses with less difficulty. Larger operations might be able to more adeptly transfer the costs than smaller trucking businesses or owner operators. Winners in the congestion pricing paradigm shift will theoretically benefit from less traffic and easier deliveries.
There are additional benefits to congestion pricing. In crowded cities like New York City, truckers face the very real risk of incurring parking tickets due to limited legitimate parking and overly congested streets. With congestion pricing, there should be more available parking to eliminate this headache.
Looking to Other Cities for Insights
With New York City poised to enact congestion pricing in 2021, lawmakers are comparing other congestion pricing practices to ensure a smooth process. Major cities such as London and Stockholm have established such laws with relative success, but they also identified pain points to avoid. In the beginning, for example, London exempted or discounted several types of vehicles due to their lesser effect on the environment. Emergency service vehicles, motorcycles, and taxis are exempt while disabled people, city residents, and low-CO2 vehicles can apply for a significant discount.
London encountered some trouble with the rise of ridesharing. Since taxis are exempt, London offered the same exemption to ride sharers. However, the number of these vehicles on the roads doubled over the course of the decade, so London amended the exemption.
Beyond New York City, congestion pricing is catching on across the nation in other high-traffic urban areas. Contact the experts at Interstate Motor Carriers to learn how we can help with your manage risk and improve your bottom line!Tags: fleet insurance, fleet management