Congestion Pricing

Congestion Pricing

Definition of Congestion Pricing

This pricing method is used to take advantage of the strength of a market to decrease the negative impact of traffic congestion.

Congestion Pricing

Description of Congestion Pricing

Roads are typically free to use when you are moving. However, if you park, you have to pay a parking meter since you’re taking up a part of the road that someone could’ve been driving on. This is typically true during the daytime whereas at night, it’s free since those who live in that area park. Additionally, price is tied to traffic flow so during rush hour, for instance, parking is more expensive. Raising and lowering the price of parking at specific times helps smooth out traffic flow.

Advantages of Congestion Pricing

For one, it helps decrease congestion so less time is spend and it lowers business expenses. It also helps the planet with a decrease in pollution and an increase in other modes of transportation such as bicycles.

Congestion Pricing

Disadvantages of Congestion Pricing

This method may force consumers to shop outside of the city, causing the shops within the city to shut down. It’s also expensive to collect the charges.

Congestion Pricing