This chapter describes the principal benefits our proposal would bring to drivers and to the city as a whole, the impact we expect the scheme to have against the identified objectives, as well as how it would impact specific user groups.

Principal benefits

A more sophisticated and comprehensive scheme would offer substantial benefits both for the city, and for individual consumers. Chapter 2 described the current complex system of national vehicle taxation and local driver charges. Drivers would benefit from more predictable, smoother journeys and in comparison to the current system, the proposed scheme would be:

Simpler

The current multiple charging schemes come with different rules, vehicle standards, hours of operation, charge amounts and payment arrangements. The new scheme would replace all existing congestion and environmental charging schemes, as well as road tolls within the area of operation. It would be easy to understand and easy to use, and it would tackle both congestion and pollution at the same time. Additional driver services, such as parking permits and charges (which currently vary between and within different local authorities) could also be integrated to further simplify transactions for customers.

Smarter

While the Congestion Charge has failed to keep up with changing demand patterns, the new scheme would be modern, sophisticated and future-proof. The scheme would operate through a simple but smart platform. By comparing financial, environmental and health impacts, and offering alternative journey options, the scheme would enhance choice for customers and promote behaviour change. A charge per vehicle would also incentivise car sharing and carpooling. This would all help to reduce vehicle delays and make journeys more reliable.

Fairer

In contrast to set daily charges, a scheme that charges variable rates on the basis of vehicle characteristics, journey timing and distance, and local road conditions, would be fairer and reflect the real impact of individual journeys. It would comply more closely with the “user pays, polluter pays” principle. Rather than penalising the small proportion of drivers who enter the zones within which current schemes apply, the new charge would ensure that everyone who contributes to congestion and pollution pays. Cleaner vehicles would be charged less than polluting ones, and drivers would pay very little for travelling in less congested areas or outside peak times. Likewise, drivers who live in areas, or travel at times of day, that are poorly served by public transport would be charged less. The personal mobility account would allow a more targeted and fairer approach to charging, for example certain underprivileged groups could be offered reduced rates.

While the CC focused on addressing congestion and the ULEZ on pollution, a next generation scheme should have equity at its core.

The scheme would also benefit London’s residents, businesses and visitors as a whole. The scheme would create a city that is:

More efficient

The scheme would promote the uptake of cleaner vehicles and car sharing, as well as the use of public transport, walking and cycling instead of driving. This would reduce overall motor vehicle usage and enable more efficient use of space. Reduced vehicle delays and more reliable journeys would benefit all users equally. The scheme would be flexible and adaptable to technological innovation and changing consumer habits. Policymakers could respond to developing technology, new research and new mobility services by adding scheme variables and amending charging bands. ⁶⁹ Making roads self-financing would also free up funding for public transport and public realm improvements – making the alternatives to driving even more attractive. Among other benefits for London as a whole, the scheme would provide TfL with a much more detailed understanding of how people and goods are moving around the city, allowing it to adapt its policies, charges and services accordingly.

Healthier

The reduction in overall car usage would help to reduce all the main transport-related air pollutants, including particulate matter generated by zero tailpipe emission vehicles. This would benefit all Londoners, regardless of their choice of transport. Lighter traffic would also improve road safety, particularly for vulnerable road users. Streets less dominated by cars would encourage more people to socialise, exercise and lead active lifestyles.

Greener

Cleaner vehicles and reduced car usage would also drive down carbon dioxide emissions, which harm the environment and induce climate change. Encouraging people to choose public transport, walking and cycling would be more environmentally sustainable. Reduced personal car use and ownership would free up road and kerbside space and allow for the creation of better green infrastructure and public realm throughout the city – for the benefit and enjoyment of all.

Impacts of different scenarios

To help understand the impact of the proposed scheme, we modelled demand, emissions and air pollution reductions. We used total vehicle demand for 2021, as projected by TfL’s modelling data as our baseline, and took the impact of existing and proposed policies into account. We tested a number of models against this baseline, varying the base charging levels and the multipliers for the different factors determining the charge, vehicle type, emissions class, congestion band and area of London. ⁷⁰ The results for reduced demand and emissions are for the whole of London.

We first tested a flat distance-based charge, regardless of vehicle type, emissions or journey location, as a baseline. As expected, the demand reduction would result mainly from outer London, where the majority of journeys are expected to take place, but which is not currently subject to congestion or environmental charging. In contrast, demand in central London would actually increase, as a flat distance-based charge would in most cases be cheaper than the existing CC and ULEZ charges, thus incentivising additional short journeys. The improvement in emissions and air pollution would also be low, as more polluting vehicles would not be targeted.

We then modelled the scheme design we recommend, i.e. with a charge that varied according to a vehicle’s contribution to congestion and pollution. ⁷¹ The results were far superior than those on the flat charge model. Drivers on less congested roads would not be charged at all, excluding most of outer London. For the average driver making a 10-kilometre journey, we expect this to amount to in the region of £1.50 – the cost of a cup of coffee or a bus ticket – although journeys in the most congested and central parts of the city, using the most polluting vehicles, would be charged much more. This model could reduce overall demand by around 10-15 per cent and reduce total CO2 emissions and air pollutants by 15-20 per cent across the whole of London. The largest reduction in demand would come from private vehicles and vans. There would be a reduction in demand in all areas but the biggest would be in inner London.

