By David Shepardson
(Reuters) -The U.S. Transportation Department has approved New York’s plan to impose a $9 congestion charge for driving in Manhattan starting on Jan. 5, a move aimed at raising billions for mass transit and cutting traffic.
The congestion charge, the first of its kind in the United States, was revived last week by Governor Kathy Hochul after she had put it on indefinite hold in June.
New York plans to charge a $9 toll during daytime hours for passenger vehicles driving in Manhattan south of 60th Street. It scrapped an earlier plan to charge $15 that would have started on June 30 of this year.
The Federal Highway Administration said in a letter made public on Friday that no additional environmental assessment was needed to impose the lower toll and that it was consistent with a review completed in 2023.
London implemented a similar fee in 2003, which is now 15 pounds ($19).
New York’s Metropolitan Transportation Authority, which approved the fee this week, said the toll will result in at least 80,000 fewer vehicles entering the zone daily, “relieving crowding in what is today the most congested district in the United States.”
New York is racing to implement the charge before President-elect Donald Trump takes office. Trump, who has a Manhattan residence, said last week he strongly disagreed with the decision to implement the fee.
Hochul said the toll is crucial to making new investment in subways and buses in New York, and that it will support $15 billion in debt financing for mass transit improvement.
Trucks and buses will pay up to $21.60, and there will be 75% discounts for traveling at night. The fee will be charged once a day regardless of how many trips are made for car owners, while taxis will pay 75 cents per trip in the Manhattan zone and Uber (NYSE:UBER) or Lyft (NASDAQ:LYFT) vehicles reserved by app will pay $1.50 per trip.
New York has said that more than 700,000 vehicles enter the Manhattan central business district daily, reducing travel speeds to around 7 mph (11 kph) on average, which is down 23% since 2010.