Los Angeles plan could make driving, ride-sharing more expensive

March 5, 2019

Tyson Fisher


Driving in Los Angeles can become even more expensive. The Metropolitan Transportation Authority recently approved measures that will look into congestion pricing and installing “mobility fees” on ride-sharing companies and other mobility transport, such as electric scooters.

On Feb. 28, the Metro Board of Directors unanimously voted to move forward with a feasibility study regarding “congestion relief pricing” and mobility fees. Charging fees to drive in certain areas is part of plan called “Re-Imagining of L.A. County: Mobility, Equity and the Environment,” which is designed to improve traffic by the time the city hosts the 2028 Olympics.

The studies are expected to last 12-24 months. The Metro Transport Authority hopes to propose new regulations on mobility fees by late 2020 and implement a congestion pricing pilot program around the same time.

Congestion relief pricing

Congestion relief pricing, more commonly referred to as tolls, will be considered in the study in three different methods: a vehicle-miles traveled (VMT) tax, charging a fee for driving in certain areas (cordon pricing), and charging a fee for driving in congested corridors (corridor pricing).

Cordon pricing will create a boundary around a central district and charge vehicles to cross that boundary. Pricing can be variable based on demand, such as peak times. Although city documents claim this method is the most common around the world, it is based on a central business district. Even though job centers are more dispersed in Los Angeles, establishing cordon pricing entering downtown L.A. is estimated to generate $1.2 billion a year.

A VMT tax has often been discussed as an alternative to the fuel tax. In this case, a VMT tax will be more variable based on location and day. Proposed uses included charging nothing with no traffic or in uncongested areas, but charging high enough rates during peak times to deter overuse. The Metro board estimated revenue of more than $10 billion a year from implementing a VMT fee for the larger metropolitan area.

According to city documents, corridor pricing would involve pricing “all lanes on all roads within a specific corridor with high traffic congestion but a viable public transit alternative.” Anyone traveling within a designated corridor during peak times would pay a fee based on miles traveled within the corridor.

In addition to potentially solving congestion problems, tolling certain roadways also will generate revenue. Currently, Los Angeles needs $26 billion for transportation projects that need to be completed by the 2028 Olympics.

Congestion pricing will not affect all of Los Angeles. The plan calls for conducting pilot programs in the most congested parts of the county in late 2020.

Addressing concerns that any kind of congestion relief pricing could have a more severe effect on lower-income motorists, a panel of experts will oversee the study to ensure that any proposed congestion pricing will be fair and equitable to everyone. One study conducted by Pew revealed that the lower third of income earners spent nearly 16 percent of their income on transportation, compared to 11 percent for the middle third and 8 percent for the upper third.

‘New mobility’ fees

Re-Imagining of L.A. County also will study fees on “new mobility” devices, such as electric scooters, and “transportation network companies,” better known as ride-sharing companies, including Uber and Lyft. New York City has installed a similar fee. A “congestion surcharge” that went into effect this year charges $2.75 per trip. Washington, D.C., taxes 6 percent of total fare. Rhode Island taxes 7 percent of the total fare.

According to the plan, mobility fees can improve equity by influencing behavior. Also, “fees and regulations can level the playing field for private-sector competition by setting standards for compliance across private companies and operations countywide,” according to city documents. Essentially, fees and regulations are designed to reduce congestion by discouraging “single-use” ride-sharing transport.

A San Francisco County Transportation Authority study showed that ride-sharing vehicles comprise 20-25 percent of vehicle trips in the downtown areas during peak periods and 15 percent of trips on a typical weekday. Another study found that approximately 60 percent of ride-sharing customers would go by transit, walking, biking or simply not make the trip at all if ride-sharing was not available. Another 20 percent would use their own car, and the remaining 20 percent would get a taxi.

Twenty-Eight by ’28

The transportation board also approved measures to continue crafting a funding plan for a project called Twenty-Eight by ’28. Scheduled to host the Olympics in 2028, Los Angeles transport officials are scrambling to improve infrastructure in the city. Approximately 28 major transportation projects need to be completed before then. Although 20 of those are scheduled to be completed by then, funding for the remaining eight is still needed to make the 2028 deadline.

In January 2018, the Metro board approved the Twenty-Eight by ’28 project list, which is projected to cost $43 billion.