President Trump has officially moved to kill NYC’s congestion pricing program. On February 19, 2025, U.S. Transportation Secretary Sean Duffy sent New York Governor Kathy Hochul a letter revoking federal approval for the tolling system—an approval originally granted through a Federal Highway Administration (FHWA) pilot program.
Within hours, the Metropolitan Transportation Authority (MTA) filed a 51-page federal lawsuit against the U.S. Department of Transportation (USDOT) in the Southern District of New York, arguing that the Trump administration did not have the authority to unilaterally rescind the program. On February 26th, FHWA wrote to the MTA and gave a deadline of March 21st to shut down the program.
Congestion pricing is authorized via legislation first enacted in 1991, which authorizes some states to start a “Value Pricing Pilot Program” (VPPP) with the federal government’s cooperation. The MTA, New York City and New York State entered into a VPPP contract with USDOT in November 2024.
The MTA’s lawsuit claims that the federal government does not have the authority to unilaterally cancel that contract. Moreover, MTA points out that USDOT did not undertake any of the environmental analysis or regulatory procedures required before making a policy change.
On the day congestion pricing was implemented, I organized and led a workshop at the Transportation Research Board’s Annual Meeting in Washington, DC, where representatives from cities around the world shared their experiences with congestion pricing and low-emission zones.
While these programs did not transform urban mobility overnight, they claim to have consistently reduced congestion and emissions. The MTA claims an 8% reduction in traffic since January 5, 2025. London saw traffic drop by 15% within the first month of its program, Stockholm, Sweden saw a 20% reduction in congestion, and Madrid’s Low Emission Zone led to an 8% sustained decrease in car trips. We learned that after a pilot program, Stockholm put the continuation of the program to a referendum. The voters spoke, it passed, and the rest is history.
USDOT Secretary Duffy’s letter to Governor Hochul revoking federal approval emphasized that congestion pricing would disproportionately harm low-income individuals, which was one of the arguments made by New Jersey Governor Phil Murphy in the lawsuit he filed. While congestion pricing presents real “equity” concerns, the MTA recognized this to some extent, and included discounts and exemptions for low-income New Yorkers and reduced charges for taxis and for-hire vehicles (FHV)—many of which are driven by immigrants from low-income communities. If you have not seen my university report that called for exempting taxis and FHVs, which are part of the public transportation ecosystem, take a look at it here. The MTA also committed to mitigation efforts for areas where congestion is predicted to increase, such as Hunts Point in the Bronx.
If congestion pricing is permanently shelved, the conversation must then shift to an often-overlooked issue: the “congestion surcharge” on taxi and FHV passengers. Since 2019, as part of the same plan that created congestion pricing, taxi and FHV riders have been charged $2.50 and $2.75, respectively, per trip below 96th Street in Manhattan. These surcharges have generated nearly $2 billion in revenue, but the burden falls squarely on an industry that has yet to recover from the pandemic.
Governor Hochul cited economic recovery as a reason for the delay in congestion pricing last year, but what about the recovery of the taxi and FHV industry on which so many of us rely? Many are now facing an even greater crisis—skyrocketing insurance costs. Unless the governor and state Legislature act soon to address the insolvency of American Transit Insurance Company, the largest taxi and FHV insurance provider in NYC, drivers will face unaffordable premiums that force them out of work. The industry will suffer a massive reduction in service, compounding the economic struggles of an already fragile sector.
Trump and/or Congress will likely be successful over time – one way or the other – in halting congestion pricing. However, there are legitimate concerns that when this happens, the MTA and the state Legislature may once again treat the taxi and for-hire vehicle industry as an ATM machine, by making-up for lost revenue through an increased congestion surcharge.
This cannot happen again! Before the MTA looks for funding elsewhere, it should first take a hard look at the efficiency of the agency and make extensive cuts to any waste or unnecessary expenditures. Also, taking a page from the Stockholm congestion pricing playbook, rather than fight this battle further in court, maybe New York should put the future of “congestion pricing” and the “congestion surcharge” to a vote via referendum?! A novel concept indeed – “let the people decide!”