Charging drivers on the most congested roads the equivalent of a cup of coffee or a bus ticket could reduce emissions and air pollution by up to a fifth.

We also tested a number of alternatives. For example, keeping the same base charge but charging all areas of London (not just the congested ones) produces the greatest impact: demand, emissions and pollution reduction all in the region of 25-30 per cent. On the other hand, a lower base charge which again charges in all geographies produces similar results to the second model. However, charging all areas of London from the beginning might be problematic in practice.

Moving from a flat charge to a variable distance-based scheme would mean that businesses the freight, logistics and servicing sector, and others reliant on frequent deliveries, would be among those most affected. Yet, the modelling showed that penalising vans and lorries much more heavily than cars does not produce significant added benefit. This is likely because businesses that tend to use them are less able to reduce their journeys or use alternative modes. Nevertheless, the scheme design principles set out above seek to incentivise greater consolidation of freight to increase the efficient use of the road network.

User profiles

The user profiles below illustrate some of the impacts and benefits of our proposed scheme on different types of road users.

The regular commuter

Adam lives in Romford and regularly commutes by car to his job as a media executive at the Here East complex in the Olympic Park. Using a busy major road at peak times means that he incurs a significant cost across the week. His manager has now agreed for Adam to work flexible hours, so he now travels off-peak whenever possible, which makes the journey cheaper. He has also purchased a bike and, for meetings that require him to make the journey at peak times, he cycles the 10-minute journey to Romford station and then gets a direct train to Stratford, from where he can walk, take a bus or cycle on to Here East.

The suburban resident

Beth lives near Sutton and commutes by car to Surrey on a daily basis. Her journey to work is not yet included within the charging area but she does get charged at the weekend, when she regularly uses congested routes to town centres and retail parks to see family and friends in other parts of south London. These journeys are now charged a little more than the equivalent single train fare but she also benefits from finding and paying for parking more easily. She has, however, now started to make some journeys using the new tram line for trips into local town centres, and appreciates the taxi booking facility available on the new app when making orbital journeys after dark. As her petrol car will need replacing in around four years’ time, she is considering purchasing a hybrid or electric vehicle to limit the impact when the scheme is extended to Sutton.

The weekend driver

The Coopers are a family living in north London. Neither of the parents uses their car to commute to work, since they cycle and take the Underground respectively. Their two children get to school by walking and by bus. Yet, they do make use of their car outside off-peak times and, in particular, at weekends to take one of their children to regional gymnastics competitions. There are occasions when the times of these competitions coincide with heavy traffic on main roads in and out of London, and they have found themselves paying several pounds for these trips. Since the introduction of the scheme, the gymnastics club has been much more proactive in encouraging parents like the Coopers to offer lifts to other gymnasts whose families are less able to afford the additional costs.

The out-of-town visitor

The Dawsons live in Lincolnshire and are attending a wedding in central London. They find a hotel in inner London with parking and drive there on the evening before the wedding day. Since they drive very infrequently to London, they have a choice of paying a flat charge online or that they can purchase in a service station approaching London or register with London’s new app to pay on a per-mile basis. Following the advice of a friend, they decide to register with the new app. Since they drive into London at a time of relatively little congestion, the fee they pay is a small fraction of the flat charge. On the day of the wedding, they try out the app to find their way to the venue and opt to use the on-demand ride-hailing service, which for two people is marginally more expensive than public transport but carries them door-to-door.

The private hire driver

Erik is a self-employed private hire driver undertaking some business account journeys during the day and working through an on-demand ride-hailing service during the evening. He used to pay the daily Congestion Charge and was very concerned that the introduction of the scheme would have a detrimental impact on his business, with the distance-based element of the charge amounting to more in an average day than the Congestion Charge. In fact, he has seen an increase in demand in inner and areas of suburban London, with the new app stimulating demand, as more people see ride-hailing as an alternative to driving, and new markets opening up such as the early-morning and late-night shared taxis run on behalf of several NHS trusts for their staff. Since the ride hailing service is now connected to London-wide journey decisions, Erik is receiving better information about where demand is greatest. He is finding he has more productive working hours and incurring fewer dead miles where he does not earn.

The sole trader

Fay is a plumber working all over London clocking up around 10,000 miles in her van and is therefore among the most frequent road users in the capital. With a 6-year old diesel van, the new charge can represent a significant amount per month, if she is frequently called out to central London properties at peak travel times. She has to pass on most of the additional cost to her customers. However, she is no longer paying the daily Congestion Charge and ULEZ when she has a central London job, and the new app makes the transactions much simpler. With reduced journey times, she is also able to take on more jobs throughout the working day. Fay has reduced her mileage in recent years by making fewer trips to suppliers, maintaining higher stock levels, and getting more items delivered straight to site. She has heard about support the Mayor is providing for commercial drivers to switch to cleaner vehicles and is exploring the option of an electric vehicle she can charge at home.

The small business

Garry runs a small craft brewery on an industrial estate in north London supplying beer to pubs, restaurants and wholesalers. Several years ago, the company invested in a second-hand 7.5 tonne vehicle to deliver directly to its clients. Undertaking frequent trips in inner London using a heavily polluting vehicle meant that the company was initially hit hard by the emissions-based elements in the new scheme but was unable to afford a newer vehicle. After several months, Garry got together with several other small companies to form a new logistics operation using zero-and low-emission vehicles and saving costs with more efficient fleet utilisation.