Uber, Lyft Could Gain From New York City Congestion Pricing They Championed

by Erica Kollmann Benzinga Staff Writer

Zinger Key Points

The new congestion toll program is intended to reduce traffic congestion, improve air quality and raise funds for mass transit.
The New York Post reports Uber spent $2 million between 2015 to 2019 to promote congestion fees.

New York City’s congestion toll program launched on Sunday, adding new fees for drivers and rideshare customers. Uber Technologies, Inc. UBER and LYFT, Inc. LYFT lobbied in favor of congestion tolls and are positioned to benefit from the new fees.

What To Know: The new congestion toll program is intended to reduce traffic congestion, improve air quality and raise funds for the city's mass transit system. Most drivers entering Manhattan’s Congestion Relief Zone, south of 60th Street, will be charged a $9 toll during peak hours while rideshare services will be charged significantly less $1.50 per vehicle.

According to a report from the New York Post, Uber and Lyft have spent millions of dollars lobbying in favor of the congestion toll program and stand to benefit from its rollout.

According to the New York Post report, Lyft contributed $18,500 in each of the last four years to Gov. Kathy Hochul's campaign, which championed the new congestion tolls. The Post also reported that Uber spent $2 million between 2015 and 2019 to promote congestion tolls.

Why It Matters: Uber and Lyft are passing the additional fee to the customer so the increased tolls will not directly affect the companies' bottom lines. The companies could also benefit from reduced traffic leading to faster service and from drivers switching to ridesharing services in order to avoid higher tolls.

Lyft announced it is refunding the new $1.50 congestion fee in the form of a credit for future trips for all rides completed in the month of January.

"Since 2019 rideshare riders have already paid a $2.75 congestion fee to the MTA for rides that start, end or pass through a separate congestion zone that begins below 96th Street in Manhattan. We don't think riders should be double taxed, and we lobbied hard for them to be exempt from this new additional $1.50 congestion fee," the company said in a statement released last week.

Josh Gold, a Uber spokesman, told the New York Post that the company was "early supporters of congestion pricing" but "government can't continue to raise prices and fees on New Yorkers and expect no consequences."

The full impact of congestion tolling on the rideshare services will become clearer as future ridership figures come in.

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