What Is Congestion Pricing and Will You Be Impacted?

When you hit the road during rush hour, you expect traffic to be pretty bad. These morning and evening periods can quickly fill the streets and make you late for your destination. Recently, cities have proposed fixing the issue through levies and fees. So, what is congestion pricing, and how will it affect you? Here’s everything you need to know. 

What Is Congestion Pricing? 

Congestion pricing charges people for accessing roads during peak hours. While it seems like an extra fee to grab money, it intends to get people off the streets and use public transportation. Conversely, you could cycle in the city for a fun outdoor workout. Fewer cars on the road mean less congestion and better flow during the busiest times. 

City officials use this transportation strategy to mitigate demand without increasing the existing supply. While some leaders expand highway lanes, this approach only induces demand without reducing drivers. Congestion pricing may be unpopular at face value, considering everyday people must pay more. However, these policies are effective in numerous ways. 

For example, the policy has environmental benefits through reduced pollution in housing near highways. With fewer vehicles, you get reduced dangerous greenhouse gases (GHGs) from tailpipes. In cities like New York, the local government can raise millions to update the subway system and other transportation options. 

When Does Congestion Pricing Start in NYC? 

New York City’s limited parking options make it less ideal for road trippers. Lately, the Big Apple has been in the news for its new congestion pricing policy. This law imposes fees on people driving anywhere below 61st Street in Manhattan. Essentially, you’ll have to pay to drive and park anywhere south of Central Park. New Yorkers started following this rule on January 5th, 2025. 

The new policy has divided New Yorkers, depending on their commute and perspective. Some residents enjoy reduced traffic, whereas others don’t enjoy paying more to be on the road. Governor Kathy Hochul has said congestion pricing is effective for New York, and the Metropolitan Transportation Authority (MTA) says travel times are down up to 30% on bridges and tunnels. 

While congestion pricing has only existed since January, the program could have a short life due to federal intervention. President Donald Trump has contemplated ending the program by removing the Department of Transportation’s approval. The policy has survived legal challenges thus far, but its long-term status is up in the air. 

Are There Any Congestion Pricing Exemptions in NYC?

Driving in lower Manhattan has become more expensive. However, the new policy doesn’t apply to everybody. If you fall under these exemptions, you can avoid paying the higher tolls:

• Emergency vehicles: Police cars, firetrucks and ambulances won’t pay extra to drive around the streets of Manhattan. These vehicles must have room to operate!
• Low-income discount: If you don’t make much money, you may apply for the low-income discount. This perk cuts your fee by 50% after your first 10 monthly trips. 
• School buses: School bus drivers are integral to safe transportation for schools. Because they belong to the government, these large vehicles aren’t subject to the congestion pricing policy.
• Government vehicles: Besides school buses, you’ll find other municipal vehicles in Manhattan driving without incurring fees. Public works employees are exempt if they serve a core agency purpose. 
• Disabilities: If you have a health condition and can’t use public transit, you may qualify for an exemption. These drivers have a special registration to indicate the excusal. 

What Cities Have Implemented Congestion Pricing? 

New York is the first American city to institute congestion pricing, though proposals and studies have examined other U.S. metro areas. For instance, a 2007 Department of Transportation project examined San Francisco, Seattle, Chicago, Miami, Minneapolis, Chicago and Los Angeles. Today, Washington D.C. and other cities have proposed legislation to institute the policy. 

On an international level, it has been more widely accepted. Here are a few examples to demonstrate what congestion pricing is on a global scale. 

1. Singapore

Singapore was the first international location to try this novel policy. In the city-state, officials tested variable pricing in late 2006 and early 2007. Experts laud Singapore for its leadership in green development and urban planning, and congestion pricing is one of its hallmarks. 

After a few years of testing, officials determined where they needed to improve traffic congestion. Then, Singapore implemented a variable pricing policy that predicts congestion levels and helps drivers. It has been a mainstay since its implementation nearly two decades ago. 

2. Norway

While Singapore was the first to tackle congestion in a major city, other locations have incorporated similar solutions in previous decades. For example, Norway’s transportation officials implemented a toll entrance to the popular summer vacation town of Bergen. 

In the 21st century, more Norwegian cities implemented congestion policies. With these laws, driving into Oslo or Kristiansand became more expensive. The toll roads have increased funding for the various tunnels, bridges and tolls. 

3. United Kingdom

In the nearby United Kingdom, the Brits have implemented congestion charges to reduce London traffic. As far back as 2008, London enforced policies to charge drivers based on their carbon dioxide (CO2) emissions, though the policy has met roadblocks depending on the mayor. 

Since the implementation, London officials have updated the policy with fees that target older vehicles. If your car, truck or van doesn’t meet the Euro 4 standards, you’ll have to pay more cash. Other congestion proposals were attempted in Manchester and Edinburgh, Scotland, but failed. 

4. Italy

Milan is one of the capitals of fashion and congestion pricing in Europe. The Italian city has charged vehicles entering the center since 2012 after effective prior testing. If you try to get to the city center, you’ll have to cough up a few more Euros. There are congestion pricing exemptions for electric vehicles (EVs) and other autos. 

The policy is relatively recent, as Milan has had it for just over a decade. Why did the sizeable European city turn to congestion pricing? Car culture is stronger in Italy than other countries, leading to more unwanted smog and pollution. So, Milan officials implemented the policy to encourage public transport and get vehicles off the roads.  

What Congestion Pricing Is Intended to Do

Paying more money to drive isn’t ideal for the average commuter. However, it can benefit everyone involved if people use public transportation or other modes. When fewer drivers are on the streets, you reduce pollution and make room for emergency services. How’s that for safety? While congestion pricing is alienating, it has demonstrable advantages worldwide.