The Roller-Skating Economist You Can Thank for Congestion Pricing

William Vickrey, an undergraduate studying mathematics and electrical engineering at Yale in the 1930s, was on a train from New Haven to visit his parents in Westchester County when he had an observation that seemed to clarify his life’s purpose. There were empty seats all around him. Instead of simply enjoying the quiet, he perceived a troubling inefficiency. Surely many of his friends, college students with flexible schedules and tight budgets, would spend an afternoon in New York if the railroads lowered the cost of ticket prices for times of the day when fewer people traveled.

An idiosyncratic academic who spent the entirety of his 60-year career in the economics department at Columbia University, Vickrey is considered the father of congestion pricing, now a fact of Manhattan street life. He is no longer alive, but he would have hardly been surprised by how long it took for his theories to materialize.

Debates about congestion pricing have gone on for decades; in recent years the opposition has focused on the charge that the plan would privilege abstract environmental goals over the financial challenges of everyday workers driving into Manhattan below 60th Street, where the tolling is in effect. Some of the criticism has been caught up in the predictable partisan animosities. Just as the plan was taking hold this week, Vickie Paladino, a Republican city councilwoman from Queens, offered an “important warning” to her supporters on social media, telling them that certain green laser pointers “like the ones you find on eBay for under $30” could disable camera sensors, which seemed less like a note of caution than a call to derail congestion pricing with an army of mischievous cat owners and their saber toys.

Congestion pricing was never an easy sell, obviously; it wouldn’t have taken years to find its place if it had been. But in the 1950s, when Vickrey was first outlining his ideas, the resistance largely centered on logistics. In a society where the highest earners were paying a marginal tax rate of 92 percent and union membership was peaking and the terror of climate change was unknown, neither class warfare nor concerns about carbon emissions animated the public discourse. Like many economists, Vickrey was an optimization zealot — if he was a zealot of anything at all. “In no other major area are pricing practices so irrational, so out of date and so conducive to waste as in urban transportation,” he wrote in an influential paper that appeared in The American Economic Review in the spring of 1963.

About 10 years earlier, Vickrey had been asked by the office of Mayor Vincent Impellitteri to look into the structure of transit fares as a means of slowing the drain on New York City’s finances. Vickrey proposed tiered pricing for riding the subway, with higher costs for rush-hour travel and certain longer distances. One idea — considered far too convoluted but essentially predicting the MetroCard — was to have each passenger deposit a quarter in a turnstile that would issue a metal card that, Vickrey wrote, would “bear notches or perhaps magnetic patterns coded to represent the station or zone of entry.” The passenger would then submit the card to the exit turnstile and expect to get whatever refund was owed.

At the time, it cost 10 cents to ride the subway. City officials did not go for Vickrey’s suggestion. They were intent on raising the fare to 15 cents across the board. Vickrey considered this a mistake. In a letter to The New York Times in April of 1953, he argued that his plan would avoid an increase in fares for nearly half of all riders and might mean a return of a five-cent fare for many others — all the while sufficiently helping balance the city’s budget.

By the end of the 1960s, City Hall, now in the hands of Mayor John Lindsay, came to Vickrey for guidance around transit funding again. Lindsay had made fighting air pollution an important part of his platform, and he believed that cars were “strangling our cities” and that “starving mass transit” imposed costs that were “difficult to measure but real.” Lindsay enthusiastically backed the recommendations made by Vickrey and Theodore Kheel, a labor mediator and fixer also brought in to think about these problems. The solutions included higher tolls and car-registration fees and a parking-garage tax, among other measures. By 1973, Lindsay was proposing tolls on the East River bridges. He was thwarted on all these initiatives.

The advancement of electronic tolling technology and the subsequent arrival of the E-ZPass would make adjusting toll rates easier. Here as well, Vickrey seems like a futurist. As early as 1959, he came up with the idea of outfitting cars with transponders, monitoring them to see when they entered and exited congested parts of a particular city and billing drivers accordingly. His interest in setting costs to particular contexts extended to public utilities.

“He was promoting differential pricing for electrical usage,” Robin Lindsey, a transportation economist at the University of British Columbia and an expert in Vickreyology, explained. “People could decide to do laundry in the middle of the day, or at night,” for example, and cost would vary depending on demand. This goes on in parts of Canada.

Vickrey was said by colleagues to have had little interest in money or academic celebrity, barely knowing what his salary was. He influenced the work of much better known economists like Kenneth Arrow and Amartya Sen though he himself was not widely recognized beyond the field. This was bound to change in 1996 when he received a call on a Tuesday in October that he had won the Nobel in economics largely for his work in auction theory. What excited him was the prospect of a much bigger platform to advance his ideas for public policy. He was getting meetings with powerful people who could bring his ideas to fruition, and he was thrilled.

Two days after he won the Nobel, he was driving to a conference in Cambridge, Mass. On the Hutchinson River Parkway, he suffered cardiac arrest and died. It was a rare excursion by car for him. In the 1930s and ’40s Vickrey had been known at Columbia for taking the train, what is now known as Metro-North, from Westchester to the Harlem stop at 125th Street and then roller-skating to campus.

A year after Vickrey died, the E-ZPass, which had been introduced in New York State in 1993, was fully operational on the New York State Thruway. Like his other ideas, it was not quickly embraced. Jeffrey Zupan, at the time a senior fellow at the Regional Plan Association, was entrusted with collecting data on how electronic tolling was working out.

“The growth was very slow,” he said. “And then people began to recognize the advantage.”