Cars sit in a traffic jam while cyclists ride by in Central London.
Cars sit in a traffic jam while cyclists ride by in Central London. Hannah McKay/Reuters

After 15 years of existence, London’s method of congestion charging is dated. It needs to be bigger, longer, and greedier.

London’s congestion charge turned 15 in February and it is showing its age. When the charge was introduced, no one foresaw the rapid proliferation of private hire vehicles like Uber. From 2013 to 2017, private hire vehicle registrations soared by over 75 percent: These cars are exempt from paying the congestion charge. A new approach to road pricing is needed to address the changes in the way people and vehicles move around the city and to generate much-needed funds for London’s transport system.    

Introduced in 2003, London’s congestion charge is a simple system: a daily charge of approximately $16.20 for entering the 13-mile square congestion charging zone between 7 a.m. and 6 p.m. on weekdays. Registered disabled people can travel for free, while congestion zone residents pay ten percent of the fee to enter the zone during those times.

By many important measures, the charge has been a success: The number of vehicles driving into Central London is a quarter lower than a decade ago. The charge has been particularly successful at deterring personal use cars from entering Central London: the number of private cars entering the zone fell 39 percent between 2002 and 2014.

Yet, competition for space on London’s streets remains high. While the congestion charge discouraged some drivers, the number of private hire vehicles is up. With private hire vehicles exempt from paying the congestion charge, this leaves London without an effective means of managing the numbers of them on the capital’s roads on weekdays. And London’s busy roads also reflect lifestyle changes: data shows that people make fewer personal transit trips, and there are more deliveries and more cab rides.

Buses have also been affected by congestion on London’s roads. In the past few years bus passenger numbers have been down. An investigation by the London Assembly, the city government’s scrutiny body, pinpointed traffic congestion as the primary reason for the fall in passenger numbers on London’s buses. It also found that the slower the speed along a bus route, the greater the drop in bus usage. Stuck on congested roads, people find that journey times by bus are unreliable, making them less attractive in comparison to other transport modes. This may account for the rise in cycling journeys: The number of cycles traveling in Central London increased by 210 percent between 2000 and 2016.

London has already reallocated some of its road space to active travel — primarily cycle and pedestrian — but the mayor of London, Sadiq Khan, has grand ambitions: In his 2018 Transport Strategy, he set out the goal for four out of five journeys made in London to be by active travel or transit by 2041 — today these transport modes only make up about 62 percent on average across London. London needs a reformed road pricing approach to halt the downward spiral in bus usage, to manage road usage effectively, to fund the capital’s transport system, and achieve the desired shift from private motorized vehicles to walking, cycling and public transit.  

Other cities offer ideas of how London’s congestion charge might be reformed. In Stockholm, drivers pay a variable charge dependent on the time of day, with a daily cap of approximately $12.50. Stockholm’s charging covers two-thirds of the city;  London’s congestion charging zone covers less than 1.5 percent. While London is larger — its geographic area is approximately eight times the size of Stockholm —  congestion in London is not exclusive to the center. Inspired by Stockholm, the London Assembly recommended replacing the daily flat rate with a charging structure that reflects when, where and for how long drivers use London’s road network.

Although New York still does not have comprehensive congestion pricing, its new surcharge on taxi and private hire vehicle rides, of $2.50 and $2.75 respectively, offers London an example of how to price the impact of these trips on the road network.

To better address the traffic challenge and generate funds for facilitating active travel and transit, London needs to update the congestion charge with a road pricing structure that covers all of London, all road users, and all of the week, including the heavy weekend night usage by private hire cars, a time when the current congestion charge does not apply. The technological advancements over the past decade and a half make a future pricing structure that reflects distance, time and location technologically feasible.

In his Transport Strategy, Mayor Sadiq Khan acknowledges the need to replace the congestion charge and hints at merging it with the Low-Emissions Zone, a London-wide, constant, emissions-based charge. However, he does not commit himself to a reform of the congestion charge in the short term.

The current five-year contract for running the Congestion Charge Zone and Low Emission Zone is up for renewal at the end of this year. This presents a great opportunity to rethink and reshape how to manage London’s roads and streets.


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