The Road Not Taken

Not all rituals are fun. Today many New Yorkers will find themselves in an all-too-familiar holiday tradition — stuck in traffic on their way to see friends and family. The saddest part of this tradition is that it is so unnecessary. Now that we have the technology for drivers to pay for the roads as easily as they pay for gasoline and telephones, we don't have to have crowding and traffic jams. Just as the gasoline lines of the 1970s disappeared when gasoline prices were allowed to fluctuate, so traffic jams can be reduced through flexible charges for road use.

America is the most advanced country in the world in many ways, and New York is one of its most advanced cities. There's no reason New Yorkers shouldn't benefit from electronic charging methods used in Bergen, Norway, since 1986, California since 1995, Singapore since 1998, London since 2003, and Stockholm, Sweden, starting this year.

Entrepreneurs want to make riding around the New York area easier. If Mayor Bloomberg gives them permission, they can finance roads, build them, and recoup their costs from drivers through tolls without the drivers even having to stop.

It's the ability to levy tolls without slowing traffic that allows new entrepreneurial activity in road building, because firms can now charge drivers. EZ Pass lanes enable us to avoid throwing change into tollbooths. Soon there won't even be any need for toll plazas. In London, cameras read cars' license plates to check that the correct amount has been paid.

Over the past month the Partnership for New York City and the Manhattan Institute have released reports estimating the costs of New York traffic congestion and proposing solutions. Each report sparked much discussion and deserves to be taken seriously.

The Partnership for New York City provides numbers for what we already know. Traffic jams cost money, lots of it, as well as frustration. Traffic delays add almost $2 billion a year to the costs of doing business in New York. Without traffic jams, businesses would get $4.6 billion more in revenue. Plus, delays cost consumers about $8 billion in lost time, lower productivity, and wasted gas.

The Manhattan Institute suggests three ways of improving New York transportation, all aimed at encouraging drivers to pay the costs of road use.

One idea is that cars coming into Manhattan would pay a fee, as in the express toll lanes in Southern California. That fee, known as "value pricing," could depend on the time of day. So driving into the city at rush hour could cost more than driving in at night, encouraging drivers either to share cars during peak times or drive when it's not so busy.

A professor at Princeton University, Alain Kornhauser, says "the concept of ‘value pricing' in New York is a no-brainer, at least to academics." And a professor at Northeastern University, Joseph Giglio, in his 2005 Hudson Institute book, "Mobility: America's Transportation Mess and How to Fix It," writes that the "pay-as-you-travel" concept in many metropolitan regions "could generate enough revenue to make their entire roadway networks fully self-supporting in the best free-market sense."

Another idea is to have special lanes on highways into the city that would be available to drivers who pay a toll, car pools, and buses. This is currently done in San Diego, Minneapolis, and Denver, and is planned for the Washington, D.C., area.

Finally, the Manhattan Institute proposes raising charges for on-street parking so they better reflect rates charged at parking garages. This would increase turnover at the meters, free up more spaces for trucks to unload, and reduce the double-parking that clogs up streets.

Many other ideas for reducing traffic congestion can be found in "Street Smart: Competition, Entrepreneurship, and the Future of Roads," a recent book edited by my father, the economist Gabriel Roth. (Economics runs in our family.) In the foreword, the transportation secretary, Mary Peters, says, "One business at a time, one commuter at a time, congestion is robbing our nation, indeed the world, of productivity and quality of life."

Her solution: "The time has come to unleash the power of the private sector to deliver the innovation, cost savings, quality, and choice it has delivered in telecommunications and other industries. Free markets work!"

One example in the book is for New York, where reducing truck traffic would substantially smooth traffic flows. The editor of "TOLLROADSnews," Peter Samuel, proposes rerouting trucks from streets by adding "truckways," portions of highway or tunnels dedicated to trucks. These could be built by public-private partnerships, financed by tolls. Mr. Samuel suggests a special tunnel for trucks as part of the Holland Tunnel system, leading to truckways on the west side of the city and connecting to others in the boroughs.

The new toll-collection technology makes public-private partnerships for road building the wave of the future. A division director at Macquarie Holdings, an Australian investment bank, D.J Gribbin, says, "Public-private partnerships afford state and local governments another tool to combat congestion and provide needed transportation capacity. Tens of billions of dollars around the world are looking for an opportunity to invest in American infrastructure. All we need to do is eliminate the obstacles for investment."

The key political question is how the collected tolls should be spent. The Manhattan Institute report suggests dedicating them to mass transit. But a far better idea is to dedicate the surplus revenues to road improvements, as was decided in Bergen, Norway, and Stockholm. A practical solution for Mayor Bloomberg could be to fund both.

Today is the Friday before Christmas. All of us out in our cars know that traffic congestion is getting worse, and that, like the whining child in the back seat, ignoring it won't make it go away. It is time to get street smart and harness private-sector funding and up-to-date technology.

Ms. Furchtgott-Roth is a senior fellow at the Hudson Institute and director of Hudson's Center for Employment Policy. Between 2003 and 2005, she was chief economist at the U.S. Department of Labor.