The initiative is intended to ease traffic and generate billions for public transportation. | Photo: Shutterstock
Restaurants in the heart of New York City are bracing for a hike in the cost of food and other supplies, a side effect of the unprecedented effort to lighten midtown traffic by charging distribution trucks and other vehicles for merely entering the area.
The expected negatives of what’s known as congestion pricing don’t end there. Because passenger vehicles are charged $9 for entering a large swathe of downtown, restaurant groups have aired fears that consumers will shift their visits to establishments in the outer boroughs or suburbs.
Restaurants outside the high-traffic zone could also be affected because cars passing through the designated area en route to other parts of the Manhattan, the island in the center of the city, are still charged.
In addition, industry representatives warn that the $9-per-car fee will dampen attendance at Broadway shows, concerts, holiday celebrations and the host of other activities that supply customers to the city’s robust restaurant trade.
Taxis entering the central business district are charging their fares an extra 75 cents per trip. The surcharge for Uber and its on-call competitors is $1.50.
The effect on commuters is also a worry to groups like the New York City Hospitality Alliance, an advocate for the city’s restaurants, bars and nightclubs.
Many of the downtown employees who worked at home during the pandemic have yet to resume their daily treks into the city, leaving a smaller customer base for restaurants that depend on office workers for breakfast, lunch and afterwork business. Charging those who drove an additional $9 a day will be a disincentive for the telecommuters to return to their midtown offices, asserts Andrew Rigie, executive director of the Hospitality Alliance.
He also cites the burden that will fall on foodservice establishments that use trucks in their catering operations.
“It’s death by a thousand cuts,” says Rigie.
Most of those threats are still what-if’s; congestion pricing was scheduled to go into effect Sunday, or too recently to be felt full-force by the industry.
But there’s no uncertainty about the impact on distribution vehicles. Any truck entering the central business district is charged a toll ranging from $14.40 to $21.60, depending on its size. The rates drop to $3.60 to $5.40 from 9 p.m. to 5 a.m. weekdays and from 9 p.m. to 9 a.m. on weekends.
“It’s significant,” says Seth Gottlieb, SVP of logistics for the distributor Baldor Specialty Foods. “It’s going to be a significant cost on top of a lot of significant costs.”
In any 24-hour period, Baldor dispatches 80 trucks into the high-traffic zone covered by congestion pricing, or all of Manhattan south of 60th Street. Twenty of the vehicles resupply operations that prefer mid-nighttime drops. The other 60 will be subject to the toll.
Unlike passenger vehicles, trucks can be charged multiple times per trip. The technology supporting congestion pricing has been programmed to charge cars only once per day, no matter how many times they zip in or out of the tolled zone. That leeway isn’t extended to cargo vehicles.
Gottlieb cites the example of a truck reupping a restaurant on 60th Street, the northern border of the fee zone. It’s charged as soon as it rolls onto 60th. “If it can’t find a place to park near the restaurant, it’ll have to circle around until it can find one. It’s charged every time it leaves and re-enters the zone.”
Baldor has reconceived its routes to prevent those multiple assessments, but it has promised restaurant customers that they’ll see no other change in service protocols. Drop sizes, drop times and the frequency of deliveries will remain as they were before congestion pricing took effect, declares Gottlieb.
Nor, he insists, will the midsized homegrown distributor pass along what it’s assessed in tolls to customers. “We’re going to look for efficiencies and absorb the cost in that way,” says Gottlieb. “Other businesses that bring food into the city may not have that opportunity.”
Advocates of congestion pricing say the operators of commercial vehicles could benefit from the initiative. Research indicates that the tolls will likely reduce traffic in the covered zone by 13%. With less time eaten by gridlock, say the proponents, trucks will spend less time getting from one place to another.
But a 13% reduction of New York-caliber traffic isn’t going to have much of an effect on Baldor, according to Gottlieb. “It’s hard for us to translate that into anything meaningful,” he says.
Baldor, the Hospitality Alliance and about 100 other affected parties have formed a coalition in hopes of tempering the impact of congestion pricing on the local food supply chain. The participants include a number of local restaurants, as well as supermarkets and charities that feed the needy.
But the main proponent of the initiative, New York Gov. Kathy Hochul, has been adamant that New York City become the first jurisdiction in the nation to give congestion pricing a try. She’s noted in the multi-year run-up to implementation that several cities in Europe have successfully adopted the approach as a way of easing traffic and its negative impact, including air pollution.
Hochul maintains that the program is necessary to generate the billions of dollars that are needed to shore up New York City’s ailing public transportation network. She contends that the congestion toll will spur more people to take the subway or a bus, while generating the funds needed to make that experience more pleasant.
“We are huge supporters of public transportation, and that’s how a lot of restaurant employees get to work,” says the Hospitality Alliance’s Rigie. “If it’s going to be in effect, there should be an exemption for essentials like food. Seafood suppliers don’t have the option of taking the subway or public transportation.”
The city’s venture has been in the works for years. Indeed, the initiative was originally scheduled to take effect in June, but Hochul postponed adoption at the last minute in the face of fierce opposition from the public. At that time, the plan called for charging passenger cars $15 per trip.
The setup is based on a network of cameras and digital scanners. The scanners can read a vehicle’s EZPass, the onboard devices that allow a car to zip through a toll booth without having to stop. The trip is recorded automatically, and the fee is tacked onto the pass user’s monthly bill.
If a car or truck isn’t equipped with an EZPass, the camera network captures the vehicle’s license-plate numbers. The data is cross-referenced with the state’s registration databases and a monthly bill is sent to whomever is listed as the owner.
The setup has already been used by London and on most major bridges in the Greater New York City area.
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