New York City’s controversial new toll could hurt small businesses by making deliveries more expensive—or help them by reducing traffic jams.

BY BRIAN CONTRERAS, STAFF REPORTER @_B_CONTRERAS_

Cars pass under a congestion pricing warning sign on George Washington Bridge as congestion pricing takes effect in New York City on January 5, 2024. Photo: Getty Images

Are you planning to visit New York City for work in the new year? Does your company rely on deliveries to lower Manhattan? Heads up: Many drivers will now have to pay to enter Manhattan south of 60th street.

Over the weekend, the largest city in the U.S. launched a new program requiring drivers to pay $9 each time they enter the lower portion of Manhattan between 5 a.m. and 9 p.m. on weekdays and from 9 a.m. to 9 p.m. on weekends. According to the Metropolitan Transportation Authority, the toll “will increase to $12 in 2028 and then $15 in 2031.”

Trucks face even higher tolls when entering the congestion zone: $14.40 at peak times for single-unit trucks ($3.60 otherwise) and $21.60 at peak times for multi-unit ones ($5.40 off-peak).

The new policy, known as congestion pricing and meant to ease the island’s infamous traffic problems, faced a circuitous path to implementation. After years of discussion, it was finally supposed to go into effect last summer, only for Governor Kathy Hochul to hold it up at the last minute. Now, however, it’s in place for good—albeit with the toll cut down from an initial $15.

FEATURED VIDEO

The Man Behind the Wheel of Driverless Trucks

Small businesses have been at the center of the ongoing backlash to congestion pricing. Hochul’s June delay, she said, was a bid to protect Manhattan’s small businesses, the owners of some of which have argued that the policy will make deliveries more expensive and reduce their flow of customers. (Hochul’s true motivation may have had more to do with electoral concerns.)

But now that the policy is happening, should entrepreneurs be concerned? Gernot Wagner, a climate economist at Columbia University Business School, told Inc. last year that similar tolls in other major cities have not harmed local entrepreneurs and, in fact, have sometimes helped them.

“Pedestrians, cyclists, basically people who spend more time in the city, closer to business … tend to spend more money,” Wagner said.

A core argument from the policy’s supporters has been that even if the toll does cost drivers a bit more money individually, it will create savings elsewhere—even for business owners—by reducing negative externalities. Consider: The Partnership for New York City, a local business advocacy group, has estimated that traffic in the New York metro area costs the economy as much as $20 billion a year, in large part because of inflated commuting time.

One poll in London (which has its own congestion policy in place) found that 69 percent of local business owners reported feeling no effect from the toll, with another 22 percent saying they’d actually saved money thanks to faster delivery times.

The daily digest for entrepreneurs and business leaders

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

© Inc.com